E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 106 CONGRESS, FIRST SESSION

Vol. 145 WASHINGTON, WEDNESDAY, JULY 28, 1999 No. 108 House of Representatives The House was not in session today. Its next meeting will be held on Thursday, July 29, 1999, at 10 a.m. Senate WEDNESDAY, JULY 28, 1999

The Senate met at 9:30 a.m. and was PLEDGE OF ALLEGIANCE telling them how to do it, to put them called to order by the President pro The Honorable BOB SMITH, a Sen- in the school of their choice, to deal tempore [Mr. THURMOND]. ator from the State of New Hampshire, with their health needs, or maybe even led the Pledge of Allegiance, as follows: to have a little fun. O Happy Day. They get to be with their family on their PRAYER I pledge allegiance to the Flag of the United States of America, and to the Repub- own money. So I got up this morning feeling good The Chaplain, Dr. Lloyd John lic for which it stands, one nation under God, indivisible, with liberty and justice for all. because finally we are going to be Ogilvie, offered the following prayer: doing something that I feel good about, f We praise You, Gracious Father. the kind of thing that I came to Wash- Your love is constant and never RECOGNITION OF THE MAJORITY ington to do, and that was to try to changes. You have promised never to LEADER control and reduce the size of Wash- ington Government, to go with what leave nor forsake us. Our confidence is The PRESIDING OFFICER (Mr. Thomas Jefferson had in mind, and in You and not ourselves. We waiver, SANTORUM). The able majority leader is that was to put those decisions back fail, and need Your help. We come to recognized. You not trusting in our own goodness closest to the people, with the people f and the Government closest to the peo- but solely in Your grace. You are our O HAPPY DAY ple. This is when we begin to do it. I joy when we get down, our strength think back during Jefferson’s term when we are weak, our courage when Mr. LOTT. Mr. President, this morn- after a war, a conflict that the country we vacillate. You are our security in a ing as I came into the Senate Chamber, had been involved in. They terminated world of change and turmoil. the words to a song came to mind, ‘‘O the death tax. Yes. Go back and look at Happy Day.’’ I almost feel like singing. Thank You for reminding us that we history. The only time death taxes This is a happy day. This is when the are not left on our own. When we forget were put in place was during wars. American people finally get to have a When the wars were over, they were You in the rush of life, You give us a little bit more control over their lives, wake-up call. And when we feel distant ended. But then mistakenly, because their own lives, based on decisions he was not in good health, President from You, it is we who move, not You. made in Chester County, PA, or in Wilson, after World War I, did not take O Lord, You will never let us go. We Pascagoula, MS. This is a day when we it off and we have been stuck with it claim Your ever-replenishing strength. are going to be talking about the peo- ever since. And now, filled with wonder, love, ple being able to keep just a little bit So this is a happy day, and I look for- and gratitude, we commit this day to more of their own hard-earned money. ward to having a discussion about the live for You and by the power of Your Too often in the Senate we are arguing specifics of tax relief for working over details; we are trying to figure out indwelling spirit. Control our minds Americans. how we from Washington can spend and give us wisdom; give us sensitivity f more of the people’s money; we are to people and their needs; help us to be thinking about how can we in Wash- SCHEDULE servant-leaders; give us boldness to ington control more of people’s lives. Mr. LOTT. Before we get started with take a stand for Your mandates of Well, finally we are going to get to that, under a previous order, the Sen- righteousness and justice. Thank You have some fun; the people are going to ate will begin a cloture vote on the for the privilege of living this day to get to have some fun. They can keep substitute amendment to the juvenile the fullest. In Your all-powerful name. their own money to look after their justice bill at 9:45. Following the vote, Amen. own children without the Government Senator SMITH is expected to make

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

S9449

. S9450 CONGRESSIONAL RECORD — SENATE July 28, 1999 some remarks regarding his concerns coming on the floor. I was just going to are substituting gun control for values, with the juvenile justice legislation. If try to get about 3 minutes before the prayer in school, the Ten Command- cloture is invoked and following the re- vote. Would that be agreeable with the ments, religious expression, and pray- marks of Senator SMITH, it is hoped the minority leader? ers at memorial services. That is what Senate will proceed to the various mo- Mr. DASCHLE. Mr. President, it they are substituting, one for the tions to send the juvenile justice bill to would be entirely agreeable. I would other. conference. just ask that prior to the time we have Let’s make it clear: If you are for I understand completely Senator a vote, I be able to use some of my gun control, vote for cloture. If you are SMITH’s concerns. He has been deter- leader time for a couple of comments. for values and prayer and the Ten Com- mined, but he has been reasonable and But I would be happy to yield the floor mandments in school, vote against clo- cooperative within the limits of what so that the Senator from New Hamp- ture. he felt he had to do to the maximum shire can speak. I yield back the remainder of my degree. I thank him for his approach. I Mr. SMITH of New Hampshire. I very time. I thank the minority leader for certainly share a lot of his concerns. much appreciate the minority leader’s his courtesy. But I believe, all things considered, consideration. The PRESIDING OFFICER. The this is the right thing to do for the The PRESIDING OFFICER. The Sen- Democratic leader. Senate and for the country. ator from New Hampshire. Mr. DASCHLE. Mr. President, I will The Senate will then begin consider- Mr. SMITH of New Hampshire. Mr. use a few minutes of my leader time to ation of the tax relief bill under the President, I want to make a point on comment. reconciliation procedures. As a re- the legislation before the cloture vote We intend to support the effort to minder, by statute, the reconciliation we are going to have shortly because, move this legislation to conference. In bill is limited to 20 hours of debate. I according to the rules, I am not going fact, I endorse the actions taken by the really would like to have more time for to be able to debate this until after the majority leader in this case in so- discussion on this bill so that we could vote, which is really not the best proc- called filling the tree. cut out some of the discussion on all ess in the world. But I want my col- For the purpose of record and draw- these other bills that come up. There- leagues to know what we will be voting ing a distinction on this bill from other fore, it is hoped that Senators will cloture on in a very few moments is bills where our majority leader has have their amendments ready and will the Senate substitute for the under- filled the tree prior to the time we offer their amendments during the 20 lying House bill. So when we go to clo- have had any debate, this bill, S. 254, hours. Debate time on amendments is ture on that, what we are doing is sub- has been debated now for 8 days, from included, but the actual vote time is stituting gun control for the House May 11 through May 20. We conducted not included in the 20 hours. bill. 32 rollcall votes. The Senate considered So we can expect to go well into the I want all of my colleagues to under- 38 amendments—18 Democratic amend- evening today and again on Thursday stand that H.R. 1501 is a return to tra- ments, 20 Republican amendments. We in order to finish. If we do not, we will ditional values. had 10 Democratic amendments agreed go over until Friday. But we have This bill brings morals back into the to, 17 Republican amendments agreed enough time and we certainly should school. It brings values back into the to, and then we had 10 Democratic and finish this bill no later than sometime school. It focuses on the cultural prob- Republican amendments that were not during the day Friday. lems that are facing us. It allows a dis- agreed to, and 1 Republican amend- We do expect opening statements this play of the Ten Commandments. It al- ment was withdrawn. morning. It may be that there will be lows individual religious expression. It The point I am making is that we several hours needed for the opening allows prayer at school memorial serv- have had a very good debate on S. 254. statements, but I hope we can quickly ices. It allows faith-based groups to We had that debate. We brought it to turn to the amendment process and compete for Government juvenile jus- conclusion. We had a final vote. Now it give Senators an opportunity to offer tice grants. That is the underlying pro- is time to move it on to conference. I amendments about which they feel vision. That is what I wanted to vote fully respect the Senator from New strongly. on, and that is what I did not have the Hampshire and his determination to Mr. President, I yield the floor. opportunity to vote on. slow this process down because he ob- f What is being substituted is gun con- jects to some of the aspects in this bill, trol. It imposes strict limits on gun and that is his right. But I will say I RESERVATION OF LEADER TIME shows. It requires the sale of trigger support the effort made by the major- The PRESIDING OFFICER. Under locks with guns, and it puts new limits ity leader to move this bill to con- the previous order, the leadership time on juvenile gun possession, even juve- ference and the method he has em- is reserved. niles who are law-abiding citizens who ployed to do so. f might like to have hunting licenses. Again, this is not the same as laying JUVENILE JUSTICE REFORM ACT The bottom line is, the bill passed by a bill down for the first time, filling OF 1999 the Senate is a good cultural bill. Gun the tree and precluding Democratic control is being substituted. If my col- amendments. We have had a very good The Senate resumed consideration of leagues vote for cloture, they are vot- debate on this bill. We have had an op- the bill. ing to substitute gun control for a very portunity to offer amendments. I cite Pending: good bill that focuses on the cultural S. 254 as the model I wish we would fol- Lott amendment No. 1344, in the nature of and moral problems in our schools. low on all bills, a model that we his- a substitute. Lott amendment No. 1345 (to amendment I will close on this point. There is a torically and traditionally have always No. 1344), to provide that the bill will become fictitious story being circulated on the followed, which is to lay a bill down, effective one day after enactment. Internet where a Columbine High allow it to be subject to amendments, Lott amendment No. 1346 (to amendment School student writes a letter to God have a good debate on amendments, No. 1345), to provide that the bill will bcome and says: have the votes, have the final vote, and effective two days after enactment. Dear God: I’m very angry with you. I don’t then go to conference. Lott amendment No. 1347 (to the language understand why you allowed 13 of my fellow I hope we can do more such of this in proposed to be stricken), to provide that the students to be killed by two of my fellow bill will become effective three days after en- the future as we consider other author- students. Please answer me as soon as pos- izing bills. I urge my Democratic col- actment. sible. Columbine High School student. Lott amendment No. 1348 (to amendment leagues and my Republican colleagues No. 1347), to provide that the bill will become A letter comes back from God: to support the effort this morning to effective four days after enactment. Dear student: Let me remind you, I’m not move this legislation forward to con- The PRESIDING OFFICER. The Sen- allowed in your high school. ference so we can resolve what dif- ator from New Hampshire. We need to think seriously because ferences there are with the House—and Mr. SMITH of New Hampshire. Mr. this is a major decision we are making. there are many very important dif- President, I see the minority leader If my colleagues vote for cloture, they ferences. I am hopeful we can bring July 28, 1999 CONGRESSIONAL RECORD — SENATE S9451 this bill back from conference in time Helms Kyl Smith (NH) off lawful and beneficial uses of fire- Hutchinson Nickles Thomas and that we can be as supportive of it Hutchison Santorum arms. as we were of the bill when it passed on Inhofe Shelby And what may be the most important May 20. thing for anyone watching this debate NOT VOTING—1 Mr. President, I encourage my col- to understand: gun control is some- leagues to be supportive this morning. Voinovich thing the House of Representatives has I yield the floor. The PRESIDING OFFICER. On this already said—with a bipartisan vote— vote the yeas are 77, the nays are 22. CLOTURE MOTION it will not accept. Three-fifths of the Senators duly cho- This is a set-up, folks. The House has The PRESIDING OFFICER. Under sen and sworn having voted in the af- said it will not accept gun control, and the previous order, pursuant to rule firmative, the motion is agreed to. the Clinton-Gore Administration, XXII, the Chair lays before the Senate along with its cronies in Congress, the pending cloture motion, which the AMENDMENT NO. 1347 The PRESIDING OFFICER. The have said they won’t accept a juvenile clerk will report. justice bill without gun control. The legislative clerk read as follows: question is now on amendment 1347. The Senator from New Hampshire is Does anybody else see a problem CLOTURE MOTION recognized for up to 1 hour. here? The problem is obvious. I don’t We the undersigned Senators, in accord- Mr. SMITH. Mr. President, I yield see how the conference committee will ance with the provisions of rule XXII of the whatever time he may consume to the fashion a version of juvenile justice Standing Rules of the Senate, do hereby Senator from Idaho. that both the House and Senate can move to bring to a close debate on the sub- live with—but I can tell you one thing: stitute to Calendar No. 165, H.R. 1501, the ju- The PRESIDING OFFICER. The Sen- ator from Idaho is recognized. whatever comes out of this conference venile justice bill: won’t have enough gun control in it for Trent Lott, Frank H. Murkowski, Chuck Mr. CRAIG. Mr. President, I thank Hagel, Bill Frist, Jeff Sessions, Rick my colleague for yielding. It is obvious the Clinton-Gore administration. Santorum, Ben Nighthorse Campbell, from the Senate vote we just had that In fact, I’m going to make a pre- diction here and now that whatever C.S. Bond, Orrin G. Hatch, John we could only have delayed this process emerges from the conference com- Ashcroft, R.F. Bennett, Pat Roberts, for several days, but we could not have mittee will instantly be criticized—and Jim Jeffords, Arlen Specter, Judd stopped the ultimate result, which Gregg, Connie Mack. maybe even threatened with a veto— would be sending a flawed Senate bill because it doesn’t have enough gun CALL OF THE ROLL to a conference with the House. Since control in it for Bill Clinton and AL The PRESIDING OFFICER. By unan- that is the case, I see no reason to burn GORE, and the folks who work with imous consent, the mandatory quorum up good will by forcing the Senate to him. That is because they need gun call under the rule has been waived. vote again and again with the same re- control as a political issue, and they VOTE sult on the various procedural steps are not interested in juvenile crime un- The PRESIDING OFFICER. The that lie before us. less they have their political issue question is, Is it the sense of the Sen- If this is where the Senate will ulti- along with it. ate that debate on the substitute mately make its stand, I am willing to I said, folks, that is ‘‘politics,’’ and I amendment No. 1344 to H.R. 1501, the let the process move forward. mean it, plain and simple. juvenile justice bill, shall be brought However, some may be asking why Since the day the Senate took its to a close? The yeas and nays are re- we even made the attempt to stop this vote, and since the day the House has quired under the rule. The clerk will action. taken its votes, we have watched the call the roll. Sometimes it can be unclear why a political maneuvering down at the The legislative clerk called the roll. Senator cast the vote he or she did. White House and with the Vice Presi- Mr. NICKLES. I announce that the That’s especially true for procedural dent on this issue. Their debate isn’t Senator from Ohio (Mr. VOINOVICH) is votes like the cloture vote we just had. about controlling violence and violent necessarily absent. So let me be clear why I voted the youth. It is about a narrow political The PRESIDING OFFICER (Mr. way I did—against cloture, against cut- agenda of the far left. GRAMS). Are there any other Senators ting off the debate on this measure, It was a campaign kicked off by the in the Chamber desiring to vote? against moving this version of S. 254 to President when he blamed the Little- The yeas and nays resulted—yeas 77, a conference with the House. ton, Colorado killings on—and I quote nays 22, as follows: It’s not because I oppose the juvenile from the speech that was later released [Rollcall Vote No. 224 Leg.] justice bill. Quite the opposite: it’s be- by the White House and printed on its cause I support good juvenile justice YEAS—77 web page—‘‘the huge hunting and sport reform. shooting culture in America.’’ Abraham Feinstein McCain I support the many provisions of this Akaka Fitzgerald McConnell What did the hunting culture and the Ashcroft Frist Mikulski legislation that truly address criminal sport-shooting culture in America have Baucus Gorton Moynihan violence, such as: Making sure violent to do with the killings in Littleton, Bayh Graham Murkowski juveniles are held accountable for their CO? In the mind of this President and Bennett Gregg Murray Biden Hagel Reed criminal actions; providing resources this Vice President, it was politics. It Bingaman Harkin Reid to states and localities to combat juve- was their entry once again into this de- Bond Hatch Robb nile crime; toughening enforcement of bate. Boxer Hollings Roberts the laws already on the books; helping Breaux Inouye Rockefeller That’s right—the President wasn’t Bryan Jeffords Roth communities promote school safety; talking about the cultural crisis that Byrd Johnson Sarbanes helping parents and the media do more distresses all of us on all sides of this Chafee Kennedy Schumer to limit the exposure of children to vi- issue and the breakdown of families, Cleland Kerrey Sessions Cochran Kerry Smith (OR) olence in the entertainment industry. the powerlessness of communities, the Collins Kohl Snowe I support these reforms, and I could alienation of young people, the vio- Conrad Landrieu Specter support the version of juvenile justice lence and brutality promoted by the Daschle Lautenberg Stevens reform passed by the House. DeWine Leahy Thompson entertainment industry. Dodd Levin Thurmond However, the reason I opposed the It was all politics narrowly focused. Domenici Lieberman Torricelli Senate bill, and why I voted against No, what the President chose to blame Dorgan Lincoln Warner cloture just now is because this is not was American hunters and spot shoot- Durbin Lott Wellstone a juvenile justice reform measure. It’s Edwards Lugar Wyden ers. Feingold Mack also a gun control measure. According to the Clinton-Gore ad- Gun control has nothing to do with ministration, those who lawfully exer- NAYS—22 stopping youth violence and crime. cise a right protected by the United Allard Campbell Enzi Gun control of the kind proposed in States Constitution—those people are Brownback Coverdell Gramm Bunning Craig Grams this bill is not just ineffective—it is responsible for the brutal, senseless Burns Crapo Grassley counterproductive because it would cut killings at Columbine High School. S9452 CONGRESSIONAL RECORD — SENATE July 28, 1999 Shame on you, Mr. President. If you justice reform and a bill that serves a a cultural problem in our schools that are one of the tens of thousands of political agenda. we need to address. It was a well- adult volunteers who have helped train I think the Senate’s vote today has thought-out bill. When that bill came Boy Scouts and other young people in made the job of the conference com- to the Senate, I tried to get a vote up marksmanship, in one of the most suc- mittee harder and perhaps impossible. or down on it. Because of procedures by cessful youth sporting programs in his- My choice would have been a clean those who felt the bill should not be tory—according to the President, bill that prioritized law enforcement passed, I could not do it. I was shut out you’re part of the problem. and focused on solving the problem of by the so-called legislative tree, a par- If you take your family on an annual youth violence. liamentary tree, so I could not offer hunting trip, a ‘‘bonding experience’’ That is the kind of bill I hope to see the bill and get a vote on it. for yourself and your kids—according coming out of the conference. That is Next comes gun control, the Senate to the Clinton-Gore administration, the kind of bill I will work for coming provisions. We have a House bill and a you’re part of the problem. out of the conference—the kind of bill Senate bill. The Senate bill imposes If you represented the United States that I could support and I believe that strict limits on gun shows. It requires of America in the Olympic shooting America wants. the sale of trigger locks with guns. It events, the gun control community They don’t want politics in this puts new limits on juvenile gun posses- wants you to know that you’re part of issue. They want safer schools and sion, the kinds of juveniles that Sen- the problem. safer streets and they want to know ator CRAIG spoke about, young teen- If you hunt for food to put on your their children are safe from violent ju- agers who perhaps might go hunting or table for your family, according to the veniles who would otherwise make sports shooting. These are needless re- Clinton and Gore administration, be- these environments unsafe. strictions on law-abiding American cause of Littleton, CO, you are part of I thank my colleague from New citizens, young and old. the problem. Hampshire for yielding. I think it is important to understand But it wasn’t enough to insult mil- I yield the floor. what has happened. This was sub- lions of law-abiding Americans by ac- The PRESIDING OFFICER. The Sen- stituted for this as a result of the vote cusing them of responsibility for what ator from New Hampshire. we just had. This bill will go to con- happened in Littleton. The President Mr. SMITH of New Hampshire. Mr. ference. Someone said quite some time went a step further to suggest that if President, I thank my colleague from ago: If you saw how laws and sausage these law-abiding citizens don’t go Idaho for his remarks. were made, you would probably get along with his gun control agenda and I say for the RECORD that I agree sick and wouldn’t want a part of ei- give up more of their liberty, then they with everything he said. ther. don’t care about the lives of children. Mr. President, we have had a very There is a lot of truth to that. I have I find that unbelievable. But that is unusual set of circumstances this what was implied very clearly by this never had a lot of confidence in those morning. who say: We will clean this up in con- President—the leader of the free world We had a vote on an issue involving accusing those who uphold the law of ference, or we will get a good bill out of gun control, yet we don’t get to speak conference, or let the conferees work being responsible for those who break until after the vote. Knowing what the the law, accusing those who would pas- their will. result is, it does take out a little bit of We will see what kind of will is sionately defend their civil liberties as the steam. worked when this comes back. This is being bad citizens, accusing those who As most of my colleagues know, and gun control, a violation of the second may have a firearm for the sole pur- I think most American people know, I amendment. We voted by 77–22 to put pose of recreation or defending them- have filibustered this bill now for more gun control on the American peo- selves and their families, accusing about a week by asking for this cloture ple. Call it what it is. When this comes these people of not wanting to save vote. As Senator CRAIG said, to simply out of conference, it will have gun con- children’s lives. have dilatory motions between now And since that kickoff back in April, trol. and the time this goes to conference During the Senate’s consideration of what have we seen? makes no sense because the result of We have seen an all-out public rela- S. 254, I was very upset that the gun this bill going to conference has al- tions campaign headed by the White control lobby in this country took ad- ready been decided by the vote of the House against lawful firearm use. vantage of a terrible tragedy. They did We have seen political candidates of Senate. a good job of it. This was a very emo- the left trying to outdo each other on Under this rule, each Senator, myself tional time, a horrible tragedy, and the gun control ideas. It is called have a now being the one on the floor, has an gun control people used it to the hilt gun control idea a week and somehow hour to discuss the reason for their and scared off a lot of people. it may elect you in November of 2000. vote on this issue. I think it is impor- What happened at Littleton was a Maybe this political campaign is tant to discuss it, even though the vote terrible tragedy. People used this on scoring points with the gun control has occurred, because the American the Senate floor and mounted an un- community. But I can tell you the peo- people need to understand what we did. precedented assault on the second ple who I have been hearing from—the I tried in a very few brief minutes, amendment rights of law-abiding people outside the Capital Beltway who thanks to the consideration of the mi- American gun owners. Not one law- really have to deal with youth violence nority leader who was kind enough to abiding American citizen had anything in their communities and in their allow me 3 minutes of his time to do to do with Columbine, not one. Not one schools—are saying gun control misses this prior to 9:45 when we had the vote, law-abiding American citizen, not one the point entirely. to point out what we were about to do. gun owner or juvenile who is a law- They are saying the solution to Apparently not too many people were abiding citizen had anything to do with youth violence is far more complicated listening. I will point out again what Columbine. They were law breakers than adding one more layer to the we did. who did that at Columbine. They cast 40,000 gun control laws—40,000, that is The House passed H.R. 1501 and sent the blame, though, on the law-abiding right—that are already on the books. it here. That is a cultural bill that al- gun owner, while leaving the movie They are saying they need real help lows the display of the Ten Command- moguls and video gamemakers who and real ideas from Washington, DC, ments in schools. It allows individual promote violence to children un- and not a political placebo for the 2000 religious expression. It allows prayer in scathed, with no mention. The problem election. school memorial services. It allows is guns, they said, not the culture. They are saying it is time to stop faith-based groups to compete for Gov- It is interesting that we take prayer pushing political agendas and start ernment juvenile justice grants. A good and values out of the schools. What pushing a law enforcement crime con- bill. comes in? Violence, drugs, condoms. trol agenda. The purpose of that bill was to make Hello, America, wake up. The Senate had a choice today be- a statement about juveniles that per- It was well done; it was well orches- tween a bill that focused on juvenile haps the issue is not guns but, rather, trated. It scared off enough people. It July 28, 1999 CONGRESSIONAL RECORD — SENATE S9453 scared off the 19 or so votes we needed 375 years we had no school shootings, as to organize and participate in stu- to block cloture on this bill. The House not one. Now we have gun control. In dent-led religious activities in public did the right thing; we did the wrong America, we have 40,000 laws, according school. thing. to Senator CRAIG, and now we have Does anyone seriously believe that We need to take a hard, introspective school shootings. Hello. Anybody lis- greater religious freedom in the public look at our Nation’s culture. That bill tening? What is going on here? Is it schools would not improve the cultural did that. This bill does not do that. We guns? If it is, how come we didn’t have environment in these schools? We see video games designed for young school shootings for 375 years when ev- spend more time trying to deny reli- people that glorify violence. I say to erybody had a gun? gion and values in our schools than we the American people taking a few mo- I believe we should take a look at the spend with our own kids. Think about ments to listen, look at those video news media. The news media has a dis- it. If we spent as much time with our games your kids are watching. Take a tressing tendency to engage in sensa- kids, loving our kids, as we do trying look at what they are watching on the tionalism, the mindless pursuit of to deny them these kinds of things, we Internet. Take a look at some of the greater ratings. On April 20 this year might have a better America. But let’s movies they are bringing home from when the children came tumbling out go back and blame guns. That is what Erol’s and watching after you go to of Columbine High School with blood we did here; we just blamed guns. We bed. Parents might want to take a look on their clothes, some children wound- put in gun control and substituted it and see what is going on in their chil- ed and crying, what happened? With for this. Faith-based organizations can com- dren’s lives. microphones in their face, they were pete for Government grants under this They glorify violence. They invite asked: What was it like to witness your bill. Does anyone doubt that involving children to engage in fantasy killings. classmate’s death? Did he say anything faith-based organizations in juvenile They never show the opposite. When as he died? justice would improve our Nation’s ju- somebody is shot in one of the video What they needed when they came venile justice system? These cultural games, they don’t mention the fact out of that high school, my fellow approaches to solving the problem of that the person who was killed may Americans, was a hug. youth violence offer great promise. have a family. They don’t talk about Do you know what would have really This bill offers great promise. This bill that. The only thing shown is the glori- made me feel good? If one of those in offers gun control. This is the coward’s fication of violence. the news media had laid down the way out. This is the ostrich vote. Put We see unconscionably violent mov- microphone and laid down the camera your head in the sand. Blame the gun. ies such as ‘‘The Basketball Diaries’’ in and walked up to one of those kids and Don’t deal with this issue. We wouldn’t which killings bear a striking resem- put his arms around them or her arms want to have to do anything as con- blance to the Littleton massacre. It around them and said, ‘‘I’m sorry. We troversial as perhaps posting the Ten doesn’t mean every kid who watches love you.’’ But, oh, no, we cannot do that. We Commandments in a school. that kind of a movie would do that. Of I was disappointed during the Sen- have to get right in the face with the course it doesn’t. Some kids can handle ate’s consideration of this bill. I was microphone and the camera and sensa- it, but some can’t. Why expose children disappointed, frankly, in some of my tionalize this kind of violence. And to this? conservative colleagues in the Senate, We see music such as that of the so- then we blame guns. some of my pro-gun conservative col- When are we going to wake up, Amer- called Marilyn Manson character that leagues in the Senate. I am dis- ica, before it is too late? This bill ad- glorifies murder, suicide, sodomy. As a appointed. We had a chance to stop dressed this—tried to. You cannot ad- matter of fact, Platinum Records has this. I spent a great deal of time over dress these kinds of things with laws, big sales on those records glorifying the past 2 weeks as we debated S. 254, but you can at least make an attempt. murder, suicide, and sodomy. Our kids arguing privately with these col- You take these things out of the are listening to this in America and we leagues, trying to persuade them to schools and the kids don’t have any blame guns. We blame guns with this hold the line against this onslaught of choice. They can’t pray; they can’t vote. more gun control. We see the marketing of violence in talk about values. If somebody gets Gun shows, do you know what the many forms over the Internet. As I killed and the teachers try to comfort goal is here? It is not instant back- said, every child is not going to go to their kids by saying a prayer, the ground checks. It is the elimination of school and murder his classmates or teacher gets fired. And we take away gun shows—eliminate the shows, don’t his teacher because he watches or plays guns and blame guns. allow any gun shows. After all, punish some video game or listens to violent H.R. 1301 declares that State and the law-abiding American who comes music. Some will be influenced by that local governments have the power to to a gun show, as millions do all across culture. display the Ten Commandments on America every year. Punish them. I had a shotgun next to my bed for as public property. This would allow the That is the easy thing to do. Do not long as I can remember. At 8 or 9 years public schools to post those Ten Com- deal with this. Do not deal with the old, I knew how to use it. I was trained mandments. Does anyone seriously criminal. Punish the people who go to to use it in the proper way. I never argue that the display of the Ten Com- gun shows, the law-abiding American thought about going to school and mandments in a public school wouldn’t citizens. using it on anybody, and neither did help kids at least think a little bit? You say, what if somebody, a bad my classmates who also had shotguns. They do represent the moral founda- person, gets a gun? Bad people are not I remember hearing it said when I grew tion of our entire civilization. Does going to come and get a gun there; up that if you read good books, good anybody have a problem with, ‘‘Thou they can get it easier somewhere else. things might happen. By the same shall not kill?’’ Does anybody have a Even if they do, if they commit a crime token, if a young person watches a bad problem with, ‘‘Thou shalt not steal?’’ with it, we put them in jail and put film or plays an evil video game, bad ‘‘Thou shalt not bear false witness?’’ them away as we do anybody else who things may happen. Why take a ‘‘Honor thy father and mother?’’ Does commits a crime. chance? But it is easier to blame the anybody have a problem with those? Is I am very disappointed about what gun. Blame the gun; blame somebody that going to threaten Western civili- the Senate did with respect to these else. Don’t look at what is going on in zation, to put those up on the wall of gun shows. It seems evident to me, the America. Wake up, America, before it the school? Really? Come on. practical effect of the Lautenberg is too late. H.R. 1501, this bill, declares that the amendment, adopted when Vice Presi- This is the second amendment to the expression of religious faith by indi- dent GORE sat in the chair and proudly Constitution that we just violated. It is vidual persons is protected by the Con- cast the tie-breaking vote: This will not guns that caused this violence. stitution of the United States. This ruin the gun shows, put them out of The first gun came over on a ship provision would allow greater freedom business. That is the aim of the amend- probably in 1607. Most likely somebody for individual students to express their ment, and that is the aim of this legis- had a gun coming into Jamestown. For religious faith, whatever it is, as well lation that we just substituted in order S9454 CONGRESSIONAL RECORD — SENATE July 28, 1999 to send it to conference. Everybody But I don’t want to see any tears; I it? We cannot blame the judges, cannot says we will get it out in conference. don’t want to hear any whining; I don’t blame the prosecutors, cannot blame We will see about that. Don’t hold your want to hear any, ‘‘I’m sorry’’; I don’t the court system. We have to blame breath. want to hear any, ‘‘My gosh, why did I guns; blame the peaceful citizen who I am very concerned about the effects do that? What happened? Where was I has the right to own a gun to protect of this so-called trigger lock amend- when they took the second amendment himself. ment. Even though the amendment ap- rights away? Where was I when they I am proud I voted the way I did pears only to require trigger locks to took the Constitution?’’ I don’t want to against cloture. I am proud I voted for be sold with guns, the legal effect may hear it. It is too late. H.R. 1501 and against S. 254. I am proud well do great damage to the second Great experts have repeatedly shown to stand up for the second amendment amendment rights of law-abiding gun that criminals do not go to gun stores, in the Chamber of the Senate, and I owners because courts may construe complete the necessary forms, and will stand up here again and again, the amendment as creating a new civil leave with legally purchased weapons. year after year, month after month, negligence standard under which gun ‘‘Hello, I’m a criminal. I am going to whatever it takes to make this case be- owners will be seen as having a legal use my gun tonight in an armed rob- cause I know I am right, and I am obligation to use their trigger locks or bery. I would like to purchase it, going to continue to do it. face legal liability if their gun is mis- please. Where do I fill out the forms?’’ When this bill comes out of con- used by some third party. What are we Criminals are going to buy their guns ference, I am going to filibuster it going to create now, a trigger lock in- on the black market or they are going again for as long as I can. I am going spector? ‘‘Knock, knock, knock. Hello, to steal them. I have had people tell me to do everything I can to kill it, what- I’m the Government trigger lock in- flat out: I might as well buy the guns ever I can do. I am only one person. spector. I want to see if you have your on the black market. It is a lot safer to In the movie ‘‘Mr. Smith Goes to trigger lock on your weapon.’’ me. The Government doesn’t know I Washington,’’ another Mr. Smith, Some people say, no, it doesn’t re- have it. Jimmy Stewart, dropped on the floor of quire they put it on their weapon; it That is pretty scary. Gun control has the Senate after several hours, 23 I just requires they buy it. Where is indi- not been shown to reduce crime. Wash- think. I think he even beat STROM vidual and personal accountability and ington, DC, where we are now, has the THURMOND, if I am not mistaken, in the responsibility? If you are dumb enough most crime in all America. The only filibuster. He dropped on the floor of to leave a weapon without a trigger people who own guns in Washington the Senate amongst a pile of news- lock lying around where a kid can are the criminals. They have them. papers. Maybe that is what I have to reach it, then you ought not own the You cannot have one. You are an hon- do. Maybe I will do that. I don’t know. gun. But that is personal responsibility est citizen. But they have them. Crime I know one thing, S. 254 is wrong and and accountability. It is not the Gov- has really gone down dramatically in H.R. 1501 is right. I am going to fight to ernment’s responsibility. It is certainly Washington, hasn’t it? Gun control has preserve, protect, and defend the con- not even workable. But maybe it will really worked here. Gun control at- stitutional right, all of the Constitu- come to that. We have Government bu- tacks a serious problem from the tion and all of the constitutional rights reaucrats who do just about everything wrong angle. Sixty million Americans of Americans, including the right to in America. We might as well have own 200 million firearms. That is a keep and bear arms. Many of us who 400,000 or 500,000 trigger lock inspec- very interesting statistic. Sixty mil- are veterans in the fight to protect the tors, and they can knock on the door, lion Americans own 200 million fire- second amendment know the bold and ‘‘Mr. SMITH, do you have a gun?’’ ‘‘Yes, arms, including 60 million handguns. clear words of the second amendment but I’m not going to give it to you.’’ Yet four-tenths of 1 percent of those by heart. We cannot say them often ‘‘Well, I wanted to see whether you handguns will be used to commit a enough if we are to educate our fellow have a trigger lock on your gun.’’ It crime. So 99.6 percent of all handguns citizens about the unmistakable mean- may come to that. Don’t laugh. are used legally; 99.6 percent, the good ing and intent behind those words of If the law develops such that gun folks; four-tenths of 1 percent, the bad that most besieged provision of the Bill owners have a legal obligation to use guys. We substituted S. 254 for H.R. of Rights. these trigger locks, they may be forced 1501, right here on the floor of the Sen- to put their safety and that of their ate. It is pretty clear: families at risk. It is not unreasonable Some argue the crime problem is the A well regulated Militia, being necessary to imagine a single mother of a small result of too much personal freedom. It to the security of a free State, the right of child, depending on her gun for safety, is not personal freedom that is the the people to keep and bear Arms, shall not be infringed. panic stricken, struggling unsuccess- problem. It is moral decadence. This fully with her trigger lock, at night, bill tries to at least help us deal with Tell me where there is anything in after hearing a burglar in the house. If it. It is moral decadence. It is a cul- that amendment that allows us to do she has no trigger lock, and she has tural, moral problem and it is getting this under the Constitution of the that thing up on a 10-foot shelf, that is worse by the day. United States of America? I stood right her choice. The Government tells her We look, in this body, for any ex- there where the pages are sitting and she has to use a trigger lock—or buy a cuse—guns, whatever—to look the took the oath twice when I came to the trigger lock she doesn’t even need. other way. Maybe we will have a bill Senate to protect and defend the Con- What in the world is happening to tomorrow to ban knives and then base- stitution of the United States, and that this country, to the second amend- ball bats, maybe cars. They kill about is what I am doing now, and that is ment, to the Constitution? It is amaz- 45 million people a year. Maybe we what I will continue to do. ing how we pick some amendments, ought to ban them. There is nothing in those words such as the first amendment, and say It is a revolving door criminal sys- about background checks. There is we must protect that amendment at all tem. That is what the problem is, nothing in there about the people hav- costs, but when it comes to the second moral decadence and a revolving door ing a right to keep and bear certain amendment, no, we can skip that one. criminal justice system that puts the kinds of arms. There is nothing in These are two examples of the grave average murderer on the street in 7 there that says handguns can be kept harm gun control amendments adopted years. That is right. The average mur- or not kept where shotguns can. Noth- by the Senate would do to second derer walks out of prison, if he goes to ing. I sure do not see anything in there amendment rights. When the heat of prison—some like Mr. Simpson never that gives Congress any leeway what- the moment is gone and the passions so go to prison when they should. Yes, soever to infringe second amendment shamelessly stirred up by the gun con- that is right, some like Mr. Simpson rights whenever some group of anti- trol lobby have subsided, many of those never go to prison when they should. gun zealots think what they like to who have supported these amendments But the average murderer in this coun- call the ‘‘public interest’’ requires it. will realize they have done the second try, if he goes to jail, serves 7 years for The public interest is to preserve and amendment serious and lasting harm. murder. But it is the gun’s fault, isn’t protect the Constitution of the United July 28, 1999 CONGRESSIONAL RECORD — SENATE S9455 States of America. That is what the being armed[,] which Americans pos- have saved two people from being public interest is and nothing else. You sess over the people of almost every killed by an individual standing in the trample on the Constitution; you tram- other Nation. . . .’’ middle of a highway with an AK–47 ple on the public interest. Thomas Jefferson, who wrote the weapon, shooting innocent people in Mr. President, how much time do I Declaration of Independence, put it their cars. have remaining? this way. Because of the second amend- Time and time again, the media has The PRESIDING OFFICER. The Sen- ment, Jefferson proclaimed: ‘‘No free asked me the same question about that ator from New Hampshire has 30 min- man shall ever be debarred the use of very incident. The obsessive focus of utes remaining. arms.’’ those questions on gun control dem- Mr. SMITH of New Hampshire. I Another Founding Father, George onstrates how much the media is in the thank the Chair. Mr. President, these Mason of Virginia, upon whose Virginia back pockets of the anti-gun zealots. solemn words that all of us revere in Bill of Rights the Federal Bill of And they are. They are working to- the second amendment could not be Rights was based, explained that the gether. Frankly, they are winning, if more clear. There is no discussion second amendment means that the mi- you want my honest opinion. They won about what those words mean. I am litia shall ‘‘consist now of the whole here today. They won again. Time and fascinated as the days go by, the more people, except a few public officials.’’ time again—again and again and I am in politics, the more I read about The whole people will now have the again—we trample on the Constitution constitutional scholars making uncon- right in the case of tyranny to go to of the United States of America. stitutional arguments. Frankly, I am their homes and pick up their arms and You know what I said to the media? sick of it. The more recognition these protect themselves. That is the purpose We ought to stop worrying about the constitutional scholars get, the more of the second amendment. It is not terrorist’s gun and start worrying unconstitutional their arguments get. about sport shooting. It is not about about tracking him down, trying him, How can anybody read the second hunting. It is about protection, the convicting him, and getting rid of him amendment to the Constitution of the right of a person to protect himself or so he can never do it again. Finally, United States and come up with gun herself from tyranny, from enemies. after several years, he was tracked control? It is just simply not possible Sadly, the modern day enemies of the down. He was convicted. He is now on to do in any rational way. Yet many of second amendment choose to ignore death row. the self-appointed leading lights of what the founders said. I do not think The man who committed those mur- constitutional law continue to try to they chose to ignore it. I think they ders outside the CIA was an alien ter- throw the second amendment into ob- deliberately ignored it. They knew ex- rorist who fled overseas. In thinking livion, to throw it on the trash heap. actly what they were doing. about the right to keep and bar arms in Boy, they are doing a good job. They are trampling on the Constitu- international terms, I find a certain There are 40,000 gun laws already. We tion—it is a design—and the American irony. We live in a time in which near- can pass a few more and stop law-abid- people are going to sit back until it is ly all of the totalitarian communist re- ing Americans from going to gun too late—not if I have anything to do gimes, which kept all of the guns in the shows. Let’s just keep sitting back, about it; not as long as I have a voice; hands of the government and out of the America, keep sitting back on your and as long as I can stand on the Sen- hands of the people they tyrannized, hands—I might use another word if I ate floor I am going to stop it. have collapsed—almost all but not all. were not on the Senate floor—and let it Today they are unrelenting in their Yet their utterly discredited philos- happen. Don’t do anything. Don’t stand attacks on the second amendment, and ophy of gun control still finds a great up. they have a big advantage. They have a number of sympathizers and supporters You need to start voting, my fellow huge advantage because they have the in the world’s oldest democracy. Americans. You need to start looking major news media solidly on their side. Two of my close friends escaped Cas- at who is doing this to you and to the I am not much on polls, but it would tro’s Cuba in the late 1950s, early 1960s. Constitution of the United States of be interesting to take a little poll to The first thing Castro did when he took America, and you need to start throw- find out how many of the news media over was go door to door, house to ing those people out of here. That is pack a little sidearm somewhere to house, literally, confiscating every what you need to do. I do not care with protect themselves in their homes. Do weapon he could get. Because once he what party they are. It is irrelevant. you want to take any bets? did that, his people were defenseless, These are the same legal scholars More than 6 years ago, I was driving and he knew it. who find a constitutional right to abor- to work, coming in here to Wash- It is interesting: Tyrannical govern- tion, to solicitation, to contributions, ington. I did not have a gun on my per- ments taking our guns; Members of the to expression, to travel, to privacy, and son because I am traveling in Wash- Senate and the media taking our guns. to a wall of separation between church ington, DC, where by law I am not al- A bitter irony, isn’t it? and state, none of which are mentioned lowed to have one. I did not think it Seen in the light of the second anywhere in the text of that hallowed would look good for a Senator to break amendment’s wording, and the mean- document. Nowhere. But, oh, they find the law. I do not like that law. I wit- ing of that provision of the Constitu- it. Abortion, where is that in the Con- nessed two people murdered in front of tion, as illuminated by the comments stitution? my eyes before the CIA. of our Nation’s founders, it is clear to I do not know if the scholars have When I got back to Washington, the me that the gun control amendments read what our founders have said, but press found out I had witnessed the to S. 254 that were adopted by the Sen- somehow I think it is reasonable to ac- murder, and the first question was not: ate are a serious attack on the second cept the premise that those who wrote Is your son OK? I just dropped him off amendment rights of all Americans. the Constitution might have known at school 2 minutes before down the The cloture vote we just took bring- what they were talking about; maybe road. Not: How is your son? Is he OK? ing debate on this bill to a close— they knew what they intended; maybe Is he handling it all right? Not: How which is what cloture is—shows where they knew what they intended since are you? Are you OK? No. That was not the votes are in the Senate. The Senate they wrote the document. the first question. That was not the has sided with gun control, and they It is interesting to read some of their second, either. went against the cultural approach. words on the second amendment. I am The first question was: Have you now You are not going to cut down a big not sure the scholars have read them. changed your position on gun control? tree by snipping the leaves off of it. We If they have, they are not listening. I I witnessed a murder 20 minutes, 30 are not going to solve this problem have read them. Let me quote a few. minutes before. That was the first with gun control. We are going to solve The father of the Constitution, question: Well, Senator, you’re a con- this problem when we understand here James Madison, made absolutely clear servative Republican, pro-gun. Have in America that we have some severe what the second amendment means. you now changed your position on the cultural and moral problems. Mr. Madison declared that the Con- second amendment? I said: No, I have We need to put values back in stitution preserves ‘‘the advantage of not. I wish I had had a gun. I might schools. We need to put God back in S9456 CONGRESSIONAL RECORD — SENATE July 28, 1999 schools. We need to allow kids to have abort your brothers and your sisters— precise, that provide some regulation the right to pray and the right to talk 35 million of them since 1973. We just of firearms in this country. They are about these things with their teachers can’t continue to do this. It will be not sweeping, they are actually rather so their teachers do not have to worry business as usual. We will kill another small, yet they have become the focus about being fired for giving comfort. 30 million over the next 25 years. It of debate and stopped a good bill from A teacher in, I believe, New York was won’t stop. moving further. The issue of the bill fired. When her children were agonizing It is not going to stop, and this isn’t has remained essentially in legislative over the fact that one of their class- going to stop, until the American peo- purgatory, and the will of the Congress mates had died, and she offered to have ple understand fully what is happening. and the American people has so far them say a little prayer to comfort When they do, hopefully, they are been denied. them, she was fired. The same people going to change the Government and I will speak for a moment about the who advocated her firing support gun get us back to the Constitution of the few so-called gun pieces that are in this control. United States. That is what we swore bill. The first is a bill by Senator I sought an opportunity to offer an to uphold, that is what we took the ASHCROFT in the Senate which essen- amendment. I wanted to have a vote on oath to defend, and that is what we tially says that juveniles can’t possess H.R. 1501. I was not allowed to get it. ought to do: Defend it and support it. or buy an assault weapon, assault All I wanted was a vote. I wanted the Anything less than that, I don’t care if weapons which were created for mili- House bill. I wanted the Senate to be it is the 2nd amendment, the 4th tary use to kill large numbers of people on record as to whether or not they amendment, the 16th amendment, the in close combat—that is the purpose of supported this alternative, H.R. 1501, or 22nd amendment, or the body of the these weapons, clearly. They were not this alternative, S. 254. Constitution itself, we should defend it made for civilian defensive purposes. It I stand right here at the desk of Dan- all, because that is what we are here is a no-brainer to say that juveniles iel Webster. Webster was in many de- for. shouldn’t be able to buy them or pos- bates at this desk in the Old Senate It is with great sadness and regret sess them. Chamber. He was born in New Hamp- that I have to say to the American peo- Secondly, trigger locks should be put shire and represented New Hampshire ple, you lost today. The second amend- on weapons sold to the American pub- in the Congress; and in a moment, I ment today took another hit, and it lic. We know they can be. We know guess, when he wasn’t thinking prop- will continue to take more until we fi- they are not costly, and we know they erly he moved to Massachusetts, and nally realize that enough is enough and will save lives in instances such as the he represented Massachusetts in the we are going to change the people who one that happened a few weeks ago, Senate. But this desk now for evermore do this to us time and time again. I when a youngster 8 years old picked up belongs to the senior Senator from New hope it happens before it is too late be- a gun, playing a war game with a 7- Hampshire. cause once we lose the Constitution year-old, and shot the 7-year-old, not I can imagine what Webster would and respect for it, we lose America. knowing the gun was loaded. Again, a think and say in the great eloquence I had a citizen tell me—I will not no-brainer. Why not sell a gun with a that he was able to deliver so many mention the name, for obvious rea- trigger lock if it is going to save inno- times on the floor of the Senate at this sons—just recently, about a week ago, cent lives? desk. I think about it often. But I can that he talked to a high-ranking Mem- imagine what he might have thought Thirdly, we would close certain gun ber in the House of Representatives. I show loopholes. Does anyone in Amer- had he been here in this debate this will leave it at that. That high-ranking morning, after a vote, with a bunch of ica really believe that a juvenile Member said, in a discussion with that should be able to go to a gun show and, rules that nobody put in the Constitu- individual: ‘‘The Constitution is noth- tion, with us getting a chance to say unidentified, surreptitiously, buy a gun ing but a piece of paper.’’ and not even have a background check? why it was a bad vote. I wonder what If that is true, there is not much I don’t think so. Webster would have said. Those are the hope. The last hope for America is the rules. American people. It is not the Senate; Finally, I authored a piece of legisla- I wonder also what he would have it is not the House; it is not the White tion which to me was another no- said if he knew we took away part of House; it is the American people. brainer. We have in prior legislation the second amendment rights of law- Mr. President, I yield back the re- prohibited American manufacturers abiding American citizens—probably mainder of my time. from making the big banana clips, the same thing he would have said if Mrs. FEINSTEIN addressed the large ammunition-feeding devices, we tried to take the first amendment Chair. some of them as large as 250 rounds, rights away or any other rights away The PRESIDING OFFICER (Mr. which are used in the so-called griev- under the Constitution. He would be HUTCHINSON). The Senator from Cali- ance killings, 9 of which have taken appalled. fornia. place in high schools all across this I am devastated by this vote person- Mrs. FEINSTEIN. Mr. President, I great country in recent years. ally because I have traveled all over rise to claim time to speak on this bill. That is the law of the land. You can’t America these past 2 years, and I know The PRESIDING OFFICER. The Sen- make them domestically. You can’t what is in the hearts of most of the ator may speak up to 1 hour. sell those that are made domestically, American people out there because I Mrs. FEINSTEIN. I thank the Chair. and you can’t possess them, if they have talked to them one-on-one, lit- Mr. President, I rise to offer my sup- were made following the assault weap- erally one-on-one, from California to port to both the majority and the mi- ons legislation which became part of Maine, to Florida, to Alabama. You nority leaders in their ongoing efforts the crime bill in 1994. name it, I have probably been in the to get the juvenile justice bill to con- There is a loophole. The loophole is State. And they are disgusted with ference. I believe it is about time. I was that they can be imported to this coun- what we do here. I am a Member of this an original cosponsor of the juvenile try. Last year alone, from almost 20 body. I am not criticizing colleagues, justice bill and helped write the gang different countries, 11.4 million large- but they get so sick and tired of it, abatement provisions of that bill. capacity, ammunition-feeding devices, watching the Constitution get tram- These provisions are really designed to over 50,000 of them of more than 250 pled on, watching their taxes go up, provide a helping Federal hand to rounds, came into this country. The watching their rights being taken State and local governments for those President couldn’t stop it by executive away, watching 35 million of their fel- gangs, criminal gangs, who are now order; we had to legislate; and, in fact, low citizens aborted and murdered. crossing State lines and illegally con- we did. Twenty Republicans voted for When we talk about culture, what do ducting criminal activities in various this. We had 59 votes in the Senate. we tell the shooters in Columbine and States all across this great country. The chairman of the House Judiciary the kids who do these terrible things? Both Houses of Congress passed this Committee moved it as an amendment We say, go to school today, be good legislation weeks ago. There are a few on the floor, which was passed by unan- kids, and while you are gone, we will commonsense measures, targeted and imous consent in the House. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9457 I will talk more about that in a mo- ent on media than I was when I was portunity to make my case before the ment because something rather das- raised. In my younger days, there vote took place, but there wasn’t time. tardly has happened to it. wasn’t even television, believe it or In the end, I had little choice, and I At Columbine High School earlier not. Today, media is surrounded by a picked up the telephone and called the this year, 13 innocent children died culture of violence—even video games. Speaker of the House of Representa- from gunshot wounds. We were all hor- So youngsters are much more exposed tives, who was most gracious. He took rified. Since that time, dozens, if not to violence today than I was when I my call. He said he did not want to kill hundreds, of other children across this was growing up in this country. the clip ban. He did not believe the Nation have also died from gunshot Third, the Nation is awash in guns. House of Representatives—the major- wounds. Congress has done nothing to These three things make a very com- ity—wanted to kill the clip ban, and he solve the problem, no measures to try bustible mix, and we need to deal with would support its reinstitution. I then to prevent this from happening in the it. called the chairman of the Judiciary future. But still we wait and we do nothing. Committee, the very distinguished On August 16, the children of Col- The delays have come in many forms, Henry Hyde of Illinois, and he had umbine will return to the very school as I have said—political maneuvering, made the clip ban amendment on the that witnessed one of the worst inci- parliamentary tactics, and others. Just floor, which passed unanimously in dents of gun violence this Nation has recently, in a virtually unprecedented separate legislation. He said he was ever seen. When they return, they are move, anti-gun control forces in the supportive of the clip ban. He said he going to be asking themselves, their House of Representatives raised a last- would move to put it back in con- parents, their teachers, and even us a minute ‘‘blue slip’’ challenge to the ference and that he believed a con- lot of questions: amendment I just spoke about, which ference committee that he would ap- What has been done to make our would stop the importation of these big point on the House side would support school safer? clips—over 11 million of them last its reinstitution into the bill. Is it harder for kids to get guns year. Put plainly, we were sideswiped, and today? It is my understanding this may have we were given no time to recover. But What has Congress done to help us? been the first time in history that such make no mistake, the juvenile justice And who is really trying to make a a challenge was raised to an amend- bill is not a revenue bill, and this chal- difference? ment under Title 18, the criminal code. lenge, I believe, was simply an attempt Many of those same children came to further delay the will of the Amer- here from Littleton this month, and The first time in history—but that didn’t stop the NRA or its supporters ican people. they asked us those same questions. I I want to explain why I don’t believe believe their questions went largely in this Congress. The clear goal of this amendment, the clip import ban is a revenue meas- unanswered. ure, as it is meant by the Constitution, The children received assurances and of the overwhelming majority of Members in both Houses of Congress despite what the House Parliamen- from leadership on both sides of the tarian has said. I want to put my views who voted for it, is to keep those for- aisle that Congress is working hard to on the record in the hope that this type eign-made, high-capacity ammunition reduce or eliminate future school of cynical maneuver won’t happen clips off our streets and out of the shootings and that Members of Con- again in the future. gress sympathized with them and hands of children and criminals. That I am not a constitutional scholar, would do anything they could to help. is the intent. You can’t use them for but to me, this is simple common But as one child from Littleton put it hunting. They are not good for defen- sense. In my view, the mere fact that a bluntly: ‘‘It is one thing for them to sive purposes. They are offensive in small part of a very large bill may inci- say they sympathize with our pain; it their use. dentally effect some revenue doesn’t is quite another to look down a gun For most people, stopping these big make the bill a revenue bill. The Con- barrel and think that maybe you are clips from flowing into our country and stitution states that all bills for rais- going to die.’’ into the hands of children and crimi- ing revenue shall originate in the This was from a girl just 17 years old, nals is simply common sense. But not House. This has been interpreted to but a girl forced to grow up very quick- for the NRA. They have tried to kill mean all bills affecting revenue, I ly after the events of this past year. this measure for years. They supported guess, because although the clip ban This is what the issue is all about—the the loophole in the first place. This does not raise revenue, it does affect boys and girls out there who fear for most recent attempt, the blue slip revenue in a small way by causing the their lives every day because of gun vi- challenge, popped up at the last Treasury to lose the proceeds from a olence. minute—after the amendment had 4.2-percent tariff on ammunition clips I have asked fourth graders in Cali- passed the Senate, after it had passed that are used in certain types of fire- fornia schools what is their greatest the House unanimously, and after we arms—I believe, handguns. fear. Do you know what it is? Getting had already waited for weeks for a con- I don’t believe the intent of this con- shot on the way to school. ference to start the juvenile justice stitutional provision was to prevent Yet still we wait and we do nothing. bill. the Senate from ever passing a bill We spent more than a week in this Essentially, the challenge raised to that somehow affects revenue. After body debating and voting on dozens of the bill involves the constitutional pre- all, almost everything we do, in some provisions to stem the tide of youth vi- rogatives of the House of Representa- way, affects revenue. We constantly olence in this country, and—as much tives to originate all revenue bills. pass bills establishing or eliminating as some would still refuse to accept Several Members of the House argue fees. We put new requirements on the it—to curb the flood of guns reaching that because the importation of large- executive branch that will clearly lead criminals and children. capacity, ammunition-feeding devices to increased costs. We establish pro- This debate isn’t all about just con- creates some revenue for the Treasury, grams that will bring extra money to trolling guns. I think this debate really the prohibition of such importation the Treasury in ways many people find has three pertinent parts to it: One, would cost us money, and thus the en- hard to imagine. Our Founding Fathers improving parenting. Parents need to tire juvenile justice bill becomes a rev- wanted the House to originate legisla- spend more time with their children. enue bill. Because no similar measure tion that raises taxes, and that I under- They need to set limits and they need was in the House bill, it was pro- stand and concur with. But I don’t be- to see that they are observed. They claimed that the Senate had illegally lieve they meant for the House to need to spend a lot of time with the originated a revenue bill. After little originate every bill in Congress, which young people. This has become less and debate and much misinformation, the would be the logical extension of the less in a world that requires two par- House voted to send the juvenile jus- arguments made during this very short ents to work. That is one thing—better tice bill back to the Senate so that we debate. parenting. could remove the clip provision. The juvenile justice bill was clearly There is a second thing. Youngsters I don’t believe such action was war- not a bill for raising revenue, and nei- left alone are more often more depend- ranted, and I would have liked an op- ther was the clip ban amendment S9458 CONGRESSIONAL RECORD — SENATE July 28, 1999 itself. The juvenile justice bill was a mouths are, or will they continue to We will then be in position to have bill to stop crime. The clip ban was an use unprecedented parliamentary ma- the Senate request the long-delayed amendment to eliminate large-capac- neuvering to avoid the issue and give conference and appoint its conferees. ity, ammunition-feeding devices from the NRA its very own Christmas in One week ago, I took the extraor- our streets. Any revenue affect was in- July? dinary step of propounding a unani- cidental, and any claim to the contrary I, for one, certainly hope that the mous consent request to move the Sen- is simply mistaken. American people win out, and I thank ate to a House-Senate conference. I In fact, the revenue effect of this bill the majority leader for getting this talked to the Majority Leader and the was so incidental that nobody even re- process moving. Chairman of the Judiciary Committee alized that tariffs would be lost until a I also would like to extend my in advance of making the unanimous few short weeks ago. Not when the thanks to the Speaker of the House of consent request. I noted the history of amendment came to the Senate floor Representatives and the chairman of this measure and the need to move to and passed. Not when the amendment the Judiciary Committee for their sup- conference expeditiously if we are to came to the House floor and passed. port. Chairman HYDE was very sup- have these programs in place before Not during the days and weeks that the portive of the assault weapons legisla- school resumes in the fall in the course juvenile justice bills sat on the cal- tion, which was moved as an amend- of my colloquy with the Majority Lead- endar. ment to the crime bill in 1994, and his er last week. Only when the pressure was finally integrity has remained strong and un- Two weeks ago, Republican leaders of getting too great—only when the Sen- challenged in that regard. the House and Senate were talking ate Majority leader and the House That is the one confidence that I about appointing conferees by the end Speaker promised conferees that have that this clip ban has a chance to of that week. Instead, they took no ac- week—only then did this issue come up fly once again. That rests on the integ- tion to move us toward a House-Senate for the first time, at the very last rity of the chairman of the Judiciary conference but, instead, were moving minute, before a rushed vote. Committee, which I believe is unblem- us away from one. By propounding the Mr. President, in at least two Su- ished, and also on the Speaker of the unanimous consent last week, I was preme Court cases—U.S. versus Munoz House of Representatives, both of trying on behalf of congressional in 1990 and another as far back as 1897— whom have given me their firm assur- Democrats, to break the logjam. The the Court has held that ‘‘revenue bills ances. unanimous consent would have cured I thank the Chair. I yield the floor. are those that levy taxes in the strict Mr. LEAHY. Mr. President, today we the procedural technicality and would sense of the word, and are not bills for have another opportunity to proceed to have resulted in the Senate requesting other purposes which may incidentally conference on the Hatch-Leahy juve- a conference and appointing conferees create revenue.’’ nile justice bill. Or today we can be de- without further delay. Clearly, Mr. President, the juvenile layed, again, by those who prefer no ac- While I regret that Republican objec- justice bill is not a bill that levies tion and no conference to moving for- tion was made to my request last taxes ‘‘in the strict sense of the word,’’ ward on the issues of juvenile violence Wednesday, I thank the majority lead- but rather it is precisely the type of and crime. er for the steps he is taking. Senate bill the Supreme Court agrees is not a I came to the floor this Monday and Democrats have been ready to go to revenue bill—one that is, and I quote it last Wednesday to demonstrate the se- conference. Unfortunately, objection again, ‘‘for other purposes which may riousness with which Senate Demo- from the other side of the aisle has ex- incidentally’’ affect revenue. crats take the matters included in S. tended the normal process from lit- Unfortunately, the House of Rep- 254, the Hatch-Leahy juvenile justice erally seconds into days and possibly resentatives never had a chance to re- bill. weeks before we can conference this view those Court cases, because this On Monday the majority leader was important matter. issue came up so quickly. able to vitiate the cloture vote that Today, the Senate takes the second In the end, whether or not a Senate had been scheduled and proceed to take step outlined in my unanimous re- bill is a revenue bill boils down to the up the House juvenile justice bill, H.R. quest, moving toward substituting the opinion of a majority of House Mem- 1501. He then offered amendment num- Senate bill for the text sent to us by bers, and those Members have spoken ber 1344 to insert the text of S. 254, the the House. Senators can cooperate in by returning the juvenile justice bill to Hatch-Leahy juvenile justice bill that taking the additional steps outlined in us for correction. But I firmly believe passed the Senate after two weeks of my consent request to get to a con- that if the House had been given an op- open debate and after significant im- ference and the Senate could proceed portunity to study the facts and review provements on May 20, by a strong bi- to appoint its conferees and request a the precedent, the outcome would have partisan vote of 73–25. In so doing, he conference without further delay, even been different. Instead, the issue was struck Title VII of the Senate bill, today. rushed, the debate cut off, and the out- which contained the amendment on the Alternatively, Senators can exercise come predetermined. import ban for high capacity ammuni- their procedural rights to obstruct I can only hope that we have now tion clips. each step of the way and require a se- overcome the remaining hurdles and It was this provision that the House ries of cloture petitions and votes. I we can quickly move to conference on used to justify its decision to return S. hope that in the interests of school these bills, because we are running out 254 to the Senate on the ground that it safety and enacting the many worth- of time. contains what they consider a ‘‘rev- while programs in the Hatch-Leahy ju- With fewer than 8 legislative days enue provision’’ that did not originate venile justice bill, they will begin to left before the children of Columbine in the House. This, too, is consistent cooperate. The delay is costing us valu- High go back to school, the future of with the unanimous consent request able time to get this juvenile justice this bill rests squarely with the Repub- that I first propounded last Wednesday legislation enacted before school re- lican leadership in both the House and and that the Majority Leader sought sumes this fall. Senate. They have said they want to last Thursday. I spoke to the Senate before the July make progress with our gun laws, and I trust that once we obtain cloture on 4th recess about the need to press for- they now have it within their power to substituting the Senate bill for the ward without delay on this bill. I re- do so. House text, which is standard practice gret that it is beginning to look like I I am encouraged that it now appears before seeking a conference, that the will be repeating that speech again as that the logjam has been broken, but Majority Leader will move to instruct we approach the August recess and the inventive and imaginative delays the conferees to reinsert the language maybe even into September. we have faced so far leave me wary of that has been omitted from the Senate I have contrasted the inaction on the future shenanigans. text to cure the technical objection of juvenile justice bill with the swift The question is, Will those who claim the House. That, too, would be con- movement on providing special legal to support reasonable gun control fi- sistent with the unanimous consents protections to certain business inter- nally put their money where their previously sought. ests. In just a few months, big business July 28, 1999 CONGRESSIONAL RECORD — SENATE S9459 successfully lobbied for the passage of which contains different cultural re- States upgrade juvenile felony records legislation to protect themselves form proposals, less spending, and no and provide school officials access to against any accountability for actions gun control provisions. In fact, the such juvenile felony records in appro- or losses their products may cause to House defeated a separate gun control priate circumstances. In addition, S. consumers. This week the Senate is bill. 254 provides more than $500 million an- moving rather briskly on corporate We must do our best to reconcile nually to the States for prevention pro- welfare and other proposals. these bills. In the end, I hope and trust grams, some of which are specifically Some on the other side of the aisle that this conference committee will targeted toward gangs in schools, and are dragging their feet and now ac- produce a vehicle that the House, the it extends the Violent Crime Reduction tively obstructing the House and Sen- Senate, and the President can support. Trust Fund through 2005 to ensure ade- ate from moving to appoint conferees If, however, some in positions of lead- quate funding of administration of jus- on the juvenile justice bill that can ership and responsibility are unwilling tice programs. make a difference in the lives of our to search for common ground and are In closing, I hope that we can proceed children and families. New programs content to simply politicize this issue, to the appointment of conferees. This and protections for school children the change to do something meaningful will give us the opportunity to accom- could be in place when school resumes for our Nation’s children may slip plish a great deal over the August re- this fall. The Hatch-Leahy juvenile jus- through our hands. I hope that does not cess, and I believe that it will allow us tice bill is a firm and significant step happen and I hope that we can come to- to approve a conference report the in the right direction. The passage of gether for the sake of our children. week after Labor Day. It would be fit- this bill shows that when this body I want to say yet again that this is ting for Congress to wrap up this his- rolls up its sleeves and gets to work, one of the most important bills that toric juvenile crime legislation when we can make significant progress. But Congress will consider this year. The America’s children are returning to school from the summer recess. that progress will amount to naught if Judiciary Committee has worked on ju- Mr. LOTT. Mr. President, I ask unan- venile crime legislation for more than the House and Senate do not con- imous consent that the pending amend- two years. The committee marked up ference and proceed to final passage on ment be agreed to, the remaining the predecessor to S. 254 for nearly two a good bill. amendments be withdrawn, the bill be Every parent, teacher and student in months last Congress. And as you are advanced to third reading and passage this country is concerned this summer aware, the Senate spend 2 full weeks occur, all without intervening action about school violence over the last two this spring debating S. 254. or debate. years and worried about the situation In 1997, juveniles accounted for near- I further ask consent that the Senate they will confront this fall. Each one of ly one-fifth of all criminal arrests in insist on its amendment, request a con- us wants to do something to stop this the United States. Juveniles com- ference with the House, the conferees violence. There is no single cause and mitted 13.5 percent of all murders, be instructed to include the above de- no single legislative solution that will more than 17 percent of all rapes, near- scribed amendment No. 343 in the con- cure the ill of youth violence in our ly 30 percent of all robberies, and 50 ference report, and the Chair be au- schools or in our streets. But we have percent of all arsons. In particular, thorized to appoint conferees on the an opportunity before us to do our schools are becoming more and more part of the Senate. part. It is unfortunate that the Senate dangerous. Fifteen percent of students The PRESIDING OFFICER. Without is not moving full speed ahead to seize have reported being victimized at objection, it is so ordered. this opportunity to act on balanced, ef- school. Additionally, more than half of The Amendment (No. 1344) was fective juvenile justice legislation. the Nation’s public schools have re- agreed to. I want to be assured that after the ported that a crime had been com- The Amendment (Nos. 1345, 1346, 1347, hard work we all put into crafting a mitted on the premises. and 1348) were withdrawn. good juvenile justice bill, that we can Sadly, the killings at Columbine The Amendment was ordered to be go to a House-Senate conference that is High School last Spring are not an iso- engrossed and the bill to be read a fair, full, and productive. We have lated event. Similar shootings have oc- third time. worked too hard in the Senate for a curred in recent years at schools in The bill (H.R. 1501), as amended, was strong bipartisan juvenile justice bill Pearl, Mississippi, which left two dead, read the third time and passed. to simply shrug our shoulders when a West Paducah, Kentucky, which left (The text of the amendment No. 1344 ECORD of Monday, narrow minority in the Senate would three dead, Jonesboro, Arkansas, which was printed in the R July 26, 1999.) rather we do nothing. I urge all Sen- left five dead, Edinboro, Pennsylvania, The Presiding Officer (Mr. HUTCH- ators to work to make today the day which left one dead, and Springfield, INSON) appointed Mr. HATCH, Mr. THUR- that we finally can request the overdue Oregon, which left two dead. MOND, Mr. SESSIONS, Mr. LEAHY, and House-Senate conference on the Hatch- S. 254 provides an infusion of funds to Mr. KENNEDY conferees on the part of Leahy juvenile justice bill. state and local authorities to combat juvenile crime and youth violence. the Senate. Mr. HATCH. Mr. President, I hope Mr. LOTT. Before I go to the next While juvenile crime is largely a state and expect that cloture will be invoked unanimous consent request, I again ex- and local issue, the federal government shortly. It is my understanding that we press my appreciation for the patience will then proceed to the appointment can play a valuable role in assisting and for the cooperation of Senator the States fight juvenile crime and vio- of conferees for the juvenile crime bill, SMITH in working through this process. which is something I have been work- lence through flexible block grants. S. Personally, I believe very strongly ing on with the majority leader for 254 provides $1 billion a year to the that we need to have a good juvenile some time. I commend the leader for States to fight juvenile crime and pre- justice bill, which includes a lot of very his commitment to this bill, and I vent juvenile delinquency. Specifically, important provisions with regard to thank my colleague from New Hamp- S. 254 includes a $450 million juvenile how we try juveniles who commit shire for allowing the Senate to work accountability incentive block grant to crime, how we incarcerate them, how its will. the States. States can use this grant to we deal with school security, including I appreciate the arguments my col- implement graduated sentencing sanc- metal detectors. It also has programs leagues have made and agree with tions; build detention facilities for ju- included for alcohol and drug abuse, much of what they said. But, in the venile offenders; drug test juvenile of- and it has some values provisions in it. end, the Senate and House have passed fenders upon arrest; and require juve- The House has passed a good bill different juvenile crime bills, and it is nile offenders to complete school or vo- which did not include the gun provi- a conference committee’s task to rec- cational training, among other re- sions. I hope this will be a juvenile jus- oncile those differences. It will be a dif- forms. S. 254 also includes the ‘‘juve- tice bill when it comes back from con- ficult challenge since the Senate has nile Brady’’ provision, which prohibits ference. an obligation to advocate for its posi- the possession of a firearm by persons I do think the right thing to do is to tion. Yet—at the same time—we must who commit a violent felony as a juve- go to conference. I appreciate coopera- recognize that the House passed a bill nile and $75 million annually to help tion in making that happen. S9460 CONGRESSIONAL RECORD — SENATE July 28, 1999 DEPARTMENT OF DEFENSE deserves the windfall. It is a question Robert and Diane are two single APPROPRIATIONS, 2000 any parent or child can answer. Amer- Americans who have fallen in love and The PRESIDING OFFICER. Under ican families, those who created the want to marry. They are not consid- the order of the Senate of June 8, 1999, wealth in the first place, those who ered wealthy. In fact, Robert is a hard- the Senate, having received H.R. 2561, need their precious resources to meet working foreman at an auto factory. future basic needs at home, are rightly will proceed to the bill. All after the Susan, his fiancee, is an experienced entitled to the revenues they have enacting clause is stricken and the text nurse. Each makes roughly $50,000 a earned, revenues Washington did not of S. 1122 is inserted. H.R. 2561 is read year. Now, under current law—when plan for to meet the expense of govern- a third time and passed. The Senate in- the file their separate tax returns— ment, from which Washington had sists on its amendment, and requests a they each take a personal exemption budgeted. conference with the House, and the and the standard deduction, giving Now, as the child returning change them a taxable income of $43,000. After Chair appoints Mr. STEVENS, Mr. COCH- for the $20, we must hand back the RAN, Mr. SPECTER, Mr. DOMENICI, Mr. applying the tax rates for singles, they money. We must do it in a broad-based each owe tax of about $8,745. BOND, Mr. MCCONNELL, Mr. SHELBY, Mr. way that is fair to those who provided GREGG, Mrs. HUTCHISON, Mr. INOUYE, the funds to Washington in the first If, however, Robert and Diane follow Mr. HOLLINGS, Mr. BYRD, Mr. LEAHY, place. We must do it through broad- their hearts—get married and start a Mr. LAUTENBERG, Mr. HARKIN, Mr. DOR- based tax relief that helps individuals family—they realize that their total GAN, and Mr. DURBIN conferees on the and families at all income levels meet combined income would be $100,000. part of the Senate. real needs. Should they marry, they would no f The broad-based tax relief plan that longer be considered middle-class indi- passed out of the Finance Committee viduals, but many would regard them TAXPAYER REFUND ACT OF 1999 with bipartisan support will do just as a wealthy family, and under current Mr. LOTT. I ask unanimous consent that. It will benefit nearly every work- law their combined income would be the Senate begin consideration of the ing American. It will help restore eq- reduced by their two personal exemp- reconciliation bill, which is the Tax uity to the Tax Code and provide tions and by the standard deduction for Relief Act, and that the first 3 hours of American families with the resources married couples. debate be equally divided in the usual they need to meet pressing concerns. It And here is where they would hit form for purposes of opening state- will help individuals and families save their first marriage penalty problem, ments only. for self-reliance and retirement. It will discovering that their new standard de- The PRESIDING OFFICER. The help parents prepare for educational duction is significantly less than the clerk will report the bill by title. costs. It will give the self-employed combination of the two standard de- The legislative assistant read as fol- and underinsured the boost they need ductions they receive as singles. lows: to pay for health insurance. It will But the marriage penalty does not A bill (S. 1429) to provide for reconciliation begin to restore fairness to the Tax end there. In fact, it gets worse. With pursuant to section 104 of the concurrent res- Code by eliminating the marriage tax their combined income, Robert and olution on the budget for fiscal year 2000. penalty. Diane—now considered by many to be Let me state exactly how the plan There being no objection, the Senate wealthy—would have a taxable income works and why it has received bipar- proceeded to consider the bill. of $87,400. This is where they would hit tisan support. This tax cut package Mr. ROTH. Mr. President, I yield my- their second marriage penalty problem. self 30 minutes. will provide broad relief by reducing The lowest tax rate bracket for mar- Mr. President, I don’t think there is the 15-percent tax bracket that serves ried couples is less than twice as wide any parent who hasn’t had the experi- as the baseline for all taxpayers to 14 as the lowest tax rate bracket for sin- ence of sending a child into a store percent. In other words, no matter gles. In other words, more of their in- with a $20 bill to buy a carton of milk, which tax bracket a family may be in, come would now be taxable at higher a loaf of bread, or perhaps a dozen eggs, by cutting the 15-percent bracket, ev- rates. The result would be a total tax and the child returns with the few es- eryone will benefit as they will pay 14 bill of $18,967, almost $1,500 more than sentials. In a demonstration of matu- percent on their first portion of taxable they would have paid as singles. That rity and responsibility, the child re- income. At the same time, this plan ex- steep increase would come at a time turns the change to his or her parent. pands the 14 percent bracket, dropping when they could least afford it, a time There is no question who the change millions of Americans who are now when just starting out as a married belongs to. After all, the parent earned paying taxes at 28 percent down to the couple they would be looking to buy a the money; it is needed to support the lower bracket. For a middle-income family of four, home, raise a family, and save for edu- family; the family will certainly have these two changes will mean a tax sav- cation. important uses for it later. The child ings of over $450 a year. And these pro- understands this. So does the parent. The legislation we introduce today— visions have already found bipartisan Most often, the change is returned to this broad-based tax relief—completely support. the household budget to take care of eliminates the marriage penalty for To restore equity to the Tax Code, Robert and Diane. The Senate Finance other important needs. this plan targets another bipartisan ob- Washington needs to demonstrate the Committee bill will allow Robert and jective by eliminating the marriage Diane to file a joint return, but to cal- same responsibility when it comes to tax penalty. For too long, husbands determining what to do with the culate their tax liability as if they had and wives who have worked and paid remained single. They would each get change that is left over from running taxes have been penalized by their dual the government. There are surplus rev- the benefit of the more generous stand- incomes. I have heard of some couples ard deduction and of the more generous enues in the Treasury. As with a child who have actually chosen not to marry rate brackets. Under this new ap- emerging from the grocery store, there because of the tax penalties their mar- proach, they would pay a total tax of is change—big change—left over after riage would incur. Congress has met the necessities of This plan will fix that by giving $17,490 which is the combination of running government. working married couples the option of what they had each paid before. This In trying to balance the budget in filing combined returns, using separate saves them almost $1,500. 1997, Congress miscalculated the reve- schedules to take advantage of the sin- But in restoring equity to the tax nues that would be generated by the gle filer tax rates and the single filer code, we do not stop with the marriage economy. At the same time, the hard standard deduction. penalty. Another important measure work, the thrift, investment, and risk- This is a change that is long overdue. contained in this broad-based tax relief taking of Americans combined to cre- American families have been suffering plan is the elimination of the alter- ate an unexpected windfall of revenue. under the unfair burden of the mar- native minimum tax for middle-income Now the question Washington seems to riage tax penalty for too long. A simple families—families like David and Mar- be grappling with concerns who rightly example shows us why: garet Klaassen. Most of us know their July 28, 1999 CONGRESSIONAL RECORD — SENATE S9461 story. The Tenth Circuit recently af- savings in times of budgetary re- igible to make additional contributions firmed that under the current law, the straints should be reexamined in light to their retirement plans that are Klaassens are required to pay the alter- of the current surplus. For example, equal to 50 percent of their plans’ max- native minimum tax despite the fact the IRA contribution limit has not imum allowable contribution. In other that it may not have been Congress’ in- changed since 1982. words, their total annual contribution tent to impact families like the Had it simply been indexed for infla- could be 150 percent of the normal con- Klaassens when Congress passed the tion, it would be almost $5,000 today. tribution. AMT. What an opportunity that would Beyond restoring equity to the tax David and Margaret Klaassen are the present middle-class families to pre- code and helping Americans prepare for parents of 10 dependent children. They pare for their futures. And that’s ex- retirement, the Taxpayer Refund Act had an adjusted gross income of $83,000 actly who benefits from IRAs—middle- of 1999 will also help individuals and and roughly $19,000 of itemized deduc- and lower-income Americans. families gain access to health care— tions relating to state and local taxes, Fifty-two percent of all IRA owners particularly those who are self-em- medical expenses, interest, and chari- earn less than $50,000. This same group ployed, or who are not covered by their table contributions. Their reported ad- makes about 65 percent of all IRA con- employers—this legislation will en- justed gross income was $63,500, and tributions, and right now they are lim- hance the tax deductibility of health with 12 personal exemptions their tax- ited by the $2,000 cap on contributions. insurance. It does this by accelerating able income was $34,000, resulting in IRS statistics also show that the aver- the full deductibility for health insur- regular tax of $5,100. age contribution level in 1993 for people ance for the self-employed and by pro- That would seem fair. And the with less than $20,000 in income was viding the same benefit on a phased-in Klaassens paid the bill. However, the $1,500. basis to employees who are not covered IRS flagged the return and determined Clearly, if the average contribution by their employers. that the family was liable for the alter- of modest-income taxpayers is $1,500, In detail, the Taxpayer Refund Act of native minimum tax, a provision in the this demonstrates that many of these 1999 will provide an above-the-line de- code that was passed to make sure that Americans want to make contributions duction for health insurance and for wealthy individuals and families do not of more than the $2,000 limit. This tax long-term care for which the taxpayer escape at least some liability through relief bill will incrementally increase pays at least 50 percent of the pre- tax shelters and other tools they might the amount that people can contribute mium. It will allow long-term care in- use to minimize their liability. The to IRAs from $2,000 to $5,000. surance to be offered in cafeteria plans IRS determined an AMT deficiency of In the area of employer-provided sav- and provide an additional dependency $1,100. For AMT purposes, the ings vehicles, the current maximum deduction to caretakers of elderly fam- Klaassens were disallowed a $3,300 de- pre-tax contribution to a 401(k) plan or ily members. To benefit small busi- duction for State and local taxes. a 403(b) annuity is $10,000. nesses, this legislation will accelerate In addition, $2,100 in medical ex- In addition, the maximum contribu- the 100 percent deduction for health in- penses were disallowed because of the tion to a 457(b) plan is $8,000. Finally, surance of self-employed individuals 10-percent floor for AMT purposes. And the maximum contribution to a SIM- beginning in 2000. To help make education more afford- finally, the Klaassens’ entire $29,000 de- PLE plan is $6,000. These limits are in- able for families and students, the Tax- duction for personal exemptions was dexed for cost-of-living increases. payer Refund Act of 1999 strengthens disallowed because of the AMT. These There has traditionally been a dif- educational savings opportunities by adjustments resulted in alternative ferential in contribution limits among making college tuition plans tax-free. minimum taxable income of $68,000— the various types of plans: IRAs having In other words, families—including twice the taxable income that the the lowest limits; SIMPLE plans hav- grandparents, aunts, and uncles—can Klaassens had without the AMT. ing a greater limit, but not as much as invest their after-tax income into a This simply is not fair. It is not what a 401(k) plan; and 401(k) and 403(b) child’s educational future. And when Congress intended. The Finance Com- plans having the highest limits, but that money is used by the child, it will mittee bill will help return fairness to the greatest number of regulations. be tax-free on buildup and withdrawal. the tax code by allowing families to re- Since the IRA limit will be raised to This legislation also increases stu- ceive the full benefits from their per- $5,000, the bill will increase limits for dent loan interest deduction income sonal exemptions. This will also re- 401(k) and 403(b) plans to $15,000 and for limits for single taxpayers by $10,000 store taxpayers’ ability to receive their SIMPLE plans to $10,000; thereby con- and adjusts the beginning income lim- $500 per child tax credits, and other tinuing the differential. The limit for its for married couples filing joint re- benefits that were intended to be avail- 457(b) plans for government employees turns to twice that of a single tax- able to middle-income families. will increase to $10,000. payer. Beyond these important These are changes that are long over- There is no question, with rising con- changes, this tax relief plan promotes due. Again, they have strong bipartisan cerns about security and self-reliance education by making deductions for support. But our broad-based Taxpayer in retirement, that these changes are employer provided assistance perma- Refund Act of 1999 does so much more. needed. They will go a long way toward nent, and by allowing employer assist- This plan will also help individuals helping individuals and families ance to be used for graduate-level and families find self-reliance and secu- achieve their economic goals. But the courses. rity in retirement through expanded benefits this legislation has for retire- Again, these are necessary changes— individual retirement accounts, as well ment planning do not stop here. changes that will help families meet as through enhanced 401(k) plans, 403(b) There are other provisions that will their priorities. plans and 457 plans. These are critical add new retirement vehicles, provide Another important component of this programs—programs that along with greater ability to transfer retirement tax relief package involves its treat- Social Security and personal savings savings between plans, promote retire- ment of estate and gift taxes. Here, our help individuals prepare for their gold- ment plans for small businesses, and objective is to protect families, farm- en years. simplify the retirement plan system ers, and small business men and women For savings through the workplace, for both employers and employees. who have worked their whole lives to there are 401(k) plans, 403(b) plans and One provision will allow employees 50 build a future for their posterity. Mem- 457 plans, each of which can be spon- years old or older to make catch-up bers of the Senate Finance Committee sored by different types of employers. contributions to their retirement can recall the heartrending testimony For individual savings, there is either plans. This will be most important for of Lee Ann Goddard Ferris whose 71- the traditional IRA or the Roth IRA. women, benefiting those who may have year-old father died in a tragic farming And all these different savings vehicles started their retirement savings late or accident in Lost River Valley, Idaho. have different limits on how much in- who may have taken time off to raise For more than 60 years, her family had dividuals can save. However, our cur- children. worked the land. rent system can do more, and the limi- Whatever the reason, once these indi- They owned over 2,600 acres—2,600 tations that we placed on retirement viduals have reached 50, they will be el- acres that had been purchased through S9462 CONGRESSIONAL RECORD — SENATE July 28, 1999 decades of toil. In Lee Ann’s own tional product than at any other time At the outset of this debate, we words, ‘‘My father’s death was the in postwar history. These same Ameri- should be mindful of some painful mis- most devastating event that any of us cans—the authors of this success takes we have made in the not too dis- has ever gone through. The second story—are rightful heirs to the wealth tant past and which we evidently mean most devastating event was sitting they are creating. After paying for the to repeat. down with our estate attorney after his Government programs for which Con- In August of 1993, just 6 years ago, we death. I’ll never forget his words. The gress has planned and budgeted, the began to correct a colossal budget mis- estate attorney said, ‘There is no way change must now be returned to the take. The President signed into law a you can keep this place, absolutely no taxpayer. deficit reduction act without precedent way.’ ’’ This legislation not only returns the in size that dramatically changed the Still suffering from her father’s acci- change by cutting taxes, it increases budget outlook—turning deficits of $290 dental death, Lee Ann couldn’t believe access to healthcare; it makes edu- billion a year, as far as the eye could what she was hearing. ‘‘How can this cation more affordable; it helps tax- see—to anticipate my friend David be?’’ she asked. ‘‘We own this land. We payers prepare for self-reliance and re- Stockman—into the surpluses we now have no debt! We just lost my father, tirement; it keeps their home, farm, project of $200 billion and more—sur- and now we are going to lose the and family business safe from death pluses on budget—leaving aside the So- ranch?’’ According to Lee Ann, ‘‘Our taxes. These are objectives that are cial Security revenue stream. attorney proceeded to pencil out the shared by everyone. They are objec- At the time of its passage, it was es- estate taxes . . . and we all sat in total tives that can be embraced by Senators timated that the 1993 legislation, the shock.’’ and Congressmen on both sides of the Omnibus Budget Reconciliation Act of Where is the fairness, Mr. President? political aisle. They are objectives that 1993, would reduce the deficit by $505 Here a family works for more than half can be made realities by being passed billion over the 5 years, 1994 through a century to build a ranch, only to hear into law. 1998. that estate taxes would rob them of Mr. President, I reserve the remain- The Office of Management and Budg- their legacy, their heritage, their der of my time. et, in its fiscal year 2000 edition of home. I yield the floor. ‘‘Analytical Perspectives,’’ estimated ‘‘This tax situation has put a tremen- Mr. MOYNIHAN addressed the Chair. that the total deficit reduction has The PRESIDING OFFICER (Mr. dous strain on my mother,’’ Lee Ann been more than twice this. I quote: BURNS). The Senator from New York. testified. ‘‘Mother worries constantly Mr. MOYNIHAN. First, I congratu- ‘‘The total deficit reduction has been and has had many sleepless nights. I late our revered chairman, Senator more than twice this—$1.2 trillion.’’ That suggests the extraordinary don’t know if any of you could ever ROTH, for the manner in which he has imagine how hard it has been on her. presented the Taxpayer Refund Act of quality of that moment when we stood She doesn’t have her husband anymore. 1999, for the manner in which he on this floor and waited for the final She worked hard her whole life and brought our committee together in vote that would allow the Vice Presi- gave up a lot of material things to put consultation and deliberation, and dent to cast the determining vote, 51– her after-tax dollars back into the land who, indeed, produced a measure which 50. The act was passed without one to pay it off. Now, unless this tax law was bipartisan. It has many elements Member of the Republican Party of ei- is changed or abolished, she will have which would commend our support ther House of the Congress. to leave her home, which she loves, and across the aisle—certainly mine. But it In 1997, we had a more bipartisan ef- our family will not have a base from is not to that issue that I will speak fort in the Balanced Budget Act of 1997. which to carry on.’’ today, but to the question of the doc- Again, we see larger revenue benefits With this legislation, Congress will trine. than were originally anticipated. do something to protect these families. I would like to put this debate in a As for the fiscal year that ends this The Taxpayer Refund Act of 1999 turns doctrinal perspective, which is to say, September, the OMB projects a budget the unified estate tax credit into a true the development in the 1960s which surplus of $99 billion and the Congres- exemption, and it increases the exemp- holds that the only way to restrain the sional Budget Office projects a surplus tion from $1 million to $1.5 million. growth of Government is to delib- of $120 billion. With the end of the fis- This legislation also significantly re- erately create a protracted fiscal cri- cal year just 2 months away, we can ex- duces the actual estate tax rate, and it sis. pect, with great confidence, a budget increases the annual gift tax exclusion This begins, of course, with a view of surplus for the second consecutive from $10,000 to $20,000 by the year 2006. Government that is so very different year. Each of the measures I have outlined from what traditional conservatism What explains this huge gap, this as part of the Taxpayer Refund Act of would hold. It is a new and radical pleasant surprise between budget ex- 1999 is vitally important to the well- idea. I will discuss how it emerged. pectations and outcomes in recent being of all families; each is a key com- But first I will cite an article from years? As is often the case in economic ponent of this tax relief package. this morning’s New York Times op-ed analysis, there are interrelated factors Again, our purpose is to be broad- page by Gertrude Himmelfarb, one of which cannot always easily be dis- based—to provide the most meaningful our preeminent historians and an entangled but which provide clues. tax relief possible—to do it in a way avowed conservative. She writes so To begin with, we appear to be in that families can meet their individual much of what goes on. She says: what has been described by our now- needs—and to present a plan that can In their eagerness to do away with the Secretary of the Treasury, Lawrence receive strong bipartisan support. nanny state, some conservatives risk belit- Summers, at his confirmation hearing With this major tax relief package— tling, even delegitimizing, the state itself. A as a ‘‘virtuous cycle.’’ I put a question $792 billion over 10 years—we meet all delicate balancing act is required: to dis- to him, and he responded: mantle or diminish the welfare state while of these criteria. And, in the process, Senator, I think it very important that, as retaining a healthy respect for the state you suggest, we do reduce the national debt we leave over $500 billion to meet itself. For good government is the pre- pressing concerns here in Washington, by the full amount of the Social Security condition of civil society, providing a safe surpluses, which would continue this vir- such as preserving and strengthening space within which individuals, families, tuous cycle by reducing interest rates, which communities, churches and voluntary asso- Medicare. makes possible more growth, which makes ciations can effectively function. We are able to do all this and to keep more tax collections, which makes larger the budget balanced for a simple rea- But, as I say, the debate on this tax surpluses, which makes lower debt, which re- son: the work, the investment, and the bill is not just a debate about tax pol- duces interest rates, which starts the cycle job creation achieved by Americans ev- icy; for it is far less a debate on taxes going again. That is an enormously impor- erywhere have succeeded in creating than a debate on economic and budget tant process. long-term economic growth. policy and the large understanding of The Honorable Robert Rubin, who It is not right that the reward for the role of Government in our society, was Mr. Summers’ distinguished prede- this success is that today our taxes are the role of Government in an advanced cessor, often spoke of a term which is the highest percent of our gross na- market economy. not in ordinary usage, but it is a term July 28, 1999 CONGRESSIONAL RECORD — SENATE S9463 known by Secretaries of State and by Last week, in testimony before the Federal Government ever to be con- persons who deal in securities, in mar- House Committee on Banking and Fi- trolled in its size as long as it had the kets. Mr. Rubin would use the term the nancial Services, Alan Greenspan, our revenues to sustain, or even to in- ‘‘risk premium on interest rates.’’ That world-renowned Chairman of the Board crease, that size. And so it came about is to say, the extra charge if a person is of Governors at the Federal Reserve, that a policy doctrine developed which lending money, if they are not certain provided some insights into what is argued that deficits, if sizable enough, of the fiscal stability of the Federal sustaining this period of remarkable had acquired a new utility—deficits Government, in this case, and, thence, growth. Observing the absence of pro- that had presumably been the horror of of the economy at large. duction bottlenecks, shortages, and conservative financial thought now be- It was, first of all, this risk premium price pressures that inevitably occur in came something attractive because that we broke in 1993, the fear that an expanding economy, he noted a they could be used to reduce the size of down the line, if these deficits of $290 number of the possible explanations for Government itself. billion in the previous year went on the good fortunes involved; notably, E.J. Dionne, Jr., in an op-ed article and on—the debt had quadrupled over just-in-time inventories and such like; in yesterday’s Washington Post, clear- the previous twelve years—that the but they have come about fortuitously ly recognizes this idea is still afoot. He day would come, again, to use an at a time when the deficit was under writes: economist’s term, when we would control, deficits were declining, and The long-term goal, about which Repub- ‘‘monetize’’ the debt through inflation. the prospects were much better all lican leaders are candid, is to put Govern- We would get rid of it by wiping out around. ment in a fiscal straitjacket for years to come. the value of the dollar. That is that The question is, Can we not keep premium, that risk premium on inter- this? Can we not sustain the extraor- In fairness, I think this is more to be est rates. dinary economic expansion on which encountered on the House side than in We began to see this effect. I was we have embarked? this body, but it still would be the cu- here on the Senate floor on February Unemployment is now at 4.3 percent. mulative effect, in fact, of the tax cuts 10, 1995. I remarked: May I say, as someone who in the Ken- that have been proposed in both bodies. I can remember the onset of this. In . . . the economy performed better than nedy administration was Assistant the late 1970s, it was clear. One could expected, in part, because Congress adopted Secretary of Labor for Policy Plan- a credible deficit reduction plan. In part, write about it, and one did. Then came ning, we would have said, sir, that a also, because, as Secretary of the Treasury the administration of President 4.3-percent unemployment rate was Rubin remarked to the Finance Committee Reagan in which, in effect, the policies this Wednesday [that is, Wednesday, Feb- unsustainable. It would lead to an out- were carried out—or they began to be ruary 8, 1995], the deficit reduction program break of inflation. Yet here we have it, carried out. In a television address, 16 squeezed the risk premium on interest rates 4.3 percent, real economic growth at 4 out of real long-term interest rates. If finan- days before his inauguration, President percent. We are in the ninth year of an Reagan said: cial markets do not believe the deficit is expansion, and we have no inflation. under control, they will levy a risk premium There will always be those who tell us that on capital lending. In 1993 and 1994, we clear- This is something that is going to re- taxes could not be cut until spending was re- ly persuaded the markets that we were fi- quire that the economic textbooks be duced. Well, you know, we can lecture our nally serious. rewritten. But we have done it, and a children about extravagance until we run From a slightly different perspective, lot of it comes about from what we did out of voice or breath, or we can cut their the Congressional Budget Office also on the Senate floor in August of 1993 extravagance by simply reducing their al- lowance. took note of the importance of reduc- and which our great hope on this side ing interest costs. For most of the of the aisle is that we not undo in this There you have President Reagan in post-World War II period, interest costs short time that has passed. his most agreeable and heart-warming have been the second or third largest Alan Greenspan, in that testimony, quality. He thought this could be done item in the budget, behind Social Secu- was very clear. He said tax cuts are to because he thought there would, in rity and national defense. be reserved for recessions. That will be fact, be reductions in Government. In commenting on this, the CBO said, the most effective means we can have There were none. Moreover, very short- of the effects of that 1993 legislation: to regenerate the economy and keep ly, his economic advisers realized the Remarkably, the biggest single change lies the long-term growth path moving economic analysis they had used to in . . . interest—now projected at 3.3 percent high. project revenue increases from tax re- of GDP in 2003 compared with 4.5 in the ear- The New York Times editorialized ductions weren’t going to work, and lier report, a testimonial to the efforts to this past Sunday, on the Oracle of the they faced a prospect of deficits of, as rein-in the debt’s growth [which had taken Fed: David Stockman once said, ‘‘$200 bil- place]. Mr. Greenspan is treated reverently on lion as far as the eye can see.’’ For the record, CBO, in its latest Capitol Hill, but it appears that the Repub- Haynes Johnson, in his superb book, budget update issued earlier this licans do not want to heed his advice to run ‘‘Sleepwalking Through History: Amer- month, now projects interest costs at a surplus and pay down the national debt, ica Through the Reagan Years,’’ just 1.7 percent of GDP in the year 2003, while saving a tax cut for when it is needed. writes: a reduction by half from its September How come this sudden resurgence The Reagan team [not the President] saw 1993 projection when we had just passed just now, when it would seem so clear the implicit failure of supply side theory as that legislation of that year. that a quite opposite policy has had an opportunity, not a problem. Outlays for net interest peaked at such very desirable effects? Well, sir, I Now, this we have to absorb. They $251 billion 2 fiscal years ago. They are go back, as I said I would earlier, to saw the failure of supply side theory— now projected to decrease to $222 bil- matters of political doctrine. which said that the more you cut lion, and if we can just keep from We don’t talk much of doctrine on taxes, the higher the revenues will be— squandering the surplus, we will repay the Senate floor, but there are times as an opportunity, not a problem. The the debt incurred in those years and for it. In 1995, for example, we debated secret solution was to let the Federal that interest cost will again go down, a constitutional amendment requiring budget deficits rise, thus leaving Con- almost to disappear. a balanced budget. I presented a series gress no alternative but to cut domes- Now, I do not mean to suggest that of papers in which I tried to describe tic programs. But in the end, they were the budget outlook is solely due to the idea of ‘‘starving the beast,’’ as the not cut. Some grew. There was a view, changes in budget policies. Factors term was; that is to say, depriving the and certainly a respectable one, that other than deficit reduction are at Federal Government of the revenues defense had to be increased. We now, work, making for a strong, sustained needed, putting it simply, to govern. incidentally, suggest there be a 20-per- economic expansion. The economy The argument is quite simple. It goes cent reduction in defense spending over brings higher receipts and lower out- back to the 1970s when a number of the next 10 years. lays for unemployment and other such theorists on the conservative wing of The Reagan administration increased programs that automatically expand in the Republican Party determined that defense spending, and they had a per- a recession. it was not going to be possible for the fectly good argument for doing that— S9464 CONGRESSIONAL RECORD — SENATE July 28, 1999 but not simultaneously with huge tax onciliation process was devised to ex- the next 10 years. Medicare is fully cuts. There, very shortly thereafter, pedite consideration of deficit reduc- funded under the budget that was had to be tax increases. But the course tion measures. adopted by the Congress this year. was set for the 1980s and the deficit The bill before us uses those same ex- That means there are no cuts. The pro- doubled, from under a trillion dollars pedited procedures to secure enact- gram is fully funded for the decade. As to about $3.7 trillion now in publicly ment of a deficit-increasing measure. a matter of fact, the President cut held debt. So I rise again to say, as I Section 313(b)(E) of the Byrd rule Medicare in the first 5 years of his have done before, that what we did in provides that any provision in any rec- budget. We did not do that. Then we 1981 with that tax cut—for which I onciliation bill which would decrease would have a rainy day fund to imple- voted because the Office of Manage- revenues used beyond the budget win- ment any Medicare reform that Con- ment and Budget, seeing our huge in- dow—in this case beyond the year gress might enact. I will allude to that flation continuing, projected surpluses 2009—may be automatically stricken soon. in the future—was so ruinously wrong. from the bill upon a point of order Third, after all the bills of the decade We now have a debt that will level off being raised. have been paid, after Social Security at about $6 trillion, while the debt held Section 1502 of the bill before us pro- recipients have their money set aside, by the public will fall by $2 trillion, or vides for permanent continuation of after we have funded every penny an- more, depending on the size of this tax tax cuts in the years beyond 2009, caus- ticipated for Medicare, and have an cut. ing revenue losses of hundreds of bil- ample rainy day fund available, if we The other important reason, which I lions of dollars. want to do something on prescription Accordingly, sir, at the appropriate will close on, is that the 1997 balanced drugs, then we would send back the ex- time, I intend to raise the Byrd rule budget amendment left us with what cess to the American taxpayers—to the point of order against section 1502 of the Washington Post this morning working families—and those in middle- calls an ‘‘accounting illusion,’’ that we the bill. I thank the Chair for his cordial con- and low-income brackets will get a can reduce the spending on domestic very substantial tax reduction. programs by 20 percent in real terms sideration of my remarks. I see my friend, the chairman of the The budget resolution recognized over the next 10 years. The illusion is Budget Committee, is on the floor. I economic conditions now, and the pro- coming apart already. Just the other yield the floor. jected economics including the plan- day, the House of Representatives de- Mr. DOMENICI. Mr. President, I ask ning for an inevitable recession that termined that the money to pay for the the distinguished chairman of the Fi- might occur in the future. It outlined a decennial census in the year 2000 re- nance Committee if he will yield up to decade-long, phased-in tax cut. Only a quired an emergency appropriation 20 minutes. very small tax cut was envisioned in outside of those limits. We have had Mr. ROTH. I am happy to yield to the the first 2 years of this budget time- that census for many years. That cen- distinguished chairman of the Budget frame because the economy is already sus is provided in the Constitution. It Committee up to 20 minutes. operating above optimum capacity. We has taken place every decade since The PRESIDING OFFICER. The Sen- want to keep inflation subdued and in- 1790. All of a sudden, we have made it ator from New Mexico is recognized for terest rates low. The budget expected into an emergency. 20 minutes. Congress to pass a tax bill that was In this morning’s Washington Post, Mr. DOMENICI. Mr. President, before very small in the first 2 years and grew our former majority leader, our be- my friend, Senator ROTH, leaves the as the decade wound its way through loved colleague, ROBERT C. BYRD, has floor, let me say to the Senate that into the next millennium. an article called ‘‘Time for Truth In Senator ROTH has come through again I congratulate again the chairman of Spending.’’ He said: for the Senate and for the people of the Finance Committee and the mem- What we need to jettison is the political this country. bers of that committee for producing rhetoric. What we need to impose is truth in His tax bill is clearly one that recog- the kind of tax cut for our budget for spending. nizes fairness, that puts the money the 21st century. I think it is appro- And he set down a few principles. He where it ought to be put, gives back to priate, prudent, and fair. Chairman said: the American people some of their ROTH has produced a tax cut that First, watch our investments carefully and money, and it does it in a way that starts small and ends up larger, reflect- manage them prudently. We should continue clearly is prudent and responsible. ing economic conditions. He has pro- our best efforts to manage the economy and It will be very difficult when we are duced a tax cut that targets help to watch out for inflation. finally finished explaining this bill for those who really need it—those with Second, do not spend our money before we the President of the United States to make it. Before the surplus is spent, whether children in school, those with elderly veto this bill. and ill parents who need long-term on tax cuts or continuing important priority We are going to talk about that a lit- programs, wait for the money to be in the care, those who are trying to save for tle later in the day. Since he has chal- bank. their own retirement instead of Gov- lenged us, we will tell the American We are proposing to spend a surplus, ernment reliance, and many more people loud and clear what he is going sir, that does not exist. items of that nature and of that sig- to be doing when he vetoes this bill. Third, pay our debts. The United States Mr. President, I rise today to discuss nificance. should take advantage of this opportunity to the budget blueprint that Congress has Yes. The same old class warfare argu- retire the national debt. ments like tired, defeated soldiers of Fourth, cover the necessities. Congress passed for the first decade of the 21st century. It embodies three major past wars have begun to stagger across should not shortchange the Nation’s core the Senate debate again—and they will programs, such as education, health care, things: Social Security, first and fore- veterans, and the like. most. Much will be said about it. But be here before us again—that we are Fifth, put aside what we need for a rainy nobody can deny that with this refund only helping the rich. We are told we day. Congress should take steps to reserve to the American taxpayers, we have must spend the surplus. That is essen- the Social Security and Medicare surpluses left intact every single penny of sur- tially the argument against our tax re- exclusively for future costs of those pro- funds—we must spend the surplus. We grams. plus that belongs to the Social Secu- rity trust fund, and we will even debate must grow Government. It is the same Sixth, don’t go on a spending spree. Resist old debate. the temptation to create costly new govern- on the floor locking it up so it is very ment programs. hard to spend. One party wants to give money to Finally, take prosperity in measured doses. The budget before us and that we programs. And we want to give money Congress should reduce taxes without pulling adopted demanded that 100 percent of to the people. That is exactly the way the rug out from under projected surpluses. all the funding that Social Security re- it has been, and that is exactly the way I can think of no wiser counsel. cipients will need will be exclusively it is on this floor. In that regard, and with great respect set aside for that purpose. I believe there is a degree of arro- for the chairman of the committee, I Second, it sets aside enough money gance in those who argue against tax would suggest that the budget rec- to meet the demands of Medicare for cuts. They say to working families: I July 28, 1999 CONGRESSIONAL RECORD — SENATE S9465 know what to do with your money bet- Congress’ budget allocates 75 percent in tax cuts. It is almost unrecognizable ter than you do. Give it to me so I can of the projected surplus over the next in terms of impact one way or the spend it. 10 years for paying down the debt and other on the American economy. It Can you imagine the arrogance of long-term priorities. If the surplus saves 92 percent of the projected sur- that position? They have grand were a dollar, two quarters would go plus during these first 2 years. As a re- schemes now with the surpluses. for Social Security, one quarter for sult, our budget surpluses will rise Republicans, through their dedicated high-priority spending—education, re- sharply from 1.4 percent of the gross efforts, and Dr. Greenspan and his fan- search, and defense—and the remaining domestic product to 2 percent by 2001. tastic ability to manage the money quarter for tax cuts. It is clear that the budget plan is not supply in our country, and to control Without tax cuts, who would spend expansionary, which some people now interest rates, have given the Nation the surplus? talk about. It truly is not. Ask any this enormous surplus. The President Not the American people. The Gov- economist to look at it in its true of the United States thinks they have ernment in Washington would spend it. sense, phased in as it is, and ask if it is the money to implement new, grand Without tax cuts, we will ‘‘grow’’ Gov- an expansionary budget. I cannot imag- schemes and to grow government. That ernment. There can be no denial of ine this tax bill would be defeated on is the issue. that. The President plans to grow Gov- such a preposterous economic observa- A government big enough to give you ernment substantially rather than give tion. everything is a government that takes back anything to the American people. In House testimony last week, Chair- everything away in the form of high He now says he would veto a $500 bil- man Greenspan cautioned against ex- taxes. lion tax cut. What about $200, Mr. pecting any rapid stimulus as a result I didn’t originate that quote. I can’t President? That means giving the of this tax relief package. I can assure imagine and I can’t fathom anything American people back about 6 cents of the American people that Congress’ tax more frightening to the average tax- the surplus, at $200. Can we afford that? plan will not overheat the economy. As payer than the sight of a grand govern- I believe we can afford 25 cents out of a matter of fact, Chairman Greenspan ment schemer rushing toward a $1 tril- every $1 of surplus. cautioned against expecting a rapid lion pile of extra taxpayer dollars. Democrats say the question is: tax stimulus as a result of this package, Republicans say it is the best of cuts versus Social Security. Tax cuts given the long phase-in of the tax cuts. times for tax cuts. Democrats say it is or Medicare. Tax cuts or domestic I can anticipate the response of my the worst of times. Everyone quotes spending. Tax cut versus debt reduc- Democratic colleagues who are likely Dr. Alan Greenspan. tion. to say: If your plan is so ideally suited The Taxpayers Refund Act before the The right answer: It is not ‘‘this’’ for the economy, why did Alan Green- Senate is the best of plans. versus ‘‘that.’’ The correct answer is, span argue we should let surpluses run It lowers rates. we can do all of the above. The size of It encourages savings. for a while before cutting taxes? It eliminates the worst of a bad Tax the surplus lets us do it all. That is the Listen carefully. I have two re- Code. It eliminates the marriage pen- reality. Save Social Security, reform sponses. First, I believe the Congress is alty for many Americans. It begins the Medicare, provide adequate funding for doing exactly what the Chairman ad- death of a death tax. It ends the alter- domestic and defense spending, pay vised. Our budget plan delivers only $28 native minimum tax, to rescue the full down the debt, and give the American billion in tax cuts over the next 2 benefit of child care, foster care, edu- people who earned the money a decent years. Most of that relief is scheduled cation, and other needed tax credits for tax cut. Do that in a manner that to arrive only after surpluses have families who otherwise unavoidably phases in, which will probably be very mounted on a consistent basis. Second would end up in the alternative min- complimentary to the American econ- and more important, Chairman Green- imum tax brackets. They are sick of omy. span is advising what policies would be Even with the tax cuts and refunds this. They are worried about it. best in an ideal world. However, he is You will get more mail on this issue we are talking about, our surplus will fully aware that ideal may not be po- because it is grossly unfair to give steadily climb as a share of GDP and litically feasible. credits and then take them away—to our national debt will ultimately be Let me read a quote he made last run across the land saying: We are de- paid off, falling dramatically from 40 week which I think was insightful: lighted to have given you a credit for percent of GDP this year to only 12 There is nothing that I can see that would your children’s education only to find percent in 2009. Under the proposal we be lost by allowing the process to delay un- less, as I have indicated many times, it ap- that middle-income Americans by the make, the external debt—the debt to the public—will go from 40 percent of pears that the surplus is going to become a hundreds of thousands are falling into lightning rod for major increases in outlays. this alternative minimum tax trap. the gross domestic product to only 12 percent by the end of the decade. That’s the worst of all possible worlds from I say: Tax cuts, if not now, when? a fiscal policy point of view. That, under all The Democrats say not now. I am amazed the President’s political conditions, should be avoided. I have great I say: If not tax cuts now, then what? advisers allege this budget is reckless. sympathy for those who wish to cut taxes The President’s answer is: Spend it Nothing is reckless about steadily ris- now, to preempt the process. And indeed if it all. It does not matter what he says he ing surpluses and paying down our debt turns out they are right, I would say moving wants to spend it for; he wants to spend by more than 50 percent over the next on the tax front makes a good deal of sense it all. decade. In fact, our plan lowers the to me. Can you imagine if we did not have level of debt more than the President’s The worst of all fiscal policies will this surplus? What will the President plan. Some may wonder why. That is materialize if the President gets his be doing—asking for tax increases to because the President spends heavily in way. The President proposes to in- pay for these programs he thinks we the first 5 years. We have tiny tax cuts. crease spending by more than $1 tril- need? I doubt that. I doubt that very Thus, he incurs more debt than we do lion over the next 10 years. Most of this much. at that time, and he cannot make it up new spending would go to create 80 I support prudent tax relief, and I in a decade. new, often repetitious, often local-gov- must say this is prudent tax relief. It is I have been amazed by the adminis- ernment-prerogative-infringing Gov- synchronized to our business cycle and tration and other opponents who claim ernment programs, with services al- the condition of the economy. It im- our tax cut will lead to higher interest ready being handled at the local or pri- proves our tax policy and moves us to- rates because the economy will over- vate sector. The President’s spending ward a system that taxes income that heat. That is just not true. The Fed is proposals are the worst of all proposals is consumed instead of income that is most concerned not with the economy from the standpoint of what is good for earned. It moves America toward a tax as it is today but what it will be in 18 America during the next 2 years. That system that allows business to deduct months and thereafter. Our tax cut is time horizon must concern the Federal investments in the year they are made. slow, a total of $28 billion over the Reserve. It encourages investment in retire- years 2000 and 2001. I repeat, if they are The President proposes to use $53 bil- ment, education, and health care. worried about stimulus, it is $28 billion lion of the surplus for new spending. It S9466 CONGRESSIONAL RECORD — SENATE July 28, 1999 is nearly twice as large as our tax cut national corporations, banks, insur- and a willingness to fight for them. At in the next 2 years. Thus, the Presi- ance companies, Wall Street securities some point, the chasm between our dent’s plan would be far more stimula- firms, and tax giveaways for the words and our actions becomes too tive than the Congress’ measured tax wealthy. That is a disappointment. It wide. If we do not fight hard enough for cut. I ask my colleagues on the other is a very harsh budget. the things we stand for at some point, side of the aisle if they are worried But even the Democratic plan fails to we have to recognize we really do not about interest rates rising because the fully fund or restore these cuts. Senate stand for them. We really do not stand economy is overheating, why support Democrats have reserved $290 billion of for them. the President’s Government-growing the surplus to soften the blow on our I cannot believe with record eco- agenda over tax cuts? The money is discretionary priorities like education, nomic performance, that the Repub- there. We have a surplus. but we still allow cuts of several hun- lican Party can come to the floor of The last question is the $792 billion dred billion dollars. In our plan, with the Senate with a proposal that calls question: Who is going to spend it? our $300 billion of tax cuts, we do not for $800 billion of tax cuts, most of When faced with the President, who make up the assumed cuts in our do- them flowing to our wealthiest citi- wants to spend the surplus, Congress mestic priorities either. zens, but with a proposed 38-percent has no choice but to cut taxes. How- Since defense spending will go up, cut in Head Start, child care, commu- ever, we have to be careful. While we and there will be spending for transpor- nity policing, and cleanup of the envi- are still saving the majority of the sur- tation which also will go up signifi- ronment. plus for shoring up our long-term fiscal cantly over the next 10 years, our other And to my party, I cannot believe the health, we must be careful in that re- domestic priorities will be squeezed Democrats come out with a proposal gard. even more. where we, too, are essentially pro- To sum up, I leave two messages How can we, as Democrats, say we posing cuts in some of these key do- today. Our budget is prudent, and it is are for addressing the needs of Amer- mestic priorities. Why did we become synchronized for where we are in the ica’s children, for fighting poverty, for involved in politics? What do we be- business cycle. Be skeptical of the ad- fully funding Head Start, for equal ac- lieve in? What are our values? Can we ministration’s criticism of our tax cess to quality education, for helping not at least make some investment to plan. They want to grow Government working families afford the cost of make sure every child, no matter the well in excess of Congress’ tax cut. health care and child care, for cleaning color of skin or income of family, Most of the spending has nothing to do up the environment, for community po- urban or rural, or boy or girl, will have with Social Security or Medicare. This licing, and for veterans’ health care, a chance to reach her full potential and is what should most concern the Amer- when we are assuming domestic spend- his full potential? ican people when faced with the sur- ing cuts of several hundred billion dol- What ever happened to the Demo- plus, excluding Social Security funds, lars? Something has to give. To use the cratic Party’s strong commitment to and I have already indicated what will old Yiddish proverb, you can’t dance at equal opportunity for every citizen? I happen to them. The Republicans want two weddings at the same time. do not see it in these proposals. We to give it back to the people who I do not understand this. There are 14 ought not to be talking about tax cuts earned it and worked so hard. million children who are poor in our that benefit the most affluent citizens, The big question then is, Who is country—14 million. There are 6.5 mil- when we cannot even live up to our na- going to spend the surplus? lion children who live in households tional vow of equal opportunity for With tax cuts, the answer is you; with income of one-half the poverty every child. without tax cuts, the answer is big gov- level. Close to one out of every four I hope we will do better as we move ernment. children in our country under the age forward in this debate. I yield the floor. I yield the floor. of 3 are growing up poor. Close to 50 The PRESIDING OFFICER. The Sen- Several Senators addressed the percent of children of color under the ator from Nevada. Chair. age of 3 are growing up poor. And now Mr. REID. The Senator from West The PRESIDING OFFICER. The Sen- we are being told by both parties—the Virginia is yielded 45 minutes. ator from Nevada. Republican Party much more so than The PRESIDING OFFICER. The Sen- Mr. REID. Mr. President, the minor- the Democratic Party—but both par- ator from West Virginia. ity yields 10 minutes to the Senator ties, that we cannot afford to renew Mr. BYRD. Mr. President, recently from Minnesota. our national vow of equal opportunity both the Office of Management and The PRESIDING OFFICER (Mr. for every child? Where in these pro- Budget and the Congressional Budget BUNNING). The Senator from Min- posals do we, as a Senate representing Office released their so-called ‘‘Mid- nesota. the United States of America, live up Session Reviews’’ on the state of the Mr. WELLSTONE. Mr. President, 3 to our national vow of equal oppor- Federal budget. Both of these new fore- weeks ago, President Clinton visited tunity for every child? casts project even better performance some of the poorest communities in Right now, in Early Head Start, for for the nation’s economy in the coming our country and he spoke eloquently of children age 3 or younger, 1 percent of ten years than they had predicted just our obligations to America’s most dis- the children who could be helped and a few months ago. In fact, the Congres- advantaged children. Now, with our given a head start are able to get this sional Budget Office projects unified economy booming and record sur- assistance. We are funding this pro- budget surpluses totaling just under $3 pluses, we have a chance to do better gram at a 1 percent level. trillion over the next ten years. Of the for all of our children. This budget fails For the Republicans, you have $800 $3 trillion, approximately $2 trillion re- America’s children. I want to speak as billion of tax cuts. You make no in- sults from surpluses being paid into the loudly and boldly as I can about this vestment in any of these areas. Your Social Security trust fund. The re- reconciliation bill, first about the Re- budget and your proposal will lead to maining $1 trillion—or $996 billion to publican proposal, and then about what Draconian, really brutal cuts in these be exact—is what is called the ‘‘on we are proposing as Democrats. programs. Not only will we not be budget’’ surplus. That is the non-Social If you look at the non-Social Secu- doing anything to make sure poor chil- Security trust fund surplus. The ques- rity surplus, about three-quarters of it dren have a chance in America, to tion before Congress is what do we do really assumes cuts in future domestic make sure that there is equal oppor- with this good news—our government spending. The Republican proposal on tunity for every child, but the proposal is about to be awash in money, if these the floor does not restore any of these of the majority party will be making projections come true. cuts. In fact, they add another cut of cuts in these programs. Before we get too far along with our roughly $200 billion. The Republican And to the Democratic Party, my grandiose plans for massive tax cuts, a plan would require a 38-percent cut in party, we have a better proposal. It is dose of reality is in order. Sometimes a domestic spending in the year 2009, and less harsh. But there has to be some dose of castor oil is in order. We may the Republican tax bills are loaded connection between the convictions we not like it so much, but it has to be with corporate welfare for multi- profess and the budgets we propose, taken. So a dose of reality is in order. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9467 These future budget surpluses are, of next year, or the inflation rate, inter- provided in fiscal year 1999. In fact, course, based on ‘‘pie in the sky’’ pro- est rates, whether there will be a reces- over the whole 10-year period—over the jections. But I don’t think ‘‘pie in the sion or the duration or virility of such 10-year period—the real reductions sky’’ is quite right. The projections are recession. In virtually every CBO re- would total $775 billion. In other words, so far out into the Stratosphere—more port, the following cautionary footnote the bulk of the $792 billion Republican than a decade away—that we would can be found: ‘‘Cyclical disturbances tax cut is likely, in reality, to be fi- need the Hubble Telescope to track could have a significant effect on the nanced by cuts in critical domestic pri- them down. budget at any time during the projec- orities—critical domestic priorities— Mr. President, the fact is that they tion period. A recession would tempo- such as education, health care, infra- have not yet occurred, the money is rarily push down taxable incomes, thus structure, child care, the environment, not yet in hand—and may well never reducing federal revenues. A recession agriculture—that will affect you, the occur—for a number of reasons. First, would also cause a boost in spending people of this country—old, young, one needs to keep in mind that budget for unemployment insurance and other white, black, male, female. They will projections for even 1 year are likely to benefit programs. CBO estimates that a affect you—you—because they will be be missed by a substantial margin over relatively mild recession (similar to financed by cuts in critical domestic the normal 5-year period of congres- the one in the early 1990s) that began priorities. sional budgets. Estimates of deficits this year could reduce the projected Mr. President, to give the American and surpluses have been off by billions surplus by $55 billion in 2000.’’ people some sense of what I am talking of dollars. This year, for the first time, Mr. President, there is no reason to about, let me focus on just three crit- instead of 5-year budget projections, we believe that CBO’s current forecast of ical areas of the Federal budget that have 10-year budget projections upon the budgetary picture over the next 10 would be thus affected. which all of the surpluses are being years will be any more accurate than First, however, let me point out that forecast, and upon which tax cut pro- have been its previous forecasts over the cuts in these programs are based on posals by Democrats, Republicans and the past two decades. the assumption that the Republicans the administration are being based. With that dose of reality in mind, will fund defense at the levels re- Does anyone really believe that these let’s now turn our attention to the Re- quested by President Clinton over the 10-year projections will be any more publican tax cut proposal now before next 10 years. If that is so, and the tax accurate than the usual 5-year num- the Senate. Earlier in my remarks, I cuts are also enacted, according to the bers? In looking at these incredible noted that the Congressional Budget Office of Management and Budget, an amounts of surpluses and tax cuts, I Office projects an on-budget surplus of across-the-board cut of 38 percent— would think that one needs more of an $996 billion over the coming 10 years that is more than a third—in outlays astrologer than an economist to read FY 2000–2009. The on-budget surplus will be required in the other public in- the tea leaves and to come up with calculations, it should be noted, are vestments and operations of the Fed- these figures. the monies not needed for Social Secu- eral Government. Mr. President, consider these facts: rity or the Postal Service, and not oth- For example, let us take a look at CBO’s estimate of revenues over the pe- erwise spent. The Republican tax cut the VA medical care program. That riod 1980 through 1998 was off by an ab- plan proposes to use virtually all of gets close to home. We are already get- solute average of $38 billion per year. these projected on-budget surpluses for ting lots of mail, lots of telephone The estimates were off by an average of tax cuts of $792 billion and for paying calls, e-mails, and so on, from veterans $38 billion per year during the period the increased interest on the federal and their families. So let’s take a look 1980 through 1998. That is a pretty fair debt of $179 billion. This leaves only $25 at the VA medical care program. piece of change! This isn’t just chicken billion in projected surpluses for the What would happen to veterans’ feed. Some years, the estimates were next 10 years. health care under the Republican tax closer to the projection than other What happens if we enact cuts of $792 cut plan if these cuts are administered years, but, as I say, the average dif- billion and the CBO projections turn in an across-the-board manner? The ference one way or the other, was $38 out to be wrong? What happens if they cuts will rise from $931 million in fiscal billion per year. Similarly, for outlays, turn out to be wrong, as they have al- year 2000 to over $11.5 billion in fiscal the projections over the past two dec- ways been? What will Congress do year 2009. In total, the cumulative cuts ades were off the mark by an absolute then? The money will by law be leaving to the VA medical program—as I say, average of $36 billion per year. The re- the Treasury everyday in the form of we are already hearing a lot from vet- sulting deficit projections by the Con- tax cuts, but there may be an inad- erans because they see these cuts com- gressional Budget Office over the pe- equate surplus to cover them. Will Con- ing—the cumulative cuts to the VA riod 1980 through 1998 were off by an gress repeal the tax cut? It is easy to medical program for this 10-year period absolute average of $54 billion per year. vote for a tax cut. Will Congress repeal will be more than $53.5 billion below Extend that figure over 10 years, and the tax cut? Will it be able to cut what it would take to continue current that is what we are doing now in this spending even further than the Repub- VA medical care services. I might add, bill, and we can see that $540 billion of lican budget—which I will say more as I say, some veterans are already the $1 trillion projected surplus could about later—already calls for? Will it feeling it, and this figure is woefully melt away faster than last year’s snow- dip into the Social Security trust fund inadequate. ball. then? Or, will Congress find it easier to What do those cuts mean in human So what about these latest ‘‘rosy’’ revert back into the bad old days of the terms? As we can see from this chart, forecasts of budgetary surpluses for the 1980s and simply run up massive annual OMB projects that 3,252,735 veterans— next 10 years? It is obvious that we deficits? Those are the four choices we not talking about dollars now; we are need to be very careful when relying on will have. All of them are unaccept- talking about real people, veterans in such projections to make decisions able. We must not mislead the Amer- particular—OMB projects that 3,252,735 about whether and if we can afford a ican people by promising them massive veterans will seek treatment at VA tax cut. tax cuts which may well be based only medical facilities in fiscal year 2000. CBO officials would be the first to on phantom surpluses which never ma- That is just over the horizon, fiscal tell you that they have widely missed terialize. year 2000. Under the Republican tax the mark in their budgetary forecasts, Even if the surpluses do happen, this plan, though, 102,278 of these veterans as would the folks at OMB. No one on Republican tax plan could emasculate are going to have to be turned away: the face of God’s green Earth can pre- national security, public investments, Sorry, that program has been reduced, dict accurately for even 1 year, much and the operations of government. As or that program has been cut out; we less for 5 or 10 years, what revenues this chart shows, these areas of the do not have room for you. will come into the Treasury, or what Federal budget could suffer real cuts As we can see, over the 10-year period expenditures will go out of the Treas- each year, beginning in fiscal year 2000, the number of veterans to be turned ury. That is because no one knows drastically below what would be nec- away—sorry, sorry, we have to turn what the unemployment rate will be essary to continue them at the levels you away—will increase each year S9468 CONGRESSIONAL RECORD — SENATE July 28, 1999 until fiscal year 2009, when, according that not only does it cut taxes by al- When President Reagan took office, to these figures, 1,430,985 veterans will most a trillion dollars over the next 10 that so-called revolution was based on be denied critical health care benefits. years but—get this—this tax cut pack- supply-side economic ideology that Is that how a grateful Nation treats its age would explode in the following 10 called for massive tax cuts. That was soldiers, sailors, and airmen? years, costing roughly an additional before more than two-thirds of the Sen- Now, let’s look at national crime- $1.8 trillion, according to preliminary ators here today arrived—almost two- fighting programs. projections by the Treasury Depart- thirds, to be exact. Sixty-three Sen- Mr. President, the budget for the ment. Also, the Treasury Department ators are here today who were not here Federal Bureau of Investigation was points out that interest on the national when I was majority leader the third approximately $3 billion in FY 1999. debt in the second 10 years caused by time, 1987 and 1988. But we are talking Paying for the Republican tax cuts the $1.8 trillion in lost revenues would about 1981. Even more Senators were would require reductions in the FBI be roughly $1.1 trillion higher. not here then. budget below what would be needed to Let me say that again. The Treasury That so-called revolution was based continue current services over each of Department points out that interest on on supply-side economic ideology that the next 10 years. Those cuts get pro- the national debt in the second 10 years called, again, for massive tax cuts, a gressively worse until in FY 2009, the caused by the $1.8 trillion in lost reve- large buildup in defense spending, and Republican tax cut would require a cut nues would be roughly $1.1 trillion balancing the Federal budget; all were of almost $1.9 billion below the $4.3 bil- higher. going to be done. Those were the prin- lion that would be necessary just to That makes a total cost of the Re- cipal budgetary concepts the Reagan maintain—just to maintain—the same publican tax cut plan in the years 2010 revolution put forth. level of service being provided by the through 2019 of $2.9 trillion. The in- There were many skeptics at the FBI in 1999. Over this 10-year period, creased interest due on the national time as to whether those policies would total cuts to the FBI’s budget would debt of $1.1 trillion caused by the Re- actually work. I was one of those skep- equal almost $9 billion. publican tax cut plan is greater than tics. The Senate majority leader, How- That is $9 for every minute since the total amount of their tax cut for ard Baker, called it a ‘‘riverboat gam- Jesus Christ was born. Nine billion dol- the first ten years, which was $792 bil- ble.’’ Nevertheless, in 1981 Congress did lars, that is a lot of money! lion. These massive drains on the U.S. enact a huge tax cut, and it did in- Again, Mr. President, what does this Treasury would take place at the very crease defense spending. Entitlement translate to in services to the Amer- time when the baby-boom generation is spending also continued to grow. What ican people? Forget the dollars for a retiring in huge numbers and placing a was the result? The result was an era of moment. As this chart shows, the FBI great strain on the Social Security and the largest Federal deficits by far in will need 10,687 agents in each of the Medicare trust funds. This tax cut history. next 10 years in order to just continue plan, in my view, represents the abso- Furthermore, ‘‘Rosy Scenario’’ its current law enforcement efforts. lute omega of irresponsibility. It passes worked her magic numbers in the budg- But, that will not be possible if we on to our children and grandchildren in et under the direction of President enact the Republican tax cuts. Instead, the years 2010 through 2019 a $2.9 tril- Reagan’s chief financial adviser, OMB we can look forward to progressively— lion drain on the U.S. Treasury. The Director David Stockman. As a result progressively—deeper reductions in the Republican tax cut would have us of those policies, rather than ridding number of FBI agents in each of the spend $2.9 trillion over the decade 2010 the country of Federal deficits, the next 10 years. In FY 2009, rather than through 2019 right now, regardless of country saw for the first time in his- being able to employ 10,687 agents, the whether that drain makes it impossible tory triple-digit billion dollar deficits FBI will only be able to employ, 5,878. for the country to meet its Social Se- in each of Mr. Reagan’s eight years in Is that what the American people curity and Medicare obligations for its office. want? And what does that do to our ef- senior citizens. In fact, the national debt stood at forts to prevent another World Trade Recently the Washington Post car- $932 billion on January 20, 1981, the Center bombing? What does it do to our ried a political cartoon by Herblock on date President Reagan took office. Un- efforts to prevent another Oklahoma one of its pages, which I have here on fortunately, on the day that President City bombing? What do cuts of that this chart. As one can see, at the top of Reagan left office on January 20, 1989, magnitude do to our programs to fight the cartoon appeared these words: the national debt stood at organized crime, or the insidious pro- ‘‘Back for an indefinite run!’’ $2,683,000,000,000. liferation of child pornography on the Let me say that again: ‘‘Back for an This chart depicts the major causes Internet? indefinite run!’’ ‘‘Rosy Scenario’’— of increased Federal debt for fiscal Sadly, the picture is no better for the whoopee, we have heard of her, haven’t years 1981 through 1991. It shows that effort to patrol our Nation’s borders. we? ‘‘Rosy Scenario—and her long line the 1981 tax cut over that 10-year pe- Progressively deeper budget cuts will of stunning surplus sugarplums.’’ riod, cost the Treasury $2.1 trillion. have to be made over the next 10 years The cartoon depicts Rosy—there she Those tax cuts were offset by a series totaling more than $3.5 billion because is, all ready for the show—in a costume of tax increases that became necessary of the massive Republican tax cuts. As with dancing girls and throwing dollar during the Reagan years in an attempt a result, as we can see displayed in this bills in the air. There is a song, ‘‘Pen- to decrease Federal deficits. Those tax next chart, the number of INS agents— nies from Heaven.’’ But Mr. President, increases equaled $800 billion. Entitle- Immigration and Naturalization Serv- these are dollar bills! Holy Smoke! ment and defense spending each grew ice agents—protecting the Nation’s Rosy Scenario is throwing them all by $600 billion above inflation over this borders will decline from the needed about us. In front of the theater in 10-year period. Interest on the climbing level of 8,947 to only 4,921 in the year which she is appearing, what do we see? national debt increased by $500 billion. 2009. How does that help address the We see two eager customers about to The S&L bailout cost $200 billion. And, problem of illegal immigration? And buy their tickets for the show. One ap- domestic spending was cut over that that is a big, big, big problem. How do pears to be an elephant; one appears to 10-year period by $400 billion below in- those kind of cuts help our drug inter- be a donkey. They are both depicted in flation. That was a very unfortunate diction efforts? What kind of message business attire. The ticket salesman and difficult period in our national his- does that send to the Colombian drug seems to have a cynical smirk on his tory. lords? face, as though he knows something The folly of the Reagan Revolution’s Mr. President, these are just three— that the elephant and the donkey, who fiscal policies is set forth in great de- just three—examples of the short- are waiting for their tickets, don’t tail in the book entitled, ‘‘The Tri- sheeting that will take place through- know. umph of Politics’’ by David Stockman. out the entire Federal Government be- When I saw this cartoon, it brought As I previously pointed out, David cause of the Republican tax plan. As if back memories about Rosy. She first Stockman was the principal architect this weren’t bad enough, the real kick- appeared on the scene in 1981 as a of the Reagan budgets until he left the er in the Republican tax cut plan is major player in the Reagan revolution. Administration in 1985. Perhaps the July 28, 1999 CONGRESSIONAL RECORD — SENATE S9469 best summary of the conclusions tax relief can be given, it ought to go The Congressional Budget Office, reached by Mr. Stockman is found in to those who need it most and not though they obviously will from time the epilogue of the book found on pages those who need it least, as this Repub- to time make mistakes, forecasts that 378–379. lican rich man’s tax bill did.’’ there will be $3 trillion more coming in The fundamental reality of 1984 was not Just as an aside, not only did Mr. over the next 10 years than we have in the advent of a new day, but a lapse into fis- Truman upset Mr. Dewey that year, obligated expenditures. While I favor cal indiscipline on a scale never before expe- but the Democrats regained control of significant debt reduction, I think one rienced in peacetime. There is no basis in the Congress. The American people would have to imagine some pretty un- economic history or theory for believing know when the Congress is dealing usual economic circumstances to imag- that from this wobbly foundation a lasting with them squarely and wisely. They ine a downturn in the economy that era of prosperity can actually emerge. also know when the Congress is playing would eliminate a $3 trillion forecast. Will we never learn! political games with their futures. It is asked: To what level do we have to Cicero said, ‘‘To be ignorant of what I am reminded, in closing, of the les- get? Does it have to be $5 trillion be- occurred before you were born is to re- son conveyed by Chaucer in ‘‘The Par- fore we can give the American people main always a child.’’ That is the value doner’s Tale.’’ Three young men, back some of their money? of history. That is what we are talking searching to find and destroy Death, This, it seems to me, is a reasonable about, history, and history is about to were directed to a tree under which proposal, a moderate proposal. One repeat itself. they found bushels of gold coins. They could make a case for an even larger This can be a year of great oppor- immediately forgot all about their cut in taxes, and the best way of illus- tunity for the Nation if Congress and quest to find and murder Death, and trating that is if we were to imagine the administration can work together they set to plotting how to get the gold that the budget was balanced and CBO on our budget priorities for the coming safely home. They decided to wait until said that over the next 10 years we an- decade. I do not think Congress needs darkness fell, and they drew lots to see ticipate exactly the amount of revenue to choose an all-or-nothing course of which of the three would be sent into coming in that is needed to meet the action, but we do need to jettison the town to buy food and wine for all of expenditures that are forecast, and I political pandering that is going on. them. The youngest was chosen. While walked down here to the floor and of- This should not be an ‘‘us versus them’’ he was gone, the other two decided to fered a piece of legislation to increase battle; it is not a ‘‘big government kill him upon his return so as to keep taxes $2 trillion, I doubt I would get a versus little people’’ battle. So what more of the gold for themselves. In the single vote. should Congress do? The same as any meanwhile, the youngest, as he went Well, I would actually have to offer a wise investor would do: into town, decided to poison the other proposal to increase taxes $2.1 trillion 1, watch our investments carefully two so as to keep it all for himself. to find myself in a situation where we and manage them prudently. Manage When he returned to the tree, the two are today. We are talking about reduc- the economy and watch out for infla- waiting men pounced upon him and ing the projected surplus from $2.9 tril- tion; 2, pay our debt. Pay down the na- killed him. And then they drank the lion down to $2.1 trillion. This is an in- tional debt; 3, cover the necessities. poisoned wine and died. crease in the after-tax income for the Don’t short change our Nation’s core Let us heed the warning of ‘‘The Par- American household. I calculate that, programs, such as education, health doner’s Tale’’ and not allow the glitter in Nebraska, it means about $4 billion care and the like; 4, put aside what we of gold to blind us to the common good worth of increased income for house- need to put aside for a rainy day. Re- of the Nation. Congress has the ability, holds that is not taken into Wash- serve the Social Security and Medicare the wisdom, and the means to chart a ington, DC. That is a significant surpluses exclusively for future costs of wise budget course for our Nation’s fu- amount of money. those programs; 5, take prosperity in ture. Let us hope that Congress can Not only is there broad-based tax re- measured doses. Ease up on taxes with- also muster the maturity to put aside lief in here with a reduction in the rate out pulling the rug out from under pro- election year rhetoric in favor of sound from 15 to 14 percent, but there are a jected surpluses. fiscal policy. number of other things that will hap- After years of struggling to overcome Mr. President, I yield the floor. pen that I consider to be good. We have a sluggish economy and mounting defi- Mr. ROTH. Mr. President, I yield 10 about 130,000 Nebraskans without cits, America is well-launched on an minutes to the Senator from Nebraska. health insurance. One of the reasons is economic renaissance. I hope we in The PRESIDING OFFICER (Mr. FITZ- that our tax policy doesn’t favor an in- Congress can rise to the challenge and GERALD). The Senator from Nebraska is dividual who makes a purchase of serve as wise stewards of this economic recognized. health insurance. This proposal will en- prosperity. I hope we can put aside our Mr. KERREY. Mr. President, I thank able many of those 130,000 people to be political posturing and act in the best the distinguished Senator from Dela- able to afford that because there is an interests of the American people and ware, the chairman of the Finance above-the-line deduction in this pro- the American Nation. Committee. I rise enthusiastically to posal for individuals. There are 400,000 Before the Congress takes this folly speak in favor of the legislation that is households in Nebraska that I estimate of a plunge, perhaps it is a good time before us, the proposal to give Ameri- will benefit from the savings section in for a bit of a history lesson. It was cans a $790 billion increase in our after- the proposal of the distinguished chair- more than 50 years ago when the Re- tax income. I want to, first of all, ad- man of our committee—people who are publican-controlled 80th Congress ap- dress this question about the size, trying to figure out how do I save for proved a massive $4 billion tax cut. which is one of the things I hear most my own retirement. I know Social Se- That was a massive tax cut—$4 bil- about when I go home. Can we afford to curity doesn’t provide me with every- lion—in those days. President Harry do it? The distinguished Senator from thing I need. I know I need some kind Truman—one of my favorite Presi- West Virginia, the ranking Democrat of savings or pension. dents—vetoed that tax cut, calling the on the Appropriations Committee, has This has significant reform in our Republicans ‘‘bloodsuckers with offices just spoken about that as well. pension laws, making it extremely on Wall Street.’’ I am quoting Mr. Tru- I believe this is a prudent amount. I likely that people right now who don’t man as saying that. It took three do not believe this is going to undo the have pensions for small businesses will times, but the Republican majority great progress we have made beginning have pensions in companies that em- overturned that veto. way back in 1990 and the first balanced ploy relatively small numbers of peo- In his nomination speech before the budget proposal for which I voted. We ple. Democratic National Convention, had another one in 1993, and another in So in addition to providing $4 billion President Truman put forth an idea 1997. Taken together, they have all worth of additional after-tax income to that we need to recall today. He said contributed to the elimination of our the people of the State of Nebraska, that ‘‘everybody likes to have low deficit and the very strong economic this proposal will also help them save taxes, but we must reduce the national growth which we have to be careful not for their retirement. It will result in an debt in times of prosperity. And when to undo. increasing number of Nebraskans who S9470 CONGRESSIONAL RECORD — SENATE July 28, 1999 have health insurance, and, in addi- In the small amount of time I have delay because every year of delay tion, it is going to make it easier for remaining, there are three remaining means you have a larger cut in your working-class families to send their problems this proposal doesn’t even benefits as a consequence. That is the children to college. pretend to address and should attempt result of not doing anything. There is a deduction here for interest to address. I have heard people talk Our proposal will cut payroll taxes on student loans. One of the most about it a lot. by $1 trillion and increase the net alarming things I see today in the No. 1, discretionary spending. This worth. It fixes Social Security and in- State is the amount of debt students tax cut is not the threat to discre- creases the net wealth and worth of are acquiring in order to be able to get tionary spending. American households by $1.5 trillion a college degree. It will increase the We have tremendous discretionary over 10 years. amount of charitable giving in Ne- spending problems right now. That is the third remaining problem braska. We have a problem with that Everybody knows VA-HUD is in trou- that needs to be addressed. We do not today. The charitable giving is flat, ble. address it by locking the money in a and we have questions being asked We have significant cuts to veterans lockbox. That doesn’t do anything to about how we can increase that that are not what anybody wants. extend the solvency of Social Security, amount. This proposal will increase the We have problems in Labor-HHS as and I hope during the progress of this charitable giving. well. debate we are able to make that clear There are 180,000 Nebraskans who We know we have problems. There is to the American people. will applaud this piece of legislation no tax cut that preceded them. What is I yield the floor. because it eliminates the current tax causing that is the growing cost of Mr. ROTH. Mr. President, I yield 14 penalty on them as a consequence of mandatory programs that in the budg- minutes to the Senator from Ten- their being married. et we passed in 1997 says that between nessee. This is a good proposal. now and 2009, 56 percent of our budget The PRESIDING OFFICER. The Sen- There is a $3 trillion surplus being currently going to mandatory pro- ator from Tennessee. forecast over the next 10 years. grams will grow to 70 percent. The dis- Mr. THOMPSON. Mr. President, I This is a moderate proposal. One cretionary programs will go from 31 thank the Chair. I thank the chairman. could have argued for a larger one. percent to 27 percent, if we are able to First of all, I want to align myself Not only did the chairman of our reduce the national debt and reduce with the comments of our previous committee put together a piece of leg- the net interest figure as well. speaker, Senator KERREY. I think he is islation that is moderate in size, but he That is what is putting pressure on right on all points. attempts to, in addition, have broad- discretionary spending. I think the question really boils based tax relief to solve real problems I know it is difficult to face it be- down to a very simple one; that is, we have in our country—that is, indi- cause it means we have to make whether or not with a $3 trillion sur- viduals who are struggling to plan for changes in those mandatory programs plus it is reckless and dangerous to their own retirement, individuals who to reduce their cost, or you have to give 25 percent back to the people who are trying to send their children to col- come to the floor and propose increased created it. Or stated another way, now lege, individuals who are trying to pur- taxes to pay for all of the things we that we apparently are going to be in chase health insurance, organizations want to pay for. surplus, is this a time for a tax cut or throughout our State that are trying There is a problem with growing a tax increase. to solicit charitable contributions, and mandatory and declining discretionary The President actually over the next families who are angry because they program expenditures. 10 years proposes a tax increase and $1 pay a penalty once they get married. Second, there is a problem with trillion more in spending as opposed to This proposal will not result in our Medicare—not just for the need to the tax cut we have proposed. undoing the great progress we have modernize the program, not just the So it is really a very basic philo- made since the first piece of legislation need to provide health insurance for sophical difference that we have here. dealing with the deficit was enacted in prescription benefits, but we should First of all, I look at the tax burden 1990, followed with the 1993 effort, and not, with the growing economy—4 per- we have today. followed by the 1997 effort. cent real growth and 3 percent real The reason we have this surplus, of This is moderate tax relief. It will be growth in quarter after quarter—we course, is because of unprecedented significant for the people of the State should not with growth in the economy revenues that are flowing into the Fed- of Nebraska. It will not bring back in- see the number of Americans who are eral Treasury. flation that Mr. Greenspan talked uninsured go up. The primary reason for that is the about because of the way the chairman There are an estimated 41 million unprecedented portion of Federal in- has drawn the bill. Americans without health insurance, come tax revenues that are flowing I have been asked by people: How can and 24 million of them are in the work- into the Treasury. you possibly do this? It is not even a force. We tax their wages to pay for The income tax portion of the gross close call for me. It is not even close. health insurance for everybody else, domestic product has now reached 10 I feel extremely enthusiastic about but they don’t have it. percent, which is an all-time high in this proposal, about both the dollar That, in my judgment, is the problem the history of the United States of size and the makeup of the things that with Medicare. It is not just Medicare. America. are in it. It is all health care that needs to be The average two-earner income fam- I think one of the things that would fixed. ily is paying 38 percent in taxes. have made this thing very attractive to Lastly, Social Security. Senator Someone reminded me the other day Senators on this side of the aisle, and THOMPSON, I, and others intend to offer that even the serfs in feudal times only I believe many on the Republican side an amendment at the appropriate time. had to pay a third to their masters, and as well, is if we could have found a way We know Social Security needs to be these families are paying 38 percent. to include an increase in the standard fixed. Tax day now is May 11. We are work- deduction—that is in Senator MOY- This is not like youth violence or ing for the Government until May 11 of NIHAN’s proposal that he will offer Medicare or lots of issues that are ex- every year. Tax revenue has doubled later—that would haven taken 3 mil- tremely complicated—global climate just since 1987. We have this record lion people in America completely off change and others. This is a very level of tax revenues as a share of our the tax rolls. It would take 9 million straightforward, simple, actuarial gross domestic product. people that are currently itemizing de- problem. What do we do about that? This bill, ductions and put them in a standard I am astonished that we are able to first of all, is addressed to the lower deduction category. survive around here without answering and middle-income taxpayer. It is ad- The proposal would have made it the question, What do you think ought dressed to the small businessperson even better from the standpoint of to be done? The 150 million Americans who is out there working every day to working families. under the age of 45 should not like a make a living. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9471 It gives some relief to those who tion we will have a smaller population, pretty much irrelevant to Social Secu- want to save. It gives some relief to and a smaller and smaller workforce, rity and Medicare. As the Comptroller folks who want to invest. It gives some with a doubling of the people drawing General pointed out, if we put every relief to folks who want to marry. And out these funds. It will not work. penny in savings, if we put every penny it gives some relief to folks who maybe We have made some progress, at least of surplus into Social Security and after paying taxes all of their lives, in advancing the debate on these issues Medicare, it would do nothing to when they die, don’t want to have the on a bipartisan basis. It is the first change or rectify the fundamental in- family farm or their business sold just time I have seen issues of this mag- herent problems we face with those two to pay the tax man again. nitude and of this importance seriously programs. It gives some relief to all of those addressed on a bipartisan basis. It is I think we can cite the Comptroller, folks. It will not hurt the economy, as very encouraging. as well as GAO, in saying the Presi- previous speakers have pointed out. As We had a Medicare commission with dent’s proposal actually makes the So- Chairman Greenspan has pointed out, Democrats and Republicans, chaired by cial Security and Medicare situation it is phased in. It is only about $38 bil- Senator BREAUX, that addressed this worse by pouring additional water into lion for tax relief for the first 2 years. Medicare problem in a serious fashion. a leaky bucket with the hole in the The President has more spending in The President’s response to that was to bottom getting bigger and bigger and his proposal—over $50 billion during scuttle the majority will of that Medi- bigger, and all the time having to pour the same period of time. If you worried care commission trying to make funda- more and more water on top. What we about the stimulus effect of the econ- mental reforms because they told us are doing is buying a little time from omy, talk to the President. Don’t talk something we already knew; that is, we the day of reckoning and convincing to us about this bill. It reduces the can’t just keep pouring money into a people in the short run all they have to Federal debt more than the President’s broken, worn out, outdated system. do is concentrate on the short run. proposal does. I think as Senator BREAUX once said: Don’t think about down the road. Don’t But in response to this kind of tax You put gasoline into an old, beat up, think about your kids or grandkids. We burden, and in response to this reason- worn out car and it is still going to be will not address serious reform but we able—as Senator KERREY said ‘‘no an old, broken down, beat up old car. will start dipping into general revenues brainer,’’ really not even a close call— Instead of pouring more money on top instead of having some control with response to a situation like that where of the system, we need fundamental re- dedicated tax dollars, FICA tax money, we have this unprecedented situation, form. We tried to do that. The Presi- dedicated to these particular programs. we have seen an unprecedented amount dent’s response was to scuttle it. Then we can keep up with it and see of inside-the-beltway hyperventilation. On Social Security, we had bipar- how we are doing, know when we are in The President, the Vice President, tisan bills in the Senate, with Demo- trouble. Forget that. We dip into gen- and members of the White House have crats and Republicans working to- eral revenues. We have an extra taken to the airwaves wringing their gether for serious Social Security re- amount and we will dip into general hands, and a different part of the sky form biting the bullet. It is not the revenues without any control, without has fallen every day. We are going to easiest thing politically to do but any way to tell how we are doing. pollute the streams, our kids are not somebody has to do it. The Democrats That is totally, totally irresponsible. going to be educated, our military is and Republicans together are doing it. Yet after doing everything they can to going to go in disrepair, and the Repub- The President was looked upon to undermine the Social Security and licans are not looking out for the mili- have a little leadership. Perhaps in Medicare long-term problem solution tary anymore. And, that old reliable these last couple of years he will want the Democrats and Republicans have standby, ‘‘We are going to harm Social to exert some leadership when he is not been trying to work on, after doing ev- Security and Medicare if we have tax having to run for reelection. His re- erything they can to work against cuts.’’ It is called ‘‘dangerous’’—a sponse was not to show leadership, but that, they, in turn, use that as a shield ‘‘dangerous tax cut.’’ to back away from serious reform, say- to say: Because we are not willing to I think that assumes a level of igno- ing he will put $100 million worth of address that, you have to go along with rance among the American people that IOUs into the Social Security trust us and spend an extra $1 trillion to does not exist. I don’t have time to fund which does nothing to save Social temporarily buy a few more years. talk about all of the accusations and Security, and represents nothing more Then they hope somebody will come charges and points that have been than a tremendous tax burden down down the road later on with more polit- made to do anything but have tax re- the line when those treasuries are re- ical courage to address the problem. lief this year. I will discuss one or two deemed by our kids and grandkids. I think that is outrageous. Tax cuts in the limited amount of time we have. While they are saying you can’t have have nothing to do with that problem. Perhaps we can address the others a tax cut, you can’t have a tax cut, we We set aside 75 percent of the surplus later. have to save all this money for Social for those matters to start with, but tax With regard to Social Security and Security and Medicare, at the same cuts have nothing to do with the funda- Medicare, of course we all know it is a time they are doing everything in the mental problem we are facing. problem. Senator KERREY pointed out world over at the White House to pre- The only reason I can see for this the nature of the problem a minute ago vent any real reform for Social Secu- kind of overreaction to a tax cut with again. It is not as if we don’t under- rity and Medicare. these unprecedented surpluses is that stand the problem. It is not as if we What about the question should we the administration feels like a person will not have to face up to it. The ques- be saving all of the surplus for Social who has been wronged, an injustice has tion is when. Security and Medicare and others? The been done to them, on the premise that We have a demographic time bomb short answer is we are taking 75 per- it is the Government’s money to start on our hands that will affect Social Se- cent of these surplus dollars and devot- with and somebody has improperly curity and Medicare. We are an aging ing it to those very areas by means of tried to take that money away from society. Some people say that is not a a lockbox, by means of setting aside them. bad problem, that we are living longer. Social Security, Medicare, other spend- For some folks, there will never be a That is right. However, we have to ing priorities. Mr. President, 75 percent good time for a tax cut. Over the last make some changes precisely because goes to those things. few years, the President recommended of that if we are not going to ruin our I think the more important point we three tax increases in times of deficits. kids and grandkids. will hear time and time again is the Now we have a time of surpluses and In the year 2030, we will have twice President and Vice President on the his response is more tax increases. I as many people over the age of 65 as we airwaves hoping people will believe we think it is a debate not just over tax have today. Currently, we have almost are doing something bad to Social Se- dollars; it is a debate over power. The four workers for every retiree; in 2030 curity and Medicare if we pass a tax folks in Washington don’t want to give we will have two workers for every re- cut. The primary point is that these up power. It is a question of who is tiree. After the baby boomer genera- surpluses we are talking about are going to make decisions with regard to S9472 CONGRESSIONAL RECORD — SENATE July 28, 1999 people’s lives. Will Washington collect We are almost there. Now we have Fiscal responsibility—corporate money and dole it out as we see fit? Or come to the point where we can actu- America has done it. Now Government are we going to leave it in the tax- ally get over the hump, position Amer- is in the process of doing it. We have payers’ hands, at least 25 percent of the ica well for the future, and my col- eliminated the deficits. We have a amount of money about which we are leagues, at least some of them, want to chance to eliminate the debt, some- talking? blow all of this investment of effort thing that has never even been con- It is not this tax cut that is dan- and discipline we have made with a templated before. Now we are going to gerous. What is dangerous is a govern- huge tax cut spending spree which the blow it on a Republican tax cut which ment that can never, ever go but in one American people are not asking for, the people do not ask for. direction: eating a bigger and bigger nor is American business asking for. Well-respected economists estimate percentage of what we produce in this First and foremost, let’s recognize that there would be probably cumu- country. What is dangerous is an ad- the $996 billion surplus only exists— lative deficits of maybe $821 billion in ministration that will use this kind of and I hope my colleagues will pay at- the non-Social Security budget over debate to mask over the fact it is not tention to this—only exists if you as- the next 10 years if the Senate Finance willing to face up to timely problems. sume that Congress will cut $775 billion Committee’s tax packets were enacted. That is what is dangerous. I think the in real dollars over the next 10 years It is a lot less than what is projected. American people see that. from programs that the American peo- That should be reason enough to I think the American people support ple want and need. rethink a vote for this tax cut package, this bill. I support this bill and urge its Does that mean we are adding on new or any tax cut package of such gigantic passage. programs? No. That is programs that proportions. The PRESIDING OFFICER. The time already exist, that are already under Let me take a minute or two to out- of the Senator has expired. Who yields the budget caps and already below ex- line what I think would happen to our time? penditure levels of where they ought to economy if a massive tax cut were en- Mr. BAUCUS. Mr. President, how be. So that surplus exists only if we cut acted. Let us consider what would hap- much time is remaining? an additional $775 billion from pro- pen if we actually voted to reduce The PRESIDING OFFICER. The Sen- grams, which I will discuss in a taxes by $792 billion. Forget the in- ator has 16 minutes. minute. equity of distribution. I can go into Mr. BAUCUS. I yield all 16 minutes That $775 billion in cuts is itself al- that, but I will not now. Forget the to the Senator from West Virginia, most equal to the size of the Repub- cruel, gross, greedy inequity of that Senator ROCKEFELLER. lican-proposed tax cut. That should tell distribution of taxes. The PRESIDING OFFICER. The Sen- you something about the tradeoff here, No. 1, if you vote for a $500 billion or ator is recognized. whether the tax cut numbers really add $792 billion tax cut, which would un- Mr. ROCKEFELLER. Mr. President, I up. Deep, deep cuts would be required doubtedly further stimulate spending, am here in the hopes of convincing my in seniors programs, education, trans- it is inconceivable to me or any ration- colleagues to oppose the $792 billion portation, veterans—just about every al person in this Chamber that the Fed- tax cut, which is based on a premise of area of the Government—an average of eral Reserve would do anything other a projected surplus of $996 billion. We over 30 percent if we are to enact a $792 than raise interest rates. I listened to have just heard a speech which basi- billion tax cut the American people are Alan Greenspan this morning as Re- cally attacked everything President not asking for. publicans tried to pin him into corners, Clinton has done and stayed away from By deep cuts I mean the kinds of cuts yet he kept coming back to the point the tax cut debate itself, and that is in programs that provide health care to that this is not the time to do it. Do shaping up as somewhat of a pattern. veterans. People talk about veterans not do it now. There will be con- I am also here in the hopes of con- and then run away from their obliga- sequences if you do it now. Do not vincing my colleagues that the only tions to them. Or child nutrition—we make the tax cuts now. This is not the prudent fiscal course, the only way you all talk about children. They will have time. can strike a blow for our constituents to be cut by more than 40 percent in The Chairman of the Federal Re- and for our country and for our place in real terms if the Republican tax cut is serve, Alan Greenspan, clearly says this world, is by taking advantage of enacted. This assumption is ludicrous. that. It is not the time for massive tax this, what I consider to be almost cer- It is ludicrous. It is a sham that a mas- cuts. If you credit him, as I think most tainly a once-in-a-lifetime chance to sive tax cut of either $792 billion or, of us do, with being a part, along with take the projected surplus and use the so-called more moderate approach, the fundamental force of the private whatever actually accrues from that to the $500 billion—they are both shams. sector, of our booming economy, then pay down the national debt. They both have the same results. They you should consider what he has to say. It is very odd to me that the Repub- both cause us to reverse course on fis- One listens closely to every word he lican Party and Democratic Party al- cal discipline and responsibility, not has to say because he has not missed most seem to have switched. The just to the American people today but one yet. Greenspan said just this week: Democratic Party appears to be the to future generations. party of fiscal responsibility. The Re- We should all have the courage to The first priority in my judgment should be getting the debt down, letting the sur- publican Party wants to be the party of admit that now, before the Senate pluses run, and to, as has been suggested political expediency. That is a political makes a mistake of historic propor- here—[I am quoting Greenspan; this is all statement on my part. I apologize for tions, we are subsuming our responsi- him]—put in contingency plans so that in that, but I have to make note of my bility to the social fabric of America as the event that all of this is happening, you understanding of what has happened in we cast our votes. That kind of debili- could move forward later, at a later date, the last several years. tating discretionary cuts cannot hap- with tax cuts. I think we should take this money to pen in an integrated and united Amer- No. 2, let’s examine what an increase take down the debt. I think we should ica. The American people will not of tax reductions would do, let’s say, use it to save for Medicare and Social stand for it. I believe the projected $996 with a 1-percent increase in the inter- Security’s future. I think we should po- billion will not materialize. That is my est rates by the Federal Reserve. In sition ourselves to be able, as Alan personal view. I do not believe it will West Virginia it would mean the aver- Greenspan has suggested, if we see the happen. But the tax cuts will kick in age home mortgage holder with an ad- surplus coming in the future years in and they will be there. I believe once justable rate mortgage of $60,000 would the way that we want, to then do a again we will get into the situation of pay $456 more every year for that mort- meaningful tax cut—once we have put spiraling deficits that we have tried so gage. our fiscal house in order. Remember all hard—going back to the structural im- The average student loan payment, the talk about getting our fiscal house pediment talks with Japan, and then based upon $11,800 owed, which is typ- in order? That is all we talked about in the discipline the folks on this side of ical, would cost the average student $70 1990, 1991, 1992, 1993. That was the the aisle exercised in 1993—that all of more a year. Add those up, and an av- talk—most of it from the other side. us have tried to exercise. erage person in West Virginia will have July 28, 1999 CONGRESSIONAL RECORD — SENATE S9473 to pay $615 more per year in increased percent of the benefit of this bill. Can for a $792 billion tax cut predicated on costs due to higher interest rates. anyone call that a middle-income tax those deep spending cuts, how will my I encourage any Member to do the cut with a straight face? If one divides colleagues be viewed in their States? math for the people they represent. up the quintiles—America divided into The PRESIDING OFFICER. The Sen- That is the increase they will have to five different income categories—it is ator’s time has expired. pay. Then you say: But there is a tax gross, it is embarrassing to see what Mr. MOYNIHAN. Mr. President, I reduction out there in the land. In happens in the distributional tables of yield 5 minutes off the bill to the Sen- West Virginia, the Republican tax rate who benefits from the Republican tax ator from West Virginia. reduction proposal will give the aver- cut. The PRESIDING OFFICER. The Sen- age West Virginia family a tax cut of How much is there for those in the ator is recognized. lower brackets doing the best they approximately $118 per year versus the Mr. ROCKEFELLER. I thank my can? Very little. In fact, for those in $615 more they will have to pay just on Democratic chairman of the Senate Fi- the lowest quintile, which is, in fact, college, car, and home. nance Committee. That is a tax cut? If they have to pay close to 23 million families, they get If my colleagues vote for this bill, more money, that is not a tax cut. But less than one-half of 1 percent of this will they be viewed as a leader? Will you say: We have the proposed mar- generous Republican tax cut bill. they be seen as somebody who is think- riage penalty relief. Maybe that is 100 I suggest my colleagues should be ing for the long-term good? That is bucks. Maybe that is a little bit more able to answer these questions to what people want. That is what people than 100 bucks, but still that is an themselves before they have to answer yearn for, is leadership. Or will they be enormous tax increase on the burden of them to their constituents. looked at as somebody who took the average families in West Virginia. I am Equally shocking is the fact that easy course of voting to ‘‘return tax taking the average family median in- more than 45 million families in the dollars,’’ or some part of them? Or will come of $30,500. lowest brackets get a tiny percentage they be viewed as somebody who signed As far as I figure, it does not add up from this bill. The 23 million American up to an economic plan that will limit to the cost of what they will have to families right in the middle get only 10 our ability to protect Medicare and So- pay in higher interest rates that are percent of the $792 billion Republican cial Security? My people point that sure to accompany a huge tax cut. proposal. That means, again, that Moreover, many of the people we rep- three-fifths, or a little bit more, get out. Even if they do not know it, even resent benefit from the programs that only 15.5 percent of the total benefits if they are not sure of it, in their own will have to be cut. I go back to the 40- in this bill. This is wrong; this is dan- minds, wouldn’t they question whether percent cut in programs that are now gerous tax policy. Frankly, it is dan- or not you are exercising leadership re- in effect and helping people; not new gerous social policy which will rever- sponsibilities or political imperatives? programs, not new spending, but pro- berate upon those who vote for it. When will these devastating cuts in Fourth, the Republican tax cut will grams in effect and already under- the important domestic programs af- increase mandatory interest payments funded and staying that way through fect your constituents? Imagine—how on the debt by $141 billion over the the year 2002. Families with children in would my colleagues respond to that? next ten years. Mandatory interest Head Start programs will have signifi- What would my colleagues say to payments on the debt are already at cant cuts. We all benefit from a range them? How would they view you when about $227 billion. Doesn’t that tell you they discover that these things hap- of basic Government services. The air in fairly clear and simple terms why we transportation system is grossly under- pened and they happened because of a need to, in fact, pay down the debt to $792 billion vote that you made? What funded. We all benefit from that. Not get rid of that obligation, to free up for all of us, but more and more of the would you hear from your constituents the capital market this money which is if you agreed to $775 billion in very im- American people are flying. now crowding out private sector in- We benefit from what goes on at NIH portant discretionary cuts on programs vestments. people care about? These are not new in biomedical research. Cures for can- Five, if we spend every dime and cer, Alzheimer’s, Parkinson’s, and programs but programs already re- more of our available assets in the duced, programs to be further dimin- many other things are on their way. Or form of yet unknown surpluses before the assistance that is provided directly ished by $775 billion. How would they we preserve Medicare and Social Secu- view you then? Would they view you as to the States—all of these things will rity for the future, there will be no ad- be cut under the Republican tax plan. a leader or as a follower of public opin- ditional resources left to strengthen ion that did not exist in that regard? Not just cut, they have already cut, those programs that we know the Here is one example which is shock- but they will be cut much more. American people do want, do ask for, ing to me, I say to the senior Senator The NIH increase this year is minute. do insist on, and do look to us to pro- from New York. The House is now con- It will go down substantially. Do peo- vide. ple really want to do this? Are my col- Medicare is desperately in need of sidering reclaiming $6 billion from the leagues truly willing to sacrifice those modernization. It is desperately in welfare reform money from the benefits for the American people for a need of universal outpatient prescrip- States—from the States, not even from tax cut that disproportionately bene- tion benefits. Social Security needs to us, but from the States—to make up fits those who are doing best in our meet the needs of the baby boom gen- their shortfall on the Labor-HHS budg- country already? eration. People on the other side and et. It is kind of ‘‘reverse Robin Hood’’— Three, the Treasury Department just some on our side talk about we in stealing from the poor to make sure we provided us with an analysis of who Washington trying to decide what is can provide tax breaks for the wealthi- benefits from the Republican tax cut good for the people as opposed to the est of Americans. when it is fully phased in. I point out people know what is good for the peo- I conclude my remarks simply by on the marriage penalty tax cut, there ple. The people out there know. Those urging my colleagues, in the most sin- will be no relief for any West Vir- whom I represent and my colleagues cere and intense terms, in one of the ginians or anybody from any of our represent know they are not in it for most important debates—the most im- States for the first 5 years because it themselves. They are in it for their portant debate I have been associated does not kick in. All we do in West Vir- children and their grandchildren. It is with in the 15 years I have been in the ginia is pay more taxes under a Repub- not just what they think might be best Senate—to weigh these considerations lican tax cut because of what it inevi- for them. They are thinking, yes, what against the possibility that exists for tably does through the Federal Reserve might be good for them, but what is this country and for our people if we System. good for their children and grand- actually pay down the national debt— If my colleagues vote for the Repub- children. That is the way Americans to accomplish the impossible—to elimi- lican tax cut, if they are of such a mind are. That is the way we have always nate the budget deficit, to eliminate to vote for the Republican tax cut, been. the national debt, and then to con- please understand that Americans in Six, and finally, for your consider- template what kind of country this the highest income brackets will get 67 ation: If my colleagues cast their vote could be for all of our citizens. S9474 CONGRESSIONAL RECORD — SENATE July 28, 1999

I thank the senior Senator from New get the idea that this is a debate be- debt, with Chairman ROTH’s tax cut, York, and I thank our colleagues and tween cutting taxes and paying down the budget adopted by Congress, which yield the floor. debt. The problem is, that is not what includes this tax cut, still pays down The PRESIDING OFFICER. Who the debate is about. This White House the Federal debt $219 billion more than yields time? has turned misinformation into an art the President’s budget. Why? Because Mr. ROTH. I yield 19 minutes to the form. Here is the living proof of it. Senator ROTH’s tax cut gives $792 bil- distinguished Senator from Texas. In the analysis of the Mid-Session lion back to working families. The The PRESIDING OFFICER. The Sen- Review that was just published by the President’s budget spends $1.033 tril- ator from Texas is recognized. Congressional Budget Office, the Con- lion. As a result, even after the tax cut, Mr. GRAMM. Mr. President, I thank gressional Budget Office basically has the Republican budget reduces debt the chairman of the committee for two findings. One, while the President held by the public by $219 billion more yielding me so much time and for let- had initially proposed spending some of than the President’s budget. ting me speak last on our side as we the Social Security surplus, we have so So his rhetoric is great. His sound begin the amendment process. shamed the administration that they bites are flawless. But the point is, he We have heard some awfully strong now have agreed with us that the is not telling the truth. The reality is, language here. Our colleague from roughly $2 trillion of surplus caused by the President proposes to spend every West Virginia begs us not to give Social Security should be set aside to penny of the discretionary surplus on Americans back some of this money either pay down debt or to fix Social Government programs and plunders So- that we have taken from them in taxes. Security. cial Security for additional money in 3 We are projecting a $3 trillion surplus It is interesting that we have voted out of the next 10 years. over the next 10 years. Nobody disputes many times on a lockbox procedure to So the debate is not between reduc- that. We have before us a bill that require that that money not be spent, ing debt and cutting taxes. The debate would give about 25 cents out of every and we have been unable to get the is between letting Government spend dollar of the projected surplus back to support of the minority in making that the money or letting the taxpayer taxpayers. Our Democrat colleagues the law of the land. But that is some- spend the taxpayer’s own money. say: Please, don’t do that. Our Presi- thing that at least to this point we But in addition to that, the tax cut dent is quoted in AP on July 25 as say- have agreed on. that is being called ‘‘huge,’’ ‘‘vulgar,’’ ing that our effort to give 25 cents out Where the disagreement is—and the ‘‘dangerous,’’ by President Clinton and of every dollar of projected surplus Congressional Budget Office shows it his supporters is actually substantially over the next 10 years back to working very clearly—is, what do you do with smaller than the massive spending people in tax cuts ‘‘will imperil the fu- the non-Social Security surplus? Basi- spree the President would take us on ture stability of the country.’’ In fact, cally, what the Congressional Budget with 81 programs. yesterday the President said it would Office finds, that the administration I ask you, how can it be more dan- hurt women’s health care. Perhaps desperately does not want anybody to gerous to start to cut taxes by $792 bil- today it will be that it will bring back know, is that their answer is, spend it. lion with a trillion-dollar surplus than the bubonic plague. They are not paying down any debt it is to fund 81 programs and spend But it is clear that the President is with the nondefense discretionary sur- $1.033 trillion? Obviously, no one can against giving back 25 cents out of plus. In fact, over a 10-year period they argue that it is even equally dan- every dollar of surplus—out of every spend every penny of it. And they gerous. So what does the President do? dollar we are taking in above what the spend so much money in their budget He basically does not tell the truth. Government needs. He thinks giving that in 3 of the years they have to Point No. 2, let’s talk about: Why a back 25 cents out of every dollar is too plunder the Social Security trust fund, tax cut now? much. basically, in contrast to what they This chart really shows the highest 7 Our Vice President says that the tax have committed to do. years in American history, in terms of cut before us is a ‘‘huge, gigantic, risky In fact, the Congressional Budget Of- the tax burden on working American tax scheme.’’ fice concludes, in looking at their own families. The highest tax burden in This is very extreme language we are budget—and, again, this is the non- American history by the Federal Gov- hearing. Let me try to explain why it partisan CBO—that in total, the Presi- ernment was in 1945 when Harry Tru- is so shrill. It is shrill for two reasons, dent, over the next 10 years, would man was President. By the way, 38 really. spend $1.033 trillion of the non-Social cents out of every dollar earned in No. 1, giving people back their money Security surplus, which is a little more America is what we were spending on so they can spend it themselves rather than the entire surplus. defense in 1945. That was the highest than Government spending it for them So when our colleagues are saying, tax burden in American history. hardly seems extreme to the American don’t give money back to taxpayers, The second highest tax burden in people. With the projected surplus of $3 pay down the debt, they are not talk- American history is today. Under trillion, giving about one-fourth of it ing about their program. The problem President Clinton, in the year 2000— back in tax cuts hardly seems extreme. is, and the frustration is, if the Presi- which is the budget year we are consid- But the other reason the President dent stood up and told the truth and ering—the Federal Government will and his supporters are so shrill is, the said, don’t give this money back to take 20.6 cents out of every dollar President is not telling the truth. Let families, let me spend it, don’t give earned by every American. That is the me explain why. this money back to working couples second highest Federal tax burden in I have a chart here that has the cover because they can’t do as good a job American history. page and one page of text of the anal- spending it as the Federal Government The third highest is under President ysis of what is called the Mid-Session could, then we could have a meaningful Clinton in 1999. Review. This is an analysis by the non- debate. But it is hard to have a mean- The fourth highest was under Presi- partisan Congressional Budget Office ingful debate because the administra- dent Clinton in 1998. that was just completed of the Presi- tion basically is engaged in a concerted The fifth highest was under Franklin dent’s budget; that is, what he proposes effort to mislead people. D. Roosevelt in 1944, when defense was we do with the surplus, what the budg- But numbers and facts are persistent 37 percent of the economy. et adopted by the Congress proposes we things. The Congressional Budget Of- The sixth highest was under Bill do with the surplus; and then it com- fice concludes two things about the Clinton in 1997. Hence, why we have on pares the two. The important point Clinton budget that are devastating. this chart ‘‘Cause of Record Taxes: War being, this is not me talking, this is No. 1, it would spend an additional and Clinton.’’ not Bill Clinton talking, this is the $1.033 trillion more than the budget we The seventh highest tax burden in nonpartisan Congressional Budget Of- have adopted and the spending caps to American history was the day Ronald fice talking. which the President is committed. Reagan became President. What did we To listen to the President and to lis- Secondly, and equally devastating, promptly do? We cut taxes by 25 per- ten to our Democrat colleagues, you despite all this talk about buying down cent. So we have never had, except July 28, 1999 CONGRESSIONAL RECORD — SENATE S9475 under President Clinton, tax levels ap- are going to let you decide how to to get more tax cuts? In fact, our col- proaching the level we have today. spend it. leagues like to rant and rave about Now, in terms of this ‘‘dangerous’’ The people could look at the Presi- across-the-board tax cuts by saying, tax cut, this is probably the most tell- dent’s 81 programs and look at our tax well, a 10-percent tax cut means that ing chart of all. The day Bill Clinton cut and they can say, ‘‘I would rather Senator ROCKEFELLER, who pays at became President, the Federal Govern- President Clinton do it,’’ or ‘‘I would least 10 times as much in taxes as I do, ment was taking 17.8 cents out of every rather do it myself.’’ That is the legiti- would get 10 times as big a tax cut. dollar earned by every American in mate debate we ought to be having. I am not offended by that. If he pays Federal taxes. Today, we are near an But we are not having it because the 10 times as much, and we have an all-time record of 20.6 cents out of White House continues to mislead the across-the-board cut, he would get 10 every dollar earned by every American. American public. times as big a tax cut. Hence, since Bill Clinton has been Let me make a few other points. Our Let me run over these figures real President, with the 1993 tax increase as colleagues keep talking about tax cuts quickly so people understand. people have moved into higher tax for the rich. I have noticed there is a The top 1 percent of income earners brackets, the tax take on the American code here: Any tax cut is for the rich. in America earn 16 percent of all the people has grown from 17.8 to 20.6 per- Any tax increase is a tax on the rich. income earned, but they pay 32.3 per- cent. So when the Democrats pushed cent of all the taxes. Now, if we took every penny of the through the largest tax increase in The top 5 percent earn 30.4 percent of non-Social Security surplus, which is American history when they last had a all the income earned, but they pay $1 trillion, under current services, ac- majority, in 1993, that was a tax on the 50.8 percent of the taxes. tually, bigger if you take a spending rich. Remember? Well, it raised taxes The top 10 percent earn 41.6 percent freeze, but if we took every penny of on gasoline for everybody. Do only rich of the income earned, but they pay 62.4 that, and we are not proposing that people drive cars and trucks? I don’t percent of the taxes. here—we are talking about $792 billion, think so. It defined as ‘‘rich’’ anybody Should anybody be shocked when you not over $1 trillion—but if we took the who made $25,000 a year or more be- cut taxes, when the upper 50 percent of entire trillion and gave it back in tax cause that is the tax it put on Social American income earners pay 99 per- cuts, 10 years from now, when that tax Security. Now, I don’t know about cent of the taxes, and they are going to cut is fully implemented, taxes would some of the States that people may get most of the tax cut? still be 18.8 percent of the economy, represent, but where I am from, $25,000 Only our Democrat colleagues and and taxes would still be substantially a year is not rich. But to our Democrat the President would be outraged about above where they were the day Bill colleagues, obviously, since the Clinton that. Our view is that tax cuts are for Clinton became President. tax increase was a tax on the rich, taxpayers. So when he is calling this tax cut $25,000 in income made you rich. Who is rich? I decided to look at this ‘‘dangerous and huge,’’ it is a tax cut According to them, our tax cut is for top 50 percent of income earners and that would not get us back, in terms of rich people. They get very excited basically ask: Who are these rich peo- tax burden, to where we were the day about the fact that they have discov- ple who the Democrats think should Bill Clinton became President. It ered when you cut taxes, people who not get a tax cut? would still mean the tax burden during don’t pay income taxes don’t get tax Let me go down who they are. the Clinton administration, even with cuts. In fact, they will point out, I am They are the 50 percent of people who this tax cut, would have grown by more sure a hundred times here, that 32 per- pay roughly 99 percent of the income than in any modern Presidency. cent of American families pay no in- taxes. Let me address the idea that this is a come taxes, which I personally think is They are 62 percent of all home- huge, dangerous tax cut. It is very in- an outrage. I think everybody ought to owners in America. They are 66 percent teresting how people make up these pay something. But 32 percent of Amer- of all people between the age of 45 and things and nobody goes and looks it up. ican families pay no income taxes, and 64. They are 67 percent of all full-time But let me give you some figures. their obvious question is: Well, under workers in America. They are 68 per- We are projecting next year, the first your tax cut, 32 percent of families cent of all workers who went to col- year of this tax cut, that revenues are don’t get a tax cut; how can that be lege. They are 69 percent of all married going to be $1.9 trillion. We are going fair? couples. And they are 80 percent of all to collect that much in taxes. This tax Let me explain why it is fair. These two-earner households in America. cut next year is a whopping $4 billion. taxpayers don’t get food stamps, the These are the people who the Demo- So out of $1.905 trillion of taxes we are great majority of them. They don’t get crats tell us are unworthy and should going to collect, this would give $4 bil- Medicaid. And unless they are elderly, get no tax cut—that these are rich peo- lion back. That is .21 percent. Now, they don’t get Medicare. They don’t ple and they deserve no tax cut. They that is the ‘‘huge, dangerous’’ tax cut qualify for those programs. Our point pay 99 percent of the income taxes, but about which we are talking. It is imple- is that tax cuts are for taxpayers. they deserve no tax cut. mented over a 10-year period. But over When we are cutting taxes, if you don’t Let me tell you what the code is. The that entire period, what is being called pay income taxes, you should not ex- Democrats are always for a tax in- a ‘‘dangerous’’ tax cut would reduce pect to get a tax cut. crease, and the tax increase, no matter taxes on the American people by 3.48 Some of our colleagues would like who it is imposed on, is always a tax on percent. So it is less than a 3.5-percent you to believe the Roth package bene- the rich. They are always against the reduction in taxes, far less than Presi- fits the rich relative to the poor. Well, tax cut, and the tax cut always goes to dent Clinton would increase govern- the plain truth is that the Roth pack- the rich, and that is basically the code. ment spending, I remind my col- age makes the tax system more pro- When you break through the code, leagues, and somehow that is ‘‘dan- gressive, not less progressive. Now, it the code is they are for tax increases. gerous.’’ is true that when you cut taxes, people They are not for tax cuts because they Well, it is dangerous if you are Bill who pay taxes get to keep more; people believe the Government can do a better Clinton, because if we give this money who don’t pay taxes don’t get a tax cut. job of spending your money than you back to the American people, he can’t But our colleagues have basically dis- can. spend it. There are 81 programs he covered that, over the years, we have The final two points: We often hear would like to have that he won’t get. made the tax code more and more and from our colleagues that this is the What the President should be asking, more progressive. In fact, today, the worst tax cut since the Reagan tax cut rather than misleading people, is: Here top 50 percent of income earners in of 1981. This is the worst tax since the are my 81 programs. This is what I am America pay 99 percent of the income Reagan tax cut. Do we want to do it going to do for you. I love you and this taxes. So is anybody surprised that, again? is what we are going to do for you. And when the top 50 percent pay 99 percent Let me remind my colleagues the day we ought to be forced to say: We are of the income taxes, that when you cut Ronald Reagan became President, an going to give you this tax cut, and we income taxes, the top 50 percent tend average family in America making S9476 CONGRESSIONAL RECORD — SENATE July 28, 1999 $50,000 a year was paying $12,626 in Fed- balance the budget and provide respon- To all the citizens watching around eral income taxes. They were paying 25 sible tax relief to the American people. the country today, let me explain. The cents out of every dollar they earned. At that time, we had no idea we would 1997 balanced budget agreement called Thanks to Ronald Reagan, today they achieve an on-budget surplus so quick- for strict spending caps in discre- are paying $6,242, or 12.5 percent. ly. Wise fiscal and monetary policies tionary, nondefense spending in fiscal The Democrats think that was ter- and a strong economy have provided a years 2000, 2001, and 2002. In other rible. This is the worst tax cut since projected surplus that gives us hope we words, the 17 percent of the Federal Ronald Reagan. They must have liked can solve some of the biggest chal- budget that funds all Government ac- the tax burden under Jimmy Carter. lenges of our time. It is an exciting tivities besides Social Security, Medi- They must have liked the 21-percent time to be in the Congress. care, Medicaid, and interest on the $5.5 interest rates under Jimmy Carter. But in our excitement about the pro- trillion national debt is subject to cuts. They must have liked the 13 percent in- jected surplus, I am afraid we are act- That 17 percent funds the federal role flation rate under Jimmy Carter. But ing in haste. And in doing so, we could in improving education, giving greater we had sense enough to end that policy undermine the hard work we have done access to Head Start, preventing crime, and let working people keep more of to get to this point. protecting the environment, providing what they earn. Let me be clear: I support responsible health care to veterans, investing in Final point: Alan Greenspan’s state- tax relief for the American people. urban and rural communities, main- ments have become similar to the I support further reform of our na- taining national parks, creating afford- Bible—nobody reads them very closely, tion’s estate tax laws so that the small able housing, reducing traffic conges- and everybody quotes them. They timberland owner in Mason County, tion through highways and mass tran- quote him on both sides of the argu- Washington, and the small business sit, and many other important func- ment. owner who sells farm equipment in tions. I would like to let him speak for him- Moses Lake, Washington, can pass The projected surplus uses as its self. I would like to do it in the context their land and livelihoods on to the baseline spending targets established of what the President has proposed. next generation. for fiscal year 2000. Right now, the Sen- I support deductibility of health in- Alan Greenspan said: ate Appropriations Committee, of surance costs so the self-employed which I am a member, is struggling to If you find that as a consequence of those owner of a technology start-up com- surpluses they tend to be spent, then I would move forward with bills. Even some of be more in the camp of cutting taxes, be- pany in Seattle can afford health care. my Republican colleagues have indi- cause the least desirable is using those sur- I support reducing the so-called cated they cannot write appropriations pluses for expanding outlays. ‘‘marriage penalty’’ so that a young bills within the current spending caps. married couple in Spokane has more When the President is proposing in- For example, both the VA, HUD, and money to purchase their first home or creasing spending by $1 trillion over Independent Agencies spending bill and begin saving for retirement. the next 10 years, don’t we find our- the Labor, Health and Human Services, I support expanding the low income and Education spending bill have not selves in a position where the surplus housing tax credit so that we increase is being spent? been reported by their respective sub- the availability of affordable housing committee because of the funding dif- The answer is obviously, yes. It is for low- and middle-income families, being spent just as fast as it can be ficulties involved. especially in rural and urban areas. The American people need to under- spent. I support the creation of Farm and Then Alan Greenspan is in favor of stand that this tax cut will mean mas- Ranch Risk Management Accounts so sive, unprecedented cuts in important giving part of it back—in this case a the apple grower in the Yakima Valley very conservative amount, 25 cents out and popular domestic priorities. will have one more tool to manage the If we assume that Congress will meet of every dollar we have in surplus. risk inherent in agriculture. the discretionary spending caps out- I think we should do it. I think it is I support the extension of the re- lined in the Republican plan, then non- the responsible thing to do. I believe search and experimentation tax credit defense discretionary programs would we will do it. so Washington state high-tech and bio- have to be cut by 23 percent by 2009. If this is taking us back to the ter- tech companies have the incentive and What does this mean for Washington rible days of lowering the tax burden, I the ability to invest in their long-term state? am ready to go back. future and the future of our country. It means 23 percent less for Hanford Mrs. MURRAY. Mr. President, I rise I support reforming the individual al- cleanup. It means 23 percent less for today to express my concerns about ternative minimum tax so that fami- salmon recovery. It means 23 percent the tax plan proposed by my Repub- lies all across Washington state can less for community police officers. It lican colleagues. continue to enjoy the full benefits of means 23 percent less for highway im- When I first came to the Senate in the HOPE scholarship and the per child provements and mass transit to meet 1993, there were projected deficits as tax credit that we passed in 1997. our growing infrastructure demands. It far as the eye could see. The United In principle, I support all of these means 23 percent less for Head Start, States had not seen a budget surplus in ideas, and many others that have been which serves more than 9,000 children a quarter century. The American peo- proposed. However, we cannot afford to in Washington state. It means 23 per- ple were demanding change after more make tax cuts without considering and cent less for reducing class size. it than a decade of Republicans in the carefully weighing the consequences. means 23 percent less for our VA hos- White House, and Republicans in con- The American people deserve a respon- pitals. It means 23 percent less for the trol of this body from 1980 to 1986. We sible tax cut. They also deserve an hon- management of Mt. Rainer National knew we had to make some unpopular est debate from this Congress about Park. But reductions in discretionary decisions to put our fiscal house in how the Republican tax bill would af- spending is far from the only concern order. And working with the Clinton fect their lives. with this tax bill. administration, the 103rd Congress The majority’s tax plan is based on This bill jeopardizes our ability to re- made those tough decisions. an assumption. An assumption about duce our national debt. All of my col- We reduced the tax burden for the what future Presidents and Congresses leagues have worked hard to get our middle class and we restored some de- will do. They assume we will have a fiscal house in order. We have success- gree of tax fairness to our system. We projected $964 billion non-Social Secu- fully balanced the budget, provided put the Federal Government on the rity surplus through fiscal year 2009. reasonable tax relief, and contributed road of less spending, while maintain- My colleagues propose to use $792 bil- to the strong economic environment ing commitments to core priorities. lion of that projected surplus over the we have today. One of our priorities Some of my colleagues were defeated next ten years to reduce taxes. They must be continuing to reduce publicly in 1994 because they did the right thing also assume that three-quarters of the held debt. By doing so we can decrease for the future of America. projected surplus will come from un- the interest payments on the debt that In 1997, Congress and the administra- specified reductions in spending by fu- currently claim 15 percent of the fed- tion reached a bipartisan agreement to ture Congresses. eral budget. And reducing the debt will July 28, 1999 CONGRESSIONAL RECORD — SENATE S9477 also help keep our economy moving working Americans want economic se- sponsible tax relief and responsible forward. Federal Reserve Chairman curity in their retirement years, not government. At a time when most Alan Greenspan has indicated again tax breaks they may never even see or Americans do not have much faith in and again that reducing debt is pref- benefit from. Congress, let us not compound that erable to a large tax cut. That’s an important point, Mr. Presi- sentiment with responsible tax poli- I have saved the most important dent. This tax bill, which would do tics. We have worked so hard to correct issue for last: Social Security and nothing for Federal initiatives—from the misguided policies of the past. As Medicare. Throughout the past year, as Social Security to Medicare, from we move forward into the next century, it appeared we would have a large pro- transportation infrastructure to edu- let’s learn the lessons of the past and jected budget surplus over the next ten cation, from Section 8 housing to clean reject the Republican tax plan in front years, I have said repeatedly that we air and water—that raise the quality of of us. should not raid the surplus for tax cuts life of low and middle income Ameri- RETIREMENT SECURITY PROVISIONS IN until we protect Social Security and cans would then give three-fourths of TAXPAYER REFUND ACT OF 1999 Medicare for the long term. the benefits in return to the top one- Mr. GREGG. Mr. President, I rise to I have listened to many of my col- fifth of income earners. The average address several important provisions in leagues talk about the importance of tax cut for the bottom 60 percent of the tax relief legislation that has been returning money to taxpayers. Let me taxpayers—with incomes of $38,200 and reported out of the Senate Finance tell my colleagues there is no better re- below—would be $139 per year. And in Committee. turn on the investment for taxpayers return for that tax cut, that same fam- In the last few years, I have taken an than saving Social Security and Medi- ily will have to worry even more about especial interest in reforming our fed- eral entitlement programs and our tax care. This must be a top priority. If we taking care of elderly parents, about policies so as to recognize and to pre- fail to enact real reform, we will be where they will find money to help pare for the retirement of the Baby judged harshly—and rightly so—by our their kids go to college since there are Boom generation that will begin in children and grandchildren. Our Na- fewer Pell Grants, and about how they 2008. During the last Congress, I was tion’s future economic security rests in get to spend some time with their kids appointed by Majority Leader Trent our hands. when they are on congested highways Saving Social Security and Medicare LOTT to chair a Senate Republican for hours each day. And to top it all Task Force on Retirement Security, on is important to all of our Nation’s sen- off, when the family goes on vacation which Chairman ROTH served, and pro- iors, but let me explain why it is espe- to see our nation’s national parks, the cially critical to women and their fam- vided the benefit of his experience and gates will be closed. his enduring commitment to pro- ilies. Women are twice as likely as men I will support the alternative drafted moting retirement saving. Our task to live with a chronic health care con- by my Democratic friends on the Fi- force produced a bill, numbered S. 883 dition. Women receive Social Security nance Committee. The alternative in the last Congress, several provisions and Medicare longer than men, and for would meet many of our priorities for of which were included in the 1997 rec- all women over age 65, 60 percent of any tax bill we send to the President. onciliation bill. I am pleased to see their retirement income comes from The Democratic alternative would that several more have been included Social Security. Often, Social Security provide broad-based relief to the more in this year’s reconciliation bill. and Medicare are their only hope for than 70 percent of taxpayers claiming I would like to review several of maintaining a reasonable standard of the standard deduction. It would re- these provisions and to discuss their living and some degree of independence move three million taxpayers from the significance. and dignity. tax rolls. It would also provide mar- Chairman ROTH has devoted several If we fail to protect the solvency of riage penalty relief. These are real ben- years of his career to promoting in- both of these important safety net pro- efits targeted to precisely the lower creased personal saving through indi- grams, my generation will become a and middle Americans that need it the vidual retirement accounts. His IRA burden on our children. Our grand- most. legislation, the Roth-Breaux bill, was children will not have the same eco- The Democratic alternative would included in its entirety as the first nomic opportunities that we had sim- allow 100 percent deductibility of title of our comprehensive bill. The ply because their parents will be tak- health insurance costs for self-em- Chairman succeeded in passing some of ing care of us. More and more older ployed individuals and include a 30 per- the provisions of this legislation during Americans would fail deep into pov- cent tax credit for individuals without reconciliation last time around, includ- erty, further straining family and gov- employer-sponsored plans. Since the ing the back-loaded IRA that has be- ernment resources, and most impor- Senate failed to pass a strong Patients’ come known as the ‘‘Roth IRA.’’ This tant the emotional and physical health Bill of Rights, the least we can do is time, the Finance Committee mark of seniors. make health insurance more accessible moves the ball still further forward on My Republican colleagues claim they to all Americans. expanding the saving in individual re- have created a lock box for Social Se- The Democratic alternative would tirement accounts. It increases the curity and Medicare. However, the Re- make public school modernization a contributions that can be made to publican proposal simply continues to high priority. It would provide $24 bil- these accounts, as well as expanding reserve the Social Security trust fund lion in modernization bonds. Mr. Presi- the number of individuals who can par- surplus for Social Security. But, they dent, this would send a strong message ticipate in them. Now more than ever, do not provide any additional resources to students, parents and administra- with the Baby boomers poised on the for either Social Security or Medicare tors that this Congress cares about pro- brink of retirement, ready to move and they do nothing to improve their viding the education infrastructure we from being earners and investors to solvency. Their lockbox is an empty desperately need. being consumers, ‘‘all saving is good promise. The Democratic alternative would saving.’’ It is a very propitious time to We can argue about the economic provide tax relief for our nation’s propose that individual saving be pro- threat posed by this package of tax struggling farmers and ranchers. It moted and encouraged. cuts targeted to the more affluent and would establish Farm and Ranch Risk I stress that we score these provi- geared towards increased consumption, Management FARRM, accounts so that sions, for our own accounting purposes, but I think we should be talking in- producers could better manage their as ‘‘revenue losers,’’ but this is mis- stead about maintaining the most suc- income to reduce risk. Given that it is leading. This is not saving that is cessful economic stability programs unlikely Congress will act to improve ‘‘lost″—it is only ‘‘lost’’ to the federal ever implemented by the federal gov- the long-term safety net for growers government. This saving and invest- ernment—Social Security and Medi- this year, FARRM accounts are the ment will result in much-needed con- care. Can you imagine the economic least we can do. tributions to capital formation and to upheaval that the insolvency of Social I urge my colleagues to vote for the economic growth. This is a far superior Security or Medicare would cause? I Democratic alternative. A vote for the use of this money than collecting it to can assure my colleagues that hard Democratic alternative is a vote for re- fuel current government consumption. S9478 CONGRESSIONAL RECORD — SENATE July 28, 1999 I was pleased to join in cosponsoring The Finance Committee proposal Finally, a number of other reforms Senator ROTH’s legislation to expand also includes several provisions to in- that I and the rest of the task force IRAs, and am further pleased that this crease the amount of contributions have sponsored in the past also appear reconciliation bill incorporates a por- that can be made to SIMPLE plans or in this bill—including important port- tion of that expansion. to other pension plans. I am pleased to ability provisions that would allow in- Senator ROTH’s IRA legislation was note that it also includes several provi- dividuals in public sector employment drafted before the task force began sions championed by our task force plans to take their pension benefits work on S. 883 in the last Congress. But that would benefit small businesses with them when they join a private there were several provisions that were and the self-employed in particular. employer. The current situation is an original to the task force of which I re- For one, it would equalize the treat- artifact of the undue complexity of our main very proud, and I am pleased to ment of self-employed and larger busi- pension law, and the incompatibility of see that they have received positive at- nesses with respect to loans taken from public and private pension regulations tention from the Finance Committee pension plans. Right now, the self-em- that has interfered with such port- this year. ployed, subchapter S owners, partners, ability until now. Public employees are First of these is the ‘‘SAFE’’ plan for sole proprietors, cannot take loans often afraid to leave public positions small businesses. This is a new type of from their pension plan as can larger because they do not know whether defined benefit plan that we worked to businesses, and this puts them at a their pension benefits will travel with devise in concert with others who also competitive disadvantage. Our pro- them, especially once it has accumu- perceived the need to make such pen- posal to correct this inequity is in- lated to a significant amount that is sion plans more attractive to small cluded in the Finance Committee bill. critical to their retirement plans. Ev- business owners. Right now, it is too We also included a proposal that eryone’s interest will be served by al- often the case that it is not in the in- would remove a disincentive for the lowing these accumulations to roll terest of a small employer to offer such self-employed to make matching con- over into other types of plans. a pension plan. The nondiscrimination tributions to their pension plans, and I simply close by again thanking the rules are too complex, and the small no longer counting such matching con- chairman for the level of attention employer may not feel that they can tributions towards the annual 401(k) that he has given to retirement saving afford the fiscal commitment of such a contribution limit. I am pleased that a in the Finance Committee mark. As size, uncertainty, and duration. version of this proposal is also included the chair of the Republican Task Force The ‘‘SAFE’’ plan neatly balances in the Finance Committee package. on Retirement Security, I find it grati- the need of employers to have a sim- I am also pleased to see the number fying to see that the chairman placed plified pension structure, with the de- of provisions included in this legisla- such a high priority for these needs sire to give employees fair treatment tion aimed at addressing the problem among the competing objectives that and a pension benefit that they can of inadequate retirement income for Senators brought to crafting this tax count on. The rules of the ‘‘SAFE’’ women, who make up the vast majority bill. I hope that indeed ‘‘the time has plan are very simple. Fair treatment is of our impoverished elderly population. come’’ for many of these provisions on ensured by simply requiring that the Our task force considered our women’s which we have worked so hard in the employer fund a benefit that is the equity provisions to be so important past, and I hope that they will be sup- same percentage of pay for each eligi- that we introduced them separately in ported throughout this reconciliation ble employee in the shop. If one year’s the last Congress as the WISE, Wom- process. contributions produce a pension benefit en’s Investment and Savings Equity I thank my colleagues, and I yield equal to 2 percent of pay for the boss, bill. the floor. then it’s also 2 percent of pay for the Some of the provisions of WISE were The PRESIDING OFFICER. The ma- employee—extremely simple. included in last year’s reconciliation jority leader. ‘‘SAFE’’ is a fully portable, fully package, including the liberalization of Mr. LOTT. Mr. President, I raise a funded pension plan that will work. It’s rules governing contributions by home- point of order that section 1502 of the portable because the contributions are makers to IRAs. bill violates the Budget Act. made specifically on behalf of each em- We also included another provision Mr. ROTH. Mr. President, pursuant ployee, so it is easy to track how much aimed at giving stay-at-home spouses a to section 904 of the Congressional of a nest egg each has accrued. If that chance to ‘‘catch-up’’ on pension con- Budget Act of 1974, I move to waive employee moves on, that balance can tributions if staying at home to care section 313(b)(1)(e) of the Budget Act move on with them with a minimum of for a child interrupted their past con- for the consideration of S. 1429, and difficulty. It’s also fully funded—sim- tributions. We offered a provision al- any conference report thereon, amend- ple rules dictate how much money the lowing ‘‘catch-up’’ opportunities for in- ments between the Houses, and any employer puts in for each employee in dividuals who had taken maternity or amendments reported in disagreement. I ask for the yeas and nays on the each year. It has to be enough to fund paternity leave. The Finance Com- motion. the promised defined benefit. Each mittee bill also includes a ‘‘catch-up’’ The PRESIDING OFFICER. Is there a year the accumulation in that account provision. Though not specific to the sufficient second? is tracked, and if it falls behind the case of families caring for children, the There is a sufficient second. amount that is assumed to be needed provision providing for larger IRA and The yeas and nays were ordered. using some flexible and reasonable in- pension contributions once the indi- Mr. ROTH. Mr. President, I yield my- terest rate assumptions, then the em- vidual reaches the age of 50 is intended self such time as I may use. ployer will have to make additional to serve the same purpose—to recog- Mr. President, the point of order contributions to make the employee’s nize that individuals often do not have against section 1502 is made necessary pension fund ‘‘whole’’ again. The em- as much money to put aside in saving by the antiquated provision of the ployer meets his obligations in a sim- until their children are out of the nest. Budget Act where provisions were ple and easily understood way, and has Giving parents a chance to ‘‘catch up’’ drawn to function in an era of deficits. no mounting financing problem at the for these lost opportunities is a family- Even though the Senate instructed end of the game. friendly reform. the Finance Committee to cut taxes, I also note that the ‘‘SAFE’’ plan I continue to believe that allowing almost everyone understood those in- also is an important benefit for long- ‘‘catch-up’’ contributions for individ- structions to mean the tax cuts would time employees who have not been cov- uals who missed out on pension con- be permanent. ered to date, because it does allow for tribution opportunities specifically be- Nevertheless, we must contend with ‘‘catch-up’’ contributions covering an cause of child-rearing is an important the language of section 313(b)(1)(e) of employee’s previous 10 years of service. idea, which I may still wish to pursue. the Budget Act which forbids any rec- This is a helpful feature because of the But I am pleased to see the provision in onciliation bill from achieving a net assistance it will give to employees this legislation and to recognize the reduction in revenue beyond the 10 who have less time to prepare for re- chairman’s effort to serve the same years for which the committee was in- tirement. end. structed. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9479 Of course, achieving a net reduction from 1980 to 1992. We have now reversed onciliation bill that would decrease in revenues is our goal, as well as our that. We have made the point on this revenue in years beyond the budget instructions. floor that we are providing tax reduc- window violates the Byrd rule and Moreover, the Budget Act provision tions from a projected surplus that has would be automatically stricken from in question was not written with this not occurred and may not occur. It cer- the bill upon a point of order being situation in mind. It was not written to tainly does not exist. waived. hinder refunds of a budget surplus. A few days ago, in a letter to the It is clear this measure, this risky Rather, it was written to bar creative Democratic Members on our side, our tax cut scheme, explodes in the second accounting provisions, such as those dear friend, the chairman of the Com- 10 years. offered on this floor to delay the tim- mittee on Foreign Relations, with re- This chart shows what happens with ing of expenditures, or to accelerate spect to the Comprehensive Test Ban the tax scheme being proposed. It the timing of revenue. Treaty, used the word ‘‘floccinau starts out modestly, but it grows geo- These were one-time only provisions cinihilipilification,’’ and it was re- metrically. In the second 10 years, it designed to occur at the end of the win- ported in the press this morning. He absolutely explodes. It goes from being dow—not for any policy reason but got that word from the Senator from an $800 billion tax cut over the first 10 only to achieve compliance for a mo- New York. Floccinau years to being over a $2 trillion tax cut ment in time with the relevant instruc- cinihilipilification is now the second in the second 10 years. tions. longest word in the Oxford Dictionary. Mr. MOYNIHAN. Will the Senator I remember a military pay install- It is from a debate in the House of yield? ment was once moved from the last day Commons in the 18th century meaning Mr. CONRAD. I am happy to yield to of one fiscal year to the first day of the the futility of budgets. They never the Senator. next year, which was outside the win- come out straight. Mr. MOYNIHAN. I believe the Treas- dow, to achieve budgetary savings in I had the opportunity to review an ury Department estimated the second the earlier years. But no provision of autobiography of John Kenneth Gal- 10 years is a $1.9 trillion tax cut, but we that sort is contained in this bill. braith years back in the New Yorker have to add $1.1 trillion in interest pay- Rather, the question here is whether magazine. I added ‘‘ism’’ to refer to the ments, such that the total cost is $3 any tax relief can be permanent except institutional nature of this, so it be- trillion. for a very small percent of tax provi- came floccinaucinihilipilificationism. Mr. CONRAD. The Senator is exactly sions. It is no joke. One never gets it right. It right. The tax cut alone in the second It is a general rule that tax relief is is not because one cannot, one does not 10 years is nearly $2 trillion. Obviously, permanent. This was true with the last try. there are additional costs. Because of tax bill, which provided an actual tax ‘‘Exogenous’’: Come in from the out- additional interest costs, if you spend cut—the Tax Relief Act of 1997. But side. Drought, hurricane, Asia goes to the money or run it in tax cuts, you that bill was paired with a balanced pieces. We don’t know what will hap- lose the interest earnings. So you add budget act of the same year, the sav- pen. We have this surplus that would to the interest costs of the United ings of which far exceeded the tax cut match a $792 billion tax cut. However, States. That is why Senator BYRD put then provided. does anybody believe we know enough in place this very wise rule, so we Today, we face a new question under about the decade beyond this one to would not undermine the fiscal integ- the Budget Act because it is unneces- continue these tax cuts, many of which rity of the United States. Now there is sary to pair this tax cut with another take hold later in the first decade, such a move to waive that rule. It ought to bill to cut spending. It is unnecessary that the Treasury Department holds be resisted. It ought to be defeated. because we have already achieved the that in the second decade the revenue This morning a column in the Wash- goal that such a spending bill would costs will be $1.9 trillion and the inter- ington Post by Robert Samuelson ad- hope to achieve, a surplus to fund a tax est and consequence will be $1.1 tril- dressed this issue in ‘‘The Reagan Tax cut. lion. So the total costs would be $3 tril- Myth.’’ He pointed out the danger, the In my opinion, the Budget Act provi- lion, which is almost four times the riskiness, the radical nature of the tax sion makes no sense if applied to the cost of the first decade. proposal before the Senate, and pointed current circumstances. Surely we cannot be so irresponsible. out that it is all based on projections Everything I have said applies in It speaks of hubris to suggest we know that very well may not come true. equal measure to the Democratic alter- what is going to happen that far out. It In fact, he pointed out: native, and every other tax cut Mem- speaks calamity, as well. . . . there is no case for big tax cuts based bers are anxious to propose on the floor I see my friend from North Dakota. I merely on paper projections of budget sur- pluses. this week. yield to the Senator 5 minutes. In sum, everyone thought we were in- Mr. CONRAD. I thank the distin- He pointed out: structed to achieve permanent tax re- guished Senator from New York. The projections, for example, assume a lief. That was the commonsense under- I rise to urge my colleagues to resist steep drop in both defense spending and do- mestic discretionary spending that may be standing. That is the better tax policy. the move to waive the budget proce- unwise, particularly for defense. I urge support for the waiver to protect dures. I think it is important to re- He goes on to say: this legislation against an arcane budg- member the history. The budget rec- et rule never intended to apply to this onciliation process was devised to ex- Suppose that spending exceeds projections by one percentage point of national income situation. pedite consideration of deficit reduc- and that tax revenues fall below projections The PRESIDING OFFICER (Mr. tion measures. That was the purpose. by the same amount. In today’s dollars, CRAPO). The Senator from New York. The bill before the Senate now per- these errors—not out of line with past mis- Mr. MOYNIHAN. As my good friend verts that process by using expedited takes—would total about $170 billion annu- knows, at the end of my statement this procedures to secure enactment of a ally. Most of the future surpluses would van- morning I indicated I would raise this measure to increase the deficit. Fortu- ish. point of order against section 1502 of nately, Senator BYRD crafted the Byrd They would vanish. the bill, which takes the 10-year provi- rule to prevent abuse of reconcili- Mr. President, I think it is very im- sions of the bill before the Senate and ation’s expedited procedures. He did portant. We have heard repeatedly extends them for an additional 10 that to protect the fiscal integrity of from our friends on the other side of years. That is clearly a violation of the the United States. This move to waive the aisle that they are only providing Byrd rule which deals with increasing that rule is a move to undermine the 25 percent of the surplus in tax cuts. the deficit on a reconciliation bill. fiscal integrity of the process. It ought They are not telling the whole story. I am surprised to find my friend refer to be resisted by every Member, espe- They are being very selective about to that provision as ‘‘antiquated’’ or cially those who profess to be conserv- what they tell the American people. ‘‘arcane.’’ We have spent 20 years try- ative. They say we have $3 trillion of pro- ing to control this deficit. We quad- Section 313(b)(e) of the Byrd rule pro- jected surpluses—projected. Let’s re- rupled the national debt in 12 years, vides that any provision in the rec- member they are projected; they may S9480 CONGRESSIONAL RECORD — SENATE July 28, 1999 not happen. And they say they are only but to the country—I say to myself, The long-time goal about which Repub- providing $800 billion of tax relief. this is actually not true. lican leaders are candid, is to put Govern- I ask for 1 additional minute. Whatever we have by way of sur- ment in a fiscal straitjacket for years to Mr. MOYNIHAN. Of course. pluses, assuming that our economic come. Mr. CONRAD. If we check their performance will continue to be as This is an idea with which we are math, we find the story is quite a bit good over the decades to come, that dealing, not a bunch of numbers, a different from the way they are telling surplus belongs to our children and grand strategy, and it will work if, in it. Of the total surplus over the next 10 grandchildren. We built up this debt. the second decade, we see a cost of this years, $2.9 trillion, nearly $2 trillion of We saddled this debt on them. We measure. The Treasury estimate is $3 it is Social Security surplus. Are they ought to make sure that whatever we trillion, an incalculable sum, which talking about spending some of this do doesn’t explode the debt after 2010, will paralyze, which will put the Gov- Social Security surplus? Are they talk- that we make sure Medicare and Social ernment in a straitjacket. We have no ing about once again raiding the Social Security will be available for them, right to do that to another generation Security surplus? If they are not, then and we make sure our children and of Americans. If they wish to do it, this should be taken right out of the grandchildren will have the same op- that is their right, but it is not surely calculation. portunities we have had. our option. Then we have to take out an addi- What the Senator from New York is Mr. WELLSTONE. Mr. President, I tional amount, about $130 billion, be- doing with this point of order, his chal- say to my colleague from New York, cause if you provide tax cuts, or you lenge right now to the majority party’s the point he just made is profoundly spend the money, interest cost goes up. plan, is to essentially say this. The important. We do not have a right to So now you are down, instead of $3 tril- people of our country, the vast major- make this decision for our children. lion, to $870 billion. And they are talk- ity of people in Minnesota, New York, The next century belongs to them. We ing about a $800 billion tax cut. They and all across the country, are very in- do not have a right to make this deci- are not using a quarter of the money, telligent about this. The last thing sion for other Democrats and Repub- unless they intend to use Social Secu- they want to see us do is explode the licans who are in the Senate to serve rity funds. Fairly described, they are debt again. They don’t want to see us and represent people. This is fiscally ir- talking about using 94 percent of the do it because they don’t want to see us responsible. It explodes the debt, and it non-Social Security surplus for a risky go into more debt as a nation. They puts us in an absolute straitjacket tax cut scheme based entirely on pro- don’t want to see their children saddled whereby we will be incapable of mak- jections, projections that might not with more debt. ing any of the investments we all say come true, and in the second 10 years There is one other point, which is a we are for to make this a better coun- those tax cuts explode, endangering the political point and also an ideological try. fiscal integrity of this Government. point. If we pass this proposal, the Re- I yield the floor. My God, after the progress we have publican plan—and I believe the Presi- Mr. ROTH. Mr. President, I yield 10 made to eliminate the deficit and cre- dent must veto it—as we look to the minutes to the Senator from Missouri. ate surpluses in the last 6 years, to second 10 years, we are going to have The PRESIDING OFFICER. The Sen- turn our back on that and take the risk such an explosion of deficits and debt ator from Missouri is recognized for 10 of putting this economic expansion in that will make it impossible for us to minutes. jeopardy? It is wild. It is risky. It move forward on any of the initiatives Mr. ASHCROFT. I thank the Chair. should not happen. And the move to that do in fact give more opportunities Mr. President, I thank my colleague waive the budget rules that protect the to children, to allow some of the in- for this opportunity to address what I fiscal integrity of this country ought vestments we should make—not unwise consider to be a very important issue. to be defeated. investments, but investments in edu- Of all the freedoms we enjoy, I think The PRESIDING OFFICER. Who cation, investments in child care, in- the freedom to use and to spend and to yields time? vestments in economic development, devote the product of our own hands, The Senator from New York. investments in our urban communities, the work we do to benefit our own fam- Mr. MOYNIHAN. I yield 5 minutes to investments in our rural communities. ilies, is perhaps one of the most cher- the Senator from Minnesota who would This Republican initiative will ex- ished freedoms of a free society. In our like to speak on the motion to waive plode the debt. It is fiscally irrespon- debates about the theories of govern- the Byrd rule. sible. It will put us in a straitjacket ment and resources and whether we The PRESIDING OFFICER. The Sen- where we as a country will not be able should have tax cuts or increased ator from Minnesota. to make any of the wise investments taxes, sometimes we forget that it is a Mr. WELLSTONE. Mr. President, I we should make in education for our fundamental freedom—a cherished op- thank the Senator from New York. I children and our grandchildren. This is portunity for individuals—to accept actually was going to come down here a critically important initiative, I say the incentive, the opportunity, and the and take a little bit of time to prepare to the Senator from New York, and I responsibility of providing for them- for this, but I will just do this off the fully support his action. This vote is selves. top of my head. probably as important a vote as we are One of the things we want to provide I want to say to the Senator from going to have over the next couple of for ourselves, obviously, is govern- New York, Senator MOYNIHAN, I come days. ment, so that we have a framework in to the floor to fully support his initia- I yield the floor. which to work, which protects our tive, what he is trying to do. I think The PRESIDING OFFICER. The Sen- property, protects us, and protects our what the Senator from New York is ator from New York. families. That is an important thing we saying is that we have a proposal on Mr. MOYNIHAN. Mr. President, I do. the floor, the Republican proposal, could not more agree with my friend We have to be careful that we do not which after the first decade is essen- from Minnesota, who has taught polit- think we are working for government tially going to explode the debt, and ical science superbly well. Earlier rather than for ourselves, or that gov- that really this is the height of folly. today, in opening remarks, I com- ernment should do for us those things I will not get at all demagogic right mented on a theory that developed on we can do for ourselves. now, but I will say this. I do not mean the conservative side of politics in the As we think about how we deal with that other times when I speak that I 1970s which held that the way to con- the resources that are generated by the am demagogic. I don’t mean that at trol the size of the Federal Government enterprise and the productivity of the all. I will say this. When I hear the dis- was to starve it of revenue—‘‘starve American people, we ought to think cussion about how we need to give the the beast’’ was the rather graphic about the American people and the fact surplus back to people, give it back to term. It was indeed. That was the ef- that the fundamental freedom we cher- the taxpayers, I say to myself—and I fort in the early 1980s until they real- ish is being able to work, to produce think this is what Senator MOYNIHAN is ized it was not working. Just yester- something, and then to manage that trying to say, not just to the Senate day, E.J. Dionne wrote: which we produce for our own benefit. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9481 We as a people have been so successful next 10 years. Very few families will seems to me that when taxes have been at it that we even are able to be gen- try to pay off a mortgage in that pe- raised in this culture, they are just erous with that which we produce. But riod of time—very few. We have an op- raised. I think we would be well served it is our own generosity. America is portunity now, very responsibly, to set to say we are going to provide a tax the most giving nation in the world. aside Social Security, which the Amer- structure that respects families. We Philanthropy here dwarfs philanthropy ican people want us to do, to take the are not going to say we will take the in other settings, but it is, in part, be- budget deficit of publicly held debt in marriage penalty out of the code for 10 cause we are allowed to keep that this country, and cut it in half, paying years and then reimposed it. which we produce. Giving is greater down the publicly held debt by half in If we are going to provide tax equity here than any place on the planet be- the next 10 years. And then we will for people so that the lowest-rate tax- cause we allow people to keep that have some money, some resources that payers in America have an even lower which they produce, to manage it for are left over in this vast infusion of rate, and more people are paying at their own benefits and for their fami- Government resource that has come that lower rate, we should not say this lies, and then to give it according to from the people. What are we going to is a sale which goes off and later on their desires. do with the rest of it? your taxes will automatically be raised We stand on the threshold of a debate The Republican plan simply says a by some Congress in the future or at about what happens when a person good part of that, some significant part some certain date in the future. It is time for us to say that the works hard and creates something, cre- of it, ought to go back to the American American people have simply paid in ates resources, earns wages, creates people. They should be able to spend it more than it takes to provide the serv- wealth—that is what wages are. People on their families, to do for themselves ices. When you pay in more than it earn that, they create it with work and what they do not need Government to takes to provide what you are buying, decide how it will be devoted, what will do for them, because the best depart- you get change. happen to it. ment of social services is the family, I go to the grocery store. When I pay We have a situation now where our the best department of education is the in more than it takes to buy the gallon Government has taxed the American family, the best department of health of milk that I want to buy for my fam- people to such an extent that if those is the family. ily, the grocer does not say to me: I taxes are just collected over the next 10 Let’s let our families operate. Let’s tell you what I’m going to do for you. years, we will have collected in that 10- fund families, not just bureaucracies. I’m going to give you a stalk of celery year period about $3.3 trillion that we Let’s fund people in their homes, not and a bag of broccoli and two boxes of will not need to spend in that 10-year just the bureaucracy in its Govern- cereal so you use up all the money you period. That is why we call it the gen- ment. That is what the Republican paid me. He says: You paid more than eral surplus, the sort of global surplus, plan is. is necessary for the services, and you the entirety of the surplus. There is a lot of debate now: If we get change. You get a refund. You get A number of us realized it would not can afford a tax cut for the next 10 relief. You get some of your resource be responsible to spend all of that, so years, we have to make sure we do not back. we said: Wait a second, there is a part promise the American people we can I think that is where we are as a Sen- of that surplus which we will not have tax cuts on a permanent basis. ate. It is time for us to look at this spend, and that is the part that is the We are making this tax relief on very country, where our cost of government surplus related to Social Security. We modest presumptions regarding the is higher than it has ever been in the said there will be no expenditures of prosperity of this country. We are pre- history of this Republic, and to say the Social Security surplus. It sounds suming a very modest growth, very that it is time to give people relief. simple and it sounds like something limited. This is conservative. That relief is appropriate. And it that should always have been the case, It is not appropriate for us to say we should be permanent, not relief upon but the truth of the matter is, for the will provide tax relief now and not pro- which we could not rely, but that it first time in recent history, in memo- vide it later. If we repeal the marriage should be relief upon which we can rable history, for the first time we had penalty tax now, we should not re- rely, plan, and build for our future. a budget in this body that said we are penalize you ten years later. That does Mr. President, I reserve the remain- not going to spend the Social Security not make sense. der of our time. surplus. We simply ought to put the tax rates Mr. MOYNIHAN addressed the Chair. Frankly, on this side of the aisle, I where we believe they reflect the integ- The PRESIDING OFFICER. The Sen- am very proud of the fact that we have rity of the American people and the ator from New York. been able to do that. It was not a budg- productivity of the American people Mr. MOYNIHAN. May I observe in et that was voted for by the people on and the fact that the American people passing, the cost of government is not the other side of the aisle. They did not are now being asked to pay more than greater than it ever has been. The reve- nues are. That is why we have a sur- vote for that. That is not something it costs to provide the service. And we plus. they have ever done with one of their ought to reduce them, and we ought to To my good friend, the Senator from budgets or one of the things they have reduce them permanently, not on a North Dakota, I yield 4 minutes to re- done with their leadership, but it is piecemeal basis, not with an automatic spond; and then the remaining 5 min- something they fought against. We reinstater of a tax which is the highest utes I yield to the Senator from Mon- have done it, and it is now an achieve- in history. tana. ment of the Senate that we have a Why is it we are asked to have a tax The PRESIDING OFFICER. The Sen- budget which is designed to protect cut and those on the other side of the ator from North Dakota is recognized every cent of Social Security, none of aisle want to make sure we cannot for 4 minutes. it to be spent to cover operating budget make it permanent relief for the peo- Mr. CONRAD. I thank the Chair and demands of this Government. That is a ple, that we have to promise somehow the ranking member, the Senator from major achievement. That is something that the highest rates in history will New York. for which we can be grateful. be revisited after a 10-year lapse? I do The Senator from Missouri misspoke. Secondly, we have a plan in place, not believe that is good government. I He said that those of us on this side even with the proposed tax relief for do not believe that is good judgment. have not supported saving every penny the American people, that will cut the I believe when we lower taxes, when of the Social Security surplus for So- national debt, the publicly held debt of we lower the burden on the American cial Security. He is simply wrong. The America, in half over the next 10 years. people, we are beginning to direct the budget we offered on our side not only That is pretty responsible. They are assets of the culture to America’s fami- saves every penny of the Social Secu- talking about lots of things, saying we lies instead of governmental bureauc- rity surplus for Social Security; in ad- are not addressing the debt properly. racy. It seems to me we ought to do dition, we proposed saving an addi- Never have I seen any budget in a that on a permanent basis. tional $300 billion over the next 10 previous setting ever purport to move I do not remember tax increases that years to strengthen and preserve Medi- forward to cut the deficit in half in the have said they only last 10 years. It care. S9482 CONGRESSIONAL RECORD — SENATE July 28, 1999 So not only did we propose saving The numbers are clear. They are tax bills that were never debated, every penny of the Social Security sur- compelling. The logic is steel-trap spending bills that were never debated. plus for Social Security, we also pro- logic, with these numbers showing They all came back in one gigantic posed taking another $300 billion and what this Republican majority budget package. That is going to happen if using it to preserve and protect Medi- tax proposal will cost—creating reck- this motion passes. That is very irre- care. lessness, irresponsibility. The numbers sponsible. It is irresponsible to us and The thing that is really jolting about are just black and white clear. to the American people. this discussion is what is in this col- This side has come up with charts, I am just astounded, frankly, that we umn that I referred to earlier by Rob- numbers; we have quoted from objec- as a Democratic Party are in a position ert Samuelson in the Washington Post tive observers, columnists. It all comes of saving the majority party from today. He says: out the same. This is extremely irre- themselves and, more important, sav- The wonder is that the Republicans are so sponsible. Let me remind my col- ing the American people. What hap- wedded to a program that is dubious as [to] leagues again why. pened in the 1980s? This is history all both policy and politics. As Federal Reserve First of all, this is a column in a re- over again. In the 1980s, this body, the Chairman Alan Greenspan noted the other cent, very respected paper, the Wall Republican President and Republican day, tax cuts might someday be justified to Street Journal, from a day or two ago: Congress, at the time succumbed to the revive the economy from a recession or to ‘‘GOP Uses Two Sets of Books. Double- siren song of huge tax breaks. What improve the prospects of a sweeping program happened? Deficits exploded. Then of tax simplification. But there’s no case for Counting Surplus Keeps Alive the No- big tax cuts based merely on paper projec- tion of Being Within Budget.’’ That is what happened? The Republican Con- tions of budget surpluses. from the Wall Street Journal written gress was forced to increase taxes. The Members of the Senate, that is what by David Rogers. No one accuses him of Republican Congress and the President is so radical about this proposal—rad- being a biased Democrat. He is a re- were forced to increase taxes twice—in ical, risky, dangerous. This proposal porter of one of the most respected fi- 1982 and 1984. So I say if we, today, lock in these not only has massive tax cuts—94 per- nancial papers in the world, the Wall huge tax cuts for the future, they are cent of all the non-Social Security sur- Street Journal. going to have to come back again to re- plus over the next 10 years—but it ab- This is his conclusion of what is enact it and put it back in place at a solutely explodes in the outyears. A going on: GOP uses two sets of books; double-counting. future time. I don’t think they want to tax cut that is $800 billion in the first do that. I urge colleagues to do what is 10 years becomes $2 trillion and costs I call that reckless. I call that irre- sponsible. Again, it is surreal. right and not support the majority on an additional $1 trillion of interest. this motion. That is exactly what the Byrd amend- Let me point this out, again, undis- puted. Nobody disputes this. The Re- The PRESIDING OFFICER. The Sen- ment was designed to prevent. The ator from Delaware controls the re- whole reason there are expedited proce- publican tax breaks explode, like the atom bomb, in the second 10 years. No- maining time. dures in budget reconciliation is to re- Mr. ROTH. Mr. President, I yield body disputes that. If you added inter- duce deficits. such time as the Senator from Texas est to this, their tax cuts are roughly Our friends on the other side are try- needs. ing to use those expedited procedures $1 trillion. There is nothing left over The PRESIDING OFFICER. The Sen- on a measure that would increase defi- for anything else—Medicare, veterans. ator from Texas is recognized. cits—blow a hole in the budget, poten- If you add in defense, which I am sure Mr. REID. Mr. President, I could not tially a hole of over $3 trillion. That is the Republican majority is going to do, hear the manager. Is the time yielded dangerous. That is not conservative. It that amounts to about a 40-percent cut, on this amendment or on the bill? is radical. It is risky. It is reckless. 40 percent in veterans’ benefits, in edu- Mr. ROTH. On this amendment, on When they say they are only using 25 cation, et cetera. That is just the first the waiver motion. percent of what is available—nonsense, 10 years. Mr. GRAMM. Mr. President, I think absolute nonsense. Of the $3 trillion Then you add it out in the next 10 there are a lot of ways you can argue that is projected—and, remember, just years and it is over $2 trillion. this point. The Byrd rule, as the distin- as Mr. Samuelson points out—if these Mr. MOYNIHAN. Plus interest. guished Senator from Montana argued, projections just change a little bit, as Mr. BAUCUS. So $2 trillion, plus in- is to try to protect us from provisions they have over and over and over in terest on the national debt, at a time that have not been debated, provisions our history, these projections of sur- when the baby boomers retire. Why is that have not been considered in com- plus could change to projections of def- that so important? mittee, but provisions that show up in icit, and we will rue the day when we Just one more chart here. It shows a reconciliation bill where we have have undermined the dramatic moves when the baby boomers are going to re- rules that are distinctly different from we have made toward fiscal responsi- tire, when current younger Americans the Senate rules, principally, that you bility in getting this country back on are going to retire. It is clear. The have limited debate for 20 hours and track. chart goes way up, beginning here in that, therefore, you can’t filibuster it The PRESIDING OFFICER. The time 2010, and the cost is $250 billion by 2020, and, therefore, you don’t have to have of the Senator has expired. at a time when the trust fund, the 60 votes to pass it. Mr. CONRAD. I just remind my col- Medicare trust fund, comes to zero. I am a supporter of the Byrd rule. I leagues, the Democratic plan has more So add it all together and the Medi- think it is a good rule, and I think it is debt reduction in it than the Repub- care trust fund comes down to zero in a rule aimed at exactly the kind of of- lican plan. That is a fact. It is indis- 2015. No dollars are left there. The baby fense that the Senator from Montana is putable. I hope my colleagues will re- boomer population is exploding and the talking about; that is, issues that have sist this move to overcome a budget tax cuts, which push us down into a not been widely debated, issues that rule to prevent undermining the fiscal deeper deficit, will be exploding in the have not been considered in com- integrity of the United States. second 10 years. No wonder the major- mittee, and issues that have not had a Mr. MOYNIHAN. The Senator from ity party wants us to pass this motion full airing of public opinion. But can Montana is yielded the remaining time waiving all points of order, waiving fis- anybody argue that any one of those we have. cal responsibility. Again, why are we points applies to this tax bill? Does The PRESIDING OFFICER. The Sen- debating this? Why are we even debat- anybody here believe this tax bill has ator from Montana is recognized. ing whether to be responsible or irre- not had a full airing of public opinion? Mr. BAUCUS. Mr. President, this de- sponsible? It is clear. The President, daily, issues some new bate is almost surreal. We are debating One final point. We remember that statement. Yesterday, it was going to whether to be reckless or not. It comes dreadful day when a conference report be the end of health care for women in down to that, whether to be responsible was brought back to this body with ev- America if we cut taxes. For all I or not. I am astounded that the Senate erything including the kitchen sink in know, by this afternoon there could be is having this debate of whether to be it—everything—bills that were never a new coming of the bubonic plague if responsible or whether to be reckless. debated in either the House or Senate, we cut July 28, 1999 CONGRESSIONAL RECORD — SENATE S9483 taxes. Daily, the Vice President com- are not for it, vote against it. We are conference report as well. I want some- ments on it. willing to let you offer a permanent body to come up and tell me what is We have had a running debate now tax cut. So that is really the issue. The going to be in that conference report. for weeks on this issue. We held exten- Byrd rule technically applies to this There is a huge difference between the sive hearings in the Finance Com- provision, but the logic of it does not Senate version and the House version, mittee on the issue. We held a markup. apply. Therefore, I argue that we even on the Republican side. There are We have had extensive debate. Nobody should waive the point of order, and major differences that have to be in America has any doubt as to what that is going to take 60 votes. There ironed out and worked out. we are doing in this bill. So my point are 55 Republicans, so if every Repub- Is anyone here today prepared to is that all the reasons we have the lican voted to waive it, we would have waive the point of order on a con- Byrd rule, all the reasons that were to get five Democrats. My argument is, ference agreement for which there has adequately explained by the Senator if you are against the tax cut, great; it not been one word written, for which from Montana, are good reasons to is perfectly legitimate to be against it. there has not been one meeting, for strike provisions from a reconciliation But don’t use a technicality to try to which really there is no understanding bill. And that is, if the provisions have undermine a legitimate proposal, or comprehension today? How could we not been widely discussed, if the public which has been debated extensively, possibly waive a point of order on is not generally aware of them, if there which is known to virtually everybody something we haven’t done yet? That have not been committee hearings and who hasn’t been hiding under a rock is what our Republican colleagues are a markup on them, you don’t want to for the last 6 months; don’t use a provi- prepared to do. give them the special privilege of being sion of law that is really aimed at pre- I hope we would have better sense in a reconciliation bill. But surely I venting extraneous material from get- than that, that we would recognize how don’t have to make a lengthy argu- ting into the bill to undermine basi- ill-founded it would be and what a ter- ment to convince people that none of cally, at least today and tomorrow, and rible precedent it would be for us to those points apply here. I think for a long time, the No. 1 issue waive a point of order on actions to be It is true that our Democrat col- in the country. I hope our Democrat taken at a later date by a conference leagues, using this technicality, can colleagues who are not just hell-bent we haven’t even named. against a tax cut will vote to waive force us to sunset this tax cut in 10 I yield the floor. years. They can do it. And in doing so, this point of order so we don’t have the absurdity of adopting a tax cut and The PRESIDING OFFICER. Who we have the tax cut for 10 years. No- yields time? body believes the Congress or the have it temporary and have it end in 10 Mr. BREAUX. Will the distinguished American people will just allow them years. chairman yield? to fall off the end of the Earth in 10 Hopefully, we are going to have an Mr. ROTH. I am happy to yield. years. It is not the complete undoing of opportunity to improve this during 10 our tax cut if this point of order should years. I am still for it if it is sunset in Mr. BREAUX. Following up on the be sustained. I don’t know that it 10 years. But I don’t think this is good Democratic leader’s question, when we would be of great practical importance. policy, and I urge my colleagues to rise have passed a bill out of the Finance But I simply say that on an issue that above the politics of the moment and Committee, the Moynihan bill, the is the No. 1 issue in the country, on an vote for good policy. Democratic version, and the Roth issue that has been extensively de- I reserve the remainder of our time. version, both for permanent tax cuts, Mr. DASCHLE. Mr. President, I know bated, on an issue where we held hear- different amounts—ours was $295 bil- our side is out of time, so I will use ings and a markup, on an issue where lion, the chairman’s was $792 billion, leader time to make a couple of re- but they were both permanent tax every American knows the subject is marks with regard to the vote we are being debated—it is referred to on a cuts—I think the point the Democratic to take. leader makes is a good one. I think I minute-by-minute basis on most of the We all are able to use our rhetorical major outlets for news in America— could possibly be for waiving the point acrobatics from time to time, but I of order if it was against this bill that there is no logic to sustaining this must say, no one is better at it than point of order. we all know about. But to extend that the distinguished Senator from Texas to a conference report when we do not I really see this as creating insta- as we try to define this set of cir- bility in the Tax Code. It wasn’t our in- know what is going to be in that bill I cumstances. think is probably going further than tention to raise a similar point of order This is a lot more than a techni- against the Democrats’ bill. Basically, certainly I would be comfortable going. cality. The Byrd rule is there for a rea- If it was limited to the bill that is be- it seems to me they have a right to son. I am glad he subscribes to the fore the Senate where everybody does propose a permanent tax cut. We could Byrd rule, but I must say, this goes know what is in it, I could understand have raised a point of order against way beyond the debate we had in com- that argument. But to say that all such a tax cut if it had been proposed. mittee and the understanding the points of order against anything that We would not have done it—basically American people and even Senators may come back—and who knows what believing they ought to have a chance have with regard to what is in the bill. may come back; I have my ideas about to say to the Nation what their vision This will give the conference, the Con- what it should be, and others have dif- is. We know their vision. They want to gress, the Senate, everybody, carte ferent opinions. I don’t know that we spend this money and they don’t want blanche all the way through the legis- can waive points of order against some- to give it back. It is perfectly legiti- lative process until this bill goes to the mate; I just don’t agree with it. President’s desk. Is that what we want thing we have not yet seen. I was won- I hope our Democrat colleagues will to do? dering, why does the point of order not take this technicality as an oppor- It would be one thing to waive a waiver cover everything that has not tunity to create a Tax Code that is in point of order and do so on the bill yet even been written? effect for 10 years and, at the end of 10 alone. That would be understandable. I Mr. ROTH. Mr. President, I say to my years, it goes away. I think it is unsta- might add, in that regard, it wasn’t the distinguished colleague, if we do not ble. I think it is an irresponsible way of Democrats who made the point of waive it with respect to the conference doing it. I don’t object. The minority order; it was the majority leader. The report, then we put the conference in a has the right to do this. If we can’t get majority leader made his own point of very difficult position. Should it write 60 votes, they have every right under order on this bill. It was the distin- a bill for 10 years, or should it write the rule to do it. It doesn’t undo our guished Chair, the senior Senator from one for a permanent tax cut? tax cut. It is not the end of the world. Delaware, who made the motion to Just let me point out that I don’t It certainly makes what we are doing waive the point of order. So let’s make know of a single tax cut taking place still of great importance. sure we have our facts straight. No one since we have had the Budget Act that I argue to those who have not hard- here made the point of order. They did. was not permanent. I don’t think there ened their hearts to a tax cut to allow But the point of order is not just on is a single person in the Finance Com- us to have a permanent tax cut. If you the bill. The point of order is on the mittee or on the floor who thought S9484 CONGRESSIONAL RECORD — SENATE July 28, 1999 otherwise—that when you had tax cuts [Rollcall Vote No. 225 Leg.] stitute provides that all provisions of it was necessarily going to be perma- YEAS—51 and amendments made by this act nent. That is just common sense. Abraham Fitzgerald Mack which are in effect on September 30, We all know that the point of the Allard Frist McCain 2009, shall cease to apply as of the close Byrd rule in this case was to avoid Ashcroft Gorton McConnell of September 30, 2009. Bennett Gramm Murkowski monkey business. We have all seen that Bond Grams Nickles Before I discuss the amendment, I happen, where you shift payment from Brownback Grassley Roberts yield 20 minutes to my colleague. one fiscal year to the next year by Bunning Gregg Roth Mr. President, we must have order. Burns Hagel Santorum The PRESIDING OFFICER. The Sen- changing it but for 1 day and, by doing Campbell Hatch Sessions that, you assure that you are in com- Chafee Helms Shelby ator is correct. The Senate will please pliance with the budget instructions in Cochran Hutchinson Smith (NH) come to order. theory but not in substance. Coverdell Hutchison Smith (OR) The Senator from New York. Craig Inhofe Stevens Mr. MOYNIHAN. Sir, I do not envy Now, we are all interested in seeing Crapo Jeffords Thomas this economy continue to grow and DeWine Kyl Thompson your position, but you seem to have prosper. One of the purposes of the tax Domenici Lott Thurmond had some success. cut is to ensure that it will happen. I Enzi Lugar Warner I yield 20 minutes for a general state- am weary of those who are saying, NAYS—48 ment by my associate on the Finance well, this is going to cause inflation, Akaka Edwards Lieberman Committee, the distinguished Senator and so forth. That is just plain rubbish. Baucus Feingold Lincoln from Louisiana, the senior Senator Bayh Feinstein Mikulski from Louisiana. If you look at our tax cut, practically Biden Graham Moynihan nothing happens the first year—a very Bingaman Harkin Murray The PRESIDING OFFICER. The Sen- small tax cut. For the first 5 years, it Boxer Hollings Reed ator from Louisiana. is something like $156 billion. So the Breaux Inouye Reid Mr. BREAUX. Mr. President, I thank Bryan Johnson Robb the distinguished Democratic leader of big tax cut is 5 years off. Byrd Kennedy Rockefeller Let me make the point: Congress will Cleland Kerrey Sarbanes our Finance Committee. It is inter- be in session. People will be here. They Collins Kerry Schumer esting; I think the action we have Conrad Kohl Snowe taken really means no matter what will be able to take appropriate action. Daschle Landrieu Specter If it is thought that the tax cut is not Dodd Lautenberg Torricelli type of tax bill ultimately comes back desirable, there is nothing to prevent Dorgan Leahy Wellstone to this body after the conference, we them from changing it. But let me just Durbin Levin Wyden cannot make it a permanent tax cut. say, common sense—and that is what NOT VOTING—1 For those on our side who have argued the American people want to see dis- Voinovich for permanency in the Tax Code for re- played here on the Senate floor—com- search and development or tax incen- The PRESIDING OFFICER. On this tives, that means we cannot do that. It mon sense is that when you have a tax vote the yeas are 51, the nays are 48. cut, it is permanent. means if we have an increase in the Three-fifths of the Senators duly cho- standard deduction and fix the mar- Every substitute, every amendment sen and sworn not having voted in the to be offered here is permanent. Even riage penalty, we can’t do that. It affirmative, the motion is rejected. means all those things many of us as the Democratic substitute is perma- The point of order is sustained, and Democrats have argued should be per- nent. Every reconciliation before on section 1502 is stricken. manent tax policy, now we are no spending or taxes, whether it was a Re- The Senator from New York. publican Congress or a Democratic Mr. MOYNIHAN. Mr. President, longer going to be able to make it per- Congress, has made permanent might we have order? manent no matter how good it is. The changes. Every reconciliation bill has The PRESIDING OFFICER. The Sen- argument is true for the other side as depended on projections. There is noth- ate will come to order. The Senator well. No matter what comes back in ing new about that. This bill is no dif- from New York. the conference report, it cannot be per- manent. ferent. It is not reckless; it is not rad- AMENDMENT NO. 1384 I think from a policy standpoint this ical; it is traditional and common (Purpose: To provide a complete substitute). is terrible policy. We literally are tell- sense. Mr. MOYNIHAN. Mr. President, I ing all the businesspeople in this coun- As I said earlier, everyone thought send to the desk the Democratic alter- try and employees in this country, peo- we were instructed to achieve perma- native to the measure before us. This is ple who save in this country, no matter nent tax relief. That was the common- an amendment in the nature of a sub- what the law is today, it is going to sense understanding. This is by far and stitute. It is proposed by myself, Mr. fall off a cliff and go poof in 10 years. away the better tax policy. BAUCUS, Mr. ROCKEFELLER, Mr. I urge Members to support the waiver What kind of roadmap for economic BREAUX, Mr. CONRAD, Mr. GRAHAM, Mr. to protect this legislation against an growth is it, when a country says our BRYAN, Mr. KERREY, and Mr. ROBB. tax policy is only going to be good for arcane budget rule never intended to The PRESIDING OFFICER. The 10 years no matter how good it is? No apply to this situation. clerk will report. I yield back the remainder of my The legislative assistant read as fol- matter how good a Democratic policy time and ask for the yeas and nays. lows: it is or Republican policy, it is only The PRESIDING OFFICER. The yeas going to last for 10 years. That in itself The Senator from New York [Mr. MOY- is very bad policy in this Senator’s and nays have been ordered. NIHAN], for himself, Mr. BAUCUS, Mr. ROCKE- All time having expired, the question FELLER, Mr. BREAUX, Mr. CONRAD, Mr. opinion. is on agreeing to the motion to waive GRAHAM, Mr. BRYAN, Mr. KERREY, and Mr. At the same time, I recognize we are section 313(b)(1)(e) of the Budget Act ROBB, proposes an amendment numbered operating with our hands tied behind for the consideration of S. 1429. This 1384. our back with regard to bringing up a vote requires a three-fifths majority. Mr. MOYNIHAN. Mr. President, I ask tax bill through budget reconciliation, The yeas and nays have been ordered. unanimous consent that reading of the with all these rather archaic rules. We The clerk will call the roll. amendment be dispensed with. ought to be able to debate fairly a tax The legislative assistant called the The PRESIDING OFFICER. Without bill, make it permanent. If you do not roll. objection, it is so ordered. like what is in it, vote no; if you like Mr. NICKLES. I announce that the (The text of the amendment is print- what is in it, vote yes. But we should Senator from Ohio (Mr. VOINOVICH) is ed in today’s RECORD under ‘‘Amend- not be restricted from offering tax leg- necessarily absent. ments Submitted.’’) islation that is the permanent policy of The PRESIDING OFFICER (Mr. SES- The PRESIDING OFFICER. There this land. SIONS). Are there any other Senators in will be order in the Senate. The Sen- We have had meeting after meeting the Chamber desiring to vote? ator from New York. in the Finance Committee, when peo- The yeas and nays resulted—yeas 51, Mr. MOYNIHAN. Mr. President, just ple have come up and said: You have to nays 48, as follows: in passing, I note page 440 of our sub- make these provisions permanent. I am July 28, 1999 CONGRESSIONAL RECORD — SENATE S9485 not sure whether I am going to expand was that nothing was done. Some will need to spend on Medicare until we re- and grow my company if you are only say it is the Republicans because they form it, which everybody agrees we going to allow it for 10 years, and who were too greedy. Others will say, no, it ought to do? knows what is going to happen after 10 was the Democrats’ fault because they Yes, ultimately the Roth tax bill will years. did not want to give a reasonable tax pass the Senate. A similar bill with the That is not good public policy; it is cut to the American people. We will same size tax cut has passed in the not good tax policy, and it points to have good political arguments, but we House. I suggest to our leaders on both the problem: the fact that we are will have no public policy. We will have sides of the aisle, let’s hold back trying bringing up tax legislation in this rec- good political arguments, but we will to go to conference. Pass these two onciliation scenario that requires us to be arguing about failure and whose bills and hold them in abeyance and let operate as we are operating. I suggest fault it was and whose fault it was that all Members, Republicans and Demo- to folks on both sides of the aisle, if we nothing was done. We will not have crats alike, those in the House and in can’t make tax laws in this country for good public policy, which we were all the Senate, go back to their respective more than 10 years, we have done sent here to craft. States and respective districts and lis- something that is very terrible for this It is clear that in a divided govern- ten to our constituents and ask them country. I think it is the wrong thing ment under which we operate, no party what their priorities are. to do. can have their way all the time. If both Do not look at the polls that Repub- Let me make a couple of comments parties take that position, we will end lican pollsters take and Democratic on the legislation that is before the up getting absolutely nothing done. pollsters take. I can give you the an- Senate. Most countries around the There are a number of us who have swer when I see the questions they ask. world would love to have the problem suggested that somewhere between the Listen to the people and have town we have in this Senate and in this Con- $295 billion Democratic proposal and meetings and talk about trying to gress right now. Other countries would the $796 billion Republican proposal work together to finish this problem look at it as a great opportunity to which the President has said he will and solve what I think is a real oppor- have the problem we are facing. We veto, there has to be some common tunity on what to do with $1 trillion. cannot seem to come to an agreement ground. There has to be a way in which I suggest that after we spend that on it. That problem is the United intelligent, hard-working Members are time in August, we then come back to States has about a $1 trillion surplus, able to come to an agreement some- our respective bodies, the House and and all of us are trying to figure out where in the middle and come up with the Senate, and move quickly, as Sen- what to do with the surplus. I suggest a figure that is reasonable and gives a ator ROTH has said he will do, on re- if we as a Congress, Republicans and good tax credit to the American people forming Medicare, real Medicare re- Democrats, cannot come to an agree- and, at the same time, uses some of the form, coming up with good suggestions ment on what to do with a $1.1 trillion surplus money, the $1 trillion, to ad- about what we need to do with a sys- surplus, we, in effect, have said we are dress the very serious needs and short- tem that was first established in 1965 not very good at governing; that we ages we have in discretionary pro- which no longer works as it should. cannot simply come together, make grams, such as veterans, health and When we do Medicare reform, we will our points, seek legitimate com- education, and has some money in it then know how much more money we promise, and figure out what to do for paying down the national debt, has need in order to make that program with a $1 trillion surplus. money in it for Medicare, which is ob- work. When we find out what that I know there are some who want the viously very important. number is, we can then combine it with President to be in a position to have There should be a way both sides can a reasonable tax cut and have enough the Republican tax bill of $796 billion come together and say: We don’t have money for hard-working Americans pass and send it down to him at the everything we want but, yes, this is and yet have enough money for Medi- White House and have a great cere- good public policy. care reform with a good, solid prescrip- mony vetoing it. I suggest the American people are tion drug package to go along with it, His argument will be that it is too crying out for us to move in that direc- and then come together, join hands for large; it is too irresponsible; it is tion. a very rare moment in bipartisan co- wasteful; it is going to cause the econ- I and others have joined in offering operation to do something which I omy to go south; we are going to have an amendment, which we hope to offer think is in the national interest, so an increase in interest rates. He is tomorrow, which tries to take the ap- that at the end of this year we will going to make a lot of good, solid polit- proach of: All right, let’s take $500 bil- have more than a political issue about ical points when he has that veto cere- lion of the $1 trillion and give the whose fault it was that nothing was mony. American people a good, solid tax cut done. We will be able to go back to our There are those on the Republican for those who need it the most, in- constituents and say that when we had side who I think would love that to crease the standard deduction for hard- the opportunity to decide what to do happen, in fact, because they will be working people, increase the amount with $1 trillion, we took that oppor- able to say: No, the President, when he that you can earn before you are tunity and came up with good public had the opportunity, chose not to give kicked up into the higher 28-percent policy. the American people a legitimate tax bracket so people can keep a little bit I hope many of our colleagues can cut, and he turned his back on the more of their dollars. Yes, let’s fix the say: I think the Democratic bill is a American people; we are fine with that marriage penalty that encourages peo- little too low in the tax cut, but I also political argument, and we will take ple, who are two single earners in the think the Republican bill is a little too that argument into the election. same family, not to marry only be- much of a good thing; therefore, I want The American people outside Wash- cause of the Tax Code. Yes, let’s do to find a legitimate compromise. ington, in my opinion, have come to something for education and savings, I suggest the word ‘‘compromise’’ is the conclusion that they are getting but let’s keep it at a reasonable figure not a dirty word. It is something we very tired of those types of political of $500 billion, and then we can have should be seeking as Members of an positions being taken by Members on the other $500 billion for things that elected body which is called upon to both sides of the aisle. are necessary or are needed. make Government work for everyone. Under the current circumstances, we The President has put some 320-odd I hope when we do offer in a bipar- are headed for a financial train wreck billion dollars into Medicare. I was tisan fashion the $500 billion tax cut because we are taking positions on privileged to chair the Medicare Com- and reserve the other $500 billion for both sides of the aisle: It is my way or mission for a year. I will tell you that other needs of discretionary spending, no way. no one can tell this Congress how much to fix Medicare and reform it with pre- I suggest that type of position leads money we need to fix Medicare. No one scription drugs, that we will be able to to nothing happening. Sure, we will all can make that assessment today be- get a strong degree of bipartisan sup- at the end of the debate have an argu- cause we have not yet reformed Medi- port so we can all work together and ment politically about whose fault it care. How can we say how much we hopefully, sometime in September, we S9486 CONGRESSIONAL RECORD — SENATE July 28, 1999 can reach an agreement that makes deduction. It is good tax policy. We be- That plan worked and worked beau- sense and is good public policy. Good lieve it certainly is simplification. tifully. We saw reductions in the def- public policy is also good politics. I We would like to have $27 billion for icit in every year of this plan. We saw suggest that is the approach we should health care initiatives, including a in the first year the deficit go down to be taking. $1,000 long-term care credit and a 50- $255 billion, and then we saw declines I yield the floor. percent deduction for long-term health in the deficit until we reach surplus. The PRESIDING OFFICER. Who insurance to make health insurance af- That is the record of these three ad- yields time? fordable. ministrations. Mr. MOYNIHAN. Mr. President, I We look forward to $17 billion in edu- In 1993, when we passed a 5-year plan yield the Senator from North Dakota cation initiatives. That would include that put us on the path to deficit re- such time as he requires to express a large bond program for public school duction, we had increased taxes on the himself fully on the matter of the com- modernization and permanently ex- wealthiest 1 percent of taxpayers on in- mittee substitute. tending employer-provided tuition as- come taxes and cut spending. That is Mr. CONRAD. May I withhold for the sistance for higher education. how we achieved balance. moment? If the Senate would indulge me, this If we look at it from another vantage Mr. MOYNIHAN. By all means. I will latter provision is so important. I have point, debt held by the public, we can take the opportunity to make a brief now 23 years in the Finance Com- see during the 1880s the debt held by description of the committee sub- mittee, and it seems every other year the public grew dramatically. It was stitute. we recommend extending it instead of only after we passed the 1993 5-year The PRESIDING OFFICER. The Sen- making it permanent. plan that debt held by the public start- ator from New York. But if ever there was a palpable, de- ed coming down. Mr. MOYNIHAN. Mr. President, it is monstrably useful program, it is when In fact, here we are today; we have our view that the roughly $900 billion employers send employees to receive seen significant progress made on debt in projected surpluses for the coming education at various levels, commonly held by the public being reduced. If we decade can prudently be allocated in graduate levels, because they want to have the wisdom to stay on this course, thirds: the first to be reserved for acquire new skills for which they will we will see further declines in the pub- Medicare. We are going to have to get be put to work at higher wages, and for licly held debt. In fact, we can be on a to Medicare. If we do not do it in this which they will pay more taxes, and course to eliminate the publicly held session, we may do it in the next or the that virtuous cycle I was talking about debt in 15 years. next Congress, but that time is coming. this morning will continue. It is unreal What have been the results of this It will require money. It will require we continue to keep it on a short life- economic policy? The results have been general revenues, there is no mistaking span. But this gives it a much longer a resurgence in our national economic that any longer. We think that keeping period. lives—the lowest inflation rate in 33 a third of a billion dollars for that pur- Finally, $31 billion in technological years, the lowest unemployment rate pose is prudent. In the meantime, it and economic development incentives, in 41 years, and we have seen the best will retire some debt and there will be including an extension of the research economic performance since the John- some interest savings and we will have credit. These seem, to us, to be widely son administration back in the 1960s. that money generally understood to be based. They are equitable, and I hope We can see the rates of growth of var- available. they will amend themselves to the Sen- ious administrations. In the Clinton We think another third has to be ate. administration we see an economic used to restore what we have come to I see my friend from North Dakota is growth rate of nearly 4 percent. We call discretionary spending. I wish I on the floor, is ready, and I yield him compare that to the Bush administra- knew for sure from where that word 15 minutes. tion, 1.3 percent; 3 percent under came. I think Senator ROTH would not Mr. CONRAD addressed the Chair. Reagan; the Carter administration, and have produced so devious a term. Is the The PRESIDING OFFICER. The Sen- so on. So we have seen a period of sus- Marine Corps discretionary? Is the ator from North Dakota. tained economic growth—in fact, the Coast Guard? Do we regard the Bureau Mr. CONRAD. I thank the Chair and longest economic expansion in our his- of the Census as something we can do thank the Senator from New York. tory. without? We did for a while, letting the I thought it might be helpful to re- In addition to the other positive ben- States do it, but since 1860 we have had view the record on how we got to where efits, we have seen a dramatic reduc- one. This is our general Government, we are today as we put in context the tion in the welfare caseload. This is and it is not discretionary, save on the choices that Senators have to make. largely a result of the economy. It is margins. Most of these functions have I think it is helpful to go back to also a result of the welfare reform pro- been with us a long time, and we need 1981, the Reagan administration, and posal that we passed a number of years them. look at what happened to deficits and ago. The percentage on welfare is the The present arrangement is for dras- debt during that period, and compare it lowest in 29 years. tic reductions in real dollars for these to the Bush administration and the All of this is jeopardized. All of this programs over the next decade. It can- Clinton administration, so that we un- is jeopardized by the risky, radical, not go on. We have just seen the pain- derstand how we got to where we are reckless proposal that is before us from ful scene of the House of Representa- today and what the implications are our friends on the other side of the tives providing an emergency appro- for the proposals before us. aisle. Interestingly enough, the very priations for the year 2000 census, as if If we go back to the Reagan adminis- people who are advocating this pro- the census came up like a hurricane or tration, I think we all recall the eco- posal said, about the 1993 plan that has a flood. We have had one every 10 years nomic history. We had, then, a major formed the basis of the deficit reduc- since 1790. It is not an emergency. It is tax cut. The results were clear. The tion and the economic resurgence of just that it cannot be met under these deficits exploded. The debt exploded. this country, that that plan would not caps. So we think a third should be pre- Then, in the Bush administration, we work. served for that purpose. saw a further explosion of deficits, The distinguished chairman of the Finally, a third for tax relief, tar- until in the last year of the Bush ad- Finance Committee said about the 1993 geted to generally accepted principles ministration we reached a budget def- plan: that are widely based. We would have icit of $290 billion. The national debt It will flatten the economy. $189 billion in broad-based tax relief. had tripled under the Reagan adminis- Senator GRAMM of Texas, a member That would, most importantly, in- tration. of the Finance Committee, said: crease the standard deduction by 60 In 1993, we passed a plan, on the We are buying a one-way ticket to reces- percent. This would remove more than Democratic side, without a single vote sion. 3 million taxpayers from the tax rolls from the Republican side, a 5-year plan The truth: The economy has reached and would provide an estimated 9 mil- to reduce the deficits and restore our a new milestone—the longest peace- lion more to simply take the standard economic health. time expansion on record. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9487 We had a former President who said: billion to strengthen and protect Medi- This tax cut scheme is not conserv- Facts are stubborn things. Indeed, they care, and $290 billion for high-priority ative; it is radical. It is risky. It is are. The fact is the 1993 5-year plan, domestic needs. reckless. It poses the threat of under- that passed without a single vote on I think it is critically important that mining all of the work we have done to the Republican side, reduced the deficit people understand when we talk about restore the fiscal integrity of this and formed the basis for an economic domestic needs, what are we talking country that has played such a large resurgence in this country. about for the next 10 years? This chart role in restoring our fiscal health. This Our friends on the other side of the shows what happens if we just have is not conservative. It is radical. It is aisle, the very ones who are here with constant buying power over the 10 risky. It is reckless. It ought to be a radical, risky plan, were the ones years, which is represented by this blue stopped. line. That is constant buying power. who were wrong about the 1993 plan. In Now, our friends on the other side of fact, Senator GRAMM, who was just Our friends on the other side say the Democrats just want to spend money. the aisle say tax revenue is the highest speaking, said at the time about the it has been in a long time, but they are 1993 plan: Let’s look at the Democratic plan. I have just indicated we want $290 not telling the whole story. Here is I want to predict here tonight that if we what the revenue and expenditure line adopt this bill the American economy is billion for domestic needs. That rep- going to get weaker and not stronger, the resents this red line. That is a cut in of the Federal Government looks like deficit four years from [now] will be higher buying power for the Federal Govern- going back to 1980 and carrying than it is today and not lower . . . when all ment from what we now have. If you through to today. is said and done, people will pay more taxes, just take last year’s spending and add The blue line is the outlays of the the economy will create fewer jobs, Govern- inflation, that is the blue line, con- Federal Government, the spending. The ment will spend more money, and the Amer- stant buying power. ican people will be worse off. red line is the revenues. What we can The Democrats are proposing cutting see is, it has been pretty constant over Senator GRAMM was wrong on vir- the buying power of the Federal Gov- time. The reason we had a deficit was tually every count. ernment. They are proposing cutting The fact is, the 1993 plan reduced the that the spending line was above the spending. revenue line—pretty basic stuff. deficit and kicked off this extraor- Here is what our Republican friends dinary economic expansion: the lowest are talking about in terms of spending In 1993, when Democrats, without a unemployment rate in 41 years, the cuts, this green line. This green line single Republican vote, passed a plan lowest inflation rate in 33 years. The means dramatic, radical cuts in edu- to balance the budget, we reduced the fact is, the very folks who are now ad- cation, in defense, in parks, in law en- spending line and we raised the revenue vocating this radical, risky plan were forcement. That is what they are talk- line. That is how we balanced the budg- wrong in 1993, and not just a little bit ing about. Does anybody believe this is et. We cut spending and, yes, we raised wrong; they were dead wrong. going to happen? Does anybody believe income taxes on the wealthiest 1 per- Now, let’s check their math. It is fas- it? It is not even happening this year. cent in this country. That is how we cinating what I have heard on the floor The Wall Street Journal reported balanced the budget. That is how we today. Over and over the message is yesterday that they are cooking the got the deficit under control. That is that we have a $3 trillion surplus and books on the Republican side because how we got the lowest unemployment we are only using one-quarter of it for they want to spend more money and in 41 years. That is how we got the low- tax relief. Let’s check that. want to act as if they are not breaking est inflation in 33 years. That is how The truth is, the total surplus that is the caps. At some point we have to face we got 18 million jobs created. That is projected over the next 10 years is $2.9 reality and face facts. Facts are stub- how we restored this country to eco- trillion, according to the Congressional born things. nomic health—by cutting spending and Budget Office. But what they haven’t This blue line is constant buying raising the revenue to balance the been saying on the floor is that $1.9 power. The Democratic plan proposes budget. trillion of that, nearly two-thirds, is cutting Federal spending in real terms. There is one thing they don’t tell us Social Security surplus. So you have to The Republican plan proposes dra- much about because I don’t think they subtract that. That leaves a surplus of matic, draconian cuts, cuts that can- want to deal with these facts. They are $1 trillion. When you take out the addi- not be sustained, will not be sustained. saying the taxes are the highest they tional interest cost that will accrue, if In fact, they won’t support them for have ever been. The tax revenue is the you are going to give a tax cut of $130 defense, and they shouldn’t. They are highest it has been in a considerable billion, you are left with $870 billion living with a fiction, and it is a fiction period. That is what helped us balance that is available of non-Social Security that is being revealed every day as the the budget, along with cutting spend- surplus. committees of Congress do their work. What do our friends on the other side Not only should we check their math ing. But what they have not talked of the aisle want to do with this $870 but we should check the whole basis for about is what has happened to indi- billion? They say, let’s take $800 bil- the projections that are being made to vidual taxes. Most individual taxes in lion, or nearly that, and give it in a tax sustain a tax cut. Let’s remember, the this country have gone down. It might cut, a risky tax cut that has the poten- money is not in the bank. The money surprise you to hear that after all the tial to blow a hole in the fiscal dis- is projected to come in. rhetoric on the other side. cipline we have established—$800 bil- I used to be in charge of projecting These are not KENT CONRAD’s calcula- lion of tax cut out of $870 billion that the revenue for my State of North Da- tions; these are the calculations of the is available. That is not 25 percent, kota. I can tell my colleagues, there is respected accounting firm, Deloitte that is 94 percent, 94 percent of the no 10-year projection that anybody can and Touche. These are the combined non-Social Security surplus being used have great confidence in. tax rates of income tax and Social Se- for a tax cut—not 25 percent, 94 per- Robert Samuelson, in today’s Wash- curity taxes. It is very interesting. cent. ington Post, said: This is for a working mother, the tax It is very interesting, the choices The wonder is that the Republicans are so burden, with a family income of just that leaves us with. We have nothing wedded to a program that is dubious as to under $20,000 a year. In 1979, their tax both policy and politics. As Federal Reserve for Medicare under the Republican Chairman Alan Greenspan noted the other rate—— plan, nothing to strengthen Medicare, day, tax cuts might some day be justified, The PRESIDING OFFICER. The Sen- nothing for domestic needs over the but there is no case for big tax cuts based ator’s 15 minutes have expired. next 10 years, and they have got merely on paper projections of budget sur- pluses. Mr. MOYNIHAN. Would the Senator unallocated $63 billion. like another 5 minutes? Compare that to the Democratic plan In fact, he went on to indicate, if that saves every penny of the Social there was just a 1-percent change in Mr. CONRAD. I would. I thank the Security surplus for Social Security revenue and expenditure from what is Senator from New York. and then, in equal thirds, one-third for projected, these surpluses would van- It is very interesting; if we study tax relief, $290 billion—$500 billion less ish. That is very much in line with what has happened to the individual than our friends on the other side—$290 what mistakes have been in the past. tax S9488 CONGRESSIONAL RECORD — SENATE July 28, 1999 rates and tax burden of people in this the richest 1 percent. That is not fair. lishing a lot of new programs to have country over 20 years, they have gone It is not wise. It is radical; it is risky; Washington bureaucrats spend the ad- down. The Republican rhetoric sug- it is reckless. ditional money coming into the Fed- gests everybody’s taxes are at record There is a better way. The Demo- eral Treasury. highs. It is not true. It is not true. This cratic alternative says save Social Se- They are not very bold when it comes is the accounting firm of Deloitte & curity first—every penny of Social Se- to giving the taxpayers back their Touche. They point out that for a curity surplus for Social Security. And money, but they are very bold in say- working mother with an income of just then for the non-Social Security sur- ing how Washington can spend that under $20,000, in 1979, her combined tax plus, to split it in equal thirds: one- money better than the taxpayers. They rate was 8.6 percent. That has dropped third to protect Medicare, to extend its are very bold in increasing new pro- to 5 percent today. Why? Because when solvency, and to provide prescription grams and very bold, without using the the Democrats passed that budget bal- drug coverage; one-third, tax reduc- words, but saying, in effect, that we in ancing plan in 1993—it is true we raised tions for working families, targeted Washington know better how to spend taxes on the wealthiest 1 percent, but squarely at the middle-income people the taxpayers’ money than the tax- we cut taxes on the vast majority of in this country, the very ones who need payers do. Americans by expanding the earned-in- tax relief; and one-third for high-pri- How they like to quote Chairman come tax credit. ority domestic needs such as edu- Greenspan because of his respect, but Look at what happened to a middle- cation, agriculture, defense, and law also they only like to tell half of what income family earning $35,000 a year. enforcement. Chairman Greenspan says. We have had Their taxes have not gone up. They Again, that $290 billion doesn’t even an opportunity, as Senators, to hear have gone down. Again, this is accord- keep pace with inflation. We are cut- Chairman Greenspan in so many dif- ing to the respected accounting firm of ting Federal spending, in real terms, in ferent forums this year, just since the Deloitte & Touche. In 1979, their com- the Democratic proposal. first of the year, talk about a surplus bined tax rate—income tax and Social I might add that we have more debt and what should be done with it. They Security taxes—was 11.2 percent. That reduction than the Republican plan. would like to have you believe the only dropped to 10.5 percent in 1999, again, Let me make that as a final point. The thing that Chairman Greenspan says is because when the Democrats passed Democratic plan has over $2 trillion of that he is against any tax cuts. the plan to balance the budget in 1993, debt reduction. The Republican plan But what he does is give Congress we expanded the earned-income tax has just under $2 trillion. several alternatives. Admittedly, he credit. I suggest to my colleagues that the says that his first choice is to retire Look at a tax burden of a family of Democratic plan is superior in every debt held by the public; four earning $85,000, and look at the way—greater debt reduction, pre- Next, to give tax reductions, because last 20 years. Again, their tax burden serving the Social Security surplus for tax reductions are better than spending has been reduced. In 1979, it was 17 per- Social Security, preserving and pro- the money as the third alternative. cent; it is 16.3 percent today. tecting Medicare, providing for our And particularly, Chairman Green- Don’t get me wrong. I am not sug- high-priority domestic needs, and, yes, span says, top priority ought to be gesting that people don’t deserve fur- tax relief targeted at those who deserve given to cutting marginal tax rates. ther tax relief. I believe they do. The it the most—not the wealthiest among Appearing just last week before the Democratic proposal provides it. It pro- us, but middle- and lower-income peo- House Budget Committee, Chairman vides it in a fair and balanced way, in ple who richly deserve some tax relief. Greenspan reiterated his position by a fiscally responsible way. I thank the Chair and yield the floor. making clear, and I will give you this That is not the case of the risky, rad- The PRESIDING OFFICER. Who quote: ical scheme of our friends on the other yields time? side. Their tax break explodes in the Mr. MOYNIHAN. Mr. President, as Only if Congress believes that the surplus second 10-year period. We have just chairman of the Finance Committee, I will be spent rather than saved is a tax cut wise. stopped that, at least momentarily. stood on this floor for 10 long hours 6 But this program that they have out- years ago and I thank the Senator from I think given the President’s, and his lined of $800 billion in tax cuts explodes North Dakota for recreating what we party’s, past and present propensity to to $2 trillion, with the additional inter- did that day and what the con- want to spend all of the surplus—the est costs that would add another tril- sequences have been. President’s budget not only spends all lion to $3 trillion in the second 10-year It had been our idea that the Senator the surplus, the President’s budget period. That is risky. At the very time from Montana would go next, but we would take $30 billion from Social Se- the baby boomers start to retire, they can alternate. curity, and they have a $100 billion tax are going to undermine the fiscal sta- Mr. ROTH. Mr. President, I yield 15 increase as well—with their propensity bility of the country. minutes to the Senator from Iowa. to spend all of it, and more than the Those aren’t the only issues that The PRESIDING OFFICER. The Sen- surplus, it should be obvious that the need to be addressed. We have already ator from Iowa is recognized for 15 congressional budget plan that is be- seen how their tax cut explodes in the minutes. fore us by the people on this side of the outyears, just as the baby boomers re- Mr. GRASSLEY. Mr. President, we aisle is aligned very much with Chair- tire. But we should also ask ourselves have a Democrat alternative tax cut man Greenspan’s position. how fair is the tax cut scheme of our that is the weakest, least adventure- I wish our friends on the other side of friends on the other side. some effort to reduce taxes that you the aisle would speak in the same way This shows the House bill that has al- could ever expect which will do little when they say that this money is not ready passed. Their idea of fairness is good for anybody. in the bank, that it is only projected to give the top 1 percent of the people I call upon my colleagues on the income—when they use that as an ex- in this country 32 percent of the ben- other side of the aisle to be bold in cuse that you can’t give people a tax efit. The top 1 percent get 32 percent of trusting the American people with cut—they ought to not project the ex- the benefits of the tax cut proposal of their money, to be bold in letting peo- penditure of that money as well. the Republicans in the House of Rep- ple keep money in their own pockets to Yet they are willing to be radical. resentatives, which has already passed. spend. I ask the other side of the aisle They are willing to be risky when pro- So for people earning under $38,000 a to be as bold in tax policy, and to be as jecting expenditure of this money. But year, they would get, on average, $99. If bold in reducing taxes as they are bold somehow it is wrong to give this you are earning over $300,000 a year, in wanting to spend the taxpayers’ money back to the people to spend be- you get $20,000. That is not fair. That money. I would like to have them be as cause if the people keep this money in should not be the policy of the United bold in reducing taxes as they are bold the first place, they don’t send it to States—a tax cut plan that is skewed in their budget of this year to increase Washington, and it is going to create to the richest and wealthiest among us, practically every program that has more jobs. It is going to turn many that gives 32 percent of the benefit to ever been thought of, and even estab- times over in the economy than would July 28, 1999 CONGRESSIONAL RECORD — SENATE S9489 otherwise be turned over in the econ- bill before us. I commend the chairman is dead wrong in saying we put tax cuts omy if it were spent by Washington bu- for taking the initiative and pushing before Social Security, because we plan reaucrats—creating jobs and creating major tax relief that people really for Social Security very thoroughly. wealth, if the taxpayers spend it, and want. And, by the way, even some We have been trying to set up a just being poured down the black, bot- Democrats supported it out of the Fi- lockbox so no one will be able to get at tomless pit if it is spent in Washington, nance Committee. The President has that money and spend it. However, we DC. only offered modest tax cuts. have not met with much cooperation We had a chart from the other side of This amendment is an example of it. from the other side of the aisle on sav- the aisle that said what a great deal Of course, in the process, as I indi- ing Social Security. I have lost track has happened since 1993 on reducing the cated, he wants to raise taxes $100 bil- of the number of times since the first deficit. But what is left out of that lion in other ways in the process of giv- of the year we have had cloture votes equation and that presentation is one ing a tax cut, because the President of on our Republican lockbox proposal. of the greatest political revolutions the United States wants it both ways. This is truly unfortunate. If we don’t that has come from the grassroots of He wants to be able to take credit for create a Social Security lockbox, we America in an off-year election in the a tax cut on the one hand while he is are going to end up spending the last 60 years. And that was that the raising taxes on the other hand. money for everything else but Social people of this country for the first time Of course, he is sending out all of Security. Even the President has said in 40 years turned both Houses of Con- these frantic, hysterical veto threats. he is in favor of a lockbox, but his ac- gress over to a Republican majority. He attacked the House bill, playing the tions fall far short of his rhetoric. It was only after that Republican class warfare card that he plays so The tax cut we are talking about majority was elected that there were well, saying that it benefited the rich. today is $792 billion. This is less than 25 dramatic changes in budgeting with Of course, he can’t do that with a Sen- percent of the total cumulative surplus the caps, and even with a reduction of ate bill. We saw that was not chal- of $3.4 trillion. A lot of our taxpayers taxes in 1997 that brought the changes lenged on this point by people on the say even $792 is not a bold enough tax and the discipline to the Hill—even to other side of the aisle, since 60 percent cut. It is even less than the $1 trillion the White House as well—that brought of the bill before the Senate helps fam- that will accumulate on the on-budget us to the place where we are today of ilies who are middle class and earning surplus. There is money left over, $505 talking about surpluses, because in the $75,000 or less. billion to be exact, to take care of Now the President and his minions first 2 years of this administration problems with the Medicare system are saying $792 billion in tax relief to their own budgets were projecting in and provide additional funds for discre- the American people is too much. He is the outyear deficits for a long, long tionary spending. saying that either they don’t need it— time. But all of that was turned around In our budget resolution, we provide meaning they don’t need the tax de- when Republicans took over Congress, $180 billion for increased discretionary crease—or he might even be saying and started down the road of bringing spending after the budget caps expire they don’t deserve it. He says this surpluses and balancing the budget. in the year 2002. That still leaves $325 while asking for billions of dollars in We are here to say that the Democrat billion to help solve Medicare problems new taxes to pay for even more spend- tax decrease of $300 billion compared to and spending for domestic priorities. ing while raiding the Social Security our $792 billion is too puny to do the Over the next 10 years the Federal trust fund of $30 billion. Government will take in nearly $23 economic good that ought to be done. That is right. This President and his trillion in all taxes. That is a lot of It is too puny to return political and budget team raids Social Security to money. This bill gives $792 billion back economic freedom to the taxpayers of pay for more spending. He does this to the American taxpayers. That still this country because the taxpayers will when taxes as a percentage of the spend that money more wisely than if Gross Domestic Product are at an all- leaves $22 trillion in revenue that the it is sent to Washington. time high of around 21 percent. Histori- Government will spend. The tax cut we But we are also here to declare vic- cally, taxes have been around 18 to 19 are talking about is only 3.5 percent, tory in the debate over whether we percent of the Gross Domestic Product 3.5 pennies out of every $1 coming into should give tax relief to the American over the last 30- to 40-year-period of the Federal Treasury over the next 10 people because they want us to believe time. We restore that historical level. years. I am a little embarrassed to tell with their amendment that they are The public at the grassroots has pret- the taxpayers we are only giving a tax for a tax cut. They are for a tax cut— ty much consented to pay—not every cut of 3.5 percent from all the money a very small, puny tax cut. The Presi- American would agree with that—but the Federal Government will take in dent says now he is for a tax cut. over 30 to 40 years, it has been about 18 over the next 10 years. That is three We have won somewhat of a victory to 19 percent. But now it is up to 21 times what the other side of the aisle in this year’s debate. The question now percent. We propose that it be more would return to the taxpayers. is not whether there should be tax re- like that historical rate of taxation, as The congressional budget plan will lief, but what kind and how much? it has been for a long time. save 75 percent of the surplus projected As a Member of the majority party, I By contrast, the administration, in by the CBO over the next 10 years. In can’t think of a better problem with addition to providing puny tax relief, contrast, the President saves only 67 which to be confronted. With a tax cut would have a debt of $200 billion more percent. The President is proposing a plan before us, we are proposing to fi- than what we will have if our budget is $95 billion tax increase. nally start sending hard-earned dollars adopted. We continually ask the American out of Washington and back to the tax- We also protect Social Security and taxpayers to trust us as legislators. payers. Medicare. There isn’t a day that goes by without Most of the provisions of this bill are The congressional budget plan before us asking for that support from our what the people from the grassroots of the Senate provides a blueprint for sav- constituents. Now it seems to me it is America have been telling their Con- ings. We are projecting a cumulative time to return trust to the American gressmen and Senators they want surplus of $3.4 trillion. This includes taxpayers. It is time to trust the Amer- done—and really want done—because the surplus in the Social Security trust ican taxpayers with a little bit of their we include those things in our bill: ad- fund as well as the on-budget general own money—3.5 percent of all the dressing the marriage penalty; pro- fund surplus. Of the estimated $3.4 tril- money coming in over the next 10 viding health care tax relief; more help lion surplus, Republicans are advo- years. for education, pensions and savings; cating in this budget saving $1.9 tril- The latest challenge from the other long-term care; child care; estate tax lion to save Social Security. These are side of the aisle is reflected in the relief; and, most importantly, general the funds which are estimated to come Democrat substitute before the Senate. relief for middle-income taxpayers. into the Social Security trust fund I suppose it could be called a tax Nearly all of the provisions that I from the payroll tax. ‘‘scratch’’ instead of calling it a tax and Senator FEINSTEIN introduced in S. Of course, the President of the cut because it is that puny. Even a 1160 are included in some form in the United States in attacking our budget number of Democrats are scoffing at S9490 CONGRESSIONAL RECORD — SENATE July 28, 1999 such a weak effort. It is less than $300 bers that I have heard in the entire de- sented by the other side, necessarily billion over 10 years. It does not even bate. assumes we are going to stick with the have a rate cut for middle-income tax- Essentially, we have choices that are budget caps on discretionary spending. payers. It does not even get rid of the quite significant. How are we going to My friends around the country unfair marriage penalty that affects manage this additional surplus? I don’t watching this ask what in the world millions of taxpayers. Compared to our want to say awesome, but it is very un- are discretionary spending caps? Let tax bill, it delays the 100-percent de- usual for this country to have a budget me explain to the American public ductibility for self-employed health in- surplus and be faced with these what they are. Essentially, Congress surance and in the process hurts small choices. Not too coincidentally, it is passed a budget, by the other side, en- business and farmers. the end of the 1990s that we have the tirely by the other side—and by the The Democrat plan only provides half choice, as we face the next century, the other side I mean the Republican of the assistance the Republican plan millennium. I think the American peo- party—which set very tight budget provides for people who need to pur- ple sent legislators to the Senate and caps. If those budget caps are projected chase their own health insurance. The the Congress to do what is right, to do in the next 10 years, that necessarily Clinton-Gore team and their lockstep what is right when we have a big sur- means about a $595 billion cut in dis- followers in Congress do not think that plus. cretionary spending, which is spending the tax rate the average American pays It has been stated many times, and I on such things as education, veterans’ is too much. We all know what their will repeat it: The projections over the benefits, Head Start programs, edu- record has been. We all know the Clin- next 10 years are for a $3 trillion sur- cation programs, and so forth. But to ton-Gore tax increase of 1993 was the plus, $2 trillion out of payroll tax addi- make it even worse, that does not take largest ever in the history of the tional revenues because more people into consideration the probable sched- are working, the economy is doing so United States. I have heard some Mem- uled increase in defense spending of well, the payroll tax revenues increase. about $127 billion, which means if you bers, in defense of their support of this We have agreed that that $2 trillion add the two together, this budget massive tax increase, try to argue that generated from the payroll tax in- means about $775 billion in real discre- this is what brought about the current creases will go into the Social Security tionary spending cuts. That is nec- surpluses. trust fund. We want to make sure the This is a revisionist history that has essarily, arithmetically, mathemati- Social Security trust fund is as secure cally, the consequence of this proposal risen to some sort of art form on the as we can possibly make it. It seems —cuts that deep. That means, if de- floor of the Senate today. First, the reasonable those revenues go to the So- fense is increased $127 billion, all the Clinton-Gore tax increase was supposed cial Security trust fund. That is agreed other discretionary spending will be to raise $240 billion. Of course, this is to here. That is not a problem. cut about 43 percent by the year 2009. less than the $290 billion they now say The question is: With the remaining That means a 43-percent cut in vet- they want to give back in this sub- $1 trillion of the $3 trillion that comes erans’ benefits. Let me tell you a little stitute amendment. out of general revenue—from income more about that. What does that However, the Clinton-Gore tax in- taxes, including corporate and indi- mean? That means about 1.5 million crease never raised the money it was vidual income taxes—what do we do veterans will be turned away—turned supposed to raise. The revenue increase with that? Very simply, it comes down away because of those cuts. It means that did come in is due to the private to making choices. Under the choices about 375,000 kids will be out of the sector economic engine and did so de- we make, some people are going to be Head Start Program, gone—375,000 spite all of the shackles this adminis- helped and some people are going to be kids. That is necessary because of a 43- tration has placed on business through hurt. That is the nature of choices. Or percent cut in all these programs be- both tax increases and unprecedented some people are helped more and some cause this budget assumes no increase regulation. people are helped not quite as much be- in discretionary spending caps and In addition, $40 billion of this new cause we have to make choices. probably, if we are realistic with our- revenue can be attributed to the cap- So essentially what do we have in selves, it means the other side is going ital gains tax reduction that the Re- front of us? I would like to show a to add back in defense. That nets out publican Congress passed in 1997. The chart that has been presented many at a 43-percent cut. administration argued this tax reduc- times, but it is important to drive this I am not saying we should increase tion would cost revenue, but the Wall point home. It is a fact. The fact is, our these programs above the baseline, al- Street Journal has said this has friends on the other side of the aisle do though perhaps in some areas we could. brought in $40 billion more. So most of propose a tax cut of about $792 billion But at the very least, we should not the arguments on the other side of the over the next 10 years. Because of that cut them 43 percent across the board. aisle are just plain wrong. tax cut, it means the debt will not be Let’s say we are not going to cut them I yield the floor. reduced as fast as otherwise might be, 43 percent across the board. Let’s say The PRESIDING OFFICER (Mr. which means interest on the debt will we are going to keep Head Start fund- ABRAHAM). The Senator from Montana. be a little more. That additional inter- ing. That necessarily means you have Mr. BAUCUS. Mr. President, I yield est on the debt is about $141 billion. If to cut something else by more than 43 myself 10 minutes. we add the two together, in effect the percent. That is where we are. Nobody I begin by asking Members and the tax cut offered by the other side really can dispute those facts —nobody. public to review the remarks of the takes $933 billion out of the roughly $1 Those are the facts. Senator from North Dakota, Mr. trillion surplus. That is a fact. Nobody Let me show another chart. To state CONRAD, given 15 or 20 minutes ago. It can deny that. That is a fact. it differently, take a dollar bill. This is was one of the best summations of the Then the next question is, does that the line—it is hard to see on this chart facts and choices we now face that I make sense? Who is helped by that? —of the tax breaks as a consequence of have ever heard. Who is hurt by that? Given the com- the bill before us. This is the additional Senator CONRAD is a former tax com- position of the tax reduction, those interest payment, which is about $63 missioner of the State of North Dakota helped tend to be the most wealthy billion for everything else, and I have and is intimately familiar with tax Americans at a period in our American already outlined what the con- matters. He also is a very senior mem- history when our economy is doing sequences of that are. ber on the Budget Committee. He is very well. Who is hurt? The people hurt The proposal before us is the Demo- very deeply involved in all of the tax by this tend to be people who are nec- cratic alternative. What is it? Basi- and spending matters that face our essarily going to face very severe re- cally, we think it is a wiser set of Federal budget. I urge Senators to re- ductions in veterans’ benefits. It might choices. Again, with roughly a $1 tril- view the comments made by the Sen- be in education provisions, it might be lion surplus that we are debating, the ator from North Dakota, Mr. CONRAD. the FBI salaries, Head Start, kids not question is what choices are we going They were very much on target. As I admitted to the program, and so forth. to make? What should we do about it? said, it was probably the best factual Why do I say that? I say that because The choice made by the other side is summary of the choices facing Mem- the budget tax proposal before us, pre- essentially all of it in tax cuts—all of July 28, 1999 CONGRESSIONAL RECORD — SENATE S9491 it. Because if you add interest lost, it What are we really saying? Many provide just $500 billion in tax relief— basically comes to it all going to tax say, give back the tax cut, give it back again, more evidence that they want to cuts. That is basically what it is. to the people, give it back now to the spend the money, not give it back, not We say no. First, because that is a people. save it for our children, but spend it on projection and we do not know if it will It is a very sympathetic argument. new Washington programs. be real; it is so back loaded. You have We are saying let’s be responsible but The President is hinting at sup- heard all the arguments. Rather, let’s let’s give it back to our children. Let’s porting tax relief somewhere in the do a little bit here and a little bit there give it back to our children in greater $250 billion range, but his own budget that protects the future. We say let’s deficit reduction. Let’s give it back to included only one tax cut, and that have about a $300 billion tax cut. Sure, our children to help their parents with could only be used for savings, not to we are for tax cuts. Let’s take $300 bil- Medicare. Let’s give it back to the fu- let families decide how to spend their lion and reduce it. ture. Let’s be responsible. own money, but for Washington, the Mr. President, I yield myself an addi- I do think we have a moral obligation President, to tell you what you are tional 5 minutes. as representatives of the people to do going to do if he decides to give any of The PRESIDING OFFICER. Without what we can to leave this country in at your surplus back. objection, it is so ordered. least as good a shape, if not better I take this opportunity to make a Mr. BAUCUS. So another third, we shape, than we found it. That means few points about why the taxpayers say, goes to Medicare. Let’s give some reducing the debt, it means helping have every right to expect this Con- to Medicare. I heard a Senator a few shore up Medicare, it means just meet- gress and the President to return at minutes ago say it is reckless or it is ing people’s needs in a very solid, re- least $792 billion of overpaid taxes. irresponsible to spend money on pro- sponsible way. First, let me emphasize that this bill grams. I ask the Senator, is it reckless, The majority plan hurts people on is a 10-year $792 billion tax cut plan is it radical to save a little bit for Medicare, hurts veterans, hurts kids in that benefits all Americans, with a Medicare? The Medicare trust fund is Head Start, hurts the country. We say focus on providing major tax relief for in dire straits, even more so than the let’s not hurt the country, let’s help middle-class families. It is not a tax Social Security trust fund. Right now the country. Let’s help the country cut for the rich. It is not an unrealistic it is projected that the surplus in the with a balanced, responsible alter- level of relief. It significantly reduces Medicare trust fund is due to reach native, one I think the American peo- taxes for millions of American families zero about 2015. What happens if the ple really would prefer if they were and individuals, and it is the biggest economy is not doing as well in the fully involved in this debate rather tax relief we have ever had since Presi- next several years? What does that than a reckless, irresponsible—I hate dent Ronald Reagan cut taxes dramati- mean? That means the Medicare trust to categorize it that way, but I do cally in the early 1980s. I again com- fund is due to reach zero earlier than think it is, quite honestly—a program mend Chairman ROTH for his leadership 2015. You wonder why the projections for that takes all of the surplus, $1 tril- and his commitment to providing the Medicare trust fund expiration lion, and sends it all back for tax cuts major tax relief. kind of bounce around? It is basically at a time when Mr. Greenspan, the We promised to return to American because the economy itself changes. Chairman of the Federal Reserve, says families the non-Social Security tax Some years we are doing very well, is not the right time for a tax cut. He overcharges they paid to the Govern- some years not so well. Right now we says it is not the right time because ment, and we have fulfilled that sol- are doing well, so that means a 2015 ex- the economy is already heated up and emn promise. The proposed tax relief piration date. we are dangerously close to the point will immediately ease working Ameri- So we are saying in the proposal where, with more stimulus, a bubble cans’ tax burden and allow them to crafted by our leader, the Senator from could burst and we could be causing a keep a little more of their own money New York, let’s save about a third of lot more problems than we can even and use it on their family priorities— this surplus, this $1 trillion surplus, for think of at this point. not Washington’s, not President Clin- Medicare. One-third for tax cuts, one- I thank the Chair and yield back my ton’s, but their families’ priorities. third for Medicare, and we are also say- time. This taxpayer relief refund legisla- ing come on, men and women around The PRESIDING OFFICER. Who tion gives middle-class working fami- here, let’s be realistic. yields time? lies at least $450 a year in relief from I mentioned earlier about the discre- Mr. ROTH. Mr. President, I yield 12 the tax squeeze. It corrects the injus- tionary spending caps and how the minutes to the Senator from Min- tice of the marriage penalty tax by al- budget on the other side assumes we nesota. lowing married couples to file joint re- are not going to raise the caps, which The PRESIDING OFFICER. The Sen- turns as if they were single payers of means in effect if we add some for de- ator from Minnesota. taxes, so 22 million Americans will no fense, about a $775 billion cut in spend- Mr. GRAMS. Mr. President, as we longer be penalized simply for the fact ing. We are saying that is unrealistic. consider the $792 billion of overpaid they are married. We are not going to cut veterans’ bene- taxes we seek to refund in the Tax- This legislation also eliminates the fits nearly that amount. We are not payer Refund Act, millions of Ameri- alternative minimum tax to permit going to take young kids out of the cans are deeply concerned about Presi- millions of American families, includ- Head Start Program. So we are saying dent Clinton’s veto threat. We just ing farmers, to enjoy the full benefit of take a third of that $1 trillion, roughly, heard the statement about we cannot tax exemptions and credits such as the and let’s dedicate that to the discre- have a ‘‘reckless’’ tax cut, but they $500-per-child tax credit which I cham- tionary spending programs so the re- want to give back this money to our pioned and the Senate passed back in ductions are not as great as we note children and grandchildren and to the 1997. they otherwise might be. The result is American people. The proposed tax relief includes a re- the interest cost that will necessarily The truth is, our bill is the bill that duction in the death tax which will result from this proposal. wants to return this surplus to the tax- help farmers and small businesses So, again, it comes down to choices. payers of the country; the President’s across the country pass on their hard- Who is helped? Who is hurt? We say the bill wants to spend it. It is very dif- earned legacies to their children, not people who should be helped are seniors ferent. Somehow, if we give it back in to pass it on to the Government but to on Medicare. We should help shore up tax relief, it is reckless because the pass it on to their children and their the Medicare trust fund, the program. American people somehow do not know heirs. Some of these Medicare dollars could how to spend it, but let us keep it in The bill makes health care more af- be set aside for drug benefits. We know Washington and let Washington spend fordable for millions of self-employed how many seniors desperately need it and it is fine. I do not understand and uninsured by making their health help with prescription drug benefits. that logic. care costs 100-percent deductible, and We are saying some could help vet- The President has also threatened to it includes my legislation to permit erans. veto a proposal from his own party to workers without coverage to deduct S9492 CONGRESSIONAL RECORD — SENATE July 28, 1999 their health insurance costs and also that tax relief will somehow harm So- As a result, Americans today are allows those purchasing long-term care cial Security, it will harm Medicare, working harder and they are working policies to deduct them as well. These and similarly impact Federal spending. longer, but they are taking home less measures will allow more people to ob- Again, my point is, these are over- money because the Federal Govern- tain health care coverage or improve paid taxes from American workers and ment is taking home more. A larger the coverage they already have. they have every right to get it all share of the earned income of working The bill before us also encourages back. To say we cannot provide this Americans is siphoned off here to working Americans to save more for level of relief without hurting Ameri- Washington, and it isn’t available for their future by expanding IRAs and cans is totally inaccurate. families to spend on their priorities. providing education tax benefits for We must recall that Americans have A recent Census Bureau report finds parents, for students, and for workers. long been overtaxed and millions of that 49 million hard-working Ameri- There is other tax relief for hard- middle-class families cannot even cans, including 8 million middle-class working Americans as well. While make ends meet due to the growing tax Americans, live in a household that has there is still room to improve the legis- burden. Our savings rate in this coun- trouble paying for just their basic lation, such as to expand the broad- try this year is a negative because fam- needs. based tax relief and to provide imme- ilies do not have any money left, espe- President Clinton himself at one diate relief of the marriage penalty, cially after paying taxes, to put away. time—this was down in Texas during a this $800 billion package is a clear vic- They are desperately in need of this campaign swing in 1995—admitted to a tory for working Americans. largest possible tax relief. group of contributors, by the way, that One of the most important points I Americans today, for example, are Americans were taxed too much. He have made repeatedly in this Chamber paying in my State of Minnesota 42 said: I might have raised taxes too is that the non-Social Security surplus percent of their hard-earned money on much in 1993. He said: You might think is the working people’s money, not taxes to support Government. I did. Well, I think I raised them too It is hard enough to raise one family Washington’s, and the people deserve much, too. without having to raise your Uncle the refund. But today he still refuses to refund Sam at the same time. According to America’s strong economy has overpaid taxes to Americans, because the Government’s own data, the aver- turned the ink in Washington’s ac- he does not think working Americans age household today pays about $10,000 counting book black for the first time are ‘‘going to spend it right.’’ President in Federal income taxes alone. That is in 40 years. The budget surplus above Clinton believes individuals are not ca- twice as much as they paid in Federal and beyond Social Security will top $1 pable of making decisions for them- taxes in 1985. The total Federal tax will trillion to $1.4 trillion over the next 10 selves and bigger Government is the consume 21 percent of the national in- years. The CBO finds the increased rev- only solution. Instead, he spends the come. Americans have not paid this enue is propelled by personal income surplus for Government programs, and much in taxes since World War II. tax increases, and the CBO cites four They say: Oh, Americans aren’t over- he calls meaningful tax relief ‘‘fiscally sources for this unexpected revenue: taxed. But since President Clinton was irresponsible.’’ His priority is not to First, the rapid growth of taxable in- elected in 1993, the amount that Fed- give tax relief at all. It is ‘‘irrespon- come, which has raised the tax base for eral tax consumes of the gross domes- sible’’ to ease Americans’ tax burdens a personal income tax receipts. tic product has gone from 18 percent to little so they can afford basic neces- Second, the CBO says adjusted gross 21 percent. So the Government is tak- sities. income, which has grown even more ing more of what this country pro- That is the question. Is it irrespon- rapidly than taxable personal income, duces, and it comes out of the pockets sible to even have a family night out mainly through the realization of cap- of average working Americans. once in a while? The family has been, ital gains. The capital gains tax in- In the past few years, Washington’s and will continue to be, the bedrock of creased by 150 percent between 1993 and income, in fact, has grown faster than American society. Strong families 1997, which is a third of the growth of our economy and twice as fast as the make strong communities; strong com- tax liability relative to GDP. income of working Americans. Wash- munities make a very strong America. Third, rising taxes paid on pension ington is growing twice as fast as what But 22 million working American cou- and IRA retirement income. you are getting in your paychecks. ples have been forced to pay $1,400 a Fourth, and I think the most impor- With more middle-income workers year more, on average, in taxes every tant, is the increase in the effective tax being thrown into higher tax brackets, year simply for choosing to be married. rate. As Americans are working harder, the ‘‘middle class tax squeeze’’ has Is it irresponsible to get rid of an un- as they earn more money, as inflation been devastating. fair tax policy that discourages mar- is there, it pushes more and more of Millions of middle-income Ameri- riage? them into the higher tax brackets. The cans, who have worked hard to get The PRESIDING OFFICER. The Sen- tax rate increase accounts for 40 per- ahead, have been pushed from the 15- ator has used his 12 minutes. cent of the tax growth in excess of GDP percent tax bracket up into the 28-per- Mr. GRAMS. I ask unanimous con- growth. That is an unfair tax. It has cent tax bracket. Hundreds of thou- sent for 5 more minutes. Or are we pushed people from one tax bracket sands of others have been pushed from short on time? into another. the 28-percent tax bracket into the 31- The PRESIDING OFFICER. The Sen- By the way, the CBO also points out percent bracket, and so on. More peo- ator from Delaware has 28 more min- the revenue windfall did not result ple working explains the surge of the utes. from legislative policy changes. In Social Security surplus because payroll Mr. ROTH. I yield the Senator 5 more other words, according to the CBO, the taxes are levied against everyone. So minutes. legislative initiatives taken by the part-time, low-income, minimum-wage Mr. GRAMS. I thank the Senator President and by Congress did not gen- earners cannot escape the cruel tax very much. erate this surplus. bites. So the question I was asking is, Is it Clearly, all four reasons we have a According to the census report, the irresponsible to get rid of an unfair tax surplus are the result of the produc- income of the average American family policy that discourages marriage? The tivity of working men and women of has grown—get this—the average in- President at one time a couple years this country, and it has little or noth- come of the American family has ago said, yes, this is an unfair tax, but, ing to do with Washington. So why grown only 6.3 percent, in constant dol- basically, Washington needs it more should the President, why should Con- lars, between 1969 to 1996—6.3 percent, than the couple does in order to raise a gress, be at the front of the line to while Federal tax revenues have in- family. spend this surplus, and why are we creased by nearly 800 percent during I have heard many who oppose $792 hearing claims that the $792 billion of the same time. Yet I hear my col- billion in tax relief support the indi- tax relief will—and these are the scare leagues on the other side of the aisle vidual relief included in this package. tactics, we hear them time after time say Americans aren’t overtaxed; some- Just which specific section of the ROTH and they are ridiculous, but they say how, they are doing fine. bill would they throw out? What part July 28, 1999 CONGRESSIONAL RECORD — SENATE S9493 of tax relief do they object to most? I for Medicare, for education, other sales tax rebate and across-the-board would like to know which part they needs, 75 cents on every dollar of this income tax cuts. would like to get rid of to get down to expected surplus. Only 25 cents on the None of these states broke their what they are proposing in tax relief. dollar, one-quarter, would go to tax re- budgets; instead they produced a ro- Let me further address the issue of lief. Somehow, they want to spend the bust economy and generated big budget so-called ‘‘fiscally irresponsible’’ tax whole dollar. surpluses which allowed them to pro- cuts that we hear of so often. ‘‘Fiscally Our tax relief takes only a small por- vide even more tax cuts. irresponsible,’’ that means, do not give tion of the total budget surplus. In Our neighbor north of the border, in it back to the people who own it, earn fact, only 23 cents of every dollar of the the Province of Ontario, chose to fol- it, and should have it, but give it to budget surplus goes for tax relief. low New Jersey and cut their income Washington. That is ‘‘responsible,’’ I There is enough to provide this 23 tax by 30 percent in 1995 instead of in- guess. cent of every surplus dollar for tax re- creasing spending. It generates a very But in a recent analysis of President lief, to protect Social Security and to successful economy. This year, Ontario Clinton’s midsession proposal, the bi- reform Medicare, including prescrip- Premier Mike Harris will cut the in- partisan Congressional Budget Office tion drug coverage from needy seniors. come tax by another 20 percent. Here is found that our budget plan saves all of But what I want to stress today is how what he says; ‘‘the debate is over; tax the $2 trillion Social Security surplus we spend this $505 billion is not the cuts create jobs.’’ Finally, I would like to take a mo- while the President’s revised plan still question before today. It will come at ment to talk again about Social Secu- spends $30 billion of the Social Secu- the end of the year when we look at rity surplus. He cannot get by with just rity, Medicare, and debt reduction. Medicare reform and the final appro- Republicans are pleased that Presi- spending surplus; he is going to raise priations bills. Today the issue is, can taxes by $98 billion, and he is also dent Clinton agrees with us that shor- we provide $792 billion in tax relief, and ing up Social Security and Medicare going to dip into the Social Security I think we have proved we can with trust fund again. should be our nation’s top priority. But these charts, and the expert advice us the difference is President Clinton His original plan spent over $150 bil- received through the budget process. lion of the Social Security surplus. Yet talks about it; and Republicans act on In fact, you don’t have to be a rocket it. we still hear claims that our tax relief scientist to figure out who is fiscally is at the expense of seniors. It is the We are determined to achieve these responsible and who’s fiscally goals. We have locked in every penny President who is spending the money, irresponsbile. raising taxes, and dipping into the So- of the $1.9 trillion Social Security sur- Contrary to Mr. Clinton’s rhetoric plus over the next 10 years, not for gov- cial Security trust fund. Yet we are ir- that tax relief will cause recession, responsible because we want to return ernment programs, not for tax cuts, cutting taxes will keep our economy but exclusively to protect all Ameri- to the American people the overcharge strong, will create jobs, increase sav- cans’ retirement. in taxes? ings and productivity, forestall a reces- We have been working hard to reform The CBO estimates that our plan re- sion and produce more tax revenues. Medicare to ensure it will be there for duces more debt held by the public History has proved that tax cuts seniors. Prescriptions drug coverage than the President’s plan. That is an- work: for the needy will be part of our com- other thing. We do reduce the debt In the 1960s, President Kennedy pro- mitment to seniors to protect their even more than the President’s plan. posed and later President Johnson en- Medicare benefits. Had the White Ours also produces an additional non- acted an individual income tax reduc- House and Democrats cooperated with Social Security surplus of nearly $300 tion of an average of 20 percent and re- us, we could have fixed Medicare by billion over the next decade while the duced the top income tax rate from 91 now. President’s plan, again, spends almost percent to 70 percent. This tax relief In any event, we will continue our ef- all of the on-budget surplus. Do you preceded one of the longest economic fort to preserve Medicare as Chairman spend it or do you give it back in tax expansions in U.S. history. ROTH reveals his Medicare bill in the relief? That is the question. Whose In the 1980s, Ronald Reagan inherited near future. money is it? We have reduced the national debt The CBO also says the President’s an economy that was deep in recession. Unemployment and inflation sank to and will continue to dramatically re- midsession proposal has no net tax cut duce it. Debt held by the public will de- but, instead, increases taxes by $95 bil- double digits and interest rates hit over 20 percent. Reagan implemented crease to $0.9 trillion by 2009. The in- lion. Again, the surplus isn’t enough. terest payment to service the debt will He wants to raise taxes another $95 bil- an economic plan that dramatically cut taxes, reduced regulations, and got drop from $229 billion in 1999 to $71 bil- lion. The President commits over $1 lion in 2009. We will eliminate the en- trillion in new and additional spending the economy moving again. What resulted was nothing short of tire debt held by the public by 2012. over the next decade by expanding Gov- As I indicated before, we have not ig- an economic miracle. Our nation expe- ernment programs or creating new pro- nored spending needs to focus on tax rienced the longest peacetime eco- grams. cuts as has been charged. We not only nomic expansion in American history. Just quickly, I will show this chart. have funded all the functions of the This is what we are talking about as to Over 8 years, 20 million new jobs were government, but also significantly in- what the President plans to do. created, unemployment sank to record creased funding for our budget prior- We all agree on saving Social Secu- lows, all Americans did better, and in ities, such as defense, education, Medi- rity, putting every dime from the So- spite of lower rates, tax revenues in- care, agriculture and others. cial Security surplus into the trust creased. In fact, as I mentioned earlier, we set fund, into our lockbox, and not spend- In the 1990s, many States cut taxes aside over $505 billion in non-Social Se- ing that. This is our projected $3,371 and turned their budget deficits into curity surplus to meet these needs and billion expected surplus. But the Presi- budget surpluses. the debate on how these funds is not dent wants to spend all that is remain- Oklahoma Governor Frank Keating before us today. But is there to high- ing and raise taxes by $95 billion more enacted the largest broad-based tax cut light how Republicans can provide $792 in order to do that. in the state’s history; Michigan Gov- billion in tax relief while not ignoring So contrary to Mr. Clinton’s plan, ernor John Engler enacted 24 tax cuts, other important priorities. our budget provides $792 billion in tax reducing state personal income taxes This major tax relief does not come relief to working Americans. Mean- to the lowest level in a generation; at the expense of seniors, farmers, while, we save every penny of the So- New Jersey Governor Whittman cut women, children or any other deserving cial Security surplus exclusively for taxes 17 times, reducing state income group. On the contrary, it benefits all Americans’ retirement. In addition, we taxes by 30 percent. In my own state of Americans and keeps our economy set aside over $505 billion for Medicare Minnesota, Governor Carlson cut taxes strong. And most importantly, this tax and to address spending needs. and generated a record budget surplus. relief will give every working Amer- Out of this whole projected surplus, And Governor Ventura returned the ican more freedom to decide what’s we plan on saving for Social Security, surplus to Minnesotans in the form of best for themselves and their families. S9494 CONGRESSIONAL RECORD — SENATE July 28, 1999 Let me include my remarks by citing would occur in my lifetime, certainly weeks—that my thoughts are not with President Reagan who once said: not my lifetime as a Member of the respect to instant gratification, not ‘‘Every major tax cut in this century Senate. the kind of political rhetoric ‘‘we want has strengthened the economy, gen- So today we are in a fortuitous cir- to return your money to you.’’ What is erated renewed productivity, and ended cumstance. As I said, who gets credit the responsible thing to do for the up yielding new revenues for the gov- for that, that is an issue we can debate country? What about my grandchildren ernment by creating new investment, at some length. But we have an oppor- and your grandchildren? Ought we not new jobs and more commerce among tunity to do the responsible thing, and to think about them? Our generation our people.’’ we have the opportunity to do the irre- doesn’t have a particularly impressive President Reagan was right. sponsible thing. track record running up a national I remember vividly that when I first I think the responsible course of ac- debt that tripled in less than a decade. proposed the $500 per child tax cut in tion is to save Social Security, ensure The Republican plan would reduce 1993, the naysayers called it bad policy, the solvency of Medicare, pay down the taxes by $792 billion, would cost $141 even ‘‘dangerous.’’ Democrats accused national debt, and then provide for a us of cutting taxes for the rich. Sound modest and realistic tax cut. That is billion of additional interest, and familiar? Some in Congress contended the responsible thing to do. would result in a surplus remaining it was too costly, and others argued In my judgment, the irresponsible al- over the 10-year period of $32 billion. that we should balance the budget ternative is the Republican tax cut be- This surplus that is projected over 10 first. I argued repeatedly that we could fore us. years is on a very shaky foundation. and should do both. And so we did. As There have been numbers bandied I also was able to ask Mr. Greenspan a result, now we have a balanced budg- around, $3 trillion is the projected sur- to talk about projections. I said to et, and the largest surplus in U.S. his- plus. With respect to the Social Secu- him: Is it not true, Mr. Chairman, that tory. Cutting taxes, reducing the na- rity surplus, that means the Social Se- not even the most able economists— tional debt, and reforming and pro- curity taxes that exceed the amount of distinguished graduates of the Wharton tecting Social Security and Medicare the Social Security payments, it is pro- School of Finance, the Harvard Busi- at the same time are all possible. We jected over the next decade that that ness School, the Stanford Business can do it again. We must do it again. surplus will amount to $1.9 trillion. School, the most erudite institutions I urge my colleagues to defeat this With respect to that surplus, there is in America—isn’t it true that no one amendment and support the $792 billion no disagreement. That should be set can tell us what the economy is going in tax relief in the Taxpayer Refund aside to protect Social Security. to be like next year, much less what it Act. The debate is about the $1 trillion is going to be like a decade from now? I thank the Chair. I yield the floor. projected surplus that is referred to as He opined that that was in fact the Mr. MOYNIHAN addressed the Chair. on-budget or non-Social Security sur- case. The PRESIDING OFFICER. The Sen- plus. ator from New York. Earlier this morning, as a member of So this policy is built upon a house of Mr. MOYNIHAN. Mr. President, I the Senate Banking Committee, we cards. We are not sure these surpluses yield 10 minutes to my colleague from were privileged to have Alan Green- will, in fact, materialize. Yet we build Nevada who is on the Finance Com- span, the distinguished and able Chair- in to our legislative actions a $792 bil- mittee. man of the Federal Reserve Board. lion tax cut. The PRESIDING OFFICER. The Sen- There are many, Democrats and Repub- We have been there before, and we ator from Nevada is recognized for 10 licans alike across the land, who give have done that before, in the 1980s. We minutes. Alan Greenspan a substantial measure were told in the 1980s that we could Mr. BRYAN. I thank the Senator of credit for the reversals in our for- have substantial tax cuts and, at the from New York and the Chair. tunes at the Federal level in terms of end of the day, we would still be able to Mr. President, I came to the Senate the situation we find ourselves in reduce the national debt. That did not as a new Member in January 1989, at today, where we are talking about pro- occur. The national debt more than tri- the end of the decade of the 1980s. The jected surpluses and not projected defi- pled. fiscal policies the Federal Government cits. I was privileged to have an oppor- I know that our friends on the other pursued during the 1980s resulted in a tunity to ask him a question. side of the aisle would say that had Federal budget that was awash in red I said: Mr. Chairman—directed to Mr. nothing to do with tax cuts. That is be- ink. Greenspan—given our current eco- cause you all in Congress spent reck- At the beginning of the 1980s, the en- nomic circumstances, if we had three lessly, foolishly, and irresponsibly. tire national debt—from the time of choices, what choice would you make: the ratification of the Constitution up Choice No. 1, a substantial tax cut; I was not a part of the Congress at until 1980—was less than $1 trillion. Choice No. 2, additional spending; that time. I will not defend all of the That included the assumption of the Choice No. 3, reducing the debt? expenditures. But I will tell Senators Revolutionary War debt, financing a His answer, unequivocal: Reduce the this: If you add what President Reagan costly and devastating Civil War, two debt. That, he said, would be the most requested the Congress to spend in the world wars, Korea, Vietnam, and the important thing this Congress could do 8 years he was President and you add programs of the Great Depression. in fiscal policy to continue the exten- up the appropriations that the Con- In less than a decade, the national sion of the longest economic expansion gress approved during those 8 years, debt tripled to $3 trillion. That is an in our Nation’s history. That comes some of those with a Republican major- indictment of the fiscal policies of the from Chairman Greenspan. ity in the Senate, the Congress ap- 1980s that we ought not to repeat. Now, under the Republican proposal proved $13 billion less, $13 billion less Mr. President, we have an oppor- before us, $964 billion is the on-budget than President Reagan requested. So tunity here. surplus. Their proposal would be to re- whether you went to school, as I did, One can debate as to who should take duce taxes by $792 billion. with the old math or the new math, credit for the circumstances which I understand the instant gratifi- those kinds of tax cuts left us with none of us could have foreseen a decade cation and I understand that if in a deficits in the trillions of dollars. ago. A decade ago it was my fondest roomful of good and hard-working Mr. President, I ask the distin- hope that somehow we would be able to Americans you asked, would you like guished leader if he would extend me control the spiraling annual deficits to pay less tax, all of us would say yes. another 5 minutes; is that possible? which were hundreds of billions of dol- Perhaps it is because my wife and I are lars each year. When asked by my fel- entering a new period in our lives—we Mr. MOYNIHAN. Another 5 minutes low Nevadans, how about the national are blessed with three adult children, for my friend from Nevada. debt, how are you going to pay that two of whom have blessed us with The PRESIDING OFFICER (Mr. back, my response was: I did not see grandchildren and a third to bless us HAGEL). The Senator from Nevada is any realistic likelihood that that with a grandchild to be in a couple of recognized for 5 minutes. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9495 Mr. BRYAN. Mr. President, there are and our grandchildren that is the re- order to complete this reconciliation several assumptions that our Repub- sponsible course of action, something tax relief bill. lican colleagues make in reaching the we can all be proud of, and provide a I yield the floor. conclusion of a $792 billion tax cut, $141 reduction in the interest payments we Mr. ROTH. Mr. President, I yield 14 billion in interest, leaving a $32 billion make each year, which is about $230 minutes to the Senator from Florida. surplus to take care of Medicare, other billion? The PRESIDING OFFICER. The Sen- priorities, including reducing the debt. I thank the Chair and yield the floor. ator from Florida is recognized for 14 It is a very shaky assumption. Mr. The PRESIDING OFFICER. The Sen- minutes. Greenspan also told us this morning ate majority leader. Mr. MACK. Mr. President, although I that history teaches us to be cautious. Mr. LOTT. Mr. President, I ask unan- agree with many of the specific provi- This surplus may never materialize. No imous consent that Senator ABRAHAM sions in the Democrat alternative tax one can predict with certainty whether be recognized to offer the next amend- package—including a few bills that I it will occur or not. ment regarding the Social Security have introduced—I must rise in opposi- Implicit in this are some other as- lockbox, and immediately following tion to this amendment. The plain fact sumptions that are totally unrealistic. the reporting by the clerk, the amend- is that the tax cut offered is just too One of those assumptions is we will be ment be temporarily laid aside and small. We have budget instructions to cut taxes by $792 billion over the next able to reduce discretionary spending Senators BAUCUS or CONRAD be recog- by $700 billion over the next 10 years. nized to offer a lockbox amendment. 10 years, and we should cut taxes by Now, there are more people in America I further ask unanimous consent that $792 billion. I am glad I have this opportunity to who believe there will be a sighting of the amendments be debated concur- talk about tax cuts, one of my favorite Elvis than believe that we are going to rently for a total of 2 hours to be subjects. reduce discretionary spending by $700 equally divided between Senators We are in the midst of what should be billion. We are talking about such pro- ABRAHAM and BAUCUS, or their des- a very easy task: reducing the tax bur- grams as veterans’ health, education, ignees, and following the conclusion or den on our citizens by $792 billion over what we need to do for agriculture, and yielding back of time, the amendments the next ten years. After all, over the any kind of emergencies that might be laid aside. next decade, the federal government is occur as a result of natural calamities I further ask unanimous consent that on track to collect over $3 trillion dol- or disasters. So the assumption that we following the debates just described, lars more than we have budgeted for can reduce spending by $700 billion in Senator DASCHLE, or his designee, be spending. the discretionary accounts, also includ- recognized to offer an amendment, and In other words, we will be over- ing national defense, is not realistic. following that debate the Senate pro- charging the taxpayers by $3 trillion. Indeed, that is premised also upon ceed to a period of morning business. You would think that the suggestion to the spending caps that are in place— I further ask unanimous consent that return to the taxpayers a mere 25 per- next year and the year after it will be no other amendments be in order prior cent of these overpayments would not even tighter—that we will be able to to the stacked votes and the votes be controversial. But we have heard, adhere to them. The chairman of the begin in the stacked sequence at 9:30 over the past few months, the defend- Banking Committee, as part of his a.m. on Thursday in the order in which ers of the status quo, the advocates of questioning to Mr. Greenspan, indi- they are offered, with 2 minutes of de- big government, raise their voices in cated that in the House already this bate prior to each vote. criticism of our tax cut goal. year they are talking about emergency Finally, I ask unanimous consent These critics say that tax cuts are spending, which is a vehicle to avoid that following those votes, there be 10 not needed, that taxpayers do not de- the spending caps and, in point of fact, hours remaining for the consideration serve to keep more of their hard earned is not emergency spending at all—$3.5 of the bill and Senator GRAMM be im- money. It has even been suggested that billion or $4.5 billion for the census, $3 mediately recognized to offer his the tax burden on our families has been billion for veterans’ health, $30 billion amendment. falling. Well, the facts could not be any this year alone. That wipes this out. The PRESIDING OFFICER. Is there clearer: the federal government will The point I am trying to make is this objection? Without objection, it is so tax away 20.6 percent of our nation’s is a highly reckless and irresponsible ordered. gross domestic product this year. That approach. What we ought to do is pro- Mr. LOTT. I ask also unanimous con- is an all-time, peacetime record, a level tect Social Security with the $1.9 tril- sent that the next Democratic first-de- that was only exceeded when we mobi- lion surplus, and there is agreement on gree amendments be in the following lized to win World War II. that. Next, we need to shore up Social order: But even though the tax burden is a Security solvency, pay down that debt, Senator KENNEDY, Senator BINGA- record high, even though we will be reduce the amount of money we are MAN, Senator KERRY of Massachusetts, overcharging the taxpayers by $3 tril- paying on interest on the national and Senator LAUTENBERG. lion over the next decade, every excuse debt, so that we can do some other The PRESIDING OFFICER. Without under the sun is being raised against things with the additional tax cuts or objection, it is so ordered. tax cuts. Some of these arguments are selective spending in terms of veterans’ Mr. LOTT. Therefore, the next vote contradictory, and all are wrong. health, or education, or national de- in regard to the Democratic alter- Some argue, from a Keynesian de- fense, whatever we determine the pri- native is scheduled to occur at approxi- mand-side perspective, that tax cuts orities may be, and then a more modest mately 6:30 or 6:35 this evening. It will will overstimulate the economy. But tax cut. be the last vote of the evening. The even after a $792 billion tax cut, the The Democratic alternative, I think, lockbox issue and the Baucus amend- federal government will run up over $2 comes pretty close to hitting the mark: ment will be debated this evening, with trillion in surpluses over the next ten Tax cuts of $290 billion, Medicare cuts those three votes occurring in the years—from a Keynesian viewpoint, $2 of $290 billion, domestic needs of $290 stacked sequence at 9:30 on Thursday trillion in surpluses is not considered a billion—that reduces spending in real morning. stimulus. And with all of the lags, the terms over the next 10 years by about As a reminder to Members, a late ses- delays, and the phase-ins, the bulk of $300 billion—and interest, $126 billion. sion is expected Thursday, and votes the tax cuts will not arrive until years That is a more responsible approach. are expected to occur on Friday, since 2007, 2008, and 2009. I hope we do not revisit the mistakes it appears it may not be possible to fin- Can anyone seriously suggest that, in of the past. Chairman Greenspan, it ish Thursday night. a $9 trillion economy, a $4 billion net seems to me, had a lot of wisdom to I reiterate my commitment that if tax cut for fiscal year 2000 will over- offer. History teaches us to be cau- we find a way to finish the votes on stimulate consumer demand? Or even a tious. These surpluses may, indeed, this issue Thursday night, we will not $25 billion tax cut in 2001? Would a $39 never occur and, indeed, if we can pay have a session on Friday. If that is not billion tax cut in 2002 overheat the down the national debt, would we not possible, we will go into session Friday economy, when this is only .004 percent be doing something for our children and continue voting as is necessary in of projected GDP? S9496 CONGRESSIONAL RECORD — SENATE July 28, 1999 Clearly, the facts do not support the taxes. And I will point out that, on cut taxes to get government out of the argument that our tax cuts will over- many occasion, including today, Fed way and give people the freedom to heat the economy. In any event, from Chairman Alan Greenspan has stated pursue their own dream—not Washing- the demand-side perspective, the tax that he believes that government ton’s. cut would be irrelevant. If we do not spending is the worst possible use of I thank the Chair. cut taxes by $792 billion, it is safe to the surpluses, and that he would sup- I yield whatever time I did not use. say that spending will increase by $792 port tax cuts if spending is the alter- The PRESIDING OFFICER. Who billion over the next decade—spending native. Furthermore, a tax cut that re- seeks recognition? by the government, that is. That is moves government barriers to savings Mr. MOYNIHAN. Mr. President, we what President Clinton means when he and investment is not an ‘‘artificial yield any time remaining on our side. says we cannot afford a tax cut—his stimulus’’ that should worry the Fed Mr. ROTH. Mr. President, I yield the bureaucrats are working overtime to one bit. Inflation, after all, is caused remainder of our time. dream up new ways to spend the by too many dollars chasing too few Mr. MOYNIHAN. Mr. President, I ask money, as if the government has first goods, not by too many investors cre- for the yeas and nays. claims to the fruits of our citizens’ ating wealth and opportunity. An even The PRESIDING OFFICER. Is there a labor. stronger economy, fueled by the free- sufficient second? What kind of spending initiatives can dom and enthusiasm of our entre- There is a sufficient second. we expect? A few years back, as many preneurs, is not something to fear. The yeas and nays were ordered. of us recall, President Clinton’s so- It is even argued that a sizable tax The PRESIDING OFFICER. The called stimulus package included cut passed now makes a future eco- question is on agreeing to the amend- spending on such urgent needs as build- nomic downturn more hazardous, as if ment of the Senator from New York. ing parking garages at the beach, re- the tax cuts needed for an economic re- On this question, the yeas and nays surfacing tennis courts, researching bound will have already been wasted by have been ordered, and the clerk will the sicklefin chub fish, renovating our efforts this year. Of course, that call the roll. swimming pools, building golf courses, argument makes the case for tax cuts, The legislative assistant called the soccer fields, and softball diamonds, as any tax cuts that would succeed in roll. Mr. NICKLES. I announce that the and constructing an ice skating warm- getting us out of a recession should Senator from Ohio (Mr. VOINOVICH) is ing hut. keep us out of one in the first place. Now, the President is not the only That is why former Fed Governor Law- necessarily absent. source of such wasteful spending rence Lindsey considers a tax cut a The result was announced—yeas 39, ideas—we in Congress are very suscep- good insurance policy against an eco- nays 60, as follows: tible to pressures to spend, spend, nomic downturn. [Rollcall Vote No. 226 Leg.] spend. But no one here doubts for a When you consider all of the argu- YEAS—39 minute that if the $792 billion in taxes ments, there really is no case against Akaka Feingold Leahy are instead brought to Washington, the cutting taxes by at least $792 billion. Baucus Feinstein Levin Biden Graham Lincoln money will all be spent. That is one Chairman ROTH is to be commended for Bingaman Harkin Mikulski very good reason why we must keep sticking to his guns and reporting out Boxer Hollings Moynihan the money out of Washington in the of Committee a bill that cuts taxes by Breaux Inouye Murray that full amount, despite all of the Bryan Johnson Reed first place. Cleland Kennedy Reid The argument is also raised that a pressure exerted by all of the advocates Conrad Kerrey Robb $792 billion tax cut leaves no money to of big government, who would rather Daschle Kerry Rockefeller meet some other important govern- spend the money. Dodd Kohl Sarbanes Dorgan Landrieu Schumer ment goals such as debt reduction. But One final point I want to make is Durbin Lautenberg Wyden we still have $1.9 trillion in social secu- that these abstract discussions tend to rity surpluses that will be in a ‘‘lock- obscure the real reason we are here. NAYS—60 box’’ to retire debt and shore up our Tax cuts are not about numbers, they Abraham Enzi McCain Allard Fitzgerald McConnell citizens’ retirement security, and an- aren’t about aggregate statistics, they Ashcroft Frist Murkowski other $505 billion in non-social security aren’t about increasing demand by 4 Bayh Gorton Nickles surpluses that can be used for Medi- thousandths of a percentage point—tax Bennett Gramm Roberts cuts are about people. We are cutting Bond Grams Roth care, National Defense, and our other Brownback Grassley Santorum priorities. It is my hope that these sur- taxes because of the 67-year-old owner Bunning Gregg Sessions pluses will be used for real priorities, of a family business in Florida’s pan- Burns Hagel Shelby not the ice skating warming huts and handle, who is discouraged from rein- Byrd Hatch Smith (NH) Campbell Helms Smith (OR) beach parking garages. It should be vesting his hard-earned profits because Chafee Hutchinson Snowe clear that this half-trillion dollars is the specter of the federal death tax is Cochran Hutchison Specter more than enough to cover our prior- hovering, waiting to swoop down and Collins Inhofe Stevens scoop up 55% of the increased value of Coverdell Jeffords Thomas ities. Craig Kyl Thompson The rest of the arguments against his business. We are cutting taxes be- Crapo Lieberman Thurmond our tax relief goal are similarly mis- cause of the two-earner family, strug- DeWine Lott Torricelli taken. Some people argue that the gling to make ends meet, that has to Domenici Lugar Warner money is needed to retire publicly-held pay over $1,000 extra in taxes just be- Edwards Mack Wellstone debt—although, after the tax cut, the cause they are married. NOT VOTING—1 remaining 75% of the surplus is avail- We are cutting taxes so that wait- able for debt reduction. Even with our resses, truck drivers, teachers and car- Voinovich tax cut, publicly-held national debt penters can put an extra $1,000 in their The amendment (No. 1384) was re- will be reduced from 40% of GDP to IRAs each year, to build a better nest jected. just 12% of GDP by 2009. egg for retirement. We are cutting Mr. ROTH. Mr. President, I move to Other people argue that the Federal taxes to enable a biomedical company reconsider the vote and I move to lay Reserve Board would react to the tax to budget that one additional research that motion on the table. cut by tightening the money supply. I project that just might lead to a break- The motion to lay on the table was have already noted that the very small through in the treatment of glaucoma agreed to. size of the tax cuts over the next two or a cure for cancer. And we are cut- Mr. ROTH. Mr. President, I ask unan- years—just .0015% of GDP—does not ting taxes to reduce government bar- imous consent that a copy of a letter add up to a dramatic increase in con- riers to saving and investment, so the from Dan Crippen, Director of the Con- sumer demand and, in fact, will not in- capital is available for the American gressional Budget Office, dated July 26, crease demand since government entrepreneurs of the 21st Century to 1999, be printed in the RECORD. The let- spending would have increased by that develop markets in technologies we ter analyzes the legislation before us, same amount were we to collect the cannot even imagine today. We need to the Taxpayer Refund Act of 1999. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9497 There being no objection, the letter CONGRESSIONAL BUDGET OFFICE COST ESTIMATE direct spending by $40 million over the 2000– was ordered to be printed in the Taxpayer Refund Act of 1999 2004 period, but would decrease direct spend- RECORD, as follows: Summary: The Taxpayer Refund Act of ing by $83 million over the 2000–2009 period. 1999 would provide for a variety of phased-in Because the bill would affect receipts and di- U.S. CONGRESS, tax reduction proposals, including a reduc- rect spending, pay-as-you-go procedures CONGRESSIONAL BUDGET OFFICE, tion of the 15 percent income tax rate to 14 would apply. Washington, DC, July 26, 1999. percent and an expansion of the proposed 14 The bill contains a new intergovernmental Hon. WILLIAM V. ROTH, Jr., percent bracket, a provision for married cou- mandate, the cost of which would not exceed Chairman, Committee on Finance, ples to file single returns, modifications of the threshold for intergovernmental man- U.S. Senate, Washington, DC. the individual alternative minimum tax, an dates ($50 million in fiscal year 1996, adjusted DEAR MR. CHAIRMAN: The Congressional increase of the annual contribution limit for annually for inflation) established in the Un- Budget Office has prepared the enclosed cost individual retirement accounts, a reduction funded Mandates Reform Act (UMRA). The estimate for the Taxpayer Refund Act of of estate and gift taxes, and a new tax deduc- bill also contains 16 new private-sector man- 1999. tion for health insurance expenses. The Con- dates. The costs of those mandates would ex- If you wish for further details on this esti- gressional Budget Office and the Joint Com- ceed the threshold established by UMRA for mate, we will be pleased to provide them. mittee on Taxation (JCT) estimate that the private-sector mandates ($100 million in fis- The CBO staff contact is Hester Grippando. bill would decrease governmental receipts by cal year 1996, adjusted annually for inflation) Sincerely, about $4 billion in fiscal year 2000, by about in fiscal years 2000 through 2004. BARRY B. ANDERSON $155 billion over the 2000–2004 period, and by Estimated cost to the Federal Govern- (For Dan L. Crippen, Director). nearly $792 billion over the 2000–2009 period. ment: The estimated budgetary impact of Enclosure. In addition, the legislation would increase the bill is shown in the following table.

By fiscal years, in millions of dollars— 1999 2000 2001 2002 2003 2004

CHANGES IN REVENUES Estimated Revenues: On-Budget ...... 22 ¥4,042 ¥24,391 ¥39,124 ¥41,685 ¥45,043 Off-Budget ...... 0 ¥97 ¥224 ¥274 ¥292 ¥312 Total Change in Revenues ...... 22 ¥4,139 ¥24,615 ¥39,398 ¥41,977 ¥45,355 CHANGES IN DIRECT SPENDING Estimated Budget Authority ...... 0 2 4 6 6 10 Estimated Outlays ...... 0 2 4 9 9 13 CHANGES IN SPENDING SUBJECT TO APPROPRIATION Estimatd Outlays ...... 0 (1) (1) (1) (1) (1) 1 Amounts under $500,000. Sources: Congressional Budget Office and Joint Committee on Taxation.

Basis of estimate: All estimates, with the garding new small business pension plans be- crease federal outlays after the effective exception of the following provisions, were ginning on December 31, 2000. The bill also date by about $35 million annually. prepared by JCT. would extend for six years beyond its current Also, by adding conjugate vaccines against Revenues expiration date of September 30, 2003, the au- streptococcus pneumoniae to the list of tax- Accelerate the Repeal of the FUTA Surtax. thority of the IRS to charge taxpayers fees able vaccines, the bill would increase the The Federal Unemployment Tax Act (FUTA) for certain rulings. CBO estimates that the imposes on employers an effective tax of 0.8 adjustment and extension of IRS fees would cost of vaccines purchased under section 317 percent on the first $7,000 in wages paid an- increase governmental receipts by $42 mil- of the Public Health Service Act. Section 317 nually to each employee. This 0.8 percent in- lion over fiscal years 2001 through 2004 and authorize grants to states for the purchase of cludes a 0.2 percent surtax scheduled to ex- by $323 million during the 2001–2009 period, vaccines under federal contracts with vac- pire on December 31, 2007. The bill would ac- net of income and payroll tax offsets. CBO cine manufacturers. The bill would also re- celerate the expiration date to December 31, based its estimate on recent collections data duce the cost of vaccines purchased under and on information from the IRS. 2004. this program after December 31, 2004, by re- Revenues from the FUTA tax are deposited Federal spending ducing the excise tax rate. Any changes in into federal unemployment trust funds, IRS User Fees. The bill would adjust and which are statutorily capped. Under current extend the authority of the IRS to charge spending under this section would be subject law, CBO projects that the amounts in the taxpayers fees for certain rulings by the Of- to the annual appropriation process. CBO es- federal trust funds will exceed the caps be- fice of the Chief Counsel and by the Office for timates that there would be additional, but ginning in 2003. Amounts above the caps are Employee Plans and Exempt Organizations. insignificant costs from the addition of the transferred to state unemployment com- The IRS has the authority to retain and streptococcus pneumoniae vaccines and sav- pensation trust funds. Since the state funds spend a small portion of these fees without ings of about $9 million annually from the are included in the unified federal budget, further appropriation. CBO estimates that reduction in he excise tax after December 31, this transfer will have no net budgetary ef- the adjustment and extension of fees would 2004. fect. However, CBO expects that states would increase direct spending by $3 million over respond to this transfer by lowering their the 2001–2004 period and by $18 million over Reduced PBGC Premiums for New Plans. unemployment taxes so that their trust fund the 2001–2009 period. Under current law, single-employer defined balances would remain constant. National Vaccine Injury Compensation benefit pension plans pay two types of an- The bill would lower the amount of reve- Fund and Medicaid. The bill would add con- nual premiums to the Pension Benefit Guar- nues deposited into the federal trust funds jugate vaccines against streptococcus anty Corporation (PBGC). All covered plans and thus would reduce the amounts flowing pneumoniae to the list of taxable vaccines are subject to a flat-rate premium of $19 per to the state funds. CBO assumes that in the and thus would allow for compensation for participant. In addition, underfunded plans year following each lowered transfer, states injuries related to those vaccines from the would respond by not lowering their unem- National Vaccine Injury Compensation Trust must also pay a variable premium that de- ployment taxes as much as they would have, Fund. CBO estimates that this provision pends on the amount by which the plan’s li- thus increasing revenues relative to current would increase outlays by $4 million over the abilities exceed its assets. law. CBO estimates that the measure would 2000–2004 period. This provision would also The bill would reduce the flat-rate pre- reduce governmental receipts by $1,029 mil- increase federal Medicaid outlays by $21 mil- mium from $19 to $5 per participant for plans lion in fiscal year 2005 and by lesser amounts lion over the 2000–2004 period because Med- established by employers with 100 or fewer in 2006 and 2007. We estimate increases in re- icaid would be required to pay the excise tax participants during the first five years of the ceipts in fiscal years 2008 and 2009. Over the on purchases of vaccines against strepto- 2005–2009 period, CBO estimates that the coccus pneumoniae. The federal government plan’s operation. According to information measure would have no net impact on gov- purchases about one-half of all vaccines obtained from the PBGC, approximately 3,000 ernmental receipts. through its Vaccines for Children program. plans would qualify for this reduction. Those IRS User Fees. The bill would adjust and In addition, the bill would reduce the tax plans contain an average of about 10 partici- extend the authority of the Internal Revenue rate applicable to all taxable vaccines from pants each. CBO estimates that the premium Service (IRS) to charge taxpayers fees for 75 cents per dose to 25 cents per dose for sales change would reduce PBGC’s premium in- certain rulings by the Office of the Chief of vaccines after December 31, 2004. This pro- come, which is classified as an offsetting col- Counsel and by the Office for Employee vision would reduce the amount of tax that lection, by about $0.4 million annually begin- Plans and Exempt Organizations. The bill the Medicaid program would be required to would eliminate the fee the IRS currently pay for vaccines purchased through its Vac- ning in 2002 or by about $1.3 million over the charges on determination letter requests re- cines for Children program and would de- 2000–2004 period. S9498 CONGRESSIONAL RECORD — SENATE July 28, 1999 Reduction of Additional PBGC Premiums and by about $4.6 million over the 2002–2004 terest of at least 10 percent). All owners for New and Small Plans. The bill would period. other than majority owners (those with an make two changes affecting the variable- Missing Plan Participants. The legislation ownership interest of 50 percent of more) rate premium paid by underfunded plans. would expand the missing participant pro- would be treated the same as other partici- First, for all new plans that are underfunded, gram. The Retirement Protection Act of 1994 pants, thus receiving a more generous guar- the bill would phase in the variable-rate pre- established a missing participant program at antee than under current law. Majority own- mium the plans must pay. In the first year, PBGC for terminating defined benefit plans. ers would be subject to simplified special they would pay nothing. In the succeeding The bill would expand the program to in- rules. The guarantee for majority owners four years, they would pay 20 percent, 40 per- clude terminating multiemployer plans, de- would be phased in at the rate of 1⁄10 for each cent, 60 percent, and 80 percent, respectively, fined benefit plans not covered by PBGC, and year that the plan has been in effect, which of the full amount. In the sixth and later defined contribution plans. is faster than the current-law phase-in, but years, they would pay the full variable-rate The budgetary impact of this provision the nonguaranteed benefits of majority own- premium determined by their funding status. would be less than $0.5 million annually. ers would be given a lower priority in the al- On the basis of information on premium pay- PBGC does not expect a high volume of miss- location of assets. Only about one-third of ments to the PBGC in 1996–1997, CBO esti- ing participants as a result of this proposal, the plans taken over by PBGC involve sub- mates that this change would affect the pre- and the administrative costs of expanding stantial owners, and the change in benefits miums of approximately 400 plans each year. the program would not be high. The net paid out by PBGC to owner-employees under It would reduce PBGC’s total premium re- budgetary effect of increased benefit pay- this provision would be less than $0.5 million ceipts by about $4.2 million over the 2000–2004 ments would also be small. Amounts paid by in each year. period. a pension plan to PBGC for missing partici- pants are held in PBGC’s trust fund, which is Pay-as-you-go considerations: The Bal- The bill would also reduce the variable- off-budget. Amounts paid out by PBGC to anced Budget and Emergency Deficit Control rate premium paid by all underfunded plans participants at the time they are located are Act sets up pay-as-you-go procedures for leg- (not just new plans) established by employ- funded in the same manner as benefit pay- islation affecting direct spending or receipts. ers with 25 or fewer employees. Under the ments to participants in plans for which The net changes in governmental receipts bill, the variable-rate premium per partici- PBGC is the trustee—partially by the trust and outlays that are subject to pay-as-you- pant paid by those plans would not exceed $5 fund and partially by on-budget revolving go procedures are shown in the following multiplied by the number of participants in funds. table. Only changes affecting on-budget out- the plan. CBO estimates that approximately Rules for Substantial Owner Benefits in lays and receipts affect the pay-as-you-go 8,300 plans would have their premium pay- Terminated Plans. The legislation would scorecard. For the purposes of enforcing pay- ments to PBGC reduced by this provision be- simplify the guarantee and asset allocation as-you-go procedures, only the effects in the ginning in 2002. Premium receipts by the rules as they relate to terminated plans in- current year, the budget year, and the suc- PBGC would decline by $1.5 million in 2002 volving a substantial owner (ownership in- ceeding four years are counted.

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

Changes in Receipts ...... 22 ¥4,042 ¥24,391 ¥39,124 ¥41,685 ¥45,043 ¥89,541 ¥114,318 ¥129,025 ¥145,337 ¥156,219 Changes in Outlays ...... 0 2 4 9 9 13 ¥16 ¥26 ¥26 ¥26 ¥27

Estimated impact on State, local, and trib- Change the tax treatment of prohibited al- The PRESIDING OFFICER. The al governments: JCT has determined that location of stock in an Employee Stock Own- clerk will call the roll. the provision that would add streptococcus ership Plan of a subchapter S corporation; The legislative assistant proceeded pneumoniae to the list of taxable vaccines in Modify anti-abuse rules related to the as- to call the roll. an intergovernmental mandate. JCT esti- sumption of liabilities; Mr. MCCAIN. Mr. President, I ask mates that the cost of the mandate would Require consistent treatment and provide not exceed the threshold specified in UMRA basis allocation rules for transfers of intan- unanimous consent that the order for ($50 million in fiscal year 1996, adjusted for gibles in certain nonrecognition trans- the quorum call be dispensed with. inflation). Sections of the bill reviewed by actions; The PRESIDING OFFICER. Without CBO regarding pension plans and IRS user Modify the treatment of certain closely objection, it is so ordered. fees contain no intergovernmental mandates held REITs; and AMENDMENT NO. 1397 as defined in UMRA. The section that would Provide for a basis reduction to assets of a (Purpose: To provide educational opportuni- move the expiration date of the federal un- corporation, if stock in that corporation is ties for disadvantaged children, and for employment surtax back three years would distributed by a partnership to a corporate other purposes) have implications for state unemployment partner. compensation programs as noted above. JCT estimates that the cost of the private- Mr. MCCAIN. Mr. President, I have Estimated impact on the private sector: sector mandates would exceed the threshold an amendment at the desk and ask for JCT has determined that 16 provisions in the established in UMRA ($100 million in fiscal its immediate consideration. bill contain private sector mandates. The year 1996, adjusted annually for inflation) in The PRESIDING OFFICER. Without private-sector mandates in the bill would: each of the fiscal years 2000–2004. objection, the clerk will report. Add certain vaccines against streptococcus The legislative clerk read as follows: pneumoniae to the list of taxable vaccines; ESTIMATED COST OF PRIVATE-SECTOR MANDATES Impose a 10 percent vote or value test for The Senator from Arizona [Mr. MCCAIN] real estate investment trusts (REITs); By fiscal years, in millions of dollars— proposes an amendment numbered 1397. Change the treatment of income and serv- 1999 2000 2001 2002 2003 2004 Mr. MCCAIN. Mr. President, I ask ices provided by taxable subsidiaries of unanimous consent that the reading of REITs; Cost of the Private Sector ...... 22 830 1,611 1,370 1,083 814 the amendment be dispensed with. Modify foreign tax credit carryover rules; The PRESIDING OFFICER. Without Require reporting of information regarding Source: Joint Committee on Taxation. objection, it is so ordered. cancellation of indebtedness by nonbank fi- Estimate prepared by: Federal Revenues: (The text of the amendment is print- nancial institutions; Hester Grippando (for IRS fees) and Noah ed in today’s RECORD under ‘‘Amend- Limit the use of the nonaccrual experience Meyerson (for FUTA). Federal Spending: ments Submitted.’’) method of accounting to the amounts to be Tami Ohler (for pensions), Jeanne De Sa (for Mr. MCCAIN. Mr. President, as per received for the performance of qualified pro- National Vaccine Injury Compensation Fund fessional services; and Medicaid), and John Righter (for IRS the agreement with the Senator from Impose a limitation on prefunding of cer- fees). Delaware, I will ask unanimous con- tain employee benefits; Estimated approved by: Robert A. Sun- sent that the amendment be laid aside Repeal the installment method for most shine, Deputy Assistant Director for Budget as soon as I use my 5 minutes. taxpayers using the accrual basis; Analysis, G. Thomas Woodward, Assistant Mr. BAUCUS. Withdrawn. Prevent the conversion of ordinary income Director for Tax Analysis. Mr. MCCAIN. Not withdrawn, set or short-term capital gains into income eli- Mr. ROTH. Mr. President, I yield 5 aside. gible for long-term capital gain rates; minutes on the bill to Senator MCCAIN. Mr. BAUCUS. Mr. President, reserv- Deny the deduction and impose an excise tax with respect to charitable split-dollar The PRESIDING OFFICER. The Sen- ing the right to object, this is not what life insurance programs; ator from Arizona is recognized. I understood the procedure was going Modify the estimated tax rules of closely Mr. MCCAIN. Mr. President, I suggest to be. I suggest the absence of a held REITs; the absence of a quorum. quorum. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9499 The PRESIDING OFFICER. The as a GAO evaluation of the program improve our education system thereby clerk will call the roll. upon its completion. The cost of this ensuring that our children are provided The legislative clerk proceeded to important test of school vouchers is with the essential academic tools for call the roll. fully offset by eliminating more than succeeding professionally, economi- Mr. MCCAIN. Mr. President, I ask $5.4 billion in unnecessary and inequi- cally and personally. I am sure we all unanimous consent that the order for table corporate tax loopholes which agree that increasing the academic the quorum call be rescinded. benefit the ethanol, sugar, gas, and oil performance and skills of all our Na- The PRESIDING OFFICER. Without industries. tion’s students must be the paramount objection, it is so ordered. The Senator First, the amendment eliminates tax goal of any education reform we imple- from Arizona. credits for ethanol producers, elimi- ment. Mr. MCCAIN. Mr. President, it was nating a $1.5 billion subsidy. Ethanol is School vouchers are a viable method made clear by the Senator from Mon- an inefficient, expensive fuel that has of allowing all American children ac- tana and the Senator from Delaware not lived up to claims that it would re- cess to high-quality schools, including that I will withdraw the amendment duce reliance on foreign oil or reduce private and religious schools. Every after speaking for 5 minutes on it, with impacts on the environment. It takes parent should be able to obtain the the full understanding that there will more energy to produce a gallon of eth- highest quality education for their be a vote on this at the proper time, as anol than the amount of energy that children, not just the wealthy. Tuition amendments are voted on probably to- gallon of ethanol contains. Ethanol tax vouchers would provide low-income morrow night. credits are simply a subsidy for corn children trapped in mediocre, or worse, Mr. BAUCUS. Reserving the right to producers, and the amendment ends schools the same educational choices object, do I understand from the Sen- the taxpayers’ support for this out- as children of economic privilege. ator from Arizona that he will offer his dated program. Some of my colleagues may argue amendment then at a later time? Second, the amendment eliminates that vouchers would divert money three subsidies enjoyed by the oil and away from our nation’s public schools Mr. MCCAIN. I have 5 minutes. I want to use the 5 minutes to talk about gas industry, totaling $3.9 billion. It and instead of instilling competition it. The Senator from Delaware told me phases out oil and gas industry’s spe- into our school systems we should be cial right to fully deduct capital costs pouring more and more money into the time tomorrow will be taken up, so for drilling, exploration and develop- poor performing public schools. I re- I asked to be given 5 minutes to talk ment; eliminates the 15% tax credit for spectfully disagree. While I support tonight. In previous years, I have ended recovering oil using particular methods strengthening financial support for up in the position where at 2 a.m. I can and ends special right of oil and gas education in our Nation, the solution speak for 1 minute and the other per- property owners to claim unlimited to what ails our system is not simply son can speak for 1 minute. At least passive losses under income and alter- pouring more and more money into it. now I have 5 minutes. native minimum tax provisions. Sub- Currently our nation spends signifi- Mr. BAUCUS. Will the Senator in- sidizing the cost of domestic produc- cantly more money than most coun- form us as to the nature of the amend- tion has not been shown to have re- tries and yet our students scored lower ment? duced reliance on foreign oil or di- than their peers from almost all of the Mr. MCCAIN. That is why I asked for rectly contributed to more efficient re- forty countries which participated in 5 minutes, so I can tell the Senator the source use or domestic productivity. the last Third International Mathe- nature of the amendment. The amendment ends these special tax matics and Science Study TIMMS test. Mr. BAUCUS. No objection. treatments. Students in countries which are strug- Mr. MCCAIN. Mr. President, today I Finally, the amendment eliminates gling economically, socially and politi- am proposing an amendment to author- the special loan program for sugar pro- cally, such as Russia, outscored U.S. ize a three-year nationwide school ducers and processors, worth $390 mil- children in math and scored far above choice demonstration program tar- lion. The Federal Government is bur- them in advanced math and physics. geted at children from economically dened with an unnecessary and unprof- Clearly, we must make significant disadvantaged families. The program itable loan program for big sugar pro- changes beyond simply pouring more would expand educational opportuni- ducers and enforcing mandated import money into the current structure in ties for low-income children by pro- quotas on foreign sugar. Sugar price order to improve our children’s aca- viding parents and students the free- supports also force consumers to pay demic performance in order to remain dom to choose the best school for their $1.4 billion every year in artificially in- a viable force in the world economy. unique academic needs, while encour- flated sugar prices. The amendment It is shameful that we are failing to aging schools to be creative and re- simply eliminates the taxpayer-funded provide many of our children with ade- sponsive to the needs of all students. loan program in 2003 and immediately quate training and quality academic The amendment authorizes $1.8 bil- requires repayment of existing loans in preparation for the real world. The lion annually for fiscal years 2001 cash, rather than sugar. number of college freshmen who re- through 2003 to be used to provide These tax benefits and subsidies were quire remedial courses in reading, writ- school choice vouchers to economically originally intended to serve a limited ing and mathematics when they begin disadvantaged children through the purpose during times of economic re- their higher education is unacceptably Nation. The funds would be divided cession and hardship in the 1970s. Our high. In fact, presently, more than 30 among the States based upon the num- economy has long since recovered and I percent of entering freshmen need to ber of children they have enrolled in believe that these subsidies have out- enroll in one or more remedial course public schools. Then, each State would lived their purpose. The sunset of these when they start college. It does not conduct a lottery among low-income programs will end these corporate wel- bode well for our future economy if the children who attend the public schools fare programs and return any remain- majority of workers are not prepared with the lowest academic performance ing benefit back to our nation’s chil- with the basic skills to engage in a in their State. Each child selected in dren. competitive global marketplace. the lottery would receive $2,000 per Mr. President, we all know that one I concede that school vouchers are year for three years to be used to pay of the most important issues facing our not the magic bullet for eradicating all tuition at any school of their choice in nation is the education of our children. that is wrong with our current edu- the State, including private or reli- Providing a solid, quality education for cational system, but they are an im- gious schools. The money could also be each and every child in our Nation is a portant opportunity for providing im- used to pay for transportation to the critical component in their quest for proved academic opportunities for all school or supplementary educational personal success and fulfillment, as children, not just the wealthy. Exam- services to meet the unique needs of well as the success of our nation: eco- ination of the limited voucher pro- the individual student. nomically, intellectually, civically and grams scattered around our country re- In total, the amendment authorizes morally. veals high levels of parent and student $5.4 billion for the three-year school We must strive to develop and imple- satisfaction, an increase in parental in- choice demonstration program, as well ment initiatives which strengthen and volvement, and a definite improvement S9500 CONGRESSIONAL RECORD — SENATE July 28, 1999 in attendance and discipline at the par- (The text of the amendment is print- applied to an on-budget deficit for a fiscal ticipating schools. Vouchers encourage ed in today’s RECORD under ‘‘Amend- year, means causes or increases an on-budget public and private schools, commu- ments Submitted.’’) deficit relative to the baseline budget projec- nities and parents to all work together Mr. ABRAHAM. I believe under the tion. ‘‘(B) BASELINE BUDGET PROJECTION.—The to raise the level of education for all previous order we will now set that term ‘baseline budget projection’ means the students. Today, we have the oppor- amendment aside so that the Senator projection described in section 257 of the Bal- tunity to replicate these important at- from Montana may be recognized to anced Budget and Emergency Deficit Control tributes throughout all our Nation’s offer an amendment. Act of 1985 of current year levels of outlays, communities. The PRESIDING OFFICER. The receipts, and the surplus or deficit into the Thomas Jefferson said, ‘‘The purpose amendment is set aside. budget year and future years, except that— of education is to create young citizens The Senator from Montana is recog- ‘‘(i) if outlays for programs subject to dis- with knowing heads and loving nized. cretionary appropriations are subject to dis- hearts.’’ If we fail to give our children cretionary statutory spending limits, such MOTION TO RECOMMIT WITH AMENDMENT NO. 1399 outlays shall be projected at the level of any the education they need to nurture Mr. BAUCUS. Mr. President, I send applicable current adjusted statutory discre- their heads and hearts, then we threat- an amendment to the desk and ask tionary spending limits; and en their futures and the future of our unanimous consent that Senators ‘‘(ii) if outlays for programs subject to dis- nation. Each of us is responsible for en- CONRAD and HARKIN be added as co- cretionary appropriations are not subject to suring that our children have both the sponsors. discretionary spending limits, such outlays love in their hearts and the knowledge shall be projected as required by section 257 The PRESIDING OFFICER. Without beginning in the first fiscal year following in their heads to not only dream, but objection, it is so ordered. to make their dreams a reality. the last fiscal year in which such limits ap- The clerk will report. plied.’’. The time has come for us to finally The legislative clerk read as follows: ‘‘(C) BUDGET RESOLUTION BASELINE.—A conduct a national demonstration of The Senator from Montana [Mr. BAUCUS] budget resolution would set forth an on- school choice to determine the benefits moves to recommit S. 1429 to the Committee budget deficit for a fiscal year if the resolu- or perhaps disadvantages of providing on Finance, with instructions to report back tion sets forth an on-budget deficit and the educational choices to all students, not within 3 days, with an amendment to reduce most recent Congressional Budget Office just those who are fortunate enough to the tax breaks in the bill by an amount suffi- baseline estimate of the surplus or deficit for be born into a wealthy family. I urge cient to allow one hundred percent of the So- such fiscal year projects an on-budget sur- my colleagues to support this amend- cial Security surplus in each year to be plus, on-budget balance, or an on-budget def- locked away for Social Security, and one- icit that is less than the deficit set forth in ment and put the needs of America’s the resolution.’’. school children ahead of the financial third of the non-Social Security surplus in each year to be locked away for Medicare (b) CONTENT OF CONCURRENT RESOLUTION ON gluttony of big business. and with the following amendment No. 1399 THE BUDGET.—Section 301(a) of the Congres- I hope my colleagues will consider for [Mr. BAUCUS], for himself, Mr. HARKIN sional Budget Act of 1974 is amended by re- this. It is time we got rid of wasteful and Mr. CONRAD. designating paragraphs (6) and (7) as para- graphs (7) and (8), respectively, and by in- and unnecessary subsidies. It is time Mr. BAUCUS. I ask unanimous con- we had a national test voucher pro- serting after paragraph (5) the following new sent reading of the amendment be dis- paragraph: gram to find out if vouchers, indeed, pensed with. will live up to the promise that many ‘‘(6) the receipts, outlays, and surplus or The PRESIDING OFFICER. Without deficit in the Federal Old-Age and Survivors of us believe is there as a result of giv- objection, it is so ordered. Insurance Trust Fund and the Federal Dis- ing parents a choice, the same that The amendment is as follows: ability Insurance Trust Fund, combined, es- wealthy parents have in this country. tablished by title II of the Social Security TITLE ll—SOCIAL SECURITY AND MEDI- AMENDMENT NO. 1397, WITHDRAWN Act;’’. CARE SAFE DEPOSIT BOX ACT OF 1999 Mr. President, I thank the Senator Subtitle B—Medicare SEC. ll01. SHORT TITLE. from Delaware and the Senator from ll This title may be cited as the ‘‘Social Se- SEC. 21. DEFINITIONS. Montana, and I ask unanimous consent curity and Medicare Safe Deposit Box Act of Section 3 of the Congressional Budget Act that the amendment be withdrawn. 1999’’. of 1974 is amended by adding at the end the The PRESIDING OFFICER (Mr. following: Subtitle A—Social Security BROWNBACK). Without objection, it is so ‘‘(11) The term ‘Medicare surplus reserve’ ll ordered. SEC. 11. PROTECTION OF SOCIAL SECURITY means the surplus amounts reserved to SURPLUSES. strengthen and preserve the Medicare pro- Mr. MCCAIN. I yield the remainder of (a) POINTS OF ORDER TO PROTECT SOCIAL gram as calculated in accordance with sec- my time. SECURITY SURPLUSES.—Section 312 of the tion 316.’’. The PRESIDING OFFICER. The Sen- Congressional Budget Act of 1974 is amended SEC. ll22. MEDICARE SURPLUS RESERVE POINT ator from Michigan is recognized. by adding at the end the following new sub- OF ORDER. AMENDMENT NO. 1398 section: Section 301 of the Congressional Budget (Purpose: To preserve and protect the sur- ‘‘(g) POINTS OF ORDER TO PROTECT SOCIAL Act of 1974 is amended by adding at the end pluses of the social security trust funds by SECURITY SURPLUSES.— the following: reaffirming the exclusion of receipts and ‘‘(1) CONCURRENT RESOLUTIONS ON THE BUDG- ‘‘(j) MEDICARE SURPLUS RESERVE POINT OF disbursement from the budget, by setting a ET.—It shall not be in order in the House of ORDER.—It shall not be in order in the Sen- limit on the debt held by the public, and by Representatives or the Senate to consider ate to consider any concurrent resolution on amending the Congressional Budget Act of any concurrent resolution on the budget, or the budget (or amendment, motion, or con- 1974 to provide a process to reduce the conference report thereon or amendment ference report on the resolution) that would limit on the debt held by the public) thereto, that would set forth an on-budget decrease the surplus in any of the fiscal deficit for any fiscal year. years covered by the concurrent resolution Mr. ABRAHAM. Mr. President, under ‘‘(2) SUBSEQUENT LEGISLATION.—It shall not below the levels of the Medicare surplus re- the unanimous consent agreement be in order in the House of Representatives serve for those fiscal years calculated in ac- which was agreed to earlier, I now send or the Senate to consider any bill, joint reso- cordance with section 316.’’. an amendment to the desk. lution, amendment, motion, or conference SEC. ll23. ENFORCEMENT OF MEDICARE SUR- The PRESIDING OFFICER. The report if— PLUS RESERVE. clerk will report. ‘‘(A) the enactment of that bill or resolu- Section 311(a) of the Congressional Budget The legislative clerk read as follows: tion as reported; Act of 1974 is amended by adding at the end The Senator from Michigan [Mr. ABRAHAM] ‘‘(B) the adoption and enactment of that the following: for himself, Mr. DOMENICI, Mr. ASHCROFT, Mr. amendment; or ‘‘(4) ENFORCEMENT OF THE MEDICARE SUR- CRAPO, Mr. ENZI, Mr. SANTORUM, Mr. GRAMS, ‘‘(C) the enactment of that bill or resolu- PLUS RESERVE.— Mr. ALLARD, Mr. FRIST and Mr. COVERDELL, tion in the form recommended in that con- ‘‘(A) IN GENERAL.—After a concurrent reso- proposes an amendment numbered 1398. ference report, lution on the budget has been agreed to, it together with associated interest costs shall not be in order in the House of Rep- Mr. ABRAHAM. I ask unanimous would cause or increase an on-budget deficit resentatives or the Senate to consider any consent reading of the amendment be for any fiscal year. bill, joint resolution, amendment, motion, or dispensed with. ‘‘(3) DEFINITION.—In this subsection: conference report that together with associ- The PRESIDING OFFICER. Without ‘‘(A) ON-BUDGET DEFICIT.—The term ‘would ated interest costs would decrease the sur- objection, it is so ordered. cause or increase an on-budget deficit’, when plus or the medicare surplus reserve in any July 28, 1999 CONGRESSIONAL RECORD — SENATE S9501 fiscal year below the level of the medicare agreement on the $1 trillion projected does not provide for drug coverage out surplus reserve for that fiscal year cal- on-budget surplus, and this amendment of hospital. culated in accordance with section 316. reserves one-third of that for Medicare. There are some exceptions for that, ‘‘(B) INAPPLICABILITY.—This paragraph Why is this amendment so impor- shall not apply to legislation that — but as a basic rule Medicare does not ‘‘(i) appropriates a portion of the medicare tant? Plainly, simply, we believe that a provide for prescription drug coverage reserve for new subsidies for prescription portion of the budget surplus should be for seniors except when they are in the drug benefits under the medicare program as reserved for Medicare. Americans very hospital. That is a problem. Roughly 30 part of or subsequent to legislation signifi- much believe in Medicare. Americans percent of Americans over age 65 de- cantly extending the solvency of the Medi- want Medicare. Americans want the pend entirely on Social Security for care Hospital Insurance Trust Fund; or Medicare program to be in good shape. their income. ‘‘(ii) appropriates new subsidies from the They want to have the security of There are a lot of seniors who are not general fund to the Medicare Hospital Insur- knowing that seniors will have a better ance Trust Fund. very wealthy. A lot of seniors who des- chance to have a portion of their ‘‘(C) SCOREKEEPING DIRECTIVE.—In scoring perately look for that Social Security legislation for purposes of enforcing the health care bills provided for, and that paycheck and who desperately are try- point of order established by this paragraph, means we need Medicare. ing to figure out how to balance their There are several problems facing us only the costs of the new prescription drug individual or family budget to pay for benefits and any associated interest costs with Medicare right now. One of them prescription drugs, to pay for heating shall be exempted from triggering the point is solvency. bills, to pay for food. This is not some of order.’’. I would like everybody to look at cataclysmic scare tactic. It is not some SEC. ll24. MEDICARE SURPLUS RESERVE. this chart behind me. Very simply, it wild story. Title III of the Congressional Budget Act shows that the Medicare trust fund will of 1974 is amended by adding at the end the become insolvent, under current pro- All of us in this Chamber who go to following: jections, by the year 2015. That as- drugstores to get prescription drugs ‘‘SEC. 316. MEDICARE SURPLUS RESERVE. sumes the economy stays as strong in run across an elderly lady or an elderly ‘‘The amounts reserved for the Medicare the next 15 years as it is today. That is man talking to the druggist, trying to surplus reserve in each year are— balance things out, trying to fill a pre- ‘‘(1) for fiscal year 2000, 33 percent of any the assumption. on-budget surplus for fiscal year 2000, as esti- If for some reason economic growth scription and trying to find enough mated pursuant to section 211 of H. Con. Res. in America declines slightly, inflation money to pay for it all, and asking the 68 (106th Congress); and rises slightly, if for some reason there druggist, ‘‘Well, maybe just half,’’ be- ‘‘(2) for each of the fiscal years 2001 is a reduction in the stock market cause they don’t have enough money. I through 2014, 33 percent of any on-budget boom, a reduction in markets, if for have seen it. I will bet that most Mem- surplus, as estimated by the Congressional some reason interest rates go up, then bers of this body have seen either that Budget Office for that fiscal year in its ini- or something similar to it. tial report for that fiscal year pursuant to the insolvency of the trust fund moves section 202(e).’’. back to the left; that is, before 2015. When I first ran for office, I knocked SEC. ll25. PAY-AS-YOU-GO EXTENSION. The Medicare trust fund is in much on virtually every door in Missoula Section 252(a) and section 252(b)(1) of the worse shape than Social Security. Pro- County, MT, a lot of doors. One thing Balanced Budget and Emergency Deficit jections are with this lockbox amend- that struck me—and I know it gets ev- Control Act of 1985 are amended by striking ment that the Social Security trust erybody who does the same thing— ‘‘before October 1, 2002,’’. fund will be in good shape way off in there are a lot of people who are really SEC. ll26. SUPERMAJORITY. the future. That is not true for the poor, who are really hurting, and most (a) POINT OF ORDER.—Subsections (c)(1) and Medicare trust fund, not true at all. of them are seniors. There are seniors (d)(2) of section 904 of the Congressional In fact, this chart shows that, opti- who are having a hard time making Budget Act of 1974 are amended by inserting mally, the trust fund is going to reach ends meet. They are lonely. And we after ‘‘310(d)(2),’’ the following: ‘‘312(g).’’ a deficit situation—the surplus will be know, too, that drug benefits, drug (b) WAIVER.—Subsections (c)(2) and (d)(3) of section 904 of the Congressional Budget Act zero—and Medicare payments will coverage is more and more important of 1974 are amended by inserting after therefore have to be decreased under to seniors. Seniors rely much more on ‘‘301(i),’’ the following: ‘‘301(j), 311(a)(4),’’. the hospital trust fund, at the very lat- drugs today than they did 20, 30 years SEC. ll27. ADJUSTMENT OF BUDGET LEVELS est by the year 2015, probably earlier. ago. In part, that is because pharma- AND REPEAL. Why is that doubly important? We ceuticals have come out with lots of Upon the enactment of this subtitle, the are reserving a portion for Medicare, different drugs that affect people’s Chairmen of the Committees on the Budget one-third of the on-budget surplus for medical condition, help people’s shall file with their Houses appropriately re- Medicare, not only because the sol- health, especially for seniors, whose vised budget aggregates, allocations, and levels (including reconciliation levels) under vency of the trust fund is in a difficult health needs more attention in later the Congressional Budget Act of 1974 to position, but also because the baby years. That is clear. We all know that. carry out this subtitle. boomers are due to reach retirement When I talk with folks when I am SEC. ll28. EFFECTIVE DATE. age at about 2011 and on through to home—it is with some frequency—I see This Act shall take effect upon the date of about 2020. it everywhere. You are reminded just its enactment, and the amendments made by The baby boomers are going to reach how many people in our country are this Act shall apply only to fiscal year 2000 retirement, and that is going to cause really in tough shape and they need and subsequent fiscal years. much more pressure on the trust fund. help. Most of them are seniors. A lot of Mr. BAUCUS. Mr. President, this is a We believe it is prudent today to re- seniors need a lot of help. Our proposal motion to recommit the bill and send serve a portion of the on-budget sur- is simple—a third of the on-budget sur- it back to the Finance Committee with plus —a third of it—to meet that prob- plus should be saved for Medicare. instructions. The instructions would be lem, to meet that demographic condi- Now the alternative from the other to change the tax bill to ensure that tion that is going to occur; namely, side has no coverage for Medicare— 100 percent of the off-budget surplus— more baby boomers. We think it is only zero, nothing, not a red cent for Medi- that is, the Social Security surplus—be prudent to preserve Medicare for that care, nothing. set in a lockbox that is in reserve, and reason. it also provides that one-third of the There is another reason to save for Mr. SANTORUM. Will the Senator on-budget, or non-Social Security sur- Medicare, and that is very simply to yield? plus, be set aside for Medicare. help make it easier for us in the Con- Mr. BAUCUS. I will yield at the ap- You might remember that although gress to provide prescription drug cov- propriate point. both sides generally agree that of the erage for seniors. If we have heard any- We have two amendments before us. roughly $3 trillion projected surplus thing lately with respect to Medicare, One is the Republican alternative, over 10 years, $2 trillion would be re- it is that seniors want and deserve which is the lockbox only for Social served for Social Security—that is the some kind of Medicare prescription Security, that is all and, I might say, Social Security lockbox part of this drug coverage. Why is that? One reason in a way which is very dangerous. It amendment—we have not reached is that today, essentially, Medicare will cause train wrecks. It is going to S9502 CONGRESSIONAL RECORD — SENATE July 28, 1999 cause the precipitation of confronta- for Medicare, for seniors. Help them ever voted to spend general fund money tions in government. It is very reck- pay those health care bills. Help them on Medicare. I don’t think there has less—very reckless. That is one alter- get those prescription drug benefits. been a vote I am aware of in the Fi- native—only Social Security in a reck- Help us relieve the undue pressure we nance Committee to actually—there less way. have caused on home health care agen- have been resolutions, a sense of the The other alternative before us, of cies, on nursing homes, on hospitals, Senate, we should save Medicare—fund the two amendments, is a lockbox that particularly rural hospitals. a Medicare program out of general fund protects Medicare also, but in a non- This is a no-brainer, Mr. President. revenues, Medicare Part A Program. reckless way. This is pretty simple stuff. It is a mat- That, to me, is a dangerous prece- Those are the two choices. It is very ter of choices. Do we want to help peo- dent. We have a separate dedicated tax simple. We say that in these times of ple on Medicare or do we not? We say for Medicare—a separate tax. What is tremendous projected surpluses, at yes, we do want to help people on Medi- now being talked about is that we have least a third of the on-budget surplus care. We want to help those seniors. to grow Medicare by using the on-budg- should be protected for Medicare—at This amendment we are offering en- et surplus. least a third. ables people who are senior citizens to Let me say this: If Medicare was a My colleagues on the other side of get the health care protection and the program that was financially sound, the aisle says zero—they want to put health care benefits that we think are that was doing a very solid job in the sense of providing efficient services, aside nothing for Medicare. We say a so important. was the kind of coverage that seniors third, and we lock it in. We lock it in I reserve the remainder of my time. are really looking for, then you might to the same degree as both sides want Mr. ABRAHAM addressed the Chair. to in some way lock in Social Security The PRESIDING OFFICER. The Sen- make the argument that it is a well- protection. We lock it in, and we pro- ator from Michigan. run program and is doing everything it vide for it. The other side has not one Mr. ABRAHAM. Mr. President, be- should be doing, and instead of raising red cent for Medicare, not one red cent, cause we had a little bit of confusion in taxes on people to fund Medicare, we not a penny, not a dime, not a quarter, the order of speaking, I propose at this should take that money out of the sur- plus. The problem is, we have a fairly nothing. If they come back and say, we point a unanimous consent agreement strong bipartisan agreement that there have some money for Medicare, that is which would allow first the Senator are a lot of problems with Medicare. a wish. They don’t lock it in. They just from Pennsylvania to speak on our The Senator from Montana will agree say maybe. Because of the big tax cut, amendment for up to 10 minutes, to be there are serious problems. No. 1, it it is not going to be there. It is just a followed by the Senator from Georgia doesn’t cover even half of health care hope and a wish and a prayer. We say to speak for 5 minutes on the amend- costs of seniors. Here is the major we lock it in. That is the difference. ment, and then we would go back at health care program for seniors, and it I strongly urge my colleagues to take that point to the other side. We had doesn’t even cover half of their costs advantage of this situation by locking thought we would start since we of- for health care. in a third of the on-budget surplus for fered the first amendment on this side What we are saying is—and we said Medicare. of the aisle. on a bipartisan basis—let’s fix Medi- Another reason for doing this is, all The PRESIDING OFFICER. Without care, make it more efficient, let it of us have heard in the last year, objection, it is so ordered. meet the needs of seniors, including roughly, about how we went too far in Mr. ABRAHAM. I yield up to 10 min- prescription drug coverage. Why? Be- 1997 with the Balanced Budget Act pro- utes to the Senator from Pennsylvania. cause when Medicare was put together visions which cut providers’ benefits. The PRESIDING OFFICER. The Sen- 35 years ago, drug therapies weren’t We have all heard that, that we have ator from Pennsylvania is recognized that common or well used; they were a cut hospitals, too, that we cut home for 10 minutes. very different game. Well, today is dif- health care too much, and so forth. Mr. SANTORUM. Mr. President, I ferent. So we need drug therapy as part Let me show my colleagues this congratulate the Senator from Michi- of a basic benefit because it is the way chart. If they can see this chart, basi- gan and Senator DOMENICI for their we treat people more often. So this cally it shows the projected cuts under great work on the Social Security idea that, somehow or another, our Medicare were about $100 billion over 5 lockbox issue. lockbox is not sufficient because we years. Now it has turned out that the Before I get into our amendment, I don’t lock up Medicare is ridiculous. actual cuts are almost twice that, al- will address the Senator from Mon- We have money to do it, A; and, B, we most $200 billion over 5 years. We have tana. First he says there is no money, have to question first whether we all heard that. not a penny, not a nickel, available for should throw more money at Medicare To be a little more specific, look how Medicare under the Republican bill. As before we fix what is fundamentally big the differential is between antici- the chairman of the Budget Committee flawed with Medicare, in making it a pated cuts under the BBA 1997 and the will show in his big charts—I don’t better program. Those are the things I actual cuts. In the anticipated cuts, have one of those big charts with me, would like to address on Medicare. the differential is greatest for home but I have a smaller one—this yellow With respect to our lockbox, I always health care—big difference. It turns area is $505 billion for domestic spend- find it unbelievable that when we have out that the actual cuts for home ing programs. an issue here with broad consensus—in health care are more than twice what If we want to—and that is the second this case, or in most cases, the issues we anticipated. And the actual cut point I want to make—use the on-budg- pushed by our side of the aisle—all of a under skilled nursing homes is about 60 et surplus to fund Medicare, which is sudden we have agreement. We have percent more than we anticipated. not an on-budget program, it is a sepa- agreement in the House, 416–12. The So I will summarize and say that the rate program like Social Security, by President says he wants a Social Secu- choice between us is very simple. We the way—it is a separate program—one rity lockbox. We come to the Senate have two amendments we are consid- of the things I hear from seniors most: and we have agreement. Probably if I ering. One is a lockbox with only So- Keep Medicare and Social Security sep- talk to seniors around the country, the cial Security, in a very dangerous way arate. That is what the lockbox is try- first thing they will tell me is: If you because it is tied to projections by the ing to do with Social Security. There is quit raiding that money out of the So- CBO. CBO determines what the debt money there if we want to take money cial Security trust fund, Social Secu- limit is under their amendment. from the general fund and use it for rity would be OK. We have an agree- The other choice is ours, which is not Medicare. ment. only to protect Social Security but So the idea that we don’t lock it up So we come to the floor with an also to protect to the same degree is ridiculous. The money is there. Then agreement to fix the Social Security Medicare, at a time when the American we can decide where we want to spend problem. Let’s lock that money up so Government faces a surplus, a surplus that money. It is a matter of priorities. only Social Security money can be of about $1 trillion over 10 years. It is I will make this argument: I don’t used for Social Security. Well, some- very simple: Save a third of the surplus know if the Senator from Montana has times, as the song in Oklahoma says, a July 28, 1999 CONGRESSIONAL RECORD — SENATE S9503 girl can’t say no. These are the girls But, no. Let me tell colleagues on the aside and protected. Over the next 10 who can’t say yes on the other side of other side of the aisle, the Medicare years, that is almost $2 trillion. the aisle. These Democrats just can’t issue is going to be here a little while I might add, that does not solve all say yes. longer. I don’t know of anybody who the issues that deal with Social Secu- We have an agreement, we have thinks Medicare is going to go away, or rity. But it makes a pretty good down- something that we all agree on. Amer- the problems in Medicare are only tem- payment on the problem. Everybody in ica is overwhelmingly agreeing with it, porary. That issue will be here, and it America agrees that ought to be done. but they can’t come around to saying is an important issue, one that should After this debate was floated around let’s get this done. No, they are going be fully debated. But it should not be the town for a while, I think the Presi- to change the subject. Well, that Social used to obstruct something that is des- dent realized it was not going to fly to Security thing, we agree with you; but perately needed to protect the Social propose to spend the Social Security you don’t do enough and therefore we Security trust fund, and that is the po- receipts. So he said on June 28. That is can’t let you do this. We can’t let you litical game that is going on. We just several weeks ago after being pum- do your Social Security. They throw up should call it what it is; it is an abso- meled for 5 weeks that he should not be this phony red herring with Medicare. I lute red herring. spending those receipts. He said, ‘‘So- am trying to say the public is tired of Social Security can be—should be— cial Security taxes should be saved for this. They want us to be able to find must be—protected from raids by the Social Security, period.’’ He didn’t say, things we have consensus on and do general government and by the very ‘‘and something else,’’ or, ‘‘Maybe we them, instead of playing political same people, I might add—we saw the ought to talk about Medicare.’’ We will games. Democratic leader come forward this talk about that in a minute. He said, What is going on in the Senate on week and say we need $10 billion more ‘‘Social Security taxes should be saved this issue, for six cloture votes, over a for agriculture. May I ask the Senator for Social Security, period.’’ That was several-month period, is political from Montana where that money is a big change. gamesmanship. We have agreement coming from? We had our side of the aisle saying no that Social Security moneys should Let me answer that question. The So- Social Security receipts for anything only be used for Social Security, and cial Security surplus. So is it really but Social Security, and we had the we can’t get one single Democrat vote that they want to do the Social Secu- President. to pass that measure. We have 80-plus rity lockbox as they say? Is it really They brought it up in the House of percent of the American public who that they want to put all that money Representatives. It was virtually unan- want it done. We have their President aside to make sure Social Security is imous with 415 votes. We are going to who said: Send me only a Social Secu- solvent for the next generation? Or is protect all the Social Security re- rity lockbox—only. We have 416 Mem- it really because they just can’t help ceipts. All that has to happen is for bers of the House who say ‘‘Social Se- themselves; they want to spend it? that to clear the Senate, and we say to curity lockbox,’’ and we have 45 ob- They don’t want a lockbox because a America: We have made a monumental structionists—45—who would rather lockbox keeps their fingers out of the breakthrough. play politics because they think they Social Security trust fund, which they What happened when it got to the can win the election on making the Re- love to raid. They just can’t help them- Senate? Filibuster. publicans bad guys on Medicare. So selves. They just love to stick their fin- We have endeavored to go to the they throw the Medicare herring out. gers in there and get that money out measure to debate it and to amend it We don’t have the Social Security her- that is just sitting there. It is just sit- five different times. I might add it ring this time. These are the two red ting there. It is similar to a sailor on would be subject to amendments to im- herrings that are chronically thrown at leave, sitting there with a shot on the prove it and to have the ideas heard Republicans at election time. We have bar and he is staring at it and he can’t from the other side of the aisle. lost the Social Security card, so let’s leave it alone. But what was the response? Don’t let play the other card to muck things up All I am saying is: Leave Social Se- the Senate get to the bill. Block it. so we don’t get things done. curity alone. Pass the lockbox. The latest ruse, which is this amend- People are sick of that. I can tell The PRESIDING OFFICER. Under ment, is to cloud it because they do not you, as a Republican Member who is the previous order, the Senator from want to be responsible for blocking a working hard to preserve Social Secu- Georgia is recognized for up to 5 min- sound measure to protect Social Secu- rity, I am sick of it. We can get this utes. rity. They don’t want to be responsible done tomorrow. We can pass a lockbox Mr. COVERDELL. Mr. President, I for that. They do not want headlines that says to every Social Security re- think it might be useful for anybody such as the New York Times that says cipient in America: Your money is not listening to the debate to put this in ‘‘Republicans Seize the Banner on So- going to be spent on other Government some sequence. When the Nation dis- cial Security.’’ This has been their pur- programs. We can make that assur- covered there would be projected sur- view for years. Suddenly, they are in ance. The President said he would sign pluses of amounts that had not been the position of having to cloud the it, and 45 people on the Democratic anticipated, they changed all the dy- issue because they do not want to be side of the aisle are saying, no, we are namics of our discussions about budg- seen as being responsible for leaving all not for getting anybody any political ets and Social Security. When the of those receipts out there that could wins because we only think of politics. President gave us his budget, he spent be spent or used for some other issue. We don’t want to give you this polit- about 40 percent of the Social Security We are prepared to pass a lockbox for ical win. We want you to be the do- receipts. Social Security—that none of those re- nothing Congress, so we are going to If there is one complaint you hear as ceipts would be spent on anything but throw this red herring out. Medicare. you travel across the country, it is Social Security, or the pay-down, and Oh, the bogeyman on the Republican that people are unhappy when the Con- that they would not be used for tax re- side; they don’t have a nickel or a gress dips into the Social Security lief. It would be a monumental break- penny or a quarter for Medicare. taxes that have been sent, purportedly, through. Garbage. The issue is not Medicare. to prepare for the retirement of all You can only conclude that, A, they This is a Social Security lockbox, those who participate. So when this don’t want a lockbox because they which the Democrat President—their Congress began, we got a budget from want those funds to be available; and, President and our President—wants. the President that spent 40 percent of B, that the reason they are coming We are ready to give it to him. What is those Social Security receipts. forth with blocking going to the bill or the response from the other side? The Our side of the aisle said no. We are an amendment—that gets into another response could be, should be: OK, let’s going to take the President at his ad- subject—is to cloud the issue, which is do Social Security. We all agree on it. monishment over the years. We are not they are blocking the ability of the We have broad bipartisan consensus. going to spend any of the Social Secu- Senate to concur with the President of We have public approval. Let’s do So- rity receipts, and we are not going to the United States and the House of cial Security. use it for tax relief. It is going to be set Representatives and give America a S9504 CONGRESSIONAL RECORD — SENATE July 28, 1999 lockbox that protects Social Security. Vice President, and their spokespeople the way, nobody goes to jail if they get It is not very complicated. wringing their hands giving one reason inside the lockbox—I don’t think fools I will say one last thing. When you after another after another why we anybody. We are making a commit- go to a town hall meeting and you talk cannot possibly have a tax cut under ment to set the money aside and not to the American people, they do not these circumstances. It is going to de- mess with it. I take that commitment want these two subjects mixed. They stroy the economy; old folks are going seriously. There is nothing keeping don’t want them jumbled up. They to be put out on the street; we are Congress from coming in the next day want Social Security protected, and going to pollute the environment; and doing something about it. then they will consider what we are women’s health issues are coming into The fact of the matter is we are not talking about on Medicare. They do play. helping the system by saying we are not want the Government in their med- It is substantial overkill, and it is going to set aside some money for icine cabinet. They don’t want these based upon the fact that they are not Medicare without addressing funda- two issues mudded. telling the truth about the elements of mental reform. A lot of people want Mr. President, I yield in accordance what they are trying to do; that is, es- prescription drugs as an additional en- with the unanimous consent. sentially give us a tax increase instead titlement. At a time when we have a The PRESIDING OFFICER. Who of a tax cut and spend an additional $1 real fiscal problem with the system seeks recognition? trillion-plus. itself, laying another entitlement on The Senator from Michigan is recog- Now what we have as part of the rea- will provide additional challenges we nized. son why we can’t have a tax cut is we will have to meet. However, there is Mr. ABRAHAM. Mr. President, at want to protect Medicare and Social even a way to do that if it is accom- this point, on behalf of myself and the Security, and, in this particular panied with fundamental reform. managers of the bill, I yield up to 15 amendment we are addressing, the Instead of doing that, what we have minutes to the Senator from Ten- question of a Medicare lockbox. in a proposal similar to the President’s I think one of the essential questions nessee. proposal, just another variation, is say- before this Congress is, What is the re- The PRESIDING OFFICER. The Sen- ing another reason we cannot have a sponsible way to protect Medicare? We ator from Tennessee is recognized for tax cut is because we need to set aside all know we have a substantial prob- up to 15 minutes. the general revenues, the surplus, to lem. We all know we are going to have Mr. THOMPSON. Mr. President, I save Medicare. It will not save Medi- thank my friend from Michigan. I to address it. What happened in response to that care. That approach will actually wind thank the Presiding Officer. up hurting Medicare. Stepping back from what we have was a bipartisan effort by the Medicare Commission, chaired by Senator I was looking at testimony of the been talking about for the last few Comptroller General on this issue. He minutes, I will go back and address the BREAUX from Louisiana. They came up with real reform because everybody was talking about the President’s pro- issue at hand concerning the lockbox. posal. It has to do with the idea of set- I think it is important to keep in knows you can’t keep pouring money on top of a system that is broken, that ting aside general fund revenues, gen- mind what we are about here and what eral surpluses, and claims we will use the essential question is. The essential is flawed, that is out of date, that is uneconomical, and that everybody says that to solve the Medicare problem. question remains whether or not when It is fallacious; it is phony. The we are faced with projected substantial has to be changed. We can disagree on how to do it, but everybody says and Comptroller General says even if all fu- surpluses, 25 percent of that amount recognizes that we have to have funda- ture surpluses were saved, we would be should be returned to the people who mental reform. saddled with the budget over the longer created those surpluses. That is the The difficulty with that is a political term and at current tax rates could American taxpayer. I think that ques- difficulty. It is not one of not knowing fund little else but entitlement funds tion should answer itself. what to do; it is having the political for the elderly population. Reforms re- Another way to put it is whether or nerve and wherewithal to sit down and ducing the future funds of Medicare not, in view of these surpluses, we need get the job done. and Social Security and Medicaid are a tax cut or a tax increase. You would This commission addressed it. This vital to restoring fiscal flexibility for think that question would answer commission did it, Democrats and Re- future generations of taxpayers. itself. You would think that certainly publicans together. But the President The Comptroller General says if we in a surplus situation you would have pulled the rug out from under that ef- took all the money and poured it into to seriously consider tax cuts under fort. That was a real chance to do some the programs, we are really not doing those circumstances. Medicare reform. That would be the very much other than perhaps buying a We have a tremendous tax burden only thing that was going to save little bit of additional time to allow us right now. Taxes are taking a greater Medicare. It is fundamental reform. to pour more money into a leaky buck- and greater share of our economic pro- The President pulled the rug out from et, when the hole in the bucket at the ductivity. Income taxes alone have that effort. bottom is getting bigger and bigger, reached the level of 10 percent of gross He says now, since we have this and we are pouring more general reve- domestic product, the highest they Medicare problem and essentially since nues, under the assumption, I suppose, have ever been in this country. they have pulled the rug out from the that we can do that forever without A two-earner family nowadays pays reform effort that would do something ever having to make real reform. 38 percent of their income in taxes. to solve the problem, that we have to He says: You would think that surely we could look to general revenues. We can’t I feel that the greatest risk lies in extend- reach agreement that now is the time have a tax cut now so we have to take ing the HI [the hospital] trust fund solvency, for a decent tax cut for the American this surplus and dedicate a huge chunk while doing nothing to improve the pro- people. If not now, when? of it for so-called fixing Medicare. gram’s long-term sustainable. Or worse, in Our Democratic colleague, Senator The fact of the matter is that will adopting changes that may aggravate the KERREY from Nebraska, put it well ear- not fix Medicare. It will not even help long-term financial outlook for the program lier today. He said: I don’t even think Medicare. It will be counterproductive. and the budgets. it is a close call—that under these cir- There will be some transition costs as The Comptroller is saying we are ag- cumstances we should have a tax cut. we move from a failing system—it still gravating the problem. You are actu- But what we are dealing with now, does a lot of good, but it is a failing ally doing harm if you think by put- with regard to the Democratic amend- system—to one of real reform. There ting a little more money on top of this ment, is another reason why they say will be some transition costs. The Re- program you can forestall real reform we should not have a tax cut. publican proposal has over $500 billion and you can fool the American people We have seen time and time again of revenues in our proposal that can be into thinking they don’t have to make over the last few days almost utter used for Medicare or any other reason. some tough choices and have real re- hysteria in this town primarily from Pouring more money in, setting it form such as the Medicare Commission the White House, the President, the aside, and calling it a lockbox—and by came up with. It is making you stand July 28, 1999 CONGRESSIONAL RECORD — SENATE S9505 off from the problem and not address pose. He did such things in his budget taking this money away from the tax- the problem. as freezing hospital costs for rural payers and shuffling it over into a We are facing a demographic time America. Senators, including the dis- trust fund extends the date by which bomb. In the year 2030 we will have tinguished Senator from Montana, are we run out of money to pay the Medi- twice as many people over the age of worried about that. The President’s care people what they are entitled to? 65. We will have about half as many proposal is that it be frozen for another Does it increase any? Not at all. You worker-per-retiree ratio. It will be year. That is where he picked up $31.5 have to change the payment plan to do twice as bad by the year 2030. We know billion. Guess what he did with it. He that. That is what Medicare reform is we have to do something. spent it on other domestic programs. all about. I am afraid I must conclude that al- That is the stark reality, unequivocal Having said that, I could even quote though saving Medicare and Social Se- truth. the President’s own OMB budget about curity has worked very well for some Having said that, let me start with a it. people who have used it as a way of quote from the CBO on July 23 of 1999. Suffice it to say, anybody who wants having to face up to the fundamental It has some real application to the so- to read this can. But even they say, problems those two programs present, called Medicare lockbox that is being ‘‘only in a bookkeeping sense’’ does the real answer to the question that is proposed today to confuse the issue. this carry out any real purpose—in a presented tonight with regard to the The issue is putting a lockbox around bookkeeping sense, nothing else. We Medicare lockbox amendment is that, Social Security. The other side doesn’t don’t need bookkeeping; we need to de- once again, it is being used as yet an- want to vote for that for some reason, cide what we are going to do with this surplus. other excuse, along with ‘‘it will ruin so they say: Let’s do another lockbox, I believe I understand the nature of the economy, it will pollute the atmos- let’s do Medicare, and we will get cred- this surplus. I am working very hard to phere, it will destroy the military.’’ It it for reducing the debt. convince people that we all ought to is being used simply as another excuse Here is what they say about it. agree on one set of facts and then see as to why we cannot have a tax cut. The chief criticism that the Presi- where we are. For folks who believe the money dent—that is, OMB—has of CBO is that, So I would like to suggest to the Sen- ought to come to Washington, there is . . . we did not give them credit for $328 ate, if they find fault with this, they never a good time for a tax cut. There billion in transfers from the general fund to can do their own. But I submit that we the Medicare trust fund. is never a good time for it. It is about have, if you start with a freeze on do- power. It is fundamentally about who Then they say, mestic spending for the next 10 years— makes decisions in our society. Anyone That’s right, we didn’t, and that’s because Do not jump up and say we cannot do believing Washington should have con- transfers from one part of government to an- that. I know we cannot do that. But if other do not reduce the public debt. trol of this, thinks even in a surplus we start with that, we have an accumu- situation that 25 percent of it can’t be The whole argument the President is lated surplus of $3.3 trillion. We ought returned to the American people. taking to the American people is that to then talk about how the Repub- I say if not now, when in the world he reduces the debt more than we do. licans plan to use that. Very simply, could we ever do it? Certainly, we are But one of his big-ticket items is this we take every penny that belongs to not doing Medicare any good. We are one right here. The Congressional Social Security and we say put it in a not doing Medicare any good by stand- Budget Office says that $328 billion lockbox. That is the debate tonight. ing here and trying to convince the that he wanted to move out of the gen- But put it in a real lockbox, don’t put American people that by setting aside eral fund, so it could not be used for it in a lockbox such as the one that is a few more general revenue dollars for tax cuts, he puts in the Medicare trust offered here on the floor tonight. It is this system, when we have failed to fund and wants credit for reducing the unbelievable that the other side would reach fundamental reform, that we can debt. even claim to have a lockbox. do that and we will be doing something What does the Congressional Budget They create another budget point of good for Medicare or the country. Office say? Fundamentally the most order on top of at least four that al- If we can’t have a tax cut with a $3 simple of all propositions: We did not ready exist, against a budget resolu- trillion surplus, I don’t know when we give them credit for that because tion that has an on-budget deficit. will ever have one. The President, in transfers from one part of Government That is exactly the issue. You can call three different years, has recommended to another do not reduce public debt. it Social Security or whatever. There tax increases in a deficit situation. That is an interesting one. are already four points of order on Now we have a surplus situation. One Then, in addition, we had a very good that. You do not need this new lockbox would think the answer to that would Senator who does not agree with the on Social Security. be a tax cut. Now he comes back and Democrats on everything and say—this But let me suggest, let’s continue on. suggests another tax increase. It is BOB KERREY: If this is the way you look at a surplus, doesn’t make sense. The President also has a great deal of pain then set all the Social Security money I suggest the Medicare lockbox pro- in his plan—a hidden pain in the form of in- aside. Then go and say, What do we do posal be defeated. come tax increases that will be borne by fu- with the rest of it? We submitted the ture generations of Americans. Mr. ABRAHAM. Mr. President, I proposal that was put in this budget yield up to 15 minutes to the Senator He is alluding to the $328 billion resolution when we designed it and from New Mexico. which are IOUs, and he says: voted on it for a tax cut over a 10-year The PRESIDING OFFICER. The Sen- I strongly disapprove of a plan that pro- period. ator from New Mexico is recognized for vides a false sense of complacency that So- People are acting as if we are cutting up to 15 minutes. cial Security has been saved by this nebulous $792 billion worth of taxes next year. Mr. DOMENICI. I ask the Presiding and vague idea of ‘‘saving the surplus’’— Do you know how much we are cutting Officer to tell me when I have used 10 The very same thing applies to taxes next year? Four billion dollars. minutes. Medicare— They are worried about whether we I heard the distinguished Senator while failing to disclose the real pain that have a tax plan that will overstimulate from Montana, Mr. BAUCUS, say there will be imposed on future generations. the American economy. That is so is not one nickel for Medicare in this When they will have to pay for it, is small that it is in the range of round- Republican budget. That is absolutely what he is saying. Their income taxes ing errors in terms of the tax take of wrong. Perhaps the Senator forgot to are going to go up by the amount of America. include the fact that there is $3.1 tril- $328 billion or whatever amount the In the next year it is maybe twice lion in this budget for Medicare, fully Democrats allegedly want to secure for that—$8 or $10 or $12 billion. It does not funded. Medicare by putting it in some kind of do anything to inflate this economy be- What the Senator should have said lockbox in an on-budget trust fund. cause we are planning it right. We are was: Shame on the President. He is ac- I also ask an interesting question: Is planning it to come in piecemeal, as a cusing Republicans, and he under- there anybody who can stand on the booming American economy can ab- funded Medicare $31.5 billion on pur- floor of the Senate and suggest that by sorb it. That is $792 billion. If you want S9506 CONGRESSIONAL RECORD — SENATE July 28, 1999 to know the number, that is 23.4 per- to settle for $300 billion—and $792 bil- leave money for a tax cut out of this cent of this total surplus. lion, rounded to $800 billion, is almost surplus. That is absolutely incredible I have been using a dollar bill. It 25 percent—they would like to give the that he would do that. I do not believe caught on. The Democrats have used American taxpayers back less than a he would submit a Medicare reform dollar bills, and they got us all con- dime, it looks to me. So if they have a program that would be so big and so fused. They have two different dollar chart up that explains their position costly that there would not be money bills, one cut in thirds, one cut some and want to use an American dollar, for a tax cut. As a matter of fact, he other way. Ours is simple. We have not put it up and clip it off at 10 percent kind of shocked me. He submitted a re- cut it any way. We say one-quarter of and say: That is what we would like to form Medicare plan that only costs $48 it, 23.4 percent, should go back to the give you back because we need all the billion, if he was right in his numbers. American people. It is tough for Demo- rest of it because we want to increase It turns out he is not right, but had he crats to believe this, but plain old spending. been right, he would have been submit- arithmetic says there is $505 billion left I do not think this applies to the dis- ting one that cost $48 billion. I submit over. The other side says there is not a tinguished Senator who is making the there is plenty of money left over to do nickel in this for Medicare. argument in behalf of the Democrats. I that. Before they came to the floor, before do not think he would want to spend My last argument, and it will take a this idea that we were not doing any- all that money. But I do believe the minute, is there are some suggesting thing for Medicare became a political President has snookered us all. He has we should not do this now. If we do not issue, the budget resolution had $90 bil- us believing we are really going to do this now, we will never do it be- lion in it for Medicare—the one you harm the American people by not pay- cause, as a matter of fact, as we pro- voted on, Republicans. It had $90 bil- ing for every new program he has in ceed through, we will obligate all this lion in. Now, look here, there is $505 mind and more. And, frankly, that is money one way or another for some billion worth of domestic priorities. We just not true. American program, and then we will submit it is up to the Congress and the In fact, tomorrow, if I can, I will put say there is not any money left for tax President to decide how to use it. But up about five of the President’s new cuts. would anybody believe we are not programs, I say to Senator ABRAHAM. I For those who are so frightened going to use part of it for prescription will get them on a chart here, and I about us having a negative impact on drugs? Of course we are. And, inciden- will ask the American people: Which do the American economy, let me suggest, tally, is that enough money? you prefer? These five new programs? for the next 3 years, our impact is in- Do you know how much the Presi- Or would you prefer to make it easier significant, almost negative. It begins dent said we need for prescription to pay off student loans? Would you to grow a little bit in the outyears, but drugs? And he would have sold this to prefer to make it easier to take care of even the great doctor—as PHIL GRAMM the American people, except it is im- an elderly parent? Would you prefer to said today—he is like the Bible, every- possible. He said $48 billion of that is stop penalizing marriage? Or would you body quotes him but nobody reads him. what you need to fix, reform, and pay prefer a new program? It does not mat- That is what PHIL GRAMM said today for prescription drugs. It turns out he ter what new program. New programs on the floor. Even he said if you are totally underestimated it. It is more are new programs, if they are added to going to spend it, have a tax cut. He like $111 billion—$118 billion. But the the expenditure of the Federal Govern- also said the Republican plan is not truth of the matter is, take $90 billion ment and are making it grow. significant enough in size over a 10- out of it, take $100 billion out of it; We believe it is a pretty good size year period or annually to have a nega- that leaves $405 billion to add to discre- right now. We believe there is a need tive impact in terms of the American tionary. Just in rough numbers, you for some growth. We believe there is a economy. could add about $50 billion a year. If need in some instances to increase dra- I think we are on the right track. you do $100 billion worth of Medicare, matically what we have been spending, Will the Senator yield me 1 additional you can add $40 billion a year. Is that and we voted for that in our budget minute? enough? resolution. We said education is one of Mr. ABRAHAM. I yield 1 minute. Tomorrow I will put up a chart show- them, if you will reform the way we Mr. DOMENICI. We are on the right ing how much discretionary spending give it to the States. Let’s put more track, and I think the Democrats have has gone up in the last decade. I would money in, not less. We said that. We missed the boat. They are mixing ap- be surprised if it went up $40 billion, argued it here on the floor. We propose ples and oranges when they try to con- net increase, in very many of the to stick with that. fuse us on another lockbox for Medi- years. But the truth of the matter is that care. I think tonight we have just So essentially we have only one issue our lockbox will make our tax cut rea- about disposed of that as being a ridic- here: Do we lock up, in an irretrievable sonable and plausible and will make ulous approach which I call anything manner, as suggested in the Abraham- sure the Social Security people are but a tax cut approach. Frankly, with Ashcroft-Domenici lockbox, which is safe. that size surplus accumulated over this really a lockbox—such a lockbox that I close tonight by suggesting to ev- period of time, I say if you cannot give the Secretary of Treasury was even erybody who is listening to this debate back a little bit of it to the American worried that it did not give Govern- the President continues to raise the people, then what do they elect us for? ment enough flexibility, so we changed issue and Democrats are following him I yield the floor. it to give them some flexibility. We almost in rote marching, and that is, The PRESIDING OFFICER. The provide, in the case of a war, in the they get cranked up and they say: We Chair recognizes the Senator from case of great emergencies, you are not want to save Social Security; we want Montana. bound by it. We provide some other to save Medicare, which simply means Mr. BAUCUS. Mr. President, I have flexibility. you should not have tax cuts. heard a lot of words. But the truth of the matter is that Here is $1.9 trillion waiting for you to Mr. DOMENICI. Good words. this is a prudent way, if you decide you tell us how to fix Social Security. Is it Mr. BAUCUS. My question is, do not want to use the surplus to grow so complicated? No, it is not com- Where’s the beef? There is nothing on big, big, big, big Government. If you plicated. He prefers the issue to a solu- the other side about what they want to want to grow it, then do it the way the tion. That is why we are on the floor. do to help Medicare—nothing. The Sen- President recommends: Do not have He does not want to submit a Social ator from Pennsylvania started out by this tax cut in; have a little piece of Security reform program. He wants to saying: Gee, there’s money for Medi- one. continue to hoodwink us into thinking care. Then he shifted his argument to The PRESIDING OFFICER. The Sen- if you give the people a tax cut, you say we should not use general revenue. ator has used 10 minutes and has 5 min- cannot fix Social Security. Then he shifted his argument to say utes remaining. I will bet the President would not that the amendment we are offering is Mr. DOMENICI. In fact, I am pre- submit a Social Security program that a charade, a smokescreen. But if you pared to make a guess, if they want us would cost so much that it would not listen to the words, there is not one July 28, 1999 CONGRESSIONAL RECORD — SENATE S9507 word of what he wants to do to help How did he do it? He said: OK, I am that goes on around here, because of Medicare and help Medicare bene- going to freeze the baseline after the votes on raising the debt limit, wheth- ficiaries, to provide money for drug year 2002 for discretionary spending, er or not to pay bills we know we have benefits, to help address the balanced and that is going to mean that I get to to pay anyway. It just doesn’t make budget agreement overcut, and to help come up with additional—that is the sense. It just does not make sense to the solvency of the trust fund. yellow, domestic priorities. tie the debt limit to what CBO says the I ask again: Where’s the beef? Not The fact is, that is very unrealistic projections are going to be on the debt. one word on that side about what they and it’s not what CBO projects. I think We already have a lockbox which want to do to help Medicare. As a mat- we ought to use the same numbers. A works—at least the House thinks it ter of fact, what I hear in the words is, lot of us on our side think CBO is a lit- works. The House approved it. I think first, we need some kind of structural tle tainted; it has become a little polit- only a handful of House Members voted reform. Let’s get structural reform, ical over the years. But I suggest we all against it. but let’s not use general revenue. start with the same numbers, and the So we are saying the House lockbox There has been reference to the best place to start is CBO. If the Sen- basically works. House Republicans Breaux commission. Senator BREAUX ate Budget Committee majority can voted for it; House Democrats voted for admits we need resources in addition to come up with its numbers, I suppose it. But we want to go one step further. structural reform to help solve the the Budget Committee minority can We are also saying, let’s reserve some Medicare problem. He said that. He is come up with its own numbers. It is no money, a third of the surplus each the chairman of the commission. He different. That is where we are. year, reserve that for Medicare. If it is said we need it. I think he is right. The It is important for Senators to know not used, if structural reform takes problems facing Medicare will require those are not CBO numbers, those are care of it and we do not have to use it, both structural reform as well as some Senate Budget Committee numbers. it can be used for tax cuts, it can be additional resources to help solve the Those are the majority’s numbers, not used for defense spending, it can be problem. At least that is his view, and CBO’s numbers. used for whatever this body thinks Mr. DOMENICI. Will the Senator he is chairman of the Breaux commis- makes the most sense. But only with a yield? sion. He ought to have some idea of supermajority vote. Mr. BAUCUS. Just say the yellow is what is necessary. My good colleagues on the other side an illusion, it is not there, because I also remind my colleagues that of the aisle also made an argument most of us, if we are realistic, are going structure reform is not easy. I will about shifting $328 billion. That is a never forget catastrophic attempts sev- to assume we are going to at least keep red herring. That argument has noth- eral years ago. That was about $4 on up with inflation over those years. If ing to do with this issue. It is irrele- seniors to pay for catastrophic and peo- we do not keep up with inflation over those years, then we are going to dra- vant. ple went berserk. That thing was re- The only point I am making is that matically cut programs. pealed faster than a New York minute of the $1 trillion on-budget surplus, we because of the politics and the dif- How much are we going to cut? The ought to at least set aside a third in a ficulty of addressing Medicare reform. figure is about a 54-percent cut in do- reserve fund for medicare. The Breaux commission did not come mestic spending. Congress can decide what it wants to up with any super-majority rec- By saying there is no inflation rate do in helping protect Social Security ommendation. They could not. It is so considered past the year 2002, for the and Medicare. We can decide to provide difficult, which is not to say we should rest of the term, these numbers rep- for prescription drug benefits. We can shirk from structure reform. Of course, resent, in effect, a 54-percent cut in dis- address the problems caused by the bal- we should work on structural reform, cretionary spending. That is what it but we also need general funds to help comes out to. That is pretty big. So anced budget amendment cut backs. with Medicare. that is why I say that yellow is an illu- We can extend the solvency of the trust I was very perplexed when I saw the sion. It is not going to happen. fund. That is what this amendment is chart put up by the chairman of the If I could address another point. My all about. It is about reserving the Budget Committee. I want to ask him colleagues on the other side of the aisle funds necessary to help America’s sen- where he got his numbers. I know made two basic charges. First, they say iors. It is actually very simple. where he got his numbers. They are his that this is a smokescreen. That we Again, I go back to my basic ques- own numbers, not CBO numbers. For really do not want a lockbox. My good tion, Where is the beef? How do our col- example, the CBO baseline projection friend, the Senator from New Mexico, leagues on the other side of the aisle over the next 10 years is a surplus of said: Well, we have the points of order. assure that are going to provide for about—it is on the chart—of about It is true, we create an additional point Medicare, provide for seniors, provide $2.896 billion. That is CBO. of order, but it is a supermajority point for drug benefits for our elderly men If you look closely at the chairman’s of order—60 votes. It is pretty hard to and women? That is the problem. chart, down below in the corner it says: get more than 60 votes around here. I urge Senators, cut through all the Source. What is the source? It is CBO Witness the waiver on the Byrd rule rhetoric. Listen carefully to the under- and the Senate Budget Committee, not did not get 60 votes. Oh, that side real- lying words. Sometimes, what people just CBO. ly wanted to waive the Byrd rule. They don’t say is just as telling as what they We have the Senate Budget Com- could not do it. They could not get 60 do say. In this case, our good col- mittee—I am trying to avoid the votes. Sixty votes is a pretty big hur- leagues make no pretense of guaran- phrase ‘‘cooked the books.’’ I will tell dle. teeing funds for medicare. Whereas we you what it did to come up with the Make no mistake, we are very serious say, very simply, let’s save a third of chart the chairman was showing. Here about protecting medicare. You can the surplus each year in a reserve fund. is what it did: also tell that we are serious because we If we need it, fine. If we do not need it, The Congressional Budget Office said, are proposing a lockbox that is very fine—we can reduce the debt and leave OK, we are going to freeze the caps as similar to the House lockbox which our options open. required under the budget through the passed by an overwhelming margin. We have this opportunity because we year 2002. Then CBO said: We are going Why is the Senate lockbox not a good have the large projected on-budget sur- to assume a baseline at the rate of in- idea? I will tell you why. Because it plus in the future. We do not have flation for the remainder of the term says the debt limit has to go down on these opportunities very often. How up to about 2009. That is how they got a step basis, depending upon what many Senators can remember times in this number, $2.896 billion. CBO’s projections really are for the the past having a $1 trillion on-budget What did the chairman of the Budget debt. That is what it says. That is projected surplus? I can’t. I do not Committee do? He said: I know what I going to force all kinds of votes here to think anyone else can either. am going to do because the Democrats raise the debt limit if it does not work What is the likelihood that is going are really right. What I am going to do out that way. to continue? What is the likelihood we is come up with a different number to We know all the charades around are going to have this opportunity 5 show there are more savings. here, all the politics, all the nonsense years from now? What is the likelihood S9508 CONGRESSIONAL RECORD — SENATE July 28, 1999 we will have it 8, 10 years from now? Mr. LAUTENBERG. I thank the Sen- Mr. President, most Americans, if Pretty slim; not very likely, in my ator from Montana. Perhaps I will use given the opportunity, would love to judgment. less time than that. pay off their loans and their debts. So we have an opportunity. We have Mr. President, I have listened care- Their mortgages. Their car loans. Well, an opportunity to put aside the funds fully to the debate. I heard comments that’s what we want our nation to do. necessary to extend the solvency of that I would describe as scornful, deri- But the Republicans, instead, want Medicare. We have the opportunity to sive, challenging everybody else’s hon- to use the money to provide massive put aside the funds necessary for struc- esty. tax breaks for wealthy individuals and tural reforms. We have the opportunity I know one thing. When we are chal- special interests. Oil interests, mineral to put aside the funds for a prescrip- lenging someone else’s honesty, it is a interests, many others. Instead of pay- tion drug benefit. I am saying, let’s good idea to do it in front of a mirror. ing off our debts and leaving our chil- preserve this surplus—let’s keep our That way, one gets to see what perhaps dren free from that obligation, the Re- options open. one might be saying, and under- publican bill would give that money to Do you know what else our lockbox standing where one is going, so that these special interests. does? Deficit reduction. People want when one reviews the argument being As you can tell, Mr. President, I ob- deficit and debt reduction. They are made for or against a particular point ject strongly to the Republican tax tired of being saddled with this debt. of view, if they want to talk in terms bill. This legislation raids surpluses They don’t want their children simi- of dishonesty and in terms of scorn and that are needed for Social Security, larly constrained. That’s why this in terms of derision about what is that sacred covenant we have with peo- lockbox is such a good proposal. If we being said, it invites the same kind of ple who have my color hair that says don’t need the funds for the next, say, commentary—which gets us nowhere. we want to care of them. It is a com- 10 years—because the Medicare trust It doesn’t improve the debate. It mitment we made, a promise we made, fund will be solvent at least until doesn’t make it clearer to the Amer- as we took the money from their pay- 2015—that is a $300 billion reduction in ican people. It doesn’t establish a check. the national debt. That is what it framework for really thinking the I want to protect Social Security. My comes down to. problem through. conscience calls for it. I have to make Mr. President, I am the senior Demo- So, again, I do not hear anything sure those who are paying Social Secu- crat on the Budget Committee. And I from the other side aisle about any rity are going to get the benefits they want to suggest that my colleagues guarantees to help Medicare except for expected when it comes to retirement take a look at an article in the Wall words—maybe something in the future time. Street Journal, entitled ‘‘GOP Uses Medicare? There are few programs in about structural reform, but certainly Two Sets of Books.’’ The article ex- this country that have the value to not in the budget tax debate—I repeat plains that the GOP is using two sets of people like Medicare, which says that again, not one red cent for Medicare. books—one from the Office of Manage- when you reach that age when sick- Helping to provide for Medicare is ment and Budget, the other from the ness, when physical problems are not a not a smokescreen because we do have Congressional Budget Office. And, by surprise, you will get the medical care a Social Security lockbox that works. taking the best of each, it’s trying to you need. Those are essential, basic Our lockbox is very similar to the one hide the fact that, and I quote, ‘‘law- things—Social Security solvency, that the House passed. They passed it. makers are poised again to raid the Medicare. These are for people when If they passed it by such a large mar- very same Social Security funds they they are most vulnerable, in their older gin, providing a supermajority point of have promised to lock away.’’ age. We have made a commitment that order, it makes sense to me that we Mr. President, I don’t accuse our we are going to take care of them. Our should do it. But let’s go farther and friends on the other side of the aisle of friends on the Republican side say no, protect Medicare. Let’s have both. deliberate untruthfulness. But I hope tax breaks; that is more important. Let’s protect Social Security. Let’s the American people will be able to un- By the way, all of this is more show also protect Medicare. It is very sim- derstand what is really going on. business than plain business. It is de- ple. They are two parts of the same Mr. President, when it comes to this signed to let the American public think package, if you will, to help the elder- tax bill, there is no doubt where I they want to be generous and they ly. stand. I stand for the majority of the want to return the money, and we are We have a lot of very poor elderly. American public. The people who are sinners because we say we are going to About a third of the American elderly concerned with making a living and help pay off the debt that your kids, rely solely on Social Security for in- providing for their children. The people Mr. and Mrs. America, won’t have to come—about a third. There are a lot of who are working hard to help their par- worry about. people who just do not have any ents and grandparents. The people in They say: Who knows better how to money. Virtually one-third are depend- families where two people are working, spend the money? Is it those bad guys ent upon it. There are about 44 million and who are having a hard time meet- in Washington—bad guys and women; people on Social Security including ing their obligations. When mom has to that is the way we are today—those folks with disabilities. The average work and dad has to work and they are bad people in Washington who want to payment is about $750 a month. That is either on different shifts or the same just take your money? I heard someone all. If a third are relying on only $750 a shifts, it means one of the parents is say ‘‘take it and spend it,’’ take it and month, that means, clearly, they really not home to be with the children at spend it, like that is the principal mo- need the help. times when that might provide the tive for responsible people serving So, again: A lockbox for Social Secu- kind of encouragement and sustenance here. I wouldn’t accuse them of that, rity that works and a lockbox for Medi- for development. There is a price to and I don’t think they ought to accuse care that also works. pay for it. us of that silly nonsense. Take your I reserve the remainder of my time. There is physical fatigue. My mother money and spend it? That is not what The PRESIDING OFFICER. Who was a widow at age 36. She worked anybody wants to do. yields time? hard. I was old enough to be in the We want to do the right thing. They Mr. BAUCUS. Mr. President, how Army. My sister was only 12 when my want to do the right thing. They just much time is remaining on both sides? father died. But there was exhaustion. haven’t learned how yet. The PRESIDING OFFICER. The Sen- It was hard to take care of all of the re- Mr. President, the cost of the tax ator has 331⁄2 minutes; the other side sponsibilities. breaks under their bill would increase has 17 minutes 20 seconds. When I look at tax cuts, I ask, which dramatically just when the baby Mr. BAUCUS. Mr. President, I yield Americans need them? The guy making boomers begin to retire. The bill would 20 minutes to my good friend, the Sen- $800,000 a year? I don’t think he needs force drastic cuts in education, envi- ator from New Jersey. a $23,000 tax cut. But that’s what he’d ronmental protection, other priorities. The PRESIDING OFFICER. The get under this bill. And that’s money It could lead to a return of higher in- Chair recognizes the Senator from New that we could be using to pay off our terest rates. And it is fundamentally Jersey. national debt. unfair. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9509 Mr. President, Democrats strongly completely unenforceable. No credi- the bottom 60 percent, earning below support tax cuts for middle-class Amer- bility. $38,000, you get $141. That is less than icans, ordinary people who are working Consider the depth of the cuts that 50 cents a day. I hope those people hard to keep things together. We have would be required. If you assume the making $38,000 don’t go out and blow proposed almost $300 billion worth of Republican Congress funds defense pro- that 50 cents a day. tax cuts. Our cuts were targeted to the grams at the levels presently proposed Another problem with this bill, ac- middle class, the people who needed by President Clinton, by the end of the cording to an analysis by Citizens for them most. But we couldn’t get the co- 10 year period, domestic needs, every- Tax Justice, the top 1 percent of the operation of our friends on the other thing from education and environ- taxpayers, those with incomes over side. We won’t take funds needed for mental protection, to the FBI, would $300,000—and the average, as we saw, is Social Security and Medicare like the have to be cut roughly 40 percent. Is $837,000—will get those juicy tax breaks Republican bill does. They are willing that credible? A 40-percent cut in stu- that we see here, while the bottom 60 to take it out of this Social Security dent aid? A 40-percent cut in health re- percent will get that $141. trust fund, which I will demonstrate search? A 40-percent cut in veterans’ That is not fair. Beyond the threat to later. programs? Social Security, Medicare, education, Neither Social Security nor Medicare That is not going to happen. But that and other priorities, and beyond its has enough financing to support the is the pretense under which we are op- fundamental unfairness, this bill also baby boomers in their retirement. We erating. poses a significant risk to our econ- need to extend the solvency of both The Republicans are saying we have omy. programs. We need to pay off our debt, to reduce and cut programs. But the It would be one thing to call for huge which now forces taxpayers to pay $225 American people need to understand tax cuts if our Nation were in the mid- billion a year in wasted interest pay- what that would mean. Head Start— dle of a recession. Sometimes you need ments. I guess they don’t want to stop 375,000 preschool children would be de- a boost, a stimulus, but today our that. They don’t want to stop that. nied services that help them come to economy is very strong. In this kind of They would rather try to dole it out school ready to learn. The FBI—that is an environment, a large fiscal stimulus principally to people at the top of the a favorite of all of ours because they do is dangerous. income ladder. They don’t want to re- very important work—would have to The Federal Reserve just tightened duce that debt. cut 6,300 agents in order to accommo- monetary policy, forcing up interest President Clinton has proposed to re- date this. VA medical care—a promise rates to preempt inflation. Chairman serve all Social Security surpluses for that was made to veterans, and to me Greenspan suggested last week the Fed debt reduction as well as another $325 when I enlisted in the Army—they may raise interest rates again to pre- billion for Medicare. The Republicans would treat 1.4 million fewer patients. serve price stability. A huge tax cut in openly oppose reserving non-Social Se- Superfund—the wonderful program these conditions would be a serious curity surpluses for Medicare, but they that helps clean up toxic waste sites in mistake. It could force up interest claim their bill reserves all Social Se- our society—no funding would be pro- rates, which could drag down the in- curity surpluses for Social Security. vided for any new cleanups, due to vestment that is driving our economy. The claim is untrue. begin in 2009. Are summer jobs impor- As Chairman Greenspan testified, ‘‘The The bill before us would raid Social tant? I think so. But 270,000 young peo- timing is not right.’’ Security surpluses in 5 of the next 10 ple would lose jobs and training oppor- Mr. President, we are doing no favors years. This chart shows the numbers. tunities. The list goes on. for middle-class families if we give Here we are, 2005; that is practically Look how the tax breaks in this bill them a tax break worth less than 50 around the corner. What does it say? explode in cost. In the first year, they cents a day and then force them to pay Red. Everybody knows what red ink cost $4.2 billion. By the last year, they higher interest rates on their mort- means. Minus $12 billion. That is out of cost almost $200 billion. In the fol- gages and their car payments. the Social Security trust fund. We have lowing 10 years, these costs explode Mr. President, before I close, I want no place to get it. So instead of pro- even more. All of this will be hap- to take a minute to respond to an anal- tecting Social Security, we are raiding pening when the baby boomers start re- ysis released last week by the Congres- Social Security because of the tax cut tiring. sional Budget Office. That analysis they want to give to the fat cats. In other words, the Republican plan supposedly shows that the GOP budget Consider what will happen in 2005. doesn’t just raid the Social Security plan reduces debt more than the Presi- The non-Social Security surplus that trust fund; it also would undermine the dent’s. But the analysis is highly mis- year will be $88.6 billion. But this bill Government’s revenue base and dra- leading, largely because it is based on would cost $89.9 billion. The bill there- matically increase the chances that questionable assumptions. fore would directly create Social Secu- Social Security benefits will be cut. For example, the analysis assumes rity surpluses of $1.3 billion in that Similarly, this bill proposes a very the Congress will abide by this year’s year. However, the real raid on Social real threat to Medicare. The Medicare spending cap, even though the chair- Security would be much deeper. This trust fund is now scheduled to go bank- man of the Appropriations Committee, legislation would increase debt and rupt by 2015. President Clinton has pro- a distinguished Senator, Senator STE- lead to higher interest costs. In 2005 posed a comprehensive reform plan VENS from Alaska, says there is no way alone, these additional interest costs that would extend solvency through he can pass the bills without more would eat up another $10.9 billion of 2027, for a dozen years or more. He money. It then assumes that Congress Social Security surpluses. So the total wants to provide a new prescription will abide by the caps in 2001 and 2002, raid on Social Security would be over drug benefit for older Americans. That which are both lower than this year’s. $12 billion in 2005. is going to come from the surpluses Then, to top it off, CBO assumes Con- If you consider both the direct rev- that we enjoy, as long as we don’t give gress will cut even further in real enue losses and the additional interest them away. terms in each of the following 7 years. costs, this bill would raid the Social What does this legislation do for Mr. and Mrs. Public, don’t you believe Security surplus in each of the second Medicare? Zero. There is not a penny that. Congress is not going to make 5 years after enactment. to extend the program’s solvency, and cuts like that in veterans’ medical Mr. President, I think I know what not one penny for prescription drugs. care. We are not going to permit Head the Republicans would say about this. Another problem with the bill is that Start to be decimated. We are not They will promise that even if this bill it is fundamentally unfair. It is loaded going to cut out programs that people does spend Social Security surpluses, up with various special interest provi- depend on for their very lives. many years from now, Congress will sions. Meanwhile, ordinary Americans Mr. President, people really need somehow make huge cuts in programs, are left with a few crumbs. many of these programs. Most don’t such as education and the environ- If we look at this chart, the top 1 per- like to depend on government if they ment, to offset these costs. Unfortu- cent of the income earners, earning can avoid it. My father at the height of nately, it is an empty promise that is $837,000, get a $23,344 cut. If you are in the depression was most ashamed of S9510 CONGRESSIONAL RECORD — SENATE July 28, 1999 the fact that he had to go to work for I yield the floor. Today, interest on the debt consumes WPA, the public works program. He de- Mr. KENNEDY. Mr. President, the nearly 13% of the federal budget. Under manded dignity. He demanded it al- principle of the Bancus amendment the President’s plan, by 2015, that an- most more than his pride would per- goes to the heart of this debate. We nual debt interest expense will be com- mit. He worked for a government pro- should not enact tax cuts which will pletely eliminated. As a result, be- gram, and he was ashamed to tell any- use up virtually the entire surplus be- tween 2011 and 2019, more than a tril- body. People like him do not want gov- fore we solve the significant financial lion additional dollars will be available ernment programs. I had my GI bill for problems facing Social Security and to pay future Social Security benefits. my education. I took it because I Medicare. We will be meeting our responsibility thought that in the final analysis not Placing Social Security and Medicare to future generations of retirees. only would it help me, but it would on a firm financial footing should be In addition, the GOP tax cut is fun- help me to be a better citizen, to make our highest budget priorities. The sur- damentally unfair in additional ways. a contribution to my country. plus gives us a unique opportunity to It distributes the overwhelming major- The Congressional Budget Office is extend the long-term solvency of these ity of its tax breaks to those with the assuming we will not abide by the two vital programs, without hurting highest incomes. The authors of the spending caps. They are assuming we the senior citizens who depend upon Republican plan highlight the reduc- are actually going to cut almost $200 them. We should seize that oppor- tion of the 15% tax bracket to 14%. billion below it. That is not credible. tunity. They point to this reduction as middle CBO’s analysis also contains a vari- Two-thirds of senior citizens depend class tax relief. But that relief is only ety of questionable statements. For ex- on Social Security retirement benefits a small part of the overall tax breaks ample, it ignores the extra $14 billion for more than fifty percent of their an- in their plan. It accounts for only $216 in tax breaks that were added to the nual income. Without it, half of the na- billion of the $792 billion in GOP tax $778 billion originally assumed in the tion’s elderly would fall below the pov- cuts. Most of the remaining provisions erty line. These same retirees rely on budget resolution. It also ignores the are heavily tilted toward the highest Medicare for their only access to need- Budget Committee’s directive to CBO income taxpayers. ed health care. For all of them, the Re- that it use different scorekeeping esti- If the Republican plan is enacted and publican proposal does absolutely noth- mates when it scores appropriations implemented, nearly 50% of the tax ing. It does not provide one new dollar bills. benefits would go to the richest 5% of to support Social Security or Medicare. Those mandates for special, ‘‘directed taxpayers—and more than 75% of the It squanders the unique opportunity scoring’’ will allow the Appropriations benefits would go to the wealthiest which the surplus has given us. 20%. Those with annual incomes ex- Committee to spend more, and will re- Social Security and Medicare rep- ceeding $300,000 would receive tax duce the surplus by at least $18 billion. resent America at its best. They reflect breaks of $23,000 a year. By contrast, Yet CBO doesn’t even mention this in a commitment to every worker that the lowest 60% of wage-earners would its analysis. disability and retirement will not Mr. President, there are other inac- mean poverty and untreated illness. share less than 11% of the total tax curacies and distortions in the CBO They are a compact between the Fed- cuts—they would receive an average analysis. But together they undermine eral government and its citizens that tax cut of only $139 a year. The choice could not be more stark— the credibility of last week’s analysis. says: work hard and contribute to the it is between using the entire surplus And, unfortunately, they’ve raised system when you are young, and we for an enormous GOP tax cut which many questions on this side of the aisle will guarantee your financial security overwhelmingly benefits the wealthiest about CBO’s fairness and objectivity. and your health security when you are Americans, or using the surplus for Mr. President, CBO is supposed to be old. objective and fair to both sides. They It has been said that the measure of modest tax cuts that leave room to are just supposed to look at the num- a society is how well it takes care of preserve Social Security and Medicare bers. That is all. its most vulnerable citizens—the very for future generations of retirees. Mr. President, let me close by just young and the very old. By that stand- SOCIAL SECURITY recapping the main problems with the ard, Social Security and Medicare are On Social Security itself, the Repub- Republican tax bill. among the finest achievements in all of lican proposal is misleading. The rhet- It raids Social Security surpluses in our history. Because of Social Security oric surrounding it conveys the false several years. and Medicare, millions of senior citi- impression that it is a major step to- It leaves nothing for Medicare. zens are able to spend their retirement ward protecting Social Security. In Its costs explode in the future, just years in security and dignity. A Repub- truth, it does nothing to strengthen when the baby boomers will be retir- lican tax cut of the magnitude pro- Social Security. ing. posed here today will put their retire- The Republican plan would not pro- It would force extreme cuts in edu- ment security in serious jeopardy. vide even one additional dollar to pay cation, health care, crime fighting, and In the first ten years, the Republican benefits to future retirees. It would not other priorities. tax cut of $792 billion—plus the in- extend the life of the Trust Fund by Its tax breaks are unfair, and give creased interest on the national debt one more day. It merely pledges to give huge benefits to special interests and required by it—will consume all but $25 to Social Security the dollars which al- the wealthiest Americans. billion of the $996 billion surplus. The ready belong to Social Security under And it’s fiscally irresponsible, risk- cost of the tax cut alone will mush- current law. ing higher interest rates and a return room to two trillion dollars between By contrast, by drawing on the sur- to the days of red ink and large defi- 2010 and 2019, plus hundreds of billions plus, President Clinton’s proposed cits. more in additional debt service. There budget would contribute more than a In sum, Mr. President, this is ex- will be no surplus left to strengthen trillion new dollars to Social Security treme legislation. It may appeal to the Social Security and Medicare for fu- over the next twenty years. Beginning far right wing of the Republican Party. ture generations of retirees. The needs in 2011, the Administration’s plan But by posing such a direct threat to of the millions of Americans who de- would devote all of the savings which Social Security and Medicare, it’s in- pend on these basic programs for their will result from debt reduction to the consistent with the values of main- well-being are ignored. Social Security Trust Fund. That step stream American families. Democrats propose a very different would extend the life of the Trust Fund That is why this President is deter- set of priorities for the surplus. We by more than a generation, to beyond mined to veto it the minute it reaches commit one-third of the surplus—$290 2050. his desk, and he should. billion over the next decade and more In fact, the Republican plan does not I urge my colleagues to oppose the thereafter—to Medicare. And beginning even effectively guarantee that exist- bill and to support the amendment of- in 2011, we would dedicate all of the ing payroll tax revenues will be used to fered by the distinguished Senator savings which will result from debt re- pay Social Security benefits. There are from Montana. duction to Social Security. trap doors in the Republican July 28, 1999 CONGRESSIONAL RECORD — SENATE S9511 ‘‘lockbox.’’ A genuine ‘‘lockbox’’ would MEDICARE in earnest. Without a significant in- guarantee that those dollars would be The failures of the Republican plan vestment now to prepare Medicare for in the Trust Fund when they are need- to preserve and strengthen Medicare is the financial demands of that era, the ed to pay benefits to future recipients. just as serious. Today, Medicare is a only options will be to dramatically But that is not what the Republican lifeline for the 40 million elderly and cut benefits or raise taxes. plan does. disabled citizens who depend on it for According to the most recent projec- Our Republican friends claim that health care. It is an essential part of tions of the Medicare Trustees, if we do the enormous tax cuts they have pro- our health care system. It allows fami- nothing, keeping Medicare solvent for posed will have no impact on Social Se- lies to save to send a child to college, the next 25 years will require benefit curity, because they are not using pay- instead of saving to send a parent to cuts of almost 11%—massive cuts of roll tax revenues. On the contrary, the the hospital. It fulfills its founding hundreds of billions of dollars—or dou- fact that the Republican budget com- promise, in which everyone pays in to ble-digit payroll tax increases. Keeping mits every last dollar of the on-budget Medicare during their working years, Medicare solvent for the next 50 years surplus to tax cuts does imperil Social and everyone benefits from good health will require cuts of 25%—or even larger Security. care during retirement. payroll tax increases. First, revenue estimates projected The Republican budget threatens to Under the guise of reform, some ten years into the future are notori- destroy Medicare by putting it on a argue that we should reduce our obliga- ously unreliable. As the Director of the starvation diet. Instead of protecting tion to support guaranteed benefits. Congressional Budget Office candidly Medicare in anticipation of the largest They favor proposals to privatize Medi- acknowledged: demographic challenge in its history, care, or turn it into little more than a Ten year budget projections are highly un- the Republican budget sacrifices Medi- voucher program—leaving senior citi- certain. In the space of only six months, care on the altar of tax breaks for the zens to the tender mercy of profit- CBO’s estimate of the cumulative surplus eering private insurance companies. has increased by nearly $300 billion. Further rich. There is not one additional dime for Medicare in the Republican budget, Nothing could be more devastating for changes of that or a greater magnitude are America’s elderly—today and in the fu- likely—in either direction—as a result of although that budget contains nearly economic fluctuations, administrative and $800 billion in tax breaks that dis- ture. judicial actions, and other developments. proportionately benefit the wealthy. We have a clear opportunity to pro- Despite this warning, the Republican Make no mistake. This budget will tect Medicare. All we have to do is re- tax cut leaves no margin for error. If determine whether we keep the med- serve a fair share of the surplus for we commit the entire surplus to tax ical care in Medicare. This budget will Medicare. But instead of protecting cuts and the full surplus does not ma- determine whether Medicare will con- Medicare, the pending bill uses $800 bil- terialize, Social Security revenues will tinue strong and continue to guarantee lion of the surplus to pay for new tax breaks. You don’t need a degree in be required to cover the shortfall in tax the protections that are so essential higher mathematics to understand cuts. for senior citizens in the years ahead. Second, even if the projected surplus Unfortunately, the pending bill falls what is going on here. This Republican does materialize, the cost of the Repub- unacceptably short of reaching these plan is Medicare malpractice. Every senior citizen knows—and lican budget exceeds the surplus in five important goals. It is, in fact, a thinly- their children and grandchildren know, of the next ten years—2005, 2006, 2007, veiled assault on Medicare and an af- too—that the elderly cannot afford 2008 and 2009. Unless the Republican front to every senior citizen who has cuts in Medicare. They are already proposal is restructured, Social Secu- earned the right to affordable health stretched to the limit—and often be- rity revenues will be required to cover care by a lifetime of hard work. It is a yond the limit—to purchase the health the shortfall in each of those years. bill that says $800 billion of new tax care they need. Third, the Republican tax cut leaves breaks for the rich are more important Because of gaps in Medicare and ris- no funds to pay for emergency spend- than preserving Medicare for our senior ing health cost, Medicare now covers ing, which has averaged $9 billion a citizens. only about 50% of the health bills of year in recent years. Over the next dec- The top priority for the American senior citizens. On average, senior citi- ade, we are likely to need approxi- people is to protect both Social Secu- zens spend 19% of their limited incomes mately $90 billion to cover emergency rity and Medicare. But this budget puts to purchase the health care they need— needs. That money has to come from tax breaks for the rich first, and Medi- almost as large a proportion as they somewhere. With the entire surplus care and Social Security last. had to pay before Medicare was enacted spent on tax cuts, the Social Security Our proposal says: save Social Secu- a generation ago. Many low-income Trust Fund will have to fund these rity and Medicare by devoting all of senior citizens have to pay even more emergency costs as well. the Social Security surplus to Social as a proportion of their income. These three threats to Social Secu- Security, and by reserving one-third of By 2025, if we do nothing, the propor- rity that I have described are very real. the on-budget surplus for Medicare. It tion of out-of-pocket spending devoted They expose the fundamental flaws says: extend the solvency of the Medi- to health care expenses will rise to that prevent the Republican ‘‘lockbox’’ care Trust Fund, not by raiding Social 29%. Too often, even with today’s from being a genuine lockbox for So- Security but by assuring that some of Medicare benefits, senior citizens have cial Security. the benefits of our booming economy to choose between putting food on the In addition, there is an even greater are used to preserve, protect, and table, paying the rent, or purchasing threat to Social Security in the out- strengthen Medicare. It says that we the health care they need. years. Under the President’s plan, the should modernize Medicare to ensure The typical Medicare beneficiary is a Social Security Trust Fund would re- that all senior citizens have access to widow, seventy-six years old, with an ceive 543 billion new dollars from the affordable medications. annual income of $10,000. She has one surplus between 2011 and 2014, and it Some of the other side contend that or more chronic illnesses. She is a would receive an additional $189 billion we should not provide additional funds mother and a grandmother. Yet this each year after that. The Republican for Medicare. They say we should look budget would cut her Medicare benefits tax cut will make the President’s plan for additional ways to reduce Medicare in order to pay for new tax breaks for impossible to carry out. The cost of spending. But Medicare spending the wealthy. These are women who will their tax cut proposal mushrooms to growth is at an all-time low. In fact, be unable to see their doctor, who will over $2 trillion between 2010 and 2019. It evidence is mounting that Congress has go without needed prescription drugs, will consume all of the surplus dollars already cut too much from Medicare in or without meals or heat, so that which were intended for Social Secu- the drive to balance the budget in 1997. wealthy Americans earning hundreds rity. There will be nothing left for So- While Democrats and Republicans of thousands of dollars a year can have cial Security. As a result, no new dol- have different opinions about how best tens of thousands of dollars more a lars will flow into the Trust Fund, and to reform Medicare, one fact remains year in additional tax breaks. the future of Social Security will re- clear: Starting in 2010, the retirement This is the wrong priority for spend- main in serious doubt. of the baby boom generation will begin ing our hard-earned surplus—and the S9512 CONGRESSIONAL RECORD — SENATE July 28, 1999 wrong priority for America. And the ture. On the threshold of a new cen- don’t recommend that we allocate a American people know it. tury, the time has come to add again specific amount to fix Medicare before As we debate these issues this week, to that structure. we have decided how to reform Medi- the response of our opponents is pre- We can modernize Medicare and pre- care. dictable. They deny that they have any pare for the 21st century—the century The Senator from Tennessee elo- plans to cut Medicare. But the Amer- of life sciences. We can prepare for the quently stated the position of the ican people will not be fooled. They massive influx of retirees from the Comptroller General of the United know that our plan and the President’s baby boom generation, if we devote the States, our sort of auditor, the person plan will put Medicare on a sound fi- resources needed to do so. The surplus who looks at things and asks: How are nancial basis for the next generation— was generated in part by Medicare sav- you doing? Is this reasonable? Does it without benefit cuts, without tax in- ings, and it is only right that a respon- make sense? creases, without raising the retirement sible portion be invested in modern- He indicates that just pouring more age, and without privatizing Medicare. izing and strengthening the Medicare. money into a system that is broken— In this debate, we intend to offer We know how the American people well, you know, if you just step on the Senators a chance to vote on whether want us to vote. Congress should listen gas in a car that is going in the wrong they are sincere about protecting both to their voice. The opponents of Medi- direction, it doesn’t get you to your Medicare and Social Security. care were wrong in 1965, and they are destination any more quickly. The key Our opponents are already trying to wrong in 1999. is to reform Medicare and have a re- confuse the issue. They say that it is The PRESIDING OFFICER. Who source available when you reform it. wrong to put the surplus into Medi- yields time? That is the Republican plan. care. The Senator from Michigan. Are we being irresponsible by taking The workers of this country are the Mr. ABRAHAM. Mr. President, I 23.8 cents out of every surplus dollar ones who have earned this surplus—and yield 10 minutes to the Senator from and saying to the American people who they want to use it to preserve and pro- Missouri. earned it that we are going to return tect Social Security and Medicare, not The PRESIDING OFFICER. The it? use it for new tax breaks for the Chair recognizes the Senator from Mis- There is an old slogan in Washington. wealthiest Americans. souri. ‘‘You send it; we spend it.’’ Our opponents say that our proposal Mr. ASHCROFT. Mr. President, People are a little tired of that. just puts new I.O.U.s into the Trust thank you very much. I thank the Sen- We have the highest tax rate in the Fund. Let’s be very clear. There are ator from Michigan. history of the country. Even State and two ways to restore Medicare’s finan- Mr. President, it would be amusing, local rates are higher in many cases cial stability. One way is to cut bene- if it weren’t tragic, to hear the rep- caused by our mandates on State and fits. The other way is to provide new resentations made by those on the local government. We have a $3.3 trillion surplus, and resources. Our proposal puts new re- other side of the aisle that the Repub- someone says we should save tax cuts sources in the Medicare Trust Fund. It licans are indifferent to our senior citi- for when it is the right time for tax takes funds that would otherwise be zens and to Medicare, or indifferent to cuts as if the timing is contingent on used for a tax cut for the wealthy, and Social Security. Let us not forget the Social Security the Government. uses them instead to maintain the I tell you. It is the American people’s lockbox is a Republican concept. health protection the elderly need and money. Their timing ought to be con- They come to us saying how aggres- deserve—and have earned. In terms of sidered. its effect on Medicare, it is no different sively they are supporting what hap- I think the American families need from depositing payroll tax receipts in pened in the House. It is about time resources to do for themselves now, the Trust Fund, as we do today. they started to support a lockbox of that they should have the money to do Those on the other side of the aisle some sort. They filibustered that at it for themselves, and not have to rely have tried to conceal their neglect of least six times previously to keep it on government. We should make that Medicare. They say that their plan from being here. It is time we have a choice. does not cut Medicare. That may be lockbox. I rise to say that this business about true in a narrow, legalistic sense—but We enacted a credible lockbox to pro- us not having a regard for Medicare it is fundamentally false in every way tect Social Security so our seniors should be dismissed. that counts. won’t be jeopardized by a reckless sort We want to reform Medicare. We Between now and 2025, Medicare has of effort to spend. don’t want to pour more resources into a shortfall of almost $1 trillion. If we There is real distress on the part of a bucket, the bottom of which is like a do nothing to address that shortfall, we our colleagues on the Democrat side of sieve. are imposing almost $1 trillion in this Chamber who are afraid we are not Sure. We will do what we can to sus- Medicare cuts, just as surely as if we going to leave enough money to spend. tain the system. It is sustainable, ac- said so directly in the text of the legis- Their spending habit is hard to break. cording to the most recent data, until lation. No amount of rhetoric can con- But I think we ought to understand the year 2014. It is good. But we ceal this fundamental fact. The au- the American people are paying in over shouldn’t decide to just pour money thors of the pending bill had a choice the next 10 years $3.3 trillion of sur- into that system. We should reform it. between supporting Medicare or slash- plus, and they don’t want to buy that There was a bipartisan commission ing Medicare—and they chose to slash much more government. They want led by Senator BREAUX that would have Medicare. some change to go to the store. reformed it. The proposed reform led A vote for our alternative is a clear You by a gallon of milk, and you give by Senator BREAUX wasn’t to take a lot statement that Congress should pre- them 10 bucks. You don’t expect them of money. As a matter of fact, it was to serve and protect Medicare for today’s to start adding other items to your save money. elderly and their children and grand- order to fill up what you could have We are willing to make resources children. Rejection of our alternative bought with your 10 bucks. You expect available. But the idea that somehow is an equally clear statement—in favor to get your money back when you pay we have to lock up $300 billion in order of new tax cuts for the rich, paid for by in a surplus, and the American people to make possible a reform of the sys- harsh and unacceptable cuts in Medi- should do that. tem when the $300 billion will keep peo- care. They suggested we don’t have any ple from wanting to reform it, and just In 1935, when President Franklin money to deal with a Medicare prob- wanting to spend what is there is not Delano Roosevelt signed the Social Se- lem. It is pretty clear we have $505 bil- the way to handle the problem. curity Act, he said it was ‘‘a corner- lion available to deal with Medicare, if The chairman of the bipartisan com- stone in a structure which is being we choose to, over the next 10 years. mission, Senator BREAUX, I don’t be- built but is by no means complete.’’ Just for example, the President said lieve supported that provision when it The creation of Medicare 30 years he could fix it for $48 billion. And $505 was before the Finance Committee. I later added significantly to that struc- billion is 10 times that much. But I don’t think we should support it now. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9513 But it is time for us to say to the milk, another ham or another box of when they retire. Under the current American people what we said in our cereal, another box of nails or hammer budget rules, this revenue is treated budget process, what the Senate voted, if you are at the hardware store, when like revenue from another source—it is I believe, 99–0 to do; and that is to lock a person has paid more for the item put into the general fund and then up the Social Security surplus. than requested, they get their money spent. The lockbox would capture the It is a program which we promised to returned. difference between the inflows to the the American people. It is a program Return the money to the American Social Security trust fund and the pay- that can go forward. We ought to have people. The American people earned ment of benefits to current retirees— that resource available to them. We this money. This is not money that reserving it for the Social Security agreed on that. The House agreed on came from Government. This is not program and helping to guarantee ben- that. from the magic of the Congress. This is efits for future retirees. Talk about the House agreement on not from the creativity of the Presi- The amendment that we are debating the other side of the aisle, yes. This is dent. This isn’t the product of the bu- tonight also prohibits transfers be- what the House agreed to—lock up So- reaucracy. This is the product of the tween the general fund and Social Se- cial Security. I think that is what we hard work of American families. In curity. That is an important provision, ought to do. many families, both parents work. In it prevents the president and Congress We expect to have $2 trillion in So- some families, both parents are work- from playing hide the ball and shifting cial Security surpluses over the next 10 ing two jobs or extra work. They have money from the Social Security trust years. We ought to make sure we don’t sacrificed and sweat. It is their money. fund to the general fund and replacing spend it on anything else. That is the We have to make a decision. Are we that money with IOUs. An IOU in the Republican plan. It ought to be the Re- going to fund families in this country Social Security Trust Fund is an obli- publican plan. It is the Democrat plan, or are we going to fund bureaucracy? gation of the United States Govern- and the President’s plan. The President Are we going to let families have an ment, it is a debt that we must pay agreed to it. He said we needed a dura- opportunity to spend the resources back. Where is that money going to ble lockbox, ‘‘period.’’ He didn’t say a which they have created? We must. In come from? We cannot repay an IOU lockbox for Social Security and add order for them to be confident about with an IOU. We must hold on the So- Medicare. The President didn’t say the fact we are not giving away the fu- cial Security surplus in a budgetary that. He said we need a Social Security ture, make clear that the President has lockbox and protect it. lockbox, period. The ‘‘period’’ was his said we need what the House of Rep- The Social Security lockbox will also language, not mine. It is not some Re- resentatives voted 416–12 in favor of, protect the Social Security surplus publican plot. The President said it. and that is a lockbox to protect Social from wasteful spending and ensure that The House of Representatives said it. Security. the money will be there to fulfill future The Republican Senate has been asking With that in mind, I say we have a obligations. Just as corporations are for it, filibustered on the other side of responsibility to the American people prohibited from spending their pension the aisle time after time after time to put the Social Security proceeds in funds on regular business expenses, after time after time after time, and the lockbox, to have a prudent ap- Congress should have the same restric- now trying to keep us from doing it proach to the rest of the expenses. Say tions on the Social Security surplus. If again. to the American people with that $800 company executives handled pension I think we need to make sure we billion over the next 10 years: You funds like the current use of Social Se- honor and respect the retirement secu- earned it; we returned it. Let’s end this curity the executives would be in jail. rity of individuals who expect us to idea of: You send it; we spend it. Our The temptation to go back to the old protect Social Security. desire and appetite should not be un- tax and spending ways is too great if Having done that, and we find out limited. Congress has access to a growing pot of there is roughly half of the next 10 I thank the Chair for this oppor- money. Congress must not go back to years’ surplus that is not earmarked tunity to support the concept of a the old spending rules. Just because we for Social Security and it is not paid in lockbox. have a surplus does not mean hat the for Social Security, that money could I reserve the remainder of my time. battle has been won. It means that we be divided between tax relief and re- Mr. ENZI. Mr. President, I rise in must continue to be watchful and en- sources for contingencies that come up support of Senator ABRAHAM’s Social sure that the surplus is used wisely. in this body, or to the United States Security lockbox amendment to the One of the attacks we have heard Congress. That is why we planned $792 Taxpayer Refund Act. This is the third from the White House and the Demo- billion in tax relief. time the Senate has considered this crats is that the we should not refund Some say: Is that too much? Is it too language and I believe it is appropriate American’s hard-earned money to them little? It is 23-plus percent of the total that we take up this matter during the because we still have an enormous fed- surplus. debate on the returning the non-Social eral debt. I find this argument aston- The lion’s share of the total surplus Security surplus for tax cuts. This ishing given the spending appetites of should go right into this lockbox. This amendment should put an end once and many on the other side of the aisle. proposal that Senator DOMENICI, Sen- for all to the rhetoric about raiding the There is nothing quite like a good tax ator ABRAHAM, I, and other Senators Social Security trust fund to provide cut to turn a tax-and-spender into a have been talking about, taking Social tax cuts. By passing this amendment, deficit hawk. While I fear this interest Security money and earmarking it for the Social Security surplus will be pro- in retiring the national debt may be Social Security benefits alone, and tected. short-lived metamorphosis, I welcome then reserving the $505 billion that is Congress has the responsibility to the interest of my colleagues from the available in addition to that for future create a firewall between the Social other side of the aisle in fiscal respon- contingencies and needs including, if Security surplus and the discretionary sibility. In fact, I would invite them to necessary, transitional costs for reform surplus to ensure that we can meet the join me as a cosponsor of Senator in Medicare. The Senator from Ten- future needs of retirees. The Social Se- ALLDARD’s bill to retire the entire na- nessee eloquently related comments by curity surplus is spoken for and Con- tional debt over a 30-year period. I be- the Comptroller General of the United gress must take steps to ensure that lieve that debt reduction is consistent States. the money is protected and ready for with a tax cut. We need to pay off our This is a resource we now have that the future. debt obligations and trim the allow- we do not have a right to keep, in my The source of the surplus is a rising ance of the federal government by re- judgment. The American people have inflow of Social Security payroll taxes. turning some of the taxpayers overpay- overpaid their taxes. Like a shop- This is money that comes out of the ment to them. keeper, who has a responsibility to give paycheck of every working American The lock-box amendment furthers back change when they are paid too who has been paying into the system this goal of debt reduction. This much for an ordered item, rather than and we deserve to give them some as- amendment includes higher debt reduc- trying to foist off an extra gallon of surance that the money will be there tion provisions than previous lock-box S9514 CONGRESSIONAL RECORD — SENATE July 28, 1999 proposals. As the surplus has continued There is a deeper choice I want to I suspect again tomorrow procedural to grow Senator ABRAHAM has moved talk about for a moment. It is a choice impediments will be placed in the way the bar higher. The amendment re- that many senior citizens in our coun- of our efforts to try to protect the So- quires more debt reduction as the sur- try make each day. Do they choose to cial Security surplus, even as everyone plus grows and I believe the American use their income to pay for drugs or do in this place makes at least verbal as- people expect that. Debt reduction cre- they choose their income for food, to sertions that they want to protect that ates a ripple effect throughout the pay the rent, or to pay for the bus? surplus. economy in the form of lower interest That is the choice that many senior But we will keep trying. Whether or rates for home mortgages or car loans citizens make each day. not we have 60 votes tomorrow, we are or student loans. About 16 million Americans are faced going to continue this battle until it is The time has come for the White with that choice a day. That is, 16 mil- won. Every single Member of the Sen- House and my colleagues on the other lion Americans rely solely on Social ate, I think, hears from their constitu- side of the aisle to finally provide pro- Security for their income. About 30 ents what this Senator hears when I tection for the Social Security pro- percent of American senior citizens am back in Michigan; an ongoing and gram. Congress must not continue to rely solely on Social Security for their ever increasing level of frustration pay lip service to the concept of pre- income, which comes out to about $750 that our seniors, as well as almost any- serving the Social Security surplus. We a month. Seniors with a total income body who pays money into the Social must take the bold steps necessary to of about $750 a month have to make Security fund, has with the notion that ensure that the program is around for choices. Choose for drugs, choose to we spend those dollars on anything the long term. We must not use long pay the rent, choose to pay the food other than Social Security. We have tried to make this a simple term funds to satisfy short term wish- bill, the bus, taxi service—those are issue from the very beginning. We have es. I urge may colleagues to join me in the choices. They have to decide which tried various forms of this lockbox. We supporting this important in the Tax- among the choices to make. have offered different types of amend- payer Refund Act of 1999. We are saying let’s help the seniors ments to try to address concerns that I thank the Chair and yield the floor. with that choice. Let’s help seniors pay have been raised. Each time, proce- Mr. BAUCUS. Mr. President, I yield the drug bill. Let’s help seniors pay a dural roadblocks have been placed in myself 5 minutes. little more of the doctor bill. If there is our way. My understanding and expec- Mr. President, a couple of points. I anything that obsesses senior citizens, tation is that they will be placed in our heard my good friend, the Senator from it is their health. way again tomorrow. But the bottom Missouri say, as has often been stated, I will never forget when I was walk- line is that—and I agree with the Sen- they are using only 23 percent of the ing across Montana campaigning for ator from Montana—that Republicans surplus for tax reduction. Congress 24 years ago, I was walking do want to cut taxes more than Demo- I think it is important to get the toward Butte, MT, near Elk Park. I crats. There is not much disagreement facts out so the American public can was walking down the highway, and I about that around here. That, I believe, decide what the truth is. The fact is, could see perpendicular to me an older reflects a clear distinction between us. about $3 trillion is projected over the fellow hunched up way off in the dis- And we Republicans want to protect next 10 years. Mr. President, $2 trillion tance walking toward his mailbox. I Social Security with a tough lockbox, off-budget, Social Security surplus; $1 could tell we were going to meet at the the very lockbox that has frequently trillion on-budget surplus. No one dis- mailbox. I had my brochure in my been criticized tonight because it is so putes that. pocket in my campaign for Congress. We also agree that the roughly $2 tough. Sure enough, we met at the mailbox. I The question is, where is the beef? trillion generated by the payroll tax, pulled out my brochure and said: Sir, I The answer is in our lockbox. It is so the off-budget surplus, should be re- am Max BAUCUS. I am running for Con- tough that in fact we have been criti- served for Social Security. We all agree gress. Is there anything on your mind cized for making it too tough. That is to that. What is in dispute is the $1 you want to talk about? Anything that where it is. It is in the teeth we have trillion remaining on-budget surplus. is really bothering you that you want put in the lockbox. The Republican tax cut essentially to talk about? We are going to try again tomorrow. uses it all, roughly $800 billion, plus He said: Oh, nothing except the We are going to try tomorrow to pass the interest expense added on because perplexities of health. this lockbox proposal in a form that the tax cut will increase interest, It is certainly true for seniors, and he will absolutely guarantee that Social which amounts to a 97-percent tax cut very much was a senior citizen. Security money sent to Washington by of the on-budget surplus. In summation, this is about choices. people who pay payroll taxes is pro- So that we have our facts straight, it I think the choice is for Medicare, not tected from any spending of any kind. is roughly 25 percent of the total, if we against Medicare. The choice is also to The budget that has been offered by include the $2 trillion for Social Secu- help those senior citizens pay for their the President is a budget that actually rity that we all agree to protect. What medical benefits. I hope Senators spends over one trillion new dollars of is in dispute is how much of the $1 tril- choose for seniors. that surplus over the next 10 years. We lion on budget is used for a tax cut. I yield back the remainder of my say those choices, as to how that sur- The answer to that is about 97 percent, time. plus ought to be spent, should reside in including the interest. If interest is not The PRESIDING OFFICER. The the hands of the people who earned the included, maybe about 60 or 70 percent Chair recognizes the Senator from money and paid the taxes and sent of the surplus is used for a tax cut. Michigan. them to Washington. We say take all Decide which numbers to use. Those Mr. ABRAHAM. How much time re- the Social Security money, protect it are the facts. I will not stand here and mains? in a tough lockbox, and then let’s re- say it is necessarily 97 percent or it is The PRESIDING OFFICER. Seven turn 25 cents out of every surplus dol- necessarily 23 percent. I think people minutes twenty-three seconds. lar to the men and women in our coun- should recognize what the truth is. Mr. ABRAHAM. I will not use all try who earned those dollars in the I have a couple of points. This is that time. first place. about choices. Either we choose to set First, I thank the manager of the As I have tried to indicate tonight, aside one-third of the on-budget sur- bill, Senator ROTH, for his patience and we have endeavored, on six previous oc- plus for Medicare for seniors, or we the support tonight in this debate. I casions, to try to pass this lockbox. In don’t. That is the choice. That is the thank all the Senators who have spo- each case procedural impediments have choice we have between the two ken on our side, to argue, once again, been placed in our way to prevent it lockbox amendments. One says lockbox for the Social Security lockbox. We from happening. We would just like to Social Security only; the other says have been doing this now for almost 3 have a chance to have an up-or-down lockbox Social Security and Medicare. months. I assure our colleagues will vote. If we have 50-plus votes, then we We believe the proper choice is to pro- continue to do this as long as we have will have a Social Security lockbox. tect Medicare. to. Hopefully we will get that chance. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9515 Mr. BAUCUS. May I ask the Senator then we will be back again as we have AMENDMENT NO. 1401 a very gentlemanly, civil question? been over the last 3 months, endeavor- (Purpose: To delay the effective dates of the Mr. ABRAHAM. The Senator from ing to find a way to finally get the provisions of, and amendments made by, Michigan, the lead sponsor of this, has American people that which they want. the Act until the long-term solvency of So- very little time left. cial Security and Medicare programs is en- But, in closing, as we examine this sured) The PRESIDING OFFICER (Mrs. issue, as we consider the next 10 years, HUTCHISON). Does the Senator from if we are really going to have, as cur- Mr. ROBB. Mr. President, I send an Michigan yield? rent projections indicate, almost $2 amendment to the desk and ask that Mr. BAUCUS. I ask the Senator trillion in Social Security surpluses, we consider it for debate at this time whether he would agree to the lockbox and if we do not do something soon to and that the vote occur on this amend- the House passed? protect this with a lockbox, those dol- ment at the time previously designated Mr. ABRAHAM. Let me say this. We lars are going to start to be spent. under the unanimous consent agree- have offered that to the Senate to be There will be great arguments made for ment. considered. One of the cloture votes cutting into portions of it this year The PRESIDING OFFICER. Without which was offered was on the House and the same will happen next year, as objection, the clerk will report. lockbox when they passed it. And once has been happening for so many years The legislative clerk read as follows: again, on party lines, we came to the already. This Senator is doing every- The Senator from Virginia [Mr. ROBB], for himself, Mr. GRAHAM, Mr. ROCKEFELLER, Ms. well of the Senate and our effort to thing he can to try to make sure those pass that bill was prevented. MIKULSKI, Mrs. MURRAY, and Mr. BRYAN, pro- efforts to take money out of the Social poses an amendment numbered 1401. All I am saying is we would like to Security trust funds for other pro- Mr. ROBB. Mr. President, I ask unan- have a final up-or-down vote on this. grams do not happen any longer. imous consent that the reading of the That is what we are asking for. All this debate which has gone on for Mr. BAUCUS. Madam President, one amendment be dispensed with. 3 months has done nothing more than more brief question? The PRESIDING OFFICER. Without delay and keep open the possibility Mr. ABRAHAM. I am going take objection, it is so ordered. that Social Security money would be back my time actually, Madam Presi- The amendment is as follows: spent on other things. I do not believe dent. I am the only person who has At the end add the following: we should let that happen. I think we been on the floor tonight who has not TITLE XVI—DELAY IN EFFECTIVE DATE should pass a lockbox tomorrow. If spoken. The Senator from Montana had Notwithstanding any other provision of, or somebody gets 50 votes for their pro- two opportunities to speak. I refrained amendment made by, this Act, no such pro- posal, then my recommendation is we because we had so many speakers on vision or amendment shall take effect until should not use any procedural impedi- our side. I would like to summarize. I legislation has been enacted that extends the ments to prevent that proposal from solvency of the Federal Old-Age and Sur- have a feeling the debate is not over on happening. The President says he vivors Insurance Trust Fund and the Federal this topic and we will have other op- wants it. Even the House has passed a Disability Insurance Trust Fund under sec- portunities. tion 201 of the Social Security Act through I just want to say we brought up the version, not the one we are offering, but they passed one nonetheless. So 2075 and the Federal Hospital Insurance House lockbox on the floor. It was pre- Trust Fund under part A of title XVIII of vented from moving forward. We let’s go forward. If somebody gets 50 such Act through 2027. percent let’s move this issue out of the brought up the tougher version, the Mr. ROBB. Mr. President, I am Senate and on towards final comple- Senate version we are offering tonight. pleased to offer this particular amend- tion. We have not had a chance, because of ment with my long-time friend and col- I gather my time is up, and I appre- procedural impediments, to vote on it. league from Florida, Senator GRAHAM, One proposal I hope might be followed ciate the debate that has happened this and others who join us. Both Senator evening. up on is a simple one. Tomorrow maybe GRAHAM and I served as Governors be- neither side should impose procedural The PRESIDING OFFICER. The Sen- fore coming to this body, and our views impediments, and if one or the other ator from Montana is recognized. on fiscal matters are frequently very version of this gets a majority of votes Mr. BAUCUS. Madam President, I much in sync as they are on the in the Senate, then let’s move it for- suggest the absence of a quorum, and amendment we offer this evening. Hav- ward. I suspect that will not happen. I in so doing state to my colleagues the ing served as executive officers of our am not going to ask anybody to answer next amendment will be offered by the States, we share a somewhat unique that tonight. But tomorrow I may Senator from Florida. He will be here perspective, and it is from that par- make a pitch and an appeal to our col- momentarily. ticular unique perspective that we offer leagues to let each side have their vote. The PRESIDING OFFICER. The this amendment. If one or the other of these lockboxes clerk will call the roll. The amendment simply states that if gets 51 votes, let’s move it forward. The Legislative assistant proceeded it is the will of a majority of the Mem- Let’s give the American people what to call the roll. bers of this body to enact the tax cut they want. That is a lockbox to protect Mr. GRAHAM. Mr. President, I ask before us, let’s at least accept responsi- Social Security. unanimous consent that the order for bility for strengthening Social Secu- Madam President, to me that makes the quorum call be rescinded. rity and Medicare first. In short, let’s sense. To me it certainly is consistent The PRESIDING OFFICER (Mr. get our priorities straight. with what voters in our States want, ENZI). Without objection, it is so or- We all understand the allure of tax what people who pay payroll taxes dered. cuts. I do not know many Americans want. It is overdue. who would not like to have a few extra This Senator will come back, if he PRIVILEGE OF THE FLOOR dollars to spend on something, and I do has to, time after time, well into the Mr. GRAHAM. Mr. President, I ask not know many Americans who truly night if we have to, to make this case. unanimous consent that Alison Egan enjoy writing a check to the IRS. Most But it is a simple one—are we or are we and Patricia Daugherty of the Finance of us work hard to minimize legally not going to really protect the Social Committee be granted the privilege of what we have to pay to Uncle Sam to Security dollars, that are sent to the floor during pendency of S. 1429, a run our Government, and most of us Washington, from being spent on any- bill to provide for reconciliation pursu- can find areas where we would like to thing other than Social Security? I say ant to section 104 of the Concurrent see Government spending cut or elimi- we should. I think we should use a Resolution on the Budget for the Fiscal nated altogether. Sure, we like and, in- tough lockbox to make sure that hap- Year 2000. deed, expect many of the services and pens. We have a chance tomorrow to The PRESIDING OFFICER. Without protections Government offers, but we vote on these two lockbox proposals. I objection, it is so ordered. do not like to have to pay for them. say, if one of them gets 50 votes, that The Chair recognizes the Senator To enact a tax cut of this magnitude ought to be good enough, if it is true from Virginia. at this time when the economy is not we all want a lockbox. If it is not true, Mr. ROBB. I thank the Chair. in need of an economic stimulus, when S9516 CONGRESSIONAL RECORD — SENATE July 28, 1999 we have not fixed Social Security, gram and a strengthened Medicare pro- been used to reduce the Federal debt— when we have not fixed Medicare, when gram. since that use will now be diverted to we backload all of the tough decisions The bill that was reported by the tax cuts, that means we will be re- future Congresses will have to make to Senate Finance Committee and its quired to pay out an additional $100 bil- pay for the cuts, when we frontload companion, which has already passed lion in interest during the next 10 only the politically popular promise of the House of Representatives, would years. With the combination of the lost more than we are actually delivering, cut taxes by approximately $800 billion interest savings associated with these when we know that discretionary over the next 10 years. tax cuts and the lost revenue from the spending assumptions are unrealistic Some have claimed—and claimed on tax cuts themselves, the surplus dis- and unattainable, when we are already this floor earlier today —that a tax cut appears completely, leaving no re- breaking the spending caps we have of $800 billion is the ideal way to usher sources to strengthen Social Security pledged to adhere to in the Balanced in a new era of budget surpluses and to or modernize Medicare for our Nation’s Budget Act we passed just 2 years ago, maintain the economic growth and older citizens. when we know defense spending is prosperity through which we are cur- Although we cannot accurately pre- going to have to increase well beyond rently living. I could not disagree dict how the economy will perform the current baseline, when we know more. over the next 10 years, we do know that that correcting a course of action will With all due respect to my col- demographic changes taking place in be far more difficult than anything we leagues, the tax cut jeopardizes the America will place a tremendous strain are bent on doing with this bill, Mr. long-term solvency of two of the crit- on Social Security and Medicare. President, I submit that to pass this ical programs for millions of Ameri- Our elderly population is growing bill at this time without this amend- cans—Social Security and Medicare— quickly. Those seniors are living longer ment would be ludicrous. It would be programs for which there is a solemn than ever before. As a result, Social Se- fiscally irresponsible in the extreme. It contract, a contract between the Amer- curity is projected to run its first ever would be as fiscally irresponsible as ican Government and its people, a con- deficit in the year 2014. anything Congress has contemplated tract which is now in question. It has been stated that all we have to during the 11 years I have served in There are a series of rather straight- do to save Social Security is to lock up this body, and we are doing it all in the forward questions that lie at the heart the $1.9 trillion that will be derived by face of a certain Presidential veto. Is it of this debate: Do we live for today? Do the Social Security surpluses in a any wonder people lose faith in their we consume for today’s satisfaction? lockbox, that we can wipe our hands of Government? Or do we plan, do we save, do we pre- any further responsibility for the sol- Enacting massive tax cuts today be- pare for tomorrow? Do we support fis- vency of Social Security. As you well fore addressing the obligations we cal gluttony or fiscal discipline? The know, the fact is that that will only know we have tomorrow is reckless. question our children might ask is, do extend the Social Security solvency to Those who propose this approach are, we eat our dessert before or after spin- approximately the year 2034. Yet our in effect, buying political benefits by ach? commitment is to preserve Social Se- using our children’s credit cards. We The amendment Senator ROBB offers curity for three generations, not only curry favor today and leave the bill for delays the effective date of any tax cut to those who are the current bene- others to pay. A surplus is what is left until after legislation strengthening ficiaries, not only to those who will over after we have met our obligations, Social Security and Medicare has been soon become beneficiaries but to their and we will not know what our obliga- enacted. This proposal, I suggest, is not children and their grandchildren. A tions are until we reform Social Secu- dissimilar to the approach which has three-generational solvency for Social rity and Medicare. been proposed by the leadership in the Security cannot be achieved through I am pleased to offer this amendment House of Representatives. They have the singular step of investing all of the with my distinguished colleague from agreed that debt reduction, at least as Social Security surplus into strength- Florida and many others who are act- measured by interest expense, should ening the Social Security trust fund. ing as cosponsors. I say in the spirit of take priority over tax cuts. Under the Even worse than the challenge faced the amendment that we all have enor- House proposal, tax cuts are not made by Social Security is the challenge mous respect for the chairman of the if interest payments do not decline. faced by Medicare. The twin pillars of committee and the bipartisan effort Similarly, our amendment places the security for older Americans—financial that has preceded this particular point preservation of Social Security and security through Social Security, in the debate. But we are simply—I am Medicare as higher priorities than tax health security through Medicare. simply unwilling—we are simply un- cuts. The amendment states that be- The trustees of the Medicare fund willing to accept the fact that we fore any tax cut proposal can be imple- have reported that Part A, the hospital should move forward with the tax cuts mented, Congress must pass, and the payments, already exceed the pro- before the surplus upon which those President must sign, legislation ex- gram’s revenue and will do so in each tax cuts are premised has actually ma- tending the solvency of Social Security of the next 15 years. terialized. three generations, or to the year 2075. In addition, not only does the pro- Mr. President, I yield the floor to my The Congress must also pass, and the gram have a serious financial problem, distinguished colleague from Florida. President must also sign, legislation Medicare is an increasingly out-of-date Mr. GRAHAM addressed the Chair. that modernizes the Medicare program program and one that fails to take ad- The PRESIDING OFFICER. The and extends the solvency of the hos- vantage of the benefits of modern med- Chair recognizes the Senator from pitalization program within Medicare ical science. We have a program which Florida. through the year 2027. is from the model year 1965 when we Mr. GRAHAM. Mr. President, the Unfortunately, the tax cut proposal desperately need one worthy of the 21st issue before us with this amendment is on the Senate floor does not just delay century. what is the proper order of consider- our efforts to preserve these important For example, we should increase the ation of the issues challenging our Na- programs for future generations; it number of important preventive bene- tion? In the Bible it talks about the brings these efforts to a screeching fits available to Medicare. We should fact that there is a season for all halt. The $800 billion tax cut in the provide for programs such as hyper- things. There is a season to plant; plan before us represents over 80 per- tension, programs like glaucoma, for there is a season to harvest. The ques- cent of the projected non-Social Secu- smoking cessation, for the manage- tion is, What is the season of America rity surplus over the next 10 years. ment of hormones—all of which would here in late July of 1999? I point to this chart, which indicates extend the quality and the length of The position Senator ROBB and I and that through the combination of the life, all of which are within the current our cosponsors take is that the season tax breaks of $792 billion, and then the extents of modern medicine. Yet the is not for a massive tax cut until we interest which we will have to pay— Medicare program does not provide have planted and harvested the seeds of rather than as our budget has been cal- those or many other of the important, a strengthened Social Security pro- culated, those $792 billion would have proven preventative measures. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9517 We need to support that preventive Mr. ROTH. Mr. President, I yield to Some people say we are cutting effort by extending Medicare to include the Senator from Tennessee such time money from education and the environ- a prescription drug benefit, which is as he may require. ment and all that. It is not true. It is not only an important part of treating The PRESIDING OFFICER. The absolutely not true. We got together as chronic diseases but a critical part of Chair recognizes the Senator from Ten- a Congress with the President a couple maintaining the health of our older nessee. of years ago and agreed to abide by citizens. Mr. THOMPSON. I thank the Chair, some caps. That was the deal. We are Private health care plans long ago and I thank Senator ROTH. trying to stay with that deal. After recognized that prescription drugs are It must seem strange to those watch- that deal runs out in 2002, we, as a Con- a vital tool in efforts to save lives, im- ing this debate that people on both gress, can spend the money however we prove health quality, and prevent and sides who have the same interest come want to. treat sickness and disease. to such different conclusions about My personal opinion is, we need to Medicare will not be relevant in the how to get where we both say we are put some more money into some things 21st century if it does not cover the trying to go. and we need to take some money out of treatments physicians use and patients There is no controversy with regard things on which we are spending require. to the need to do something about money. That is what Congress is all Yet the tax plan before us says noth- Medicare and Social Security. We all about. So this business that we are ing about preserving Social Security to know that. There is no controversy going to be cutting this program and the year 2075 or protecting and about the need to do something not cutting that program would lead some- strengthening Medicare to the year just for ourselves but the next genera- one watching us to believe that in our 2027. Instead, it blindly devotes vir- tion and the next generation after proposal we are slashing this and slash- tually all of the non-Social Security that. I think that is why many of us ing that. That is what the President is surplus to tax cuts without considering came to the Congress and to the Sen- going around and saying, and he is mis- the larger budget issues, issues which ate. We wanted to give back a little leading people when he is doing that. hang over us like the sword of Damo- bit. We wanted to look forward. We When we increase, we have certain cles. wanted to do some of those tough constraints. There is no question about things that maybe we thought anybody Despite a record economy, the best that. I make no apologies for it. I think couldn’t do and we could maybe come fiscal situation since the late 1960s, it is a good thing. It is what we agreed in for a little while and do that. this tax bill passes on the hard choices, to do. Even past that, we should have Yet here we are, with such diamet- passes on the choices that are going to certain constraints. But within that rically different views as to what will be important to our children and our framework, we have the ability to accomplish that. That is what makes grandchildren. spend more money on some things and good debates, and we have heard a fine less money on others. That is as far as The deficit may be gone, but we are presentation with regard to this discretionary spending is concerned. still operating under the same pass- amendment. But I think it is totally Now, with regard to Medicare and So- the-buck-to-the-next-generation men- shortsighted and misguided. cial Security, the proposal before us tality that created it. Talk of an $800 In the first place, let’s not forget basically takes our natural sentiment billion tax cut versus a $500 billion tax what we are about. We are about the to be very concerned about Medicare cut versus a $250 billion tax cut, all of question of whether or not we should and Social Security, because they are those miss the fundamental point. The have a tax cut with a projected $3 tril- in trouble, and says let’s hold every- fundamental point is, Congress should lion surplus. Some people are sus- thing off until we solve that problem. not pass any tax cut until we have picious of these projections. I am sus- That sounds like a good idea, if this strengthened Social Security by mak- picious of most projections. We know it proposal that is before us right now ing it solvent for three generations. We will not be exactly right. We just don’t would solve that problem. It would not. should not pass any tax cut until we know which direction or how much. It would exacerbate the very problem modernize Medicare by increasing the But this Congress gets together quite we say we are trying to solve. number of preventive benefits, incor- often and passes tax cuts. If a little far- This amendment would say we can’t porating a prescription drug benefit, ther down the road we have been prov- have any tax cuts until we pass legisla- and securing the program’s fiscal en to be incorrect with regard to our tion that will make Medicare solvent health. Those should be our priorities. projection, it won’t take us very long to the year 2027 and make Social Secu- When this amendment was intro- to come in here and raise additional rity solvent to the year 2075. What is duced during last week’s Finance Com- revenues if they are needed. It happens magic about those dates? What about mittee markup, it was defeated on a all the time, in my opinion, whether the year after 2027? We have been talk- strict party-line vote. It is my hope they are needed or not. ing about what is going to happen in that bipartisanship, common sense, re- On the other hand, if we spend an ad- the year 2030. We are going to have spect for future generations of Ameri- ditional trillion dollars, as the Presi- twice as many people over the age of 65 cans will prevent a similar outcome on dent suggests, that is gone. If we add at 2030. Why would we want to make it the Senate floor this week. But if it on additional entitlements without the solvent to the year 2027 when we are does not, I am very confident and, ability to pay for it when our entitle- going to be right in the middle of frankly, very proud that President ments are eating us alive in terms of crunch time? Clinton has stated he will veto any tax squeezing out spending for everything There is no magic to these dates. cut proposal that does not put Social else, we will never reverse that process. Where these dates come from is the Security and Medicare first. He is in I fail to see the danger, the treach- President of the United States. These the fiscally responsible position, one erous nature of a tax cut, because we are President Clinton’s dates. These that values wise preparation over in- can raise taxes anytime we want to. are the dates to which he says what he stant gratification. But right now on the table we have a $3 is doing will extend Medicare and So- Now is the time to extend the life of trillion projected surplus. It is really cial Security. And they won’t. Medicare and Social Security. Later, if very simple. What do we do with that? I think that most economists, most our fiscal situation permits, it might We say that actually less than 25 per- objective observers, the Comptroller be time to enact tax cuts. But my first cent of it, a little over 23 cents on the General, the CBO, and everyone else priority, shared by Senator ROBB, is to dollar, should go back to the tax- who has taken a look at it basically ac- my nine grandchildren and the other payers. The rest of it goes to debt re- knowledged that. But it is suggested children of their generation. I hope my duction, Social Security, whatever we that we wait before we have any tax colleagues will join me in making this choose to spend with regard to Medi- cuts until we agree on legislation that the priority of Congress as well. care or any other items of preference will solve these problems by those I thank the Chair. on which we believe we need to spend dates. Can you imagine that process? The PRESIDING OFFICER. Who money. And we can’t tell that year to Can you imagine our agreeing on what yields time? year. legislation in effect accomplishes that? S9518 CONGRESSIONAL RECORD — SENATE July 28, 1999 I can tell my colleagues—and I think a way that will produce more off the would produce much more than what most observers I have read who have a investments than are being made. the Social Security system is pro- job in looking at these things would Now we have bipartisan legislation ducing today. Those are the only conclude—that the President’s pro- over here—the Senator from Virginia things we can do. I do not believe these posal does not do that. What the Presi- and I—on a bill that we think will do other things are serious in the effect dent basically proposes—and he is able that. That is the only kind of thing they would have. to say this with a straight face because that will do that. Transferring more Of course, again—and I mentioned it it is so complicated; it is difficult to general revenue funds—as I put it ear- several times today—we are dependent understand—is saying, okay, we have lier, putting more water into a leaky upon the President’s support, I guess, trouble with Medicare and Social Secu- bucket, when the hole in the bottom of to pass a bill that will do these things rity. For the most part we have dedi- the bucket is getting bigger every when, on the other hand, he is doing cated sources, FICA taxes, to take care day—will only carry us so far, they everything he can to prevent reform. of most of all that. But we have trouble think until 2027 on Medicare and 2075 We had a bipartisan Medicare commis- with that now. So instead of dis- on Social Security. It might. It might sion. We have these bipartisan bills. As ciplining ourselves, let’s go to the gen- get us that far if we put enough general far as the commission is concerned, the eral revenue, because we have some revenue funds in while we have a sur- President did everything he could to extra now, and instead of reforming plus. I assume it very well might get us defeat the recommendations there. Medicare and Social Security and to 2027. Democrats and Republicans—and Sen- doing those things that the Medicare So what. Don’t we have an obligation ator BREAUX chaired that commission, Commission tried to do, instead of past that? Don’t we have an obligation a Democrat—worked together and doing those things that some bipar- to do something more fundamental? It came up with solutions. The President tisan Senators—the Senator from Vir- doesn’t take a genius to say you have would not support it. He would rather ginia is on one bill that I am on—in- some extra money, let’s just pour it on have a temporary political issue than a stead of doing those fundamental top of a broken system, or, as one of long-term solution to this problem. things to really solve Medicare and So- our Members likes to say, putting more That is very disappointing. Many of us cial Security, let’s just transfer some gasoline into an old run down, beat up, who were critical of the President some general revenues over into those items decrepit automobile doesn’t change the time ago thought that in his last cou- to serve as a temporary fix—in Medi- nature of that automobile. ple of years in office he might want to care’s case, until 2027. So the President’s plan with regard step forward and do this and leave that I don’t know what the idea is that we to so-called saving Social Security is kind of legacy. He could have done are supposed to do. I guess the idea is not a serious proposal. The President’s that. It is a wasted opportunity, and I none of us will be around here to have own budget—the document that he sub- regret that. to answer for it by 2028. But let’s look mits, the ‘‘Analytical Perspectives of So that is the Social Security plan, at it individually. Since this amend- the Budget of the United States Gov- one that doesn’t consist of real eco- ment is predicated upon the Presi- ernment, Fiscal Year 2000’’—says that: nomic assets and will have to be fi- dent’s proposal, I can only assume that Under the proposals in the President’s nanced by raising taxes borrowed from it takes the position that the Presi- budget, the trust funds balances are esti- the public or reducing benefits. dent’s plan works and the President’s mated to increase by approximately 70 per- What about Medicare? As I under- plan will actually get us solvency by cent by the year 2004, raising to $2.8 trillion. stand it, the President’s proposal there these dates. That is the part of the plan the Presi- basically transfers $327 billion from the But with regard to Social Security, I dent says will take Social Security out general revenue. CBO takes a look at it think both the majority leader and the and keep it solvent until the year 2075. and says it will make Medicare more Speaker of the House have reserved bill But the President’s own folks continue: solvent for several more years. It No. 1 on both sides for the President’s These balances are available to finance fu- doesn’t have a number on it. But this is Social Security bill, where he can sub- ture benefit payments and other trust fund what the professionals who look at this mit his legislation that he says will ef- expenditures—but only in a bookkeeping say about that. This is what CBO says fectuate his plan in order to save So- sense. These funds are not set up to be pen- about the President’s Medicare financ- cial Security. It hasn’t come yet be- sion funds, as are the funds of private pen- ing. Again, is this the solution to the cause I think most people realize it is sion plans. They do not consist of real eco- Medicare problems we have? Is this the nomic assets that can be drawn down in the not a serious plan. It is a transfer of future to fund benefits. Instead, they are reason why we can’t have tax cuts be- trillions of dollars of IOUs in the Social claims on the Treasury that, when redeemed, cause this is what we need to do? I Security trust fund, the creation of a will have to be financed by raising taxes, don’t think so. Listen: new debt that will constitute a burden borrowing from the public, or reducing bene- The President is proposing to augment on future taxpayers. fits or other expenditures. The existence of Medicare’s financing by making transfers You talk about looking out for the large trust fund balances, therefore, does from the general fund of the U.S. Treasury future. This is not looking out for the not, by itself, have any impact on the Gov- to the program’s trust funds. future; this is not looking out for our ernment’s ability to pay benefits. That sounds familiar—Social Secu- children and our grandchildren, by It is a shell game. His own folks, in rity and Medicare. transferring trillions of dollars in IOUs this thick document, basically tell it Consistent with the policy outlined in the that will have to be redeemed some like it is. When you hear him talk President’s budget for fiscal year 2000, CBO day. Then the President, of course, about it, of course, it is a little bit dif- estimates that $288 billion would be trans- doesn’t make these transfers until ferent. It makes you believe it is real ferred from the general fund to the Hospital starting 2011 because that is outside money and you are setting something Insurance trust funds over the next decade. the purview that we are looking at, and aside, and so forth. It is not. The only That transfer would delay by several years way we can reform this problem, and the projected date on which the HI [Hospital CBO and all these other commentators. Insurance] trust fund will become insolvent So nobody is really able to evaluate it the only way we are going to get our by committing future general revenues to very effectively. And then it takes the arms around it, is to increase FICA the program. It would do nothing to address money he says will come from all of taxes. We don’t want to do that. The the underlying rapid growth in spending for this and he has the Government invest working man is overburdened as it is Medicare that will eventually outrun the it. He has the U.S. Government invest today. Cut benefits. We don’t want to revenues dedicated to the program. it. do that, or come up with a system that Just on borrowed time, headed to- Chairman Greenspan says that is a is going to produce more revenue than ward a cliff. terrible idea. When you get right down the investment that our Social Secu- This plan does nothing to fundamen- to it, after all is said and done, there rity system has today, which is vir- tally alter that. are only three ways to solve this prob- tually nil. We can put a little part of it The Comptroller General, talking lem, in terms of Social Security: You in the stock market, and even if the about the President’s proposal—again, have to increase taxes, you have to cut market crashed, unless we had unprec- this amendment is based upon the benefits, or you have to come up with edented decades of low market, it numbers, as I understand it—if I am July 28, 1999 CONGRESSIONAL RECORD — SENATE S9519 wrong about that, I can be corrected. diverted with false reasons as to why out for tax cuts is a time when the But they are the same numbers that we shouldn’t have a tax cut. economy is not in need of the economic the President has been using through- We have had more reasons in one day stimulus that would come with a tax out his plan. The Comptroller General than you can shake a stick at as to cut. says: why the world would come to an end if The one thing that the Fed seems to I feel that the greatest risk lies in extend- we had a tax cut. There is no good time suggest to us is that a tax cut could ing the HI trust fund solvency while doing for a tax cut for some people because a overheat the economy and would have nothing to improve the program’s long-term tax cut has more to do with than just consequences that we are trying to sustainability, or worse, in opting for dollars and cents; it has to do with the avoid at this particular time. But the changes that may aggravate the long-term exercise of who is going to make deci- bottom line is this: We are not sug- financial outlook for the program. sions in this society. Money is power. gesting anything but, hold up. We are What he is talking about is some- Where the money lies is where the saying in effect, What is the hurry? thing that might not only not do any power lies. Is it going to be in the There is no compelling urgency to cut good in terms of a fundamental sense pockets of the American people, or is it taxes, particularly when we are talking but will aggravate the problem. If we going to be in our pockets? about a tax cut of this magnitude that deceive ourselves into believing that Some say we have been a little bit can be addressed next year, or the year by using general revenue moneys we too reticent ourselves because we say after, or whenever we find that we can are really doing something to solve the of the surplus dollar that only 25 per- afford to make that kind of a tax cut Social Security/Medicare problem, it cent or less should go into the Amer- after meeting our obligations, such as will put off real reform and wind up ican people’s pockets. But to call that protecting Social Security and Medi- hurting Social Security and Medicare. dangerous, to call that gluttonous, to care. It encourages us to wait. We can’t af- call that selfish greatly exceeds the That is all we are saying. We are only ford to wait for fundamental reform. mark. suggesting that, because of the mag- We have in excess of $500 billion in I urge the defeat of the amendment. nitude of this particular bill, we ought our proposal that can be spent for tran- Thank you, Mr. President. to suspend this particular tax cut until sition costs, Medicare, any other dis- The PRESIDING OFFICER. The Sen- we have achieved those objectives. I cretionary spending proposals that we ator from Virginia. suggest that is a relatively modest re- as a Congress decide to spend it on. Mr. ROBB. Mr. President, I thank straint on our activities, but it is a fis- That is general revenue money, too. you, and I thank the distinguished Sen- cally responsible approach to take. There is no question about that. ator from Tennessee for his comments. I have to tell the distinguished Sen- But, fundamentally, both sides have I think he is absolutely correct in that ator from Tennessee that there are to come together on an agreement that there is much that we agree upon. I many on this side of the aisle at least this is not the sort of thing that is would like to commend him for his ef- who are not all that enamored with going to solve that problem. It has fort to reach the bipartisan consensus some of the suggestions that our breth- nothing to do with tax cuts. If we don’t that is going to be required if we are ren have made with respect to tax cuts fundamentally solve the Social Secu- going to solve either challenge that we at this time, and indeed we voted for rity problem, a tax cut is going to be are discussing this evening. the Democratic alternative only be- irrelevant. If we don’t fund it, they are Social Security will not be saved cause it would substitute for the bill going to be irrelevant to that. It has without a bipartisan effort, and it is that is on the floor today. nothing to do with that basic problem. going to require the hard, politically But we are not against tax cuts alto- By keeping the economy strong, cut- risky work that the Senator from Ten- gether for all time. Indeed, there are ting taxes for working people, letting nessee just alluded to. The same thing some areas where we should provide them keep a little bit more of their is true with saving Medicare. Those are cuts—the extending, for instance, of own money, it doesn’t directly benefit not easy decisions. That is one of the the R&D tax credits and others that we these programs but it helps the people principal reasons that we are sug- know we are going to do anyhow—it is whom these programs ultimately are gesting we ought to address those something that would provide a sense designed to benefit. tough questions first. of realism and would allow some cer- In conclusion, basically we have no Let me suggest I understand in terms tainty in terms of planning for those legislation before us and no proposal of the remarks made by the distin- companies that are doing the cutting that would effectuate this amendment guished Senator from Tennessee that edge work, that make our economy in terms of what kind of legislation are taking on something that is not on the strong, and that make us a leader in we talking about to reach these magic table is effective. But we are not really the global economy. dates. defending all of the President’s plan in But we are just saying this tax cut is Second, the President’s position, this particular instance. We are using a so big and so difficult to justify that which I think these dates are based couple of numbers that happen to coin- we ought to at least hold up until we upon, is a flawed one for the reason cide with the President’s. But ours is have, again to quote the distinguished that we have set out. much simpler and much more specific. Senator, ‘‘done the hard, politically Lastly, not only is this not reform, We are talking about simply post- risky work’’ to protect Social Security but it goes against reform. So, indeed, poning this tax cut. and Medicare. we come full circle. The Senator from Tennessee made Again, I commend the Senator be- I agree with my colleagues that my the point that it might be difficult to cause he is willing to engage. He is heart is in the same place as theirs. I actually achieve whatever is necessary willing to roll up his sleeves and en- want to figure out a way for us to come for some actuary to come to the con- gage on a bipartisan basis in trying to together and really do something about clusion that we had in effect saved So- make those tough decisions. I wish we Medicare and Social Security. I want cial Security or that we had saved could find more on both sides of the to find a way to do something about Medicare. I would not contest that as- aisle who were willing to roll up their not just ourselves up to 2027, or how- sertion by the Senator from Tennessee. sleeves and work on these decisions. ever long some of us might still be But we are not saying you can never The distinguished Senator from Flor- around here—not myself, but the next have a tax cut. We are saying only that ida and I are saying, let’s simply not generation and the generation after we will not have this tax cut, this tax make this tax cut effective until we that. cut that we believe at this time is ex- have solved those problems facing both Let’s look seriously and see whether cessive. It may be that a time will Medicare and Social Security. I agree or not this is the sort of thing that is come when tax cuts, particularly tar- with the Senator from Tennessee, we going to get us there, or whether buck- geted tax cuts, are appropriate. I sug- are not solving these problems just by ling down and doing the hard work, the gest to my friend from Tennessee that saving some of the surplus generated hard, politically risky work—because if while the time may be difficult to envi- by Social Security. That does not bring you use the words, you are running sion in terms of major tax cuts, it about the systematic change we are some kind of political risk—and not be seems to me a time that does not cry going to need to have if we are going to S9520 CONGRESSIONAL RECORD — SENATE July 28, 1999 solve the long-term solvency question wave of Americans who will reach 65 I assume, thus, that we agree those with respect to Social Security. We are and become beneficiaries under the are the right numbers. not doing that at this point with re- Medicare program and the Social Secu- With a total surplus from non-Social spect to Medicare. To that extent, I rity program beginning in the year Security purposes—and we have al- agree with the Senator. 2010. That generation, the generation ready agreed we will put all the Social We have the tougher decisions to born immediately after World War II, Security surplus into saving Social Se- make. We are saying let’s not take ad- will more than double the number of curity—that is $964 billion over 10 vantage of a projected future surplus current beneficiaries in Social Security years, meaning the total amount that since that would, indeed, make all of and Medicare. That is a fact. is left will be $32 billion over 10 years, the other decisions more difficult. Second, it is a fact that under the or a little over $3 billion a year in Another point where I differ with the current financing in the year 2014, 4 order to do everything else that we Senator from Tennessee, he says it is years after that tidal wave begins to may find needs to be done. always easy to come back and, in ef- hit, Social Security will go negative. The fact is, once we have committed fect, reverse the decisions; if we cut That is, it will begin to pay out more ourselves to this plan, there are no fis- taxes too deeply, we can turn around benefits than it will take in annually cal resources to either further and raise taxes. With all due deference in revenues. strengthen Social Security to move be- and respect, raising taxes is not easy to Third, it is a fact that even if we do yond the year 2034, or to strengthen do. There are very few in this body on as is suggested, put all of the Social Medicare. So there is a fiscal relation- either side of the aisle who like to be Security surplus into strengthening ship. tagged with either authoring or voting the Social Security system primarily But beyond the fiscal Siamese twins for a tax increase. That is the problem by paying down the national debt, even of these issues, Social Security and with tax cuts of this magnitude, par- that step will only extend the solvency Medicare, and this tax cut, is a polit- ticularly when they would be so dif- of Social Security to the year 2034. ical reality. There is nothing easier in ficult to reverse, and we splurge with- That happens to be a significant date politics, there is nothing that is less out making the tough decisions first. for me because my youngest daughter likely to get you a chapter in ‘‘Profiles will become 65 in the year 2034. I hope In the meantime the current surplus In Courage,’’ than cutting taxes. Ev- she might not necessarily be listening can be used for constructive, long-term erybody likes to cut taxes. That is the to my remarks, she would not be happy debt reduction. classic case of eating your political Lastly, I have been concerned about for me to remind her of that. Fourth, it is a fact that Medicare is desert. The question is, Do you eat the focus on publicly held debt as op- a program of the 1960s based on 1960s your desert before you have had to first posed to the total debt. We used to be knowledge of medical science, 1960s eat your vegetables? That is what we very much concerned about the total concepts of how to provide insurance are being asked to do by passing this debt. I have told my friends from the for health care. With a few exceptions, tax cut before we have dealt with the White House and others who have fo- it is still a 1965 program. It is a pro- vegetables of Social Security and Medi- cused on this, I think what we are gram in which the trust funded por- care. doing to reduce the public debt is a tions—that is, those that relate to hos- One of the most responsible groups is good thing. However, the plan promises pital services—is already in a negative a group which is now led by two of our too much. We are really not reducing position. It is a program which will colleagues, former Republican Senator the total obligation we have simply by crack under the weight of the bene- from New Hampshire, Warren Rudman, making the IOU a statutory obligation ficiaries who will begin drawing its and Democratic Senator from Georgia, instead of having it part of the publicly services in the year 2010. Sam Nunn, the Concord Coalition. The held dealt. Reducing the publicly held Finally, it is a fact that the longer Concord Coalition was one of the driv- debt does good things. It makes our fi- we delay dealing with Social Security ing forces that has given us the oppor- nancial future better. It means we and Medicare, the more difficult the tunity to have this debate tonight don’t have to go out and borrow on the problem becomes. We may think we about surpluses because they helped markets. However, the same obliga- have eased our burden by delaying focus national attention on the rot we tions we have with respect to Social these hard decisions. We may have were suffering year after year because Security now, with respect to Medicare eased our burden because we may not of the deficits and the mounting na- now, are still there. We are simply be here. But the sooner we act for the tional debt. transferring them to a different form benefit of all Americans, particularly What does the Concord Coalition ad- so our financial picture looks a little those Americans who properly are an- vise us about the issue we face tonight? better. ticipating the contract they have with Mr. President, I ask unanimous con- I suggest again this is a limited their Government for the financial se- sent to have printed in the RECORD im- amendment. It is simply saying, what curity of Social Security and the mediately after my remarks, a state- is the hurry with respect to huge tax health security represented by Medi- ment released today, July 28, 1999, by cuts that may or may not materialize? care, their problems, their challenges, the Concord Coalition. Let’s do the responsible thing. Let’s do grow daily more severe as we delay The PRESIDING OFFICER. Without that hard, politically risky work of ex- dealing with these fundamental issues. objection, it is so ordered. tending Social Security and Medicare I want to join my colleague, Senator (See Exhibit 1.) solvency first. Then we can address the ROBB, in saying much of what the Sen- Mr. GRAHAM. This is the statement question of whether or not we provide ator from Tennessee said was compel- of the Concord Coalition. In conclusion additional tax cuts and what form and ling. However, he asked a question: it provides: what magnitude they might take. Why is there a relationship between The bottom line is that, at the moment, I yield the floor. Social Security solvency, Medicare and political leaders have no idea how to meet Mr. GRAHAM. Mr. President, in 1983 its strengthening and solvency, and the the long-term spending promises that have Alan Greenspan chaired a commission tax cut? These are unrelated, disparate been made for Social Security and Medicare, to study the state of Social Security. policy issues. and no idea how to meet the tough discre- He began the deliberations of that com- I beg to say I could not disagree tionary spending caps on which the baseline mission with this admonition: Every surplus is premised. Major tax cuts should more. There are two ways in which await the resolution of these issues. If the member of the commission is entitled these issues are inextricably inter- politically hard choices are not made before to their opinion. No member of the twined. One is fiscal. This chart indi- the easy ones, there is a very real danger commission is entitled to their facts. cates with the tax cut of $792 billion that we’ll end up spending a surplus we don’t We are going to work off a common and the foregone interest savings of really have. base of facts and then from that com- $141, the total cost to the treasury over Let me repeat: mon base arrive at an informed set of the next 10 years of the plan before the If the politically hard choices are not made judgments. Senate is $933 billion. If someone wish- before the easy ones, there is a very real dan- What are some of the facts that drive es to challenge those numbers, I stand ger that we’ll end up spending a surplus we this amendment? One, there is a tidal silent and yield for them to do so. don’t really have. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9521 So those are why the issues of se- come out to the year 2075. If somebody year tax cut, The Concord Coalition today quencing—what do we do first, where has a different standard they believe challenged Congress and the President to do we put our primary priorities—are Social Security solvency should be make the hard choices on discretionary and central for the fiscal future of this judged by, let them come forward and entitlement spending before enacting a major tax cut. country and the debate we have this make the case. But I believe we should ‘‘Cutting taxes in anticipation of spending week. I will briefly say why I think the guarantee this program for current cuts that have not been made, and may proper order is Social Security and beneficiaries, their children—like my never be made, is a recipe for the return of Medicare first. child who, in the year 2034, will start chronic annual budget deficits,’’ said Policy First, the Social Security taxpayers drawing her Social Security benefits Director Robert Bixby. The Concord Coali- and the Medicare taxpayers, through and become eligible for Medicare. I am tion pointed out that Congress and the Presi- their payroll taxes, have created the pleased to say that same daughter is dent have yet to agree on several key spend- totality of the surplus we have today. now about to make us grandparents, ing issues, including: Adele and myself. This will be our 10th Discretionary caps—The Congressional There is no other surplus than the So- Budget Office (CBO) baseline assumes that cial Security surplus today, and there grandchild. In November she will have the discretionary spending caps will be com- will only be a meager surplus beyond a baby. So we are concerned about the plied with through 2002. It is increasingly Social Security for the foreseeable fu- new baby who will soon come into our clear, however, that this goal will not be ture. So should not the people who cre- family. I believe that is a concern all of met. Spending will exceed the caps either ex- ated the surplus have some moral us share who are or hope soon to be plicitly or by stealth through the emergency standing to be at the front of the line, grandparents. So I believe in the three- loophole. The projected baseline surplus var- not the back of the line, when we de- generational standard, which has been ies by hundreds of billions of dollars depend- the standard against which Medicare ing upon the path of discretionary spending. cide how to spend the surplus? Tax cuts should therefore await a more real- Second, a substantial amount of the solvency has been historically judged, is a sound one and represents the istic assessment of the non-Social Security non-Social Security surplus is going to surplus, which will be available only after be the result of the Social Security intergenerational contract. the dust settles on the appropriations bills. We are not suggesting how that con- surplus being invested in paying down Medicare prescription drug benefit—Congres- tract should be fulfilled because there the debt held by the public and there- sional leaders and the President seem to are many ways. But we are saying that fore relieving the National Government agree that a prescription drug benefit should is the standard against which all pro- of enormous interest payments—that be added to Medicare. According to CBO, the posals should be judged. Similarly, President’s plan would cost $111 billion over $2 trillion of Social Security surplus with Medicare—that is a more difficult ten years. Republican leaders have suggested when it is fully committed to reducing proposition because Medicare, unlike a less expensive approach, but the question the debt held by the public. Let us say Social Security, is not totally funded remains—how much will the new benefit the average interest on the debt of the cost? out of a trust fund but rather a mix- Federal Government today is 6 percent. Social Security reform—The CBO baseline as- ture of a trust fund for hospitalization sumes that the entire surplus will be used for Mr. President, as a certified public ac- and general revenue, plus premiums by countant, what kind of interest savings debt reduction. But what about Social Secu- the beneficiaries for the physicians’ rity reform? Many responsible reform plans do you get at 6 percent on $2 trillion? portion of Medicare. We are saying would use at least the Social Security por- A very substantial amount of money. that, for the hospitalization plan, we tion of the surplus as the down payment on And that is a significant part of the should set as a standard the year 2027 a funded system of individually owned Social non-Social Security surplus. Don’t the for solvency of that trust fund. Security accounts. If combined with appro- people who are creating those interest Again, if someone wishes to argue for priate long-term cost savings in the rest of savings deserve to be at the front of a different standard, that is certainly the program, such a reform plan would do the line, not at the back of the line? more to improve the outlook for future gen- their prerogative. But we need to have erations than a strategy of debt reduction Third, we do have a solemn contract a measurement. We need to have some- between the American Government and alone. Enacting a major tax cut now, how- thing like an external audit, some ever, could drain away resources that may its people on these programs. If we standard to which we can submit our well be needed for the costs of transitioning think we should not have that con- proposals and have them evaluated as to a more sustainable, generationally equi- tract, then I think someone should to whether they meet the test of the table Social Security system. stand up and be candid and honest and American people. ‘‘The bottom line is that, at the moment, say: Let’s repeal the 1935 Social Secu- So what we are saying is let’s main- political leaders have no idea how to meet rity Act, let’s repeal the 1965 Medicare the long-term spending promises that have tain our options. Let us not place our- been made for Social Security and Medicare, Act, so there will not be any false ex- selves in a position where we are un- pectations. We are going to abrogate and no idea how to meet the tough discre- able to achieve those standards of sol- tionary spending caps on which the baseline these contracts. vency for Social Security and Medi- surplus is premised. Major tax cuts should I do not believe there is any Member care. Once we have done that, we can await the resolution of these issues. If the of this Senate or the House of Rep- declare hallelujah, and then we can politically hard choices are not made before resentatives who would do so. There- proceed, if there are funds left after we the easy ones, there is a very real danger fore, I believe we, as the trustees for have accomplished those purposes, to that we’ll end up spending a surplus we don’t the American people in these impor- tax cuts or whatever else the Congress really have,’’ Bixby said. tant programs, have an obligation to and the American people believe to be The PRESIDING OFFICER. The see that they can fulfill their expecta- their priorities. But these are the first Chair recognizes the Senator from tions. two priorities. There is both a moral Delaware. Finally, we are not suggesting, with and a legal obligation, and maybe most Mr. ROTH. I yield myself 10 minutes. the amendment that Senator ROBB and important, an obligation to our future, Mr. President, my good friend and I have offered, what the resolution of as seen in the faces of our children and colleague, the Senator from Virginia, this issue should be. There are prob- grandchildren. It is to them that this raised the question as to why a tax cut ably a dozen or more good ideas in this amendment is directed. now, what is the hurry; the economy is Chamber as to how we should strength- I urge my colleagues to adopt the doing well. Let me tell you why I think en Social Security, how we should simple principle: Let’s do first things it is critically important we have a tax strengthen Medicare. What we are say- first, and Social Security and Medicare cut now. That is because the American ing is there should be a performance solvency are the first two responsibil- family needs it. standard. The performance standard, I ities of this Congress. I thank the In going home and talking to my say to the Senator from Tennessee, my Chair. constituents, talking to many families, good friend, is not one we stole from EXHIBIT 1 whether they are farmers or small somebody else. We have been saying for [From the Concord Coalition, July 28, 1999] businessmen, or whomever, they are many years that Social Security TAX CUTS SHOULD AWAIT HARD CHOICES ON finding it hard to face the challenges of should be solvent for three generations. SPENDING today. The cost of sending a child to When you apply that three- WASHINGTON.—With the House and Senate college is increasing very rapidly and generational test to 1999, it happens to headed toward passage of a $792 billion, 10- is taxing the typical American family. S9522 CONGRESSIONAL RECORD — SENATE July 28, 1999 We provide relief in this package for leaves enough money on the table for put that money in the bank, that we the American family who is trying to Social Security reform, $1.9 trillion, pay down the national debt. send their children to college. They are and Medicare reform, $505 billion. Again, in terms of urgency, one-half trying to send their children to college As I said in the Finance Committee, of 1 percent is what we would do right today, not 5 or 10 years hence. That is I am committed to moving a Medicare now. But the other 99.5 percent would the reason it is important. bill through the committee after we re- be locked into the law that we would I point out there is something like 42 turn in September. It is my hope that be obligated, by law, to change at the million families without health insur- comprehensive Medicare reform can be appropriate time. That is the reason we ance. There is no hurry to try to ad- achieved, including providing for a pre- are suggesting that we do not want to dress that, as we do in this legislation? scription drug benefit, but it must be rush to judgment with respect to what We provide that someone who is self- on a bipartisan basis and it must be many of us believe would simply not be employed or an employee who works done with White House cooperation. a responsible tax cut of this magnitude for a company that has no health in- The chairman’s mark complies with at this time. surance can take a tax deduction for the budget resolution to this com- With that, Mr. President, I thank the their insurance. That is helping to pro- mittee by reducing on-budget revenues Chair and yield the floor. vide access today. None of us know by $792 billion over 10 years. This Mr. THOMPSON addressed the Chair. whether we will be sick today, tomor- amount will allow up to $505 billion of The PRESIDING OFFICER. The row, or in a week. There is a need for the on-budget surplus to be dedicated Chair recognizes the Senator from Ten- that today, not 5, 10 years from now. to Medicare reform. The President’s nessee. What about savings? We all agree as plan costs $118 billion over 10 years. Mr. THOMPSON. If the chairman will to the critical importance of the two Clearly, the $505 billion left on the cede me a couple other minutes, just a domestic programs—Social Security table is more than sufficient to reform couple of points. and Medicare. But to retire today, it is Medicare with a prescription drug ben- I have enjoyed this discussion very important people have savings, and efit. much. It is a serious discussion about a that is the reason we have stressed so The Committee on Finance has held serious problem. My only real dis- much the importance of pensions, the numerous hearings on Social Security appointment is to learn that the Sen- importance of IRAs, because if people over the past few years. Many of the ator from Florida has twice as many are going to retire with dignity, they members of the committee have offered grandchildren as I have. But all we ask must have the opportunity to save not comprehensive Social Security reform is for an opportunity to catch up. tomorrow, not 5 years from now, but plans that, I have to say, are quite But I think there are a lot of things today. compelling. I do intend to return to So- we do agree on. We agree that there is Marriage penalty: How many of my cial Security after this recess and the a crisis. We agree that we need funda- Senate works its way through Medi- colleagues have gone home and talked mental reform in Medicare and Social care reform. to people about that? There is concern Security. We agree that the longer we I oppose this amendment, and I firm- that taxwise it pays not to marry but ly believe we can address all three—a delay in doing that, the worse the prob- to live in so-called sin. We take care of tax cut, Medicare reform, and strength- lem is going to be. the marriage penalty. It is long over- en Social Security. I yield the floor. So the question is, Are we doing the due. Why wait? I think there is good The PRESIDING OFFICER. The right thing by temporarily papering reason, if we are going to help the Chair recognizes the Senator from Vir- over the problem to extend it a few American family, let’s help the Amer- ginia. years, knowing that is not going to ican family today, not sometime in the Mr. ROBB. I thank the Chair. Mr. fundamentally solve the problem, giv- distant future. President, I want to respond briefly, if ing us an excuse not to really address It intrigues me. People say delay the I can, to our distinguished chairman the fundamental problem or should we tax cut, it is not important. But what and friend from Delaware with respect push and pressure ourselves to go about spending? My good friend from to the question of timing. ahead and address the fundamental Wyoming raised that point, and it is a The distinguished Senator from Dela- problem? That is really the issue here solid one. If we are going to delay tax ware mentioned the fact that the tax today. I think that is where we have a cuts, why shouldn’t we say there can be cut this year is only $4 billion out of disagreement. no increased spending until we solve some $792 billion that is proposed in When I said that there is no relation- these two domestic programs? If it is the bill. That is about one-half of 1 per- ship between this Medicare/Social Se- fair for one, why isn’t it fair for the cent of the total promise that would be curity problem on the one hand and tax other? incorporated in statutory law if, for cuts on the other, I did not mean to say Then the point was made this tax cut any reason, we are wrong. That is what if you keep more of the tax money and is inflationary. That is hard to under- we would have to find a way to change, pour more of it into Medicare and So- stand. In the year 2000, we are talking against all of the forces that are nor- cial Security, you could not delay it a about a $4 billion tax cut. That is not mally arrayed against any tax in- little longer. That is certainly true, very large when you stop and think crease. but fundamentally there is no relation- that our GDP is $9 trillion. It is not Why squander the opportunity to pay ship. very likely our tax cut in the next year down or to begin to pay down the na- The reason I said that was because of or two is going to have a very signifi- tional debt—not just the publicly held what the Comptroller of the United cant effect on the economy. The larger debt, the national debt, the national States said. In his testimony in July cuts come down the road in the last 5 unified debt? This is the first time in before the Finance Committee, he said: years. Sure, we may not like to vote well over a generation there has been Even if all future surpluses were saved— for tax increases, but we have all done any opportunity to pay down the debt. Taking every penny of the surplus, it in the past, and we will do it again We are not proposing additional not one dime of tax cuts— if it is necessary, but this tax cut is spending. I have not checked with my very slow in developing into a major distinguished colleague from Florida we would nonetheless be saddled with a budget over the longer term that the current reduction for the American people. for certain, but if the distinguished tax rates could fund little else but entitle- I oppose the legislation for those rea- chairman of the committee were will- ment programs for the elderly population. sons. I am a strong believer that we ing to accept an amendment that Reforms reducing the future growth of Medi- can have the tax cut, address the prob- would suggest some similar restraint care, as well as Social Security and Med- lems of Medicare, as well as Social Se- on spending which would correspond to icaid, are vital under any fiscal and eco- curity. As I said, the new CBO estimate the restraint we are attempting to nomic scenario to restoring fiscal flexibility of the on-budget surplus over the next place on cutting taxes, I will suggest to for future generations of taxpayers. 10 years is $996 billion, while my bill re- the chairman of the committee, I think That is the reason I say that even if turns most of this overpayment of we could find a place to make a deal. we put all this aside —we are throwing taxes back to those who sent it to We are not suggesting profligate a lot of numbers around here—take all Washington, while at the same time it spending. We are suggesting that we of it, pour it into Medicare and Social July 28, 1999 CONGRESSIONAL RECORD — SENATE S9523 Security, so we can tell people we derstand that. But it might focus the ple of Morocco, I extend my heartfelt saved it for a few more years, it really mind a little bit. As Samuel Johnson condolences. would not address the fundamental said: when a man knows he is to be King Hassan ruled Morocco for 38 problems. hanged it concentrates his mind won- years as only the second King of Mo- Is it incumbent on us to have a tem- derfully. That is not an exact quote, rocco in that country’s modern, inde- porary solution or to force ourselves to but that is fairly close to it. Delaying pendent history, having succeeded to have a longer-term solution? I think it the effective date of the tax cuts might the throne after the death of his father, is the latter. That is kind of what it give us some incentive, some focus, to King Mohammed V, in 1961, only five boils down to. conduct that hard, politically risky years after Morocco gained its inde- My friends talk about the size of this work that the Senator from Tennessee pendence from the French. tax cut. The economy is projected to be so accurately described it is going to Morocco, however, is an ancient $9 trillion next year. The net tax cuts take if we are to solve the problem country and the country with which next year alone are $4 billion, so the with either Social Security or Medi- the United States has its oldest unin- tax cuts are less than one-twentieth of care. terrupted diplomatic relations. Our 1 percent of the economy next year— All we are saying is, let’s not squan- two countries signed a Treaty of Peace less than one-twentieth of 1 percent. der this money. It isn’t just a matter of and Friendship in 1786, which the I am told that the tax cuts over the correcting it next year, it exacerbates United States ratified the following 10-year period would be 3.4 percent of the problem, because it is going to in- year. Thus began a relationship that total Federal revenues, and it would be crease the amount of money we are provided our tall ships a haven in the under 1 percent of the gross domestic going to have to carry in terms of the 18th century and developed into a rela- product. So that is not a huge tax cut debt. So we are saying: Hang on; $4 bil- tionship of geostrategic importance in if you look at it under those terms, in lion, one-half of 1 percent; it is not the 20th century. terms of the share of the economy, es- worth locking in the kind of a tax cut This special friendship was cherished pecially in light of the fact that taxes, some are suggesting until we’ve done in modern times by leaders in both of especially Federal taxes—especially first things first. our countries, particularly King Has- Federal income taxes—are mush- It has been a good debate. I am par- san, and I was pleased to see that rooming as a share of our total econ- ticularly grateful, first of all, to my President Clinton, along with former omy. It is eating up more and more and friend and colleague from Florida for President Bush, attended King Has- more as a share of our total economy. his leadership and cosponsorship, and san’s funeral this weekend. America We may have good times now, but to the distinguished chairman, who is lost a good friend, a wise counsel on that is not guaranteed. We are in a also good natured—notwithstanding the region, and an important and brave world standing as an island, as it were, differences we may have which may be promoter for peace in the Middle East. at the present time while those all fairly significant, but I have never One of the biggest challenges for the around us have problems. Our friends heard a cross word uttered by him—and Arab world, as in other parts of the in Asia, our friends in Japan, some of to the distinguished Senator from Ten- world, has been the challenge of mod- our friends in Europe, some in South nessee for engaging in this dialogue ernization, and how leaders encourage America, all have economic problems. which I think does at least illustrate their governments and societies to rise So we have to be mindful of that as we the choice we are going to have to to this challenge. go along. make and the choice that, in fact, we We have seen several models: secular Quite frankly, there are some who are asking our colleagues to make. socialist dictatorships, radical fun- say, when we have a deficit, certainly We are simply saying do not squan- damentalist regimes, and traditional we can’t afford to cut taxes; we have a der the surplus by making this kind of authoritarians. King Hassan, whose re- deficit. And listening to the debate humongous tax cut this year when we markable career spanned from the era today, apparently some of our same can wait until next year or the year of decolonization to the doorstep of the friends, when we have a surplus, say we after and find out exactly where we are next century, demonstrated that the can’t cut taxes because we really don’t going and, hopefully, increase the pres- traditional model could adapt to the know whether or not we will have the sure to actually save Social Security economic and political challenges of surplus. So that does not leave us and Medicare. With that, I thank the modernization. He understood that tra- much room for a tax cut. Chair, and I thank my colleagues. dition was not the enemy of the mod- I have enjoyed the debate. I yield the The Senator from Florida and I hap- ern, but could ease the transition by floor and thank the chairman and my pily yield back the remaining time on providing stability and respect for his good friends from Florida and Virginia our side. people while allowing political and eco- for such an interesting discussion. Mr. ROTH. Mr. President, I yield nomic reforms to unleash the funda- Mr. ROBB addressed the Chair. back the remainder of my time. mental strengths and dreams of his The PRESIDING OFFICER. The I ask unanimous consent that the people. Chair recognizes the Senator from Vir- pending Baucus motion be considered For his adept stewardship, he earned ginia. in order under the provisions of the the deep and sincere affection of the Mr. ROBB. I will just respond to one consent agreement and all other provi- vast majority of Morocco’s nearly 30 point made by my distinguished friend sions of the consent agreement remain million citizens. from Tennessee. He was suggesting, in status quo. Beginning as a traditional authori- correctly, that if we were to reserve, The PRESIDING OFFICER. Without tarian, the King recognized the impor- save, all of the surplus, we would not objection, it is so ordered. tance of constitutional governance save Social Security and we would not f early in his reign and expanded polit- save Medicare. We do not disagree. We ical rights through the years. In doing concede. MORNING BUSINESS so, he was one of the most successful Indeed, I suggest that that makes the Mr. ROTH. Mr. President, I ask unan- leaders in the Arab world in recon- case for why we believe we ought to imous consent that the Senate now ciling traditional monarchy with the save this surplus and, at the very least, proceed to a period of morning busi- requisites and demands of modernity. not squander it, because it might in- ness. King Hassan in recent years had crease the incentive to make those f furthered political reform such that, tough political choices we have not today, the lower house of parliament is made to protect these two programs. IN MEMORY OF KING HASSAN OF elected through universal suffrage from So saving all of the surplus is not MOROCCO a roster of multiple parties, and the going to save Social Security. It is not Mr. HATCH. Mr. President, I rise to governing coalition, including the going to make Social Security solvent recognize the death of the Arab world’s Prime Minister, is controlled by the in the context that the Senator from longest-standing leader, King Hassan II opposition. Florida and I are discussing, nor is it of Morocco, who died last Friday at the Concomitant with these political re- going to do that for Medicare. We un- age of 70. To his family, and to the peo- forms has been a steady improvement S9524 CONGRESSIONAL RECORD — SENATE July 28, 1999 in the human rights situation, marked, He was dedicated to this mission for ENROLLED BILLS SIGNED in some significant cases, by reconcili- decades, and it is quite unfortunate The message also announced that the ation with and compensation for vic- that he could not live to see the final Speaker has signed the following en- tims of the past. While power still re- outcome of his lengthy efforts. rolled bills: sides predominantly with the crown, Many in my home State of Michigan S. 604. An act to direct the Secretary of King Hassan, by advancing political de- and throughout the United States Agriculture to complete a land exchange mocracy and the free market, allowed stand with the people of Morocco in with Georgia Power Company. his people and provided his son, King mourning the loss of this great leader. S. 1258. An act to authorize funds for the Mohammed VI, with the fundamental My deepest and heartfelt condolences payment of salaries and expenses of the Pat- go out to King Mohammed VI, the ent and Trademark Office, and for other pur- platform on which Morocco will pro- poses. ceed confidently into the next century. King’s family and all the people of Mo- S. 1259. An act to amend the Trademark Mr. President, no remarks on the leg- rocco in these difficult times. Act of 1946 relating to dilution of famous acy of King Hassan can be complete f marks, and for other purposes. without recognizing his prescient view S. 1260. An act to make technical correc- THE VERY BAD DEBT BOXSCORE of reconciliation between Israel and tions in title 7, United States Code, and for the Arab world. Many note that some Mr. HELMS. Mr. President, at the other purposes. of the initial meetings preparing for close of business yesterday, Tuesday, The enrolled bills were signed subse- the signing of the historic Camp David July 27, 1999, the Federal debt stood at quently by the President pro tempore accords occurred with King Hassan in $5,640,525,290,562.24 (Five trillion, six (Mr. THURMOND). Morocco. The fact is that the King of hundred forty billion, five hundred Morocco had been providing opportuni- twenty-five million, two hundred nine- f ties for encounters and dialogue for ty thousand, five hundred sixty-two years before then, showing that the dollars and twenty-four cents). MEASURE PLACED ON THE King had a wise vision for peace as well One year ago, July 27, 1998, the Fed- CALENDAR as a pragmatist’s approach for moving eral debt stood at $5,539,293,000,000 (Five trillion, five hundred thirty-nine The following bill was read twice and toward this noble goal. placed on the calendar: From the 1960s to the late Prime billion, two hundred ninety-three mil- Minister Rabin’s visit to Morocco in lion). H.R. 2488. An act to provide for reconcili- ation pursuant to section 105 and 211 of the 1993—which was, by the way, only the Five years ago, July 27, 1994, the Fed- eral debt stood at $4,634,715,000,000 concurrent resolution on the budget for fis- second Arab nation visited by an cal year 2000. Israeli leader, after Egypt—King Has- (Four trillion, six hundred thirty-four san of Morocco demonstrated that he billion, seven hundred fifteen million). f recognized the permanent role that the Ten years ago, July 27, 1989, the Fed- eral debt stood at $2,802,522,000,000 (Two Jewish state had to play in the affairs ENROLLED BILLS PRESENTED of the Middle East. In this, as in many trillion, eight hundred two billion, five other areas, King Hassan was a leader hundred twenty-two million). The Secretary of the Senate reported among leaders. Fifteen years ago, July 27, 1984, the that on July 28, 1999, he had presented Morocco’s new king, King Moham- Federal debt stood at $1,535,890,000,000 to the President of the United States, med VI, has many challenges before (One trillion, five hundred thirty-five the following enrolled bills: him. He, along with King Abdallah of billion, eight hundred ninety million) S. 604. An act to direct the Secretary of Jordan, represents the new generation which reflects a debt increase of more Agriculture to complete a land exchange than $4 trillion—$4,104,635,290,562.24 with Georgia Power Company. of leaders in the region: highly edu- S. 1258. An act to authorize funds for the cated, understanding the West, cog- (Four trillion, one hundred four billion, six hundred thirty-five million, two payment of salaries and expenses of the Pat- nizant of the realities of the region, ent and Trademark Office, and for other pur- and faced with enormous domestic eco- hundred ninety thousand, five hundred poses. nomic challenges. Morocco’s is a sixty-two dollars and twenty-four S. 1259. An act to amend the Trademark youthful population, straddled with an cents) during the past 15 years. Act of 1946 relating to dilution of famous unacceptably high illiteracy rate and f marks, and for other purposes. an unyielding demand for economic de- S. 1260. An act to make technical correc- MESSAGES FROM THE PRESIDENT tions in title 17, United States Code, and for velopment. These are extremely tough Messages from the President of the other purposes. challenges to burden a new and young United States were communicated to king. But let us recall the youth of the Senate by Mr. Williams, one of his f King Hassan when he assumed the secretaries. throne in 1961 and the misplaced doubts EXECUTIVE MESSAGES REFERRED EXECUTIVE AND OTHER about his future. We recognize today COMMUNICATIONS the legacy of King Hassan to his son As in executive session the Presiding and his nation. Officer laid before the Senate messages The following communications were The United States should assist in from the President of the United laid before the Senate, together with the continuing modernization of Mo- States submitting sundry nominations accompanying papers, reports, and doc- rocco and the continuing cooperation which were referred to the appropriate uments, which were referred as indi- to create a more peaceful Middle East. committees. cated: So should continue a special relation- (The nominations received today are EC–4400. A communication from the Pro- ship into the 21st century that began so printed at the end of the Senate pro- gram Analyst, Office of the Chief Counsel, propitiously in the 18th. ceedings.) Federal Aviation Administration, Depart- ment of Transportation, transmitting, pur- f f suant to law, the report of a rule entitled THE DEATH OF KING HASSAN II MESSAGES FROM THE HOUSE ‘‘Revision of Class D and Class E Airspace; OF MOROCCO At 2:19 p.m., a message from the Cannon AFS, Clovis NM; Docket No. 99– ASW–02 (7–19/7–22)’’ (RIN2120–AA66) (1999– Mr. ABRAHAM. Mr. President, I rise House of Representatives, delivered by Mr. Hanrahan, one of its reading 0233), received July 23, 1999; to the Com- today to honor the life of King Hassan mittee on Commerce, Science, and Transpor- II and express my deepest sympathy clerks, announced that the House has tation. and condolences to the people of Mo- passed the following bills, in which it EC–4401. A communication from the Chief, rocco. requests the concurrence of the Senate: Office of Regulations and Administrative It was with a great sense of sadness H.R. 2488. An act to provide for reconcili- Law, U.S. Coast Guard, transmitting, pursu- that I learned of the death of King Has- ation pursuant to section 105 and 211 of the ant to law, the report of a rule entitled san, a statesman, a peacemaker, and a concurrent resolution on the budget for fis- ‘‘Technical Amendments; Organizational cal year 2000. Changes; Miscellaneous Editorial Changes visionary. The King was beloved not H.R. 2605. An act making appropriations and Conforming Amendments (USCG–1999– only by the Moroccan people, but by for energy and water development for the fis- 5832)’’ (RIN2115–ZZ02) (1999–0001), received people committed to peace throughout cal year ending September 30, 2000, and for July 23, 1999; to the Committee on Com- the Middle East and around the world. other purposes. merce, Science, and Transportation. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9525 EC–4402. A communication from the Chief, EC–4412. A communication from the Chief, Lands Management Act of 1996 (Rept. No. Office of Regulations and Administrative Office of Regulations and Administrative 106–125). Law, U.S. Coast Guard, transmitting, pursu- Law, U.S. Coast Guard, transmitting, pursu- By Mr. CHAFEE, from the Committee on ant to law, the report of a rule entitled ant to law, the report of a rule entitled ‘‘Re- Environment and Public Works, with an ‘‘Safety/Security Zone Regulations; Glouces- gatta Regulations; Northern California An- amendment in the nature of a substitute: ter Schooner Fest, Gloucester, MA (CGD01– nual Marine Events (CGD11–99–007)’’ S. 1100. A bill to amend the Endangered 99–104)’’ (RIN2115–AA97) (1999–0048), received (RIN2115–AE46) (1999–0029), received July 23, Species Act of 1973 to provide that the des- July 23, 1999; to the Committee on Com- 1999; to the Committee on Commerce, ignation of critical habitat for endangered merce, Science, and Transportation. Science, and Transportation. and threatened species be required as part of EC–4403. A communication from the Chief, EC–4413. A communication from the Chief, the development of recovery plans for those Office of Regulations and Administrative Office of Regulations and Administrative species (Rept. No. 106–126). Law, U.S. Coast Guard, transmitting, pursu- Law, U.S. Coast Guard, transmitting, pursu- By Mr. HELMS, from the Committee on ant to law, the report of a rule entitled ‘‘Spe- ant to law, the report of a rule entitled ‘‘Re- Foreign Relations, with an amendment and cial Anchorage Areas/Anchorage Grounds gatta Regulations; SLR; Chesapeake Chal- with a preamble: Regulations; Hudson River, Hyde Park, NY lenge, Patapsco River, Baltimore, MD S. Res. 166. A resolution relating to the re- (CGD01–97–086)’’ (RIN2115–AA98) (1999–0003), (CGD05–99–064)’’ (RIN2115–AE46) (1999–0028), cent elections in the Republic of Indonesia. received July 23, 1999; to the Committee on received July 23, 1999; to the Committee on By Mr. HELMS, from the Committee on Commerce, Science, and Transportation. Commerce, Science, and Transportation. Foreign Relations, without amendment and EC–4404. A communication from the Chief, EC–4414. A communication from the Gen- with a preamble: Office of Regulations and Administrative eral Counsel, Consumer Product Safety Com- S. Con. Res. 48. A concurrent resolution re- Law, U.S. Coast Guard, transmitting, pursu- mission, transmitting, pursuant to law, the lating to the Asia-Pacific Economic Coopera- ant to law, the report of a rule entitled report of a rule entitled ‘‘Child Resistant tion Forum. Packaging of Consumer Products Containing ‘‘Chemical Testing; Management Informa- f tion System Reporting Requirements Methacrylic Acid’’ (RIN3041–AB78), received (USCG–1998–4469)’’ (RIN2115–AF67) (1999–0002), July 22, 1999; to the Committee on Com- EXECUTIVE REPORTS OF received July 23, 1999; to the Committee on merce, Science, and Transportation. COMMITTEE Commerce, Science, and Transportation. EC–4415. A communication from the Acting EC–4405. A communication from the Chief, Director, Office of Sustainable Fisheries, Na- The following executive reports of Office of Regulations and Administrative tional Marine Fisheries Service, Department committees were submitted: of Commerce, transmitting, pursuant to law, Law, U.S. Coast Guard, transmitting, pursu- By Mr. WARNER, for the Committee on the report of a rule entitled ‘‘Closure for Pa- ant to law, the report of a rule entitled Armed Services: cific Ocean Perch in the Western Regulatory ‘‘Drawbridge Regulations; Columbia River, The following named officer for appoint- Area of the Gulf of Alaska’’, received July 23, OR (CGD13–99–007)’’ (RIN2115–AE47) (1999– ment in the United States Air Force to the 1999; to the Committee on Commerce, 0031), received July 23, 1999; to the Com- grade indicated under title 10, U.S.C., section Science, and Transportation. mittee on Commerce, Science, and Transpor- 624: tation. EC–4416. A communication from the Dep- EC–4406. A communication from the Chief, uty Assistant Administrator for Fisheries, To be brigadier general Office of Regulations and Administrative National Marine Fisheries Service, Depart- Col. Gary H. Murray, 2413 Law, U.S. Coast Guard, transmitting, pursu- ment of Commerce, transmitting, pursuant The following named officer for appoint- ant to law, the report of a rule entitled to law, the report of a rule entitled ‘‘Final ment in the United States Air Force to the ‘‘Drawbridge Regulations; Harlem River, NY Rule to Establish Procedures for the Testing grade indicated while assigned to a position (CGD01–99–093)’’ (RIN2115–AE47) (1999–0028), and Certification of Bycatch Reduction De- of importance and responsibility under title received July 23, 1999; to the Committee on vices in the Gulf of Mexico,’’ (RIN0648–AK32), 10, U.S.C., section 601: received July 23, 1999; to the Committee on Commerce, Science, and Transportation. To be lieutenant general EC–4407. A communication from the Chief, Commerce, Science, and Transportation. Office of Regulations and Administrative EC–4417. A communication from the Acting Lt. Gen. Robert H. Foglesong, 8617 Law, U.S. Coast Guard, transmitting, pursu- Director, Office of Sustainable Fisheries, Na- The following named officer for appoint- ant to law, the report of a rule entitled tional Marine Fisheries Service, Department ment in the United States Air Force to the ‘‘Drawbridge Regulations; Mullica River, NJ of Commerce, transmitting, pursuant to law, grade indicated while assigned to a position (CGD05–99–034)’’ (RIN2115–AE47) (1999–0030), the report of a rule entitled ‘‘Closure for Pa- of importance and responsibility under title received July 23, 1999; to the Committee on cific Ocean Perch in the West Yakutat Dis- 10, U.S.C., section 601: Commerce, Science, and Transportation. trict of the Gulf of Alaska,’’ received July 23, To be lieutenant general EC–4408. A communication from the Chief, 1999; to the Committee on Commerce, Lt. Gen. Charles R. Heflebower, 8234 Office of Regulations and Administrative Science, and Transportation. Law, U.S. Coast Guard, transmitting, pursu- EC–4418. A communication from the Acting The following named officer for appoint- ant to law, the report of a rule entitled Director, Office of Sustainable Fisheries, Na- ment in the United States Air Force to the ‘‘Drawbridge Regulations; Steamboat Oper- tional Marine Fisheries Service, Department grade indicated while assigned to a position ation Regulation (CGD13–99–019)’’ (RIN2115– of Commerce, transmitting, pursuant to law, of importance and responsibility under title AE47) (1999–0027), received July 23, 1999; to the report of a rule entitled ‘‘Closure for 10, U.S.C., section 601: the Committee on Commerce, Science, and Northern Rockfish in the Central Regulatory To be lieutenant general Area of the Gulf of Alaska,’’ received July 23, Transportation. Lt. Gen. Lansford E. Trapp, Jr., 7799 EC–4409. A communication from the Chief, 1999; to the Committee on Commerce, Office of Regulations and Administrative Science, and Transportation. The following named officer for appoint- Law, U.S. Coast Guard, transmitting, pursu- f ment in the United States Army to the grade ant to law, the report of a rule entitled indicated under title 10, U.S.C., section 624: ‘‘Drawbridge Regulations; Inner Harbor REPORTS OF COMMITTEES To be major general Navigation Canal, LA (CGD08–99–011)’’ The following reports of committees Brig. Gen. Zannie O. Smith, 6499 (RIN2115–AE47) (1999–0029), received July 23, were submitted: The following named officer for appoint- 1999; to the Committee on Commerce, By Mr. MCCAIN, from the Committee on ment in the United States Army to the grade Science, and Transportation. Commerce, Science, and Transportation, indicated while assigned to a position of im- EC–4410. A communication from the Chief, without amendment: portance and responsibility under title 10, Office of Regulations and Administrative S. 655. A bill to establish nationally uni- U.S.C., section 601: Law, U.S. Coast Guard, transmitting, pursu- form requirements regarding the titling and To be lieutenant general ant to law, the report of a rule entitled registration of salvage, nonrepairable, and ‘‘Drawbridge Regulations; Atlantic Intra- rebuilt vehicles (Rept. No. 106–123). Maj. Gen. Lawson W. Magruder, III, 0729 coastal Waterway (AIWW), Beaufort, SC By Mr. MURKOWSKI, from the Committee The following named officer for appoint- (CGD08–99–038)’’ (RIN2115–AE47) (1999–0033), on Energy and Natural Resources, with an ment in the United States Army to the grade received July 23, 1999; to the Committee on amendment in the nature of a substitute: indicated while assigned to a position of im- Commerce, Science, and Transportation. S. 711. A bill to allow for the investment of portance and responsibility under title 10, EC–4411. A communication from the Chief, joint Federal and State funds from the civil U.S.C., section 601: Office of Regulations and Administrative settlement of damages from the Exxon To be lieutenant general Law, U.S. Coast Guard, transmitting, pursu- Valdez oil spill, and for other purposes (Rept. Maj. Gen. Johnny M. Riggs, 1680 ant to law, the report of a rule entitled No. 106–124). ‘‘Drawbridge Regulations; Hackensack By Mr. MURKOWSKI, from the Committee The following named officer for appoint- River, NJ (CGD01–98–091)’’ (RIN2115–AE47) on Energy and Natural Resources, with ment in the United States Army to the grade (1999–0032), received July 23, 1999; to the Com- amendments: indicated while assigned to a position of im- mittee on Commerce, Science, and Transpor- H.R. 149. A bill to make technical correc- portance and responsibility under title 10, tation. tions to the Omnibus Parks and Public U.S.C., section 601: S9526 CONGRESSIONAL RECORD — SENATE July 28, 1999 To be lieutenant general ate and appeared in the Congressional M. Osman Siddique, of Virginia, to be Am- Maj. Gen. Daniel G. Brown, 2522 Record of June 23, 1999. bassador Extraordinary and Plenipotentiary Navy nominations beginning Michael K. of the United States of America to the Re- The following named officer for appoint- Abate, and ending Gregg W. Ziemke, which public of Fiji, and to serve concurrently and ment in the United States Army to the grade nominations were received by the Senate and without additional compensation as Ambas- indicated while assigned to a position of im- appeared in the Congressional Record of sador Extraordinary and Plenipotentiary of portance and responsibility under title 10, June 23, 1999. the United States of America to the Republic U.S.C., section 601: Army nominations beginning Phil C. of Nauru, Ambassador Extraordinary and To be lieutenant general Alabata, and ending Joseph J. Zubak, which Plenipotentiary of the United States of Maj. Gen. Michael W. Ackerman, 6573 nominations were received by the Senate and America to the Kingdom of Tonga, and Am- The following named officers for appoint- appeared in the Congressional Record of bassador Extraordinary and Plenipotentiary ment in the United States Navy to the grade June 28, 1999. of the United States of America to Tuvalu. indicated under title 10, U.S.C., section 624: Navy nomination of Laurel A. May, which (The following is a list of all members of was received by the Senate and appeared in To be rear admiral my immediate family and their spouses. I the Congressional Record of June 28, 1999. have asked each of these persons to inform Rear Adm. (lh) Alberto Diaz, Jr., 0577 Air Force nominations beginning Larita A. me of the pertinent contributions made by Rear Adm. (lh) Bonnie B. Potter, 9786 Aragon, and ending James J. White, which them. To the best of my knowledge, the in- The following named officer for appoint- nominations were received by the Senate and formation contained in this report is com- ment in the United States Navy to the grade appeared in the Congressional Record of plete and accurate.) indicated while assigned to a position of im- June 30, 1999. Nominee: Muhammad Osman Siddique. portance and responsibility under title 10, Marine Corps nominations beginning Post: Fiji, Nauru, Tonga, and Tuvalu. U.S.C., section 601: Charles E. Headden, and ending Robert L. Contributions, Amount, Date, and Donee. To be vice admiral Williams, which nominations were received Self: $1,000.00, 30 Sept ’95, Clinton/Gore Pri- by the Senate and appeared in the Congres- mary; $5,000.00, 18 Mar ’96, DNC-Non-Federal; Vice Adm. Robert J. Natter, 9953 sional Record of June 30, 1999. $500.00, 27 Jun ’96, Friends of Patrick Ken- The following named officer for appoint- Air Force nominations beginning Milton C. nedy; $1,000.00, 10 Sept ’96, New Mexicans for ment in the United States Navy to the grade Abbott, and ending Scott J. Zobrist, which Bill Richardson; $20,000.00, 18 Mar ’96, DNC; indicated while assigned to a position of im- nominations were received by the Senate and $500.00, 27 Jun ’96, Nick Rahal for Congress; portance and responsibility under title 10, appeared in the Congressional Record of July $1,000.00, 07 Oct ’96, Bonior for Congress; U.S.C., section 601: 1, 1999. $1,000.00, 04 Dec ’96, Friends of Chris Dodd To be vice admiral Marine Corps nomination of James R. (primary); $1,000.00, 04 Dec ’96, Friends of Rear Adm. Gregory G. Johnson, 3052 Judkins, which was received by the Senate Chris Dodd (general); $1,000.00, 12 Jan ’99, and appeared in the Congressional Record of Kennedy for Senate. (The above nominations were re- July 14, 1999. 2. Spouse: Catherine Mary Siddique; ported with the recommendation that Navy nominations beginning Dean D. $1,000.00, 30 Sept ’95, Clinton/Gore Primary; they be confirmed.) Hager, and ending David F. Sanders, which $5,000.00, 29 May ’96, DNC-Non-Federal; Mr. WARNER. Mr. President, for the nominations were received by the Senate and $20,000.00, 29 May ’96, DNC. Committee on Armed Services, I report appeared in the Congressional Record of July 3. Children: Omar O. Siddique, none; Julene favorably nomination lists which were 14, 1999. N. Siddique, none; Leila C. Siddique, none; Army nominations beginning Gary W. Ace, printed in the RECORDS of June 21, 1999, Zachary O. Siddique, none. June 23, 1999, June 28, 1999, June 30, and ending X4393, which nominations were 4. Parents: Muhammad Osman Ghani (Fa- received by the Senate and appeared in the ther)—Deceased; Shamsun Nahar Ghani 1999, July 1, 1999, July 14, 1999, July 19, Congressional Record of July 19, 1999. (Mother)—none. 1999, July 21, 1999, and ask unanimous Navy nominations beginning Scott R. 5. Grandparents: Muhammad Darbari—De- consent, to save the expense of reprint- Barry, and ending Charles L. Taylor, which ceased; Maqbool Begum—Deceased. ing on the Executive Calendar, that nominations were received by the Senate and 6. Brothers & Spouses: M. Osman & Rana these nominations lie at the Sec- appeared in the Congressional Record of July Farruk, none; M. Osman & Hazcra Khaled, retary’s desk for the information of 21, 1999. none; M. Osman & Veronique Yousuf, $500.00, Senators. Navy nominations beginning Lloyd B.J. 10 Sept ’96; New Mexicans for Bill Richard- Callis, and ending Michelle L. Wulff, which son. The PRESIDING OFFICER. Without nominations were received by the Senate and 7. Sisters & Spouses: Nahar & Kamal objection, it is so ordered. appeared in the Congressional Record of July Ahmad, none; Helen & Aminul Islam, none; (The nominations ordered to lie on 21, 1999. Zereen & Wahidul Islam, none; Nasreen & the Secretary’s desk were printed in By Mr. HELMS, for the Committee on For- Ghulam Suhrawardi, $500.00, Sept ’94, Ted the RECORDS of June 21, 1999, June 23, eign Relations: Kennedy for Senate; $500.00, Sept ’96, New 1999, June 28, 1999, June 30, 1999, July 1, Mexicans for Bill Richardson. 1999, July 14, 1999, July 19, 1999 and A. Peter Burleigh, of California, a Career July 21, 1999, at the end of the Senate Member of the Senior Foreign Service, Class Michael A. Sheehan, of New Jersey, to be of Career Minister, to be Ambassador Ex- Coordinator for Counterterrorism, with the proceedings.) traordinary and Plenipotentiary of the rank and status of Ambassador at Large. Army nominations beginning Richard F. United States of America to the Republic of (New Position) Ballard, and ending Su T. Kang, which nomi- the Philippines and to serve concurrently (The following is a list of all members of nations were received by the Senate and ap- and without additional compensation as Am- my immediate family and their spouses. I peared in the Congressional Record of June bassador to the Republic of Palau. have asked each of these persons to inform 21, 1999. (The following is a list of all members of me of the pertinent contributions made by Army nominations beginning Donald M. my immediate family and their spouses. I them. To the best of my knowledge, the in- Cinnamond, and ending George R. Silver, have asked each of these persons to inform formation contained in this report is com- which nominations were received by the Sen- me of the pertinent contributions made by plete and accurate.) ate and appeared in the Congressional them. To the best of my knowledge, the in- Nominee: Michael A. Sheehan. Record of June 21, 1999. formation contained in this report is com- Post: Coordinator for Counterterrorism. Army nominations beginning Kimberly J. plete and accurate.) Contributions, Amount, Date, and Donee. Ballantyne, and ending Stephen C. Ulrich, Nominee A. Peter Burleigh. Self: none. which nominations were received by the Sen- Post: Manila. Spouse: n/a. ate and appeared in the Congressional Contributions, Amount, Date, and Donee: Daughter: Alexandra E. Sheehan: none. Record of June 21, 1999. 1. Self: $250, 6/98, HRC and $250, 3/97, HRC Mother: Janet Purcell Sheehan: none. Army nominations beginning *Denise D. (Human Rights Compaign). Father: John M. Sheehan: none. Adams, and ending *Tami M. Zalewski, 2. Spouse (n/a). Grandparents: all deceased. which nominations were received by the Sen- 3. Children and Spouses (n/a). Brothers and Spouses: Matthew J. ate and appeared in the Congressional 4. Parents (deceased). Sheehan: none; Dennis P. Sheehan: none; Record of June 21, 1999. 5. Grandparents (deceased). Susan F. Sheehan: none; Terence P. Army nominations beginning George D. 6. Brothers and Spouses: David P. Sheehan: none; Leslie Sheehan: none; Joseph Lanning, and ending Gregory J. Zanetti, Burleigh—none. D. Sheehan: none; Patricia P. Sheehan: none. which nominations were received by the Sen- 7. Sisters and Spouses: Ann Burleigh Bou- Sisters and Spouses: MaryAnne Sheehan: ate and appeared in the Congressional cher—none. none; Kathleen Sheehan Roach: none; Record of June 23, 1999. Charles Randolf Roach: to Frank Lucas, 6th Marine Corps nominations beginning David J. Brady Anderson, of South Carolina, to District, Oklahoma 1994: $20; to Ed Munster, J. Abel, and ending Raymon Zapata, Jr., be Administrator of the Agency for Inter- 2nd District, Connecticut 1994: $250; to Ed which nominations were received by the Sen- national Development. Munster, 2nd District, Connecticut 1996: $100. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9527 Robert S. Gelbard, of Washington, a Career Bill Bradley for US Senate ’96, 5APR94, Rangel for the 106th Congress, 6NOV97, Member of the Senior Foreign Service, Class $500. $5,000. of Career Minister, to be Ambassador Ex- Friends of Congressman Hochbrueckner, National Leadership PAC, 9JAN98, $5,000. traordinary and Plenipotentiary of the 18AUG94, $500. Leadership ’98 (FKA Friends of Albert United States of America to the Republic of Friends of Jane Harman, 30SEP94, $500. Gore, Jr., Inc.), 31JUL98, $5,000. Indonesia. Democratic Senatorial Campaign Com- Democratic Senatorial Campaign Com- (The following is a list of all members of mittee, 20APR93, $1,000. mittee, 19 FEB97, $10,000. my immediate family and their spouses. I Kerrey for US Senate Committee, Democratic Congressional Campaign Com- have asked each of these persons to inform 15MAR93, $1,000. mittee, 25 APR97, $10,000. me of the pertinent contributions made by Kennedy for Senate, 30APR93, $1,000. Democratic Senatorial Campaign Com- them. To the best of my knowledge, the in- Moynihan Committee, Inc., 3MAY93, $1,000. mittee, 17APR98, $10,000. formation contained in this report is com- Lieberman ’94 Committee, 30JUN93, $1,000. Contributions of Barbaralee Diamonstein- plete and accurate.) Senate Victory ’94, 16DEC93, $1,000. Spielvogel Moynihan Committee, Inc., 16DEC93, Nominee: Robert S. Gelbard. Moynihan Committee, Inc., 3MAY93, $1,000. $1,000. Post: Ambassador to Indonesia. Bill Bradley for US Senate ’96, 8FEB93, Nominated June 21, 1999. Kerrey for US Senate Committee, 3JUN94, $500. Contributions, Amount, Date, and Donee. $1,000. Bill Bradley for US Senate ’96, 5AP96, $500. Self: $100.00, 1998, Sen. Paul Coverdell. Friends of Bob Carr, 26JUL94, $1,000. Democratic Congressional Campaign Com- Spouse: Alene, none. Kennedy for Senate, 27SEP94, $1,000. mittee, 29MAR96, $5,000. Children and Spouses: Alexandra, none. Democratic Senatorial Campaign Com- Clinton/Gore ’96 Primary Committee, Inc., Parents: Ruth and Charles, deceased. mittee, 19OCT94, $1,000. Grandparents: deceased. 27OCT95, $1,000. Friends of Bob Carr, 28OCT93, $1,000. Clinton/Gore ’96 Gen. Election Legal & Ac- Brothers and Spouses: Nicholas, none. DNC Services Corporation/Democratic Na- counting Compliance, 27OCT95, $1,000. Sisters and Spouses: N/A. tional Committee, 17MAY93, $5,000. Evelyn Simonowitz Lieberman, of New Friends of Chris Dodd—’98, 4DEC95, $500. DNC-Non-Federal Individual, 31AUG94, Kerry Committee, 9FEB96, $500. York, to be Under Secretary of State for $25,000. Public Diplomacy. (New Position) Friends of Dick Durbin Committee, Time Future, Inc. (FKA Bill Bradley for 16FEB96, $1,000. Richard Monroe Miles, of South Carolina, a US Senate), 21FEB95, $500. Career Member of the Senior Foreign Serv- Kennedy for Senate (1994), 21FEB96, $1,000. Friends of Senator Carl Levin, 23AUG95, A lot of People Supporting Tom Daschle, ice, Class of Minister-Counselor, to be Am- $500. bassador Extraordinary and Plenipotentiary 12DEC96, $2,000. Time Future, Inc. (FKA Bill Bradley for DNC-Non-Federal Individual, 6JUN95, of the United States of America to be Repub- US Senate), 12SEP95, $500. lic of Bulgaria. $7,000. Friends of Chris Dodd—’98, 4DEC95, $500. DNC Services Corporation Democratic Na- The following is a list of all members of Rangel for Congress ’96, 5MAR96, $500. my immediate family and their spouses. I tional Committee, 13AUG98, $18,000. Kerry Committee, 9FEB96, $500. A Lot of People Supporting Tom Daschle, have asked each of these persons to inform Friends of Mark Warner, 15FEB96, $500. me of the pertinent contributions made by 30JAN97, $1,000. Nadler for Congress, Inc., 18APR96, $500. A Lot of People Supporting Tom Daschle, them. To the best of my knowledge, the in- Democratic Congressional Campaign Com- formation contained in this report is com- 30JAN97, $1,000. mittee, 9JUL96, $500. Rangel for the 106th Congress, 4SEP97, plete and accurate. Friends of Chris Dodd—’98, 21DEC96, $500. Nominee: Richard Monroe Miles. $1,000. Friends of Chris Dodd—’98, 21DEC96, $500. Rangel for the 106th Congress, 4SEP97, Post: The Republic of Bulgaria. Feingold Senate Committee, 23DEC96, $500. Contributions, amount, date, and donee: $1,000. Rangel for Congress ’96, 9JUL96, $500. Nita Lowey for Congress, 6FEB98, $1,000. 1. Self: none. Sanders for Senate, 12JUN95, $1,000. 2. Spouse: none. South Dakota Democratic Party, 5FEB98, Clinton/Gore ’96 Primary Committee, Inc., $1,000. 3. Children and spouses: Richard Lee and 30JUN95, $1,000. Elizabeth Anne Miles, none. New York State Democratic Committee, Clinton/Gore ’96 Primary Committee, Inc., 27FEB97, $5,000. 4. Parents: Iris Mann (deceased) and James 17NOV95, $1,000. Miles, none. South Dakota Democratic Party, 2MAY97, New York State Democratic Committee, $5,000. 5. Grandparents: Richard and Lillian 6JUL95, $1,000. Fortner (deceased). Wyden for Senate, 20JAN96, $1,000. J. Richard Fredericks, of California, to be 6. Brothers and spouses: none. Wyden for Senate, 20JAN96, $1,000. Ambassador Extraordinary and Pleni- 7. Sisters and spouses: Louise Angell (Rich- Clinton/Gore ’96 Primary Committee, Inc., potentiary of the United States of America ard), step-sister, none. Lois Navarro (Ar- 19SEP95, $1,000. to Switzerland, and to serve concurrently thur), step-sister, none, Donna Peabody Kennedy for Senate 2000, 21FEB96, $1,000. and without additional compensation as Am- (Kristin), half-sister, none. Charles Rangel Victory Fund, 9JUL96, bassador Extraordinary and Plenipotentiary $1,000. of the United States of America to the Prin- Carl Spielvogel, of New York, to be Ambas- Friends of Schumer, 31OCT96, $1,000. cipality of Liechtenstein. sador Extraorindary and Plenipotentiary of A Lot of People Supporting Tom Daschle, The following is a list of all members of the United States of America to the Slovak 12DEC96, $2,000. my immediate family and their spouses. I Republic. Democratic Congressional Campaign Com- have asked each of these persons to inform The following is a list of all members of mittee, 29MAR96, $5,000. me of the pertinent contributions made by my immediate family and their spouses. I Rangel National Leadership PAC FKA Na- them. To the best of my knowledge, the in- have asked each of these persons to inform tional Leadership PAC, 1NOV96, $5,000. formation contained in this report is com- me of the pertinent contributions made by Dealers Election Action Committee of the plete and accurate. them. To the best of my knowledge, the in- National Automobile Dealers Association Nominee: J. Richard Fredericks. formation contained in this report is com- (NADA) Post-General, 25OCT96, $5,000. Post: Ambassador to Switzerland and plete and accurate. DNC Non-Federal Unincorporated Associa- Liechtenstein. Nominee: Carl Spielvogel. tion Account, 24APR96, $25,000. Contributions, amount, date, and donee: Post: Ambassador to the Solvak Republic. A Lot of People Supporting Tom Daschle, 1. Self, see attachment. Contributions, amount, date, and donee: 3FEB97, $1,000. 2. Spouse, see attachment. 1. Self: See attached. 98 Friends of Chris Dodd, 15JUN97, $500. 3. Children and Spouses (NA). 2. Spouse: Barbaralee Diamonstein- Friends of Byron Dorgan, 24DEC97, $500. 4. Parents, see attachment. Spielvogel—see attached. Green for United States Senate, 15MAY97, 5. Grandparents (NA). 3. Children and spouses: Rachel Spielvogel, $1,000. 6. Brothers and Spouses, see attachment. Paul Spielvogel, David and Patricia A lot of People Supporting Tom Daschle, 7. Sisters and Spouses, see attachment. Spielvogel, none. 3FEB97, $1,000. 4. Parents: Deceased. A lot of People Supporting Tom Daschle, MY FAMILY 5. Grandparents: Deceased. 3FEB97, $1,000. Wife: Stephanie Sorensen Fredericks. 6. Brothers and spouses: Deceased. Nita Lowey for Congress, 6FEB98, $1,000. Children: Matthew Foley Fredericks, age 7. Sisters and spouses: None. South Dakota Democratic Party, 5FEB98, 13, Colleen Sorensen Fredericks, age 12, and Contributions of Carl Spielvogel $1,000. Will Norman Fredericks, age 8. Bill Bradley for US Senate ’96, 8FEB93, Moynihan Committee, Inc., 24APR98, Mother: Lois F. Fredericks. $500. $1,000. Father: Norman J. Fredericks (deceased). Lautenberg Committee, 18JUN93, $500. Victory in New York, 13OCT98, $1,000. Brothers: Norman J. Fredericks, Jr., and Lieberman ’94 Committee, 31MAR94, $500. Schumer, ‘98, 10OCT98, $1,000. Peter G. Fredericks. Democratic Congressional Campaign Com- Rangel for the 106th Congress, 4SEP97, Sisters: Lois F. Thornbury, Marcia F. mittee, 8JUN94, $500. $5,000. McGratty, and Anne G. Fredericks. S9528 CONGRESSIONAL RECORD — SENATE July 28, 1999 Grandparents: Deceased. Marcia & Edward McGratty (Sister and Brother John D. Frederickson: Clinton/Gore ’96 Pri- in-law) Political Contributions—Continued mary Committee, Inc., 29JUN95, $1,000. J. Richard Fredericks Political Contributions 5/25/97—Carroll for Assembly ...... 250 Julie Ann, Frederickson: Dr. John Hagelin 3/12/92—Clinton for President Com- 8/16/97—Carroll for Assembly ...... 100 for President 1996, 24JUN96, $250. mittee ...... $1,000 11/1/97—Ferguson for Congress ...... 500 Robert J. Frederickson: National Res- 7/24/92—Democratic National ...... 1,000 5/10/98—Committee to Elect J. taurant Association Political Action Com- 12/3/93—Kathleen Brown ...... 450 Schrier ...... 100 mittee, 19AUG96, $200. 3/11/94—Governor Pete Wilson ...... 1,000 10/19/98—Ferguson for Congress ...... 500 Richard J. Fredericks: Democratic Con- 4/6/94—Empower America ...... 5,000 2/5/98—Mullaney for Senate ...... 1800 gressional Campaign Committee, 30JUN97, 9/26/95—Committee to Re-Elect Frank $10,000; Nancy Pelosi for Congress, 13JUN97, Jordon ...... 1,000 Anne Fredericks (Sister) Political $1,000; Nancy Pelosi for Congress, 13JUN97, 2/13/96—Fund for Democratic Leader- Contributions—None $1,000; Friends of Barbara Boxer, 30JUN97, ship ...... 1,000 Peter and Michelle Fredericks (Brother and $1,000; Friends of Barbara Boxer, 30JUN97, 5/15/96—Friends of Senator D’Amato .. 1,000 Sister in-Law) Political Contributions $1,000; John Breaux Committee, 27OCT97, 6/17/96—Democratic National Com- 1/13/98—Engler for Governor ...... $1000 $500; John Breaux Committee, 27OCT97, mittee—Nonfed Acct...... 100,000 $1,000; A lot of People Supporting Tom 6/17/96—Florida Democratic Party ..... 50,000 1/13/98—Engler for Governor ...... 1000 10/14/98—Kilpatrick for US Congress .. 250 Daschle, 3FEB98, $1,000. 6/17/96—Illinois Democratic Party ..... 50,000 Stephanie Fredericks, ONC Services Cor- Jeanne Fredericks: Christopher Shays for 6/17/96—Pennsylvania Democratic poration/Democratic National Committee, Congress Committee, 28OCT97, $500; Chris- Party ...... 50,000 30SEP96, $20,000; Democratic Senatorial topher Shays for Congress Committee, Congressman Bart Gordon ...... 1,000 Campaign Committee, 30JUN97, $3,000; 20OCT98, $500. 10/13/96—Texas Victory 96’ ...... 2,000 Friends of Barbara Boxer, 30JUN97, $1,000; John Fredericks: Committee to Re-Elect 10/21/96—New Hampshire Democratic Friends of Barbara Boxer, 30JUN97, $1,000; Congresswoman Marge Roukema, 1JUN98, Party ...... 5,000 John Breaux Committee, 27OCT97, $1,000; $500. 10/21/96—Kansas Democratic Party .... 15,000 John Breaux Committee, 27OCT97, $500; John W. Fredericks: New Jersey Bankers 10/22/96—Wyoming Democratic Party 20,000 Political Action Committee, 2JY98, $500. 10/22/96—Texas Democratic Party ...... 25,000 Friends of Lois Capps, 2MAR98, $1,000; Presi- dent’s California Majority Fund, 2MAR98, Joseph T. Fredericks: International Asso- 10/22/96—WVSDEC Victory 96’ ...... 1,000 ciation of Firefighters Interested in Reg- 10/22/96—Oklahoma Democratic Party 1,200 $10,000; Democratic Congressional Campaign Committee, 2MAR98, $8,000; Mike Thompson istration and Education, 28MR98, $275. 10/22/96—Orton 1990 ...... 1,000 Norman J. Fredericks, Jr.: National Ready 3/27/97—Daschle for Senate ...... 1,000 for Congress, 2MAR98, $1,000. Paul J. Fredricks: Marks Boos Benhard for Mixed Concrete Association Political Action 6/7/97—Pelosi for Congress (Primary Committee (Concretepac), 14JA98, $200; Kil- and General Election) ...... 2,000 U.S. Congress 1994, 9 MAR 94, $900. J.W. Fredericks: Citizens for Senator patrick for United States Congress, 10NO98, 6/20/97—DCCC ...... 10,000 Wofford, 7JAN94, $500; DNC Services Cor- $250. 6/30/97—California Victory 1998 (Joint poration/Democratic National Committee, Peter G. Fredericks: Kilpatrick for United Fundraising Comm.) ...... 5,000 2FEB93, $200; Citizens for Senator Wofford, States Congress, 10NO98, $250. DSCC ($3,000) 18OCT94, $250; Haytaian-U.S. Senate ’94, Richard Fredericks: Democratic Senatorial Boxer for Senate ($2,000 Primary 16MAY94, $1,000; Friends of Newt Gingrich— Campaign Committee, 30JN97, $3,000; Dan and General) Williams for Congress, 30MR98, $200. 10/1/97—John Breaux 1998 (Primary 1992, 20OCT94, $250. Norman J. Federicks, Jr., National Ready James Fredericksen, MD: Society of Tho- and General Election) ...... 1,500 Mixed Concrete Association Political Com- racic Surgeons Political Action Committee: Stephanie S. Fredericks (Wife) Political mittee, 1AUG94, $250. The (STS PAC), 27FE97, $500. Contributions Jay Fredericksen: Norm Dicks for Con- John D. Frederickson: National Republican gress Committee, 14OCT94, $250; Friends for Congressional Committee Contributions, 9/4/96—Democratic National Com- Slade Gorton 1994, 22OCT94, $250. 27FE98, $350. mittee ...... 50,000 Richard Frederickson: Toby Roth for Con- Robert Frederickson: National Restaurant 10/30/96—Minnesota Democratic Party 26,000 gress ’94 Committee, 26AUG94, $500. Association Political Action 13AU97, $250. 10/30/96—Texas Democratic Party ...... 10,000 Rita A. Frederickson: Republican National Edward J. McGratty, III: Mike Ferguson 10/30/96—New Jersey Democratic Committee—RNC, 5AUG93, $250; Republican for Congress, 20OCT98, $500; Mike Ferguson Party ...... 24,000 National Committee—RNC, 19JAN94, $250. for Congress, 4NO97, $500. 10/1/97—John Breaux for Senate ...... 1,500 J Fredericks: DNC Services Corporation/ 6/30/97—California Victory 1998 (Joint Democratic National Committee, 30SEP96, Barbara J. Griffiths, of Virginia, a Career Fundraising Comm.) ...... 5,000 $20,000. Member of the Senior Foreign Service, Class DSCC ($3,000) J. Richard Fredericks: Fund for Demo- of Minister-Counselor, to be Ambassador Ex- Boxer for Senate ($2,000 Primary cratic Leadership FKA SAC PAC, 21FEB96, traordinary and Plenipotentiary of the and General) $1,000; DNC Non-Federal Unincorporated As- United States of America to the Republic of 2/24/98—California Presidential Ma- sociation Account, 26JUN96, $100,000; Friends Iceland. jority Fund ...... 10,000 of Senator D’Amato (1998 Committee), The following is a list of all members of 3/2/98—Presidential California Major- 20MAY96, $1,000; DNC-Non-Federal Indi- my immediate family and their spouses. I ity Fund (Joint Fundraising Comm. 10,000 vidual, 30SEP96, $10,000; Texas Democratic have asked each of these persons to inform Lois Capps ($1,000 Run-off) Party, 21OCT96, $2,000; Orton for Congress, me of the pertinent contributions made by Mike Thompson ($1,000 Primary) 23OCT96, $1,000; New Hampshire Democratic them. To the best of my knowledge, the in- DCCC ($8,000 Primary) State Committee, 29OCT96, $5,000. formation contained in this report is com- 5/13/98—Committee to Retain Judge J.W. Fredericks: Harvey Gantt for Senate plete and accurate. Douglas ...... 100 Campaign Committee, 13JUN96, $300; Harvey Nominee: Barbara J. Griffiths. 12/2/98—The Mark Hopkins (California Gantt for Senate Campaign Committee, Post: Republic of Iceland Victory Fund—CDP) (In-Kind) ...... 12,500 3SEP96, $300; Harvey Gantt for Senate Cam- Contributions, amount, date, and donee: Lois F. Fredericks (Mother) Political paign Committee, 18OCT96, $300; Harvey 1. Self, none. Contributions—None Gantt for Senate Campaign Committee, 2. Spouse, David M. Schoonover, none. 8APR96, $300; Citizens for Senator Wofford, 3. Children and spouses, not applicable. Norman J. Fredericks, Jr. (Brother) Political 9JAN96, $500; Citizens for Senator Wofford, 4. Parents, Arthur R. Griffiths (deceased); Contributions 13FEB96, $500. Gloria G. Emmel, none. 8/1/94—Concretepac ...... $250 John Fredericks: Phil Gramm for Presi- 5. Grandparents, Arthur Peet (deceased); 6/11/96—Concretepac ...... 300 dent, Inc., 23FEB95, $500; Republican Na- Mabel Griffiths (deceased); Erich Lehmann 12/28/97—Concretepac ...... 200 tional Committee—RNC, 13SEP95, $1,000; (deceased); Marie Lehmann (deceased). 10/17/98—Kilpatrick for US Congress .. 250 Martini for Congress, 22DEC95, $200; Friends 6. Brothers and spouses, Robert E. and Pa- 12/31/98—Concretepac ...... 200 of Newt Gingrich, 22JAN96, $750; Republican tience Griffiths, none; Gregory L. and Terry National Committee—RNC, 23JUL96 $1,000; Griffiths, none; Randall A. and Abbie Grif- Lois & Mike Thornbury (Sister and Brother in- RNC Republican National State Elections fiths, none. law) Political Contributions Committee, 13SEP95, $275; Frelinghuysen for 7. Sister, Wendy Griffiths Pohanka, $2000, 1998—Michigan Republican Party ...... $200 Congress, 21OCT96, $200. 5/1997, Tom Davis, House of Representatives. 1998—Newt Gingrich ...... 50 Ralph A. Fredericks: NRCCC—Nonfederal In process of divorce; Spouse contribu- Account, 8JAN96, $250. tions, unknown. Marcia & Edward McGratty (Sister and Brother Robert Fredericks: Electrical Construction in-law) Political Contributions PAC-National Electrical Contractors Asso- Sylvia Gaye Stanfield, of Texas, a Career 3/26/95—Mullaney for Assembly ...... $1500 ciation Inc. (ECPAC), 10APR96, $250. Member of the Senior Foreign Service, Class 4/7/95—Carroll for Assembly ...... 1000 John C. Frederickson: Hoyer for Congress, of Minister-Counselor, to be Ambassador Ex- 2/5/97—Mullaney for Assembly ...... 1800 5SEP96, $200. traordinary and Plenipotentiary of the July 28, 1999 CONGRESSIONAL RECORD — SENATE S9529 United States of America to Brunei they be confirmed, subject to the nomi- for the construction and renovation of public Darussalam. nees’ commitment to respond to re- schools and to provide tax incentives for cor- The following is a list of all members of quests to appear and testify before any porations to participate in cooperative my immediate family and their spouses. I duly constituted committee of the Sen- agreements with public schools in distressed have asked each of these persons to inform ate.) areas; to the Committee on Finance. me of the pertinent contributions made by By Mr. ABRAHAM (for himself and Mr. them. To the best of my knowledge, the in- f FEINGOLD): formation contained in this report is com- INTRODUCTION OF BILLS AND S. 1455. A bill to enhance protections plete and accurate. JOINT RESOLUTIONS against fraud in the offering of financial as- Nominee: Sylvia Gaye Stanfield. sistance for college education, and for other Post: Brunei Darussalam. The following bills and joint resolu- purposes; to the Committee on the Judici- Contributions, amount, date, and donee: tions were introduced, read the first ary. 1. Self, none beyond $1 check-off on income and second time by unanimous con- tax return. f sent, and referred as indicated: 2. Spouse, none. SUBMISSION OF CONCURRENT AND 3. Children and spouses, N/A. By Mr. WELLSTONE (for himself, Mr. 4. Parents, Mrs. J.A. (Nadine Roberts) KENNEDY, Mr. INOUYE, Mr. DASCHLE, SENATE RESOLUTIONS Stanfield, none; Mr. J.A. Stanfield, deceased and Mr. MOYNIHAN): The following concurrent resolutions for 20 years. S. 1447. A bill to amend the Public Health and Senate resolutions were read, and 5. Grandparents, deceased for over 20 years. Service Act, Employee Retirement Income 6. Brothers and spouses, none. Security Act of 1974, and the Internal Rev- referred (or acted upon), as indicated: 7. Sisters and spouses, Eunice F. Stanfield, enue Code of 1986 to provide for nondiscrim- By Mr. HELMS (for himself and Mr. M.D., none. inatory coverage for substance abuse treat- BIDEN): ment service under private group and indi- S. Res. 168. A resolution paying a gratuity William B. Taylor, Jr., of Virginia, for the vidual health coverage; to the Committee on to Mary Lyda Nance; considered and agreed Rank of Ambassador during tenure of service Health, Education, Labor, and Pensions. to. as Coordinator of U.S. Assistance for the By Mr. HUTCHINSON (for himself, f New Independent States. Mrs. LINCOLN, Mr. DEWINE, Mr. (The above nominations were re- ASHCROFT, Mr. SESSIONS, Mr. FRIST, STATEMENTS ON INTRODUCED ported with the recommendation that Mr. BREAUX, Mr. MOYNIHAN, Mrs. BILLS AND JOINT RESOLUTIONS FEINSTEIN, and Mrs. BOXER): they be confirmed, subject to the nomi- S. 1448. A bill to amend the Food Security By Mr. WELLSTONE (for him- nees’ commitment to respond to re- Act of 1985 to authorize the annual enroll- self, Mr. KENNEDY, Mr. INOUYE, quests to appear and testify before any ment of land in the wetlands reserve pro- Mr. DASCHLE, and Mr. MOY- duly constituted committee of the Sen- gram, to extend the program through 2005, NIHAN): ate). and for other purposes; to the Committee on S. 1447. A bill to amend the Public Mr. HELMS. Mr. President, for the Agriculture, Nutrition, and Forestry. Health Service Act, Employee Retire- Committee on Foreign Relations, I re- By Mr. CONRAD (for himself, Mr. ment Income Security Act of 1974, and FRIST, Mr. ROBB, Mr. INOUYE, Mr. port favorably a nomination list which the Internal Revenue Code of 1986 to THOMPSON, Mr. MURKOWSKI, and Mr. was printed in the RECORD of July 1, DEWINE): provide for nondiscriminatory coverage 1999, and ask unanimous consent, to S. 1449. A bill to amend title XVIII of the for substance abuse treatment service save the expense of reprinting on the Social Security Act to increase the payment under private group and individual Executive Calendar, that these nomi- amount for renal dialysis services furnished health coverage; to the Committee on nations lie at the Secretary’s desk for under the medicare program; to the Com- Health, Education, Labor, and Pen- information of Senators. mittee on Finance. sions. The PRESIDING OFFICER. Without By Mr. DODD (for himself and Mr. LIEBERMAN): FAIRNESS IN TREATMENT—THE DRUG AND objection, it is so ordered. S. 1450. A bill to authorize the Secretary of ALCOHOL ADDICTION RECOVERY ACT OF 1999 (The nominations ordered to lie on Transportation to convey a National Defense ∑ Mr. WELLSTONE. Mr. President, I the Secretary’s desk were printed in Reserve Fleet vessel to the Glacier Society, rise today to introduce legislation that the RECORD of July 1, 1999, at the end of Inc., of Bridgeport, Connecticut; to the Com- will ensure that private health insur- the Senate proceedings.) mittee on Commerce, Science, and Transpor- ance companies cover the costs for In the Foreign Service nominations begin- tation. By Mr. HARKIN (for himself, Mr. HOL- drug and alcohol addiction treatment ning Susan Garrison, and ending Richard services at the same level that they Tsutomu Yoneoka, which nominations were LINGS, Mr. BIDEN, and Mr. GRAHAM): S. 1451. A bill to amend titles XI and XVIII received by the Senate and appeared in the pay for treatment for other diseases. of the Social Security Act to improve efforts Congressional Record of July 1, 1999. The purpose of this bill is to end dis- to combat medicare fraud, waste, and abuse; By Mr. JEFFORDS, for the Committee on crimination in insurance coverage for to the Committee on Finance. Health, Education, Labor, and Pensions: drug and alcohol addiction treatment. By Mr. SHELBY (for himself, Mr. A. E. Dick Howard, of Virginia, to be a This bill, entitled Fairness in Treat- BAYH, Mr. BRYAN, Mr. ROCKEFELLER, Member of the Board of Trustees of the ment: The Drug and Alcohol Addiction James Madison Memorial Fellowship Foun- and Mr. BINGAMAN): S. 1452. A bill to modernize the require- Recovery Act of 1999, offers the nec- dation for a term of six years. ments under the National Manufactured James Roger Angel, of Arizona, to be a essary provisions to provide this assur- Housing Construction and Safety Standards Member of the Board of Trustees of the ance. of 1974 and to establish a balanced consensus Barry Goldwater Scholarship and Excellence For too long, the problem of drug and process for the development, revision, and in Education Foundation for a term expiring alcohol addiction has been viewed as a interpretation of Federal construction and February 4, 2002. safety standards for manufactured homes; to moral issue, rather than as a disease. Edward B. Montgomery, of Maryland, to be the Committee on Banking, Housing, and Too often, a cloak of secrecy has sur- an Assistant Secretary of Labor. Urban Affairs. rounded this problem, causing people Richard M. McGahey, of the District of Co- By Mr. FRIST (for himself, Mr. FEIN- lumbia, to be an Assistant Secretary of who have this disease to feel ashamed GOLD, Mr. BROWNBACK, and Mr. Labor. and afraid to seek treatment for their Jack E. Hightower, of Texas, to be a Mem- LIEBERMAN): symptoms for fear that they will be S. 1453. A bill to facilitate relief efforts and ber of the National Commission on Libraries seen as admitting to a moral failure, or a comprehensive solution to the war in and Information Science for a term expiring Sudan; to the Committee on Foreign Rela- a weakness in character. We have all July 19, 1999. tions. seen portrayals of alcoholics and ad- Christopher C. Gallagher, of New Hamp- By Mr. ROBB (for himself, Mr. LAUTEN- dicts that are intended to be humorous shire, to be a Member of the Board of Direc- BERG, Mr. CONRAD, Mr. HARKIN, Mr. or derogatory, and only reinforce the tors of the Corporation for National and KENNEDY, Mr. DASCHLE, Mr. REID, Community Service for a term expiring Oc- biases against people who have prob- Mrs. MURRAY, Mr. LEVIN, Mr. tober 6, 2003. (Reappointment) lems with drug and alcohol addiction. I CLELAND, Mr. DODD, Mr. TORRICELLI, Jerry D. Florence, of California, to be a cannot imagine this type of portrayal Mr. SCHUMER, Mrs. LINCOLN, Mr. Member of the National Museum Services of someone who has another kind of JOHNSON, Mr. WELLSTONE, Mr. KERRY, Board for a term expiring December 6, 2002. Mr. KERREY, and Mr. AKAKA): chronic illness, a heart problem, or (The above nominations were re- S. 1454. A bill to amend the Internal Rev- who happens to carry a gene that pre- ported with the recommendations that enue Code of 1986 to expand the incentives disposes them to diabetes. S9530 CONGRESSIONAL RECORD — SENATE July 28, 1999 It has been shown that some forms of physical and mental damage. We know in insurance coverage for alcohol and addiction have a genetic basis, and yet too of the devastation caused by addic- drug rehabilitation and treatment has we still try to deny the serious medical tion when violence between people is received the strong support of the nature of this disease. We think of one of the consequences. A 1998 White House, ONDCP Director General those with this disease as somehow dif- SAMHSA report outlined the links be- Barry McCaffrey, Former Surgeon Gen- ferent from us. We forget that someone tween domestic violence and substance eral C. Everett Koop, Former President who has a problem with drugs or alco- abuse. We know from clinical reports and Mrs. Gerald Ford, the U.S. Con- hol can look just like the person we see that 25–50% of men who commit acts of ference of Mayors, Kaiser Permanente in the mirror, or the person who is sit- domestic violence also have substance Health Plans, and many leading figures ting next to us at work or on the sub- abuse problems. The report recognized in medicine, business, government, way, or like someone in our own fam- the link between the victim of abuse journalism, and entertainment who ily. In fact, it is likely that most of us and use of alcohol and drugs, and rec- have successfully fought the battle of know someone who has experienced ommended that after the woman’s safe- addiction with the help of treatment. drug and alcohol addiction, within our ty has been addressed, the next step Hearings held last year by the Senate families or our circle of friends or co- would be to help with providing treat- Appropriations Committee and the workers. ment for her addiction as a step toward Committee on Health, Education, Alcoholism and drug addiction are independence and health, and toward Labor, and Pensions highlighted the re- painful, private struggles with stag- the prevention of the consequences for cent major advances in scientific infor- gering public costs. A study prepared the children who suffer the same abuse mation about the disease; the biologi- by The Lewin Group for the National either directly, or indirectly by wit- cal causes of addiction; the effective- Institute on Drug Abuse and the Na- nessing spousal violence. ness and low cost of treatment; and tional Institute on Alcohol Abuse and People who have the disease of addic- many painful, personal stories of peo- Alcoholism, estimated that the total tion can be found throughout our soci- ple, including children, who have been economic cost of alcohol and drug ety. According to the 1997 National denied treatment. abuse to be $246 billion for 1992. Of this Household Survey on Drug Abuse pub- We know that the failure of insur- ance companies to provide treatment cost, $98 billion was due to drug addic- lished by SAMHSA, nearly 73 percent can sometimes have devastating re- tion to illicit drugs and other drugs of all illegal drug users in the United sults. The New York Times recently taken for non-medical purposes. This States are employed. This number rep- highlighted the tragic suicide of a estimate includes addiction treatment resents 6.7 million full-time workers and prevention costs, as well as costs young man who desperately sought in- and 1.6 million part-time workers. Al- patient treatment care for his drug ad- associated with related illnesses, re- though many of these workers could diction and fought for 8 months to have duced job productivity or lost earnings, and should have insurance benefits the plan authorize the treatment that and other costs to society such as that would cover treatment for this was in fact included in as part of his crime and social welfare programs. The disease, they do not. benefits. The authorization came study also determined that these costs In addition to the health problems through—but too late—he had died are borne primarily by governments (46 resulting from the failure to treat the three weeks earlier from a drug over- percent), followed by those who abuse illness, there are other serious con- dose. This kind of denial of care for ad- drugs and members of their households sequences affecting the workplace, diction treatment is not at all unique— (44 percent). According to this same such as lost productivity, high em- the 1998 Hay Group Report on Em- study, private health and life insurance ployee turnover, low employee morale, ployer Health Care Dollars Spent on companies bear only 3.2 percent of the mistakes, accidents, and increased Substance Abuse showed that from 1988 costs of drug abuse and 10.2 percent of worker’s compensation insurance and through 1998 the value of substance the costs of alcohol abuse. health insurance premiums—all results abuse treatment benefits decreased by The health effects resulting from al- of untreated addiction problems. 74.5%, as compared to a 11.5% decrease cohol addiction can be very serious, Whether you are a corporate CEO or a for overall health care benefits. even fatal. A 1996 article in Scientific small business owner, there are simple, Addiction to alcohol and drugs is a American estimated that excessive al- effective steps that can be taken—in- disease that affects the brain, the body, cohol consumption causes more than cluding providing insurance coverage and the spirit. We must provide ade- 100,000 deaths in the U.S. each year. Of for this disease, ready access to treat- quate opportunities for the treatment these deaths, twenty-four per cent are ment, and workplace policies that sup- of addiction in order to help those who due to drunken driving, eleven percent port treatment—that can reduce these are suffering and to prevent the health are homicides, and eight percent are human and economic costs. and social problems that it causes. suicides. Alcohol contributes to can- We know from the outstanding re- This legislation will take an important cers of the esophagus, larynx, and oral search conducted at NIH, through the step in this direction by requiring that cavity, which account for seventeen National Institute on Drug Abuse and health insurance plans eliminate dis- percent of these deaths. Strokes re- the National Institute on Alcohol crimination for addiction treatment. lated to alcohol use account for an- Abuse and Alcoholism, that treatment The costs for this are very low. A 1999 other nine percent of deaths. Alcohol for drug and alcohol addiction can be study by the Rand Corporation found causes several other ailments, such as effective. That is the major finding that the cost to managed care health cirrhosis of the liver. These ailments from a NIDA-sponsored nationwide plans is now only about $5 per person account for eighteen percent of the study of drug abuse treatment out- per year for unlimited substance abuse deaths. comes. The Drug Abuse Treatment treatment benefits to employees of big We know that addiction to alcohol Outcome Study (DATOS) tracked 10,000 companies. A 1997 Milliman and Rob- and other drugs contribute to other people in nearly 100 treatment pro- ertson study found that complete sub- problems as well. Addictive substances grams in 11 cities who entered treat- stance abuse treatment parity would have the potential for destroying the ment for addiction between 1991 and increase per capita health insurance person who is addicted, their family, 1993. Results showed that for all four premiums by only one half of one per- and their other relationships. We treatment types studied, there were re- cent, or less than $1 per member per know, for example, that fetal alcohol ductions in the use of cocaine, heroin, month—without even considering any syndrome is the leading known cause and marijuana after treatment. More- of the obvious savings that will result of mental retardation. If the woman over, treatment resulted in other posi- from treatment. Several studies have who was addicted to alcohol could re- tive changes in behavior, such as fewer shown that for every $1 spent on treat- ceive proper treatment, fetal alcohol psychological symptoms and increased ment, more than $7 is saved in other syndrome for her baby would be 100 work productivity. health care expenses, and that these percent preventable, and more than We must do more to prevent this ill- savings are in addition to the financial 12,000 infants born in the U.S. each ness and to treat those who are ad- and other benefits of increased produc- year would not suffer from fetal alco- dicted to drugs and alcohol. Over the tivity, as well as participation in fam- hol syndrome, with its irreversible past few years, the principle of parity ily and community life. Providing July 28, 1999 CONGRESSIONAL RECORD — SENATE S9531 treatment for addiction also saves mil- ployees on business days during the pre- ‘‘section 2704’’ and inserting ‘‘sections 2704 lions of dollars in the criminal justice ceding calendar year and who employs at and 2707’’. system. But for treatment to be effec- least 2 employees on the first day of the plan (2) ERISA AMENDMENTS.— tive and helpful throughout our society year. (A) IN GENERAL.—Subpart B of part 7 of ‘‘(3) APPLICATION OF CERTAIN RULES IN DE- subtitle B of title I of the Employee Retire- all systems of care—including private TERMINATION OF EMPLOYER SIZE.—For pur- ment Income Security Act of 1974 (29 U.S.C. insurance plans—must share this re- poses of this subsection: 1185 et seq.) is amended by adding at the end sponsibility. ‘‘(A) APPLICATION OF AGGREGATION RULE the following: This legislation does not mandate FOR EMPLOYERS.—Rules similar to the rules ‘‘SEC. 714. PARITY IN THE APPLICATION OF that health insurers offer substance ad- under subsections (b), (c), (m), and (o) of sec- TREATMENT LIMITATIONS AND FI- diction treatment benefits. What it tion 414 of the Internal Revenue Code of 1986 NANCIAL REQUIREMENTS TO SUB- STANCE ABUSE TREATMENT BENE- does is prohibit discrimination by shall apply for purposes of treating persons as a single employer. FITS. health plans who offer substance addic- ‘‘(a) IN GENERAL.—In the case of a group ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN PRE- tion treatment from placing unfair and health plan (or health insurance coverage of- CEDING YEAR.—In the case of an employer life-threatening limitations on caps, which was not in existence throughout the fered in connection with such a plan) that access, or financial requirements for preceding calendar year, the determination provides both medical and surgical benefits addiction treatment that are different of whether such employer is a small em- and substance abuse treatment benefits, the from other medical and surgical serv- ployer shall be based on the average number plan or coverage shall not impose treatment of employees that it is reasonably expected limitations or financial requirements on the ices. substance abuse treatment benefits unless We must move forward now to vigor- such employer will employ on business days in the current calendar year. similar limitations or requirements are im- ously address the serious and life- posed for medical and surgical benefits. ‘‘(C) PREDECESSORS.—Any reference in this threatening problem of drug and alco- ‘‘(b) CONSTRUCTION.—Nothing in this sec- subsection to an employer shall include a tion shall be construed— hol addiction in our country. It is long reference to any predecessor of such em- ‘‘(1) as requiring a group health plan (or past time that insurance companies do ployer. health insurance coverage offered in connec- their fair share in bearing the responsi- ‘‘(d) SEPARATE APPLICATION TO EACH OP- bility for treating this disease. tion with such a plan) to provide any sub- TION OFFERED.—In the case of a group health stance abuse treatment benefits; or I ask that the full text of the bill be plan that offers a participant or beneficiary ‘‘(2) to prevent a group health plan or a printed in the RECORD. two or more benefit package options under health insurance issuer offering group health The bill follows: the plan, the requirements of this section insurance coverage from negotiating the S. 1447 shall be applied separately with respect to level and type of reimbursement with a pro- each such option. Be it enacted by the Senate and House of vider for care provided in accordance with ‘‘(e) DEFINITIONS.—For purposes of this Representatives of the United States of America this section. section— in Congress assembled, ‘‘(c) SMALL EMPLOYER EXEMPTION.— ‘‘(1) TREATMENT LIMITATION.—The term ‘‘(1) IN GENERAL.—This section shall not SECTION 1. SHORT TITLE. ‘treatment limitation’ means, with respect This Act may be cited as the ‘‘Fairness in apply to any group health plan (and group to benefits under a group health plan or health insurance coverage offered in connec- Treatment: The Drug and Alcohol Addiction health insurance coverage, any day or visit Recovery Act of 1999’’. tion with a group health plan) for any plan limits imposed on coverage of benefits under year of a small employer. SEC. 2. PARITY IN SUBSTANCE ABUSE TREAT- the plan or coverage during a period of time. MENT BENEFITS. ‘‘(2) SMALL EMPLOYER.—For purposes of ‘‘(2) FINANCIAL REQUIREMENT.—The term (a) GROUP HEALTH PLANS.— paragraph (1), the term ‘small employer’ ‘financial requirement’ means, with respect means, in connection with a group health (1) PUBLIC HEALTH SERVICE ACT AMEND- to benefits under a group health plan or MENTS.— plan with respect to a calendar year and a health insurance coverage, any deductible, plan year, an employer who employed an av- (A) IN GENERAL.—Subpart 2 of part A of coinsurance, or cost-sharing or an annual or title XXVII of the Public Health Service Act erage of at least 2 but not more than 25 em- lifetime dollar limit imposed with respect to ployees on business days during the pre- (42 U.S.C. 300gg–4 et seq.) is amended by add- the benefits under the plan or coverage. ing at the end the following: ceding calendar year and who employs at ‘‘(3) MEDICAL OR SURGICAL BENEFITS.—The least 2 employees on the first day of the plan ‘‘SEC. 2707. PARITY IN THE APPLICATION OF term ‘medical or surgical benefits’ means year. TREATMENT LIMITATIONS AND FI- benefits with respect to medical or surgical NANCIAL REQUIREMENTS TO SUB- ‘‘(3) APPLICATION OF CERTAIN RULES IN DE- STANCE ABUSE TREATMENT BENE- services, as defined under the terms of the TERMINATION OF EMPLOYER SIZE.—For pur- FITS. plan or coverage (as the case may be), but poses of this subsection: ‘‘(a) IN GENERAL.—In the case of a group does not include substance abuse treatment ‘‘(A) APPLICATION OF AGGREGATION RULE health plan (or health insurance coverage of- benefits. FOR EMPLOYERS.—Rules similar to the rules fered in connection with such a plan) that ‘‘(4) SUBSTANCE ABUSE TREATMENT BENE- under subsections (b), (c), (m), and (o) of sec- provides both medical and surgical benefits FITS.—The term ‘substance abuse treatment tion 414 of the Internal Revenue Code of 1986 and substance abuse treatment benefits, the benefits’ means benefits with respect to sub- shall apply for purposes of treating persons plan or coverage shall not impose treatment stance abuse treatment services. as a single employer. limitations or financial requirements on the ‘‘(5) SUBSTANCE ABUSE TREATMENT SERV- ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN PRE- substance abuse treatment benefits unless ICES.—The term ‘substance abuse services’ CEDING YEAR.—In the case of an employer similar limitations or requirements are im- means any of the following items and serv- which was not in existence throughout the posed for medical and surgical benefits. ices provided for the treatment of substance preceding calendar year, the determination ‘‘(b) CONSTRUCTION.—Nothing in this sec- abuse: of whether such employer is a small em- tion shall be construed— ‘‘(A) Inpatient treatment, including detoxi- ployer shall be based on the average number ‘‘(1) as requiring a group health plan (or fication. of employees that it is reasonably expected health insurance coverage offered in connec- ‘‘(B) Non-hospital residential treatment. such employer will employ on business days tion with such a plan) to provide any sub- ‘‘(C) Outpatient treatment, including in the current calendar year. stance abuse treatment benefits; or screening and assessment, medication man- ‘‘(C) PREDECESSORS.—Any reference in this ‘‘(2) to prevent a group health plan or a agement, individual, group, and family coun- subsection to an employer shall include a health insurance issuer offering group health seling, and relapse prevention. reference to any predecessor of such em- insurance coverage from negotiating the ‘‘(D) Prevention services, including health ployer. level and type of reimbursement with a pro- education and individual and group coun- ‘‘(d) SEPARATE APPLICATION TO EACH OP- vider for care provided in accordance with seling to encourage the reduction of risk fac- TION OFFERED.—In the case of a group health this section. tors for substance abuse. plan that offers a participant or beneficiary ‘‘(c) SMALL EMPLOYER EXEMPTION.— ‘‘(6) SUBSTANCE ABUSE.—The term ‘sub- two or more benefit package options under ‘‘(1) IN GENERAL.—This section shall not stance abuse’ includes chemical dependency. the plan, the requirements of this section apply to any group health plan (and group ‘‘(f) NOTICE.—A group health plan under shall be applied separately with respect to health insurance coverage offered in connec- this part shall comply with the notice re- each such option. tion with a group health plan) for any plan quirement under section 713(f) of the Em- ‘‘(e) DEFINITIONS.—For purposes of this year of a small employer. ployee Retirement Income Security Act of section— ‘‘(2) SMALL EMPLOYER.—For purposes of 1974 with respect to the requirements of this ‘‘(1) TREATMENT LIMITATION.—The term paragraph (1), the term ‘small employer’ section as if such section applied to such ‘treatment limitation’ means, with respect means, in connection with a group health plan.’’. to benefits under a group health plan or plan with respect to a calendar year and a (B) CONFORMING AMENDMENT.—Section health insurance coverage, any day or visit plan year, an employer who employed an av- 2723(c) of the Public Health Service Act (42 limits imposed on coverage of benefits under erage of at least 2 but not more than 25 em- U.S.C. 300gg–23(c)) is amended by striking the plan or coverage during a period of time. S9532 CONGRESSIONAL RECORD — SENATE July 28, 1999

‘‘(2) FINANCIAL REQUIREMENT.—The term ‘‘(1) as requiring a group health plan (or ‘‘(B) Non-hospital residential treatment. ‘financial requirement’ means, with respect health insurance coverage offered in connec- ‘‘(C) Outpatient treatment, including to benefits under a group health plan or tion with such a plan) to provide any sub- screening and assessment, medication man- health insurance coverage, any deductible, stance abuse treatment benefits; or agement, individual, group, and family coun- coinsurance, or cost-sharing or an annual or ‘‘(2) to prevent a group health plan or a seling, and relapse prevention. lifetime dollar limit imposed with respect to health insurance issuer offering group health ‘‘(D) Prevention services, including health the benefits under the plan or coverage. insurance coverage from negotiating the education and individual and group coun- ‘‘(3) MEDICAL OR SURGICAL BENEFITS.—The level and type of reimbursement with a pro- seling to encourage the reduction of risk fac- term ‘medical or surgical benefits’ means vider for care provided in accordance with tors for substance abuse. benefits with respect to medical or surgical this section. ‘‘(6) SUBSTANCE ABUSE.—The term ‘sub- services, as defined under the terms of the ‘‘(c) SMALL EMPLOYER EXEMPTION.— stance abuse’ includes chemical depend- plan or coverage (as the case may be), but ‘‘(1) IN GENERAL.—This section shall not ency.’’. does not include substance abuse treatment apply to any group health plan (and group (B) CONFORMING AMENDMENT.—The table of benefits. health insurance coverage offered in connec- contents for chapter 100 of the Internal Rev- ‘‘(4) SUBSTANCE ABUSE TREATMENT BENE- tion with a group health plan) for any plan enue Code of 1986 is amended by inserting FITS.—The term ‘substance abuse treatment year of a small employer. after the item relating to section 9812 the benefits’ means benefits with respect to sub- ‘‘(2) SMALL EMPLOYER.—For purposes of following new item: stance abuse treatment services. paragraph (1), the term ‘small employer’ ‘‘Sec. 9813. Parity in the application of treat- means, in connection with a group health ‘‘(5) SUBSTANCE ABUSE TREATMENT SERV- ment limitations and financial plan with respect to a calendar year and a ICES.—The term ‘substance abuse services’ requirements to substance plan year, an employer who employed an av- means any of the following items and serv- abuse treatment benefits.’’. ices provided for the treatment of substance erage of at least 2 but not more than 25 em- ployees on business days during the pre- (b) INDIVIDUAL HEALTH INSURANCE.— abuse: (1) IN GENERAL.—Part B of title XXVII of ‘‘(A) Inpatient treatment, including detoxi- ceding calendar year and who employs at least 2 employees on the first day of the plan the Public Health Service Act (42 U.S.C. fication. 300gg-41 et seq.) is amended by inserting ‘‘(B) Non-hospital residential treatment. year. ‘‘(3) APPLICATION OF CERTAIN RULES IN DE- after section 2752 the following: ‘‘(C) Outpatient treatment, including ‘‘SEC. 2753. PARITY IN THE APPLICATION OF screening and assessment, medication man- TERMINATION OF EMPLOYER SIZE.—For pur- poses of this subsection: TREATMENT LIMITATIONS AND FI- agement, individual, group, and family coun- NANCIAL REQUIREMENTS TO SUB- seling, and relapse prevention. ‘‘(A) APPLICATION OF AGGREGATION RULE STANCE ABUSE BENEFITS. ‘‘(D) Prevention services, including health FOR EMPLOYERS.—Rules similar to the rules ‘‘(a) IN GENERAL.—The provisions of sec- education and individual and group coun- under subsections (b), (c), (m), and (o) of sec- tion 2707 (other than subsection (e)) shall seling to encourage the reduction of risk fac- tion 414 of the Internal Revenue Code of 1986 apply to health insurance coverage offered tors for substance abuse. shall apply for purposes of treating persons by a health insurance issuer in the indi- as a single employer. ‘‘(6) SUBSTANCE ABUSE.—The term ‘sub- vidual market in the same manner as it ap- stance abuse’ includes chemical dependency. ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN PRE- plies to health insurance coverage offered by ‘‘(f) NOTICE UNDER GROUP HEALTH PLAN.— CEDING YEAR.—In the case of an employer a health insurance issuer in connection with The imposition of the requirements of this which was not in existence throughout the a group health plan in the small or large section shall be treated as a material modi- preceding calendar year, the determination group market. fication in the terms of the plan described in of whether such employer is a small em- ‘‘(b) NOTICE.—A health insurance issuer section 102(a)(1), for purposes of assuring no- ployer shall be based on the average number under this part shall comply with the notice tice of such requirements under the plan; ex- of employees that it is reasonably expected requirement under section 713(f) of the Em- cept that the summary description required such employer will employ on business days ployee Retirement Income Security Act of to be provided under the last sentence of sec- in the current calendar year. 1974 with respect to the requirements re- tion 104(b)(1) with respect to such modifica- ‘‘(C) PREDECESSORS.—Any reference in this ferred to in subsection (a) as if such section tion shall be provided by not later than 60 subsection to an employer shall include a applied to such issuer and such issuer were a days after the first day of the first plan year reference to any predecessor of such em- group health plan.’’. in which such requirements apply.’’. ployer. (2) CONFORMING AMENDMENT.—Section (B) CONFORMING AMENDMENTS.— ‘‘(d) SEPARATE APPLICATION TO EACH OP- 2762(b)(2) of the Public Health Service Act (42 (i) Section 731(c) of the Employee Retire- TION OFFERED.—In the case of a group health U.S.C. 300gg–62(b)(2)) is amended by striking ment Income Security Act of 1974 (29 U.S.C. plan that offers a participant or beneficiary ‘‘section 2751’’ and inserting ‘‘sections 2751 1191(c)) is amended by striking ‘‘section 711’’ two or more benefit package options under and 2753’’. and inserting ‘‘sections 711 and 714’’. the plan, the requirements of this section (c) EFFECTIVE DATES.— (ii) Section 732(a) of the Employee Retire- shall be applied separately with respect to (1) IN GENERAL.—Subject to paragraph (3), ment Income Security Act of 1974 (29 U.S.C. each such option. the amendments made by subsection (a) 1191a(a)) is amended by striking ‘‘section ‘‘(e) DEFINITIONS.—For purposes of this shall apply with respect to group health 711’’ and inserting ‘‘sections 711 and 714’’. section— plans for plan years beginning on or after (iii) The table of contents in section 1 of ‘‘(1) TREATMENT LIMITATION.—The term January 1, 2000. the Employee Retirement Income Security ‘treatment limitation’ means, with respect (2) INDIVIDUAL MARKET.—The amendments Act of 1974 is amended by inserting after the to benefits under a group health plan or made by subsection (b) shall apply with re- item relating to section 713 the following health insurance coverage, any day or visit spect to health insurance coverage offered, new item: limits imposed on coverage of benefits under sold, issued, renewed, in effect, or operated the plan or coverage during a period of time. ‘‘Sec. 714. Parity in the application of treat- in the individual market on or after January ‘‘(2) FINANCIAL REQUIREMENT.—The term ment limitations and financial 1, 2000. ‘financial requirement’ means, with respect requirements to substance (3) COLLECTIVE BARGAINING AGREEMENTS.— to benefits under a group health plan or abuse treatment benefits.’’. In the case of a group health plan main- health insurance coverage, any deductible, tained pursuant to 1 or more collective bar- (3) INTERNAL REVENUE CODE AMENDMENTS.— coinsurance, or cost-sharing or an annual or gaining agreements between employee rep- (A) IN GENERAL.—Subchapter B of chapter lifetime dollar limit imposed with respect to resentatives and 1 or more employers rati- 100 of the Internal Revenue Code of 1986 is the benefits under the plan or coverage. fied before the date of enactment of this Act, amended by inserting after section 9812, the ‘‘(3) MEDICAL OR SURGICAL BENEFITS.—The the amendments made subsection (a) shall following: term ‘medical or surgical benefits’ means not apply to plan years beginning before the ‘‘SEC. 9813. PARITY IN THE APPLICATION OF benefits with respect to medical or surgical later of— TREATMENT LIMITATIONS AND FI- services, as defined under the terms of the (A) the date on which the last collective NANCIAL REQUIREMENTS TO SUB- plan or coverage (as the case may be), but STANCE ABUSE TREATMENT BENE- bargaining agreements relating to the plan FITS. does not include substance abuse treatment terminates (determined without regard to ‘‘(a) IN GENERAL.—In the case of a group benefits. any extension thereof agreed to after the health plan (or health insurance coverage of- ‘‘(4) SUBSTANCE ABUSE TREATMENT BENE- date of enactment of this Act), or fered in connection with such a plan) that FITS.—The term ‘substance abuse treatment (B) January 1, 2000. provides both medical and surgical benefits benefits’ means benefits with respect to sub- For purposes of subparagraph (A), any plan and substance abuse treatment benefits, the stance abuse treatment services. amendment made pursuant to a collective plan or coverage shall not impose treatment ‘‘(5) SUBSTANCE ABUSE TREATMENT SERV- bargaining agreement relating to the plan limitations or financial requirements on the ICES.—The term ‘substance abuse services’ which amends the plan solely to conform to substance abuse treatment benefits unless means any of the following items and serv- any requirement added by subsection (a) similar limitations or requirements are im- ices provided for the treatment of substance shall not be treated as a termination of such posed for medical and surgical benefits. abuse: collective bargaining agreement. ‘‘(b) CONSTRUCTION.—Nothing in this sec- ‘‘(A) Inpatient treatment, including detoxi- (d) COORDINATED REGULATIONS.—Section tion shall be construed— fication. 104(1) of Health Insurance Portability and July 28, 1999 CONGRESSIONAL RECORD — SENATE S9533 Accountability Act of 1996 is amended by rate) the quality of dialysis services fraud, waste, and abuse; to the Com- striking ‘‘this subtitle (and the amendments may decline. Therefore, an update to mittee on Finance. made by this subtitle and section 401)’’ and the composite rate is recommended.’’ inserting ‘‘the provisions of part 7 of subtitle Further, MedPAC has concluded that MEDICARE WASTE TAX REDUCTION ACT OF 1999 B of title I of the Employee Retirement In- come Security Act of 1974, and the provisions the majority of dialysis facilities now Mr. HARKIN. Mr. President, today I of parts A and C of title XXVII of the Public lose money on Medicare reimburse- am introducing with Senator HOL- Health Service Act, and chapter 1000 of the ment and the problem is especially LINGS, Senator BIDEN, and Senator Internal Revenue Code of 1986’’. acute for small, rural, and non-profit GRAHAM an important piece of legisla- SEC. 3. PREEMPTION. dialysis facilities. In my state, we sim- tion that will help to protect and pre- Nothing in the amendments made by this ply cannot afford to lose rural pro- serve Medicare. The bill is entitled the Act shall be construed to preempt any provi- viders—including providers of dialysis Medicare Waste Tax Reduction Act of sion of State law that provides protections services. 1999. to enrollees that are greater than the protec- This legislation will ensure dialysis tions provided under such amendments.∑ For over ten years now, I have facilities have the resources to con- worked to combat fraud, waste and tinue offering critical dialysis services By Mr. CONRAD (for himself, Mr. abuse in the Medicare program. As to individuals with kidney failure. I FRIST, Mr. ROBB, Mr. INOUYE, Chairman and now Ranking Minority urge my colleagues to support this im- Mr. THOMPSON, Mr. MURKOWSKI, Member of the Senate Appropriations portant legislation. and Mr. DEWINE): ∑ Subcommittee with oversight of the S. 1449. A bill to amend title XVIII of By Mr. DODD (for himself and administration of Medicare, I’ve held the Social Security Act to increase the hearing after hearing and released re- payment amount for renal dialysis Mr. LIEBERMAN): port after report documenting the ex- services furnished under the Medicare S. 1450. A bill to authorize the Sec- tent of this problem. While virtually no program; to the Committee on Fi- retary of Transportation to convey a one was paying attention to our effort nance. National Defense Reserve Fleet vessel to the Glacier Society, Inc., of Bridge- for many years, we’ve succeeded in MEDICARE RENAL DIALYSIS FAIR PAYMENT ACT bringing greater attention and focus to OF 1999 port, Connecticut; to the Committee on this problem in recent years. ∑ Mr. CONRAD. Mr. President, today I Commerce, Science, and Transpor- am pleased to join Senator FRIST to in- tation. Part of our effort has been to try to troduce the Medicare Renal Dialysis CONVEYANCE OF THE SHIP GLACIER quantify the scope of the problem. Sev- Fair Payment Act of 1999. This legisla- ∑ Mr. DODD. Mr. President, I rise eral years ago, the General Accounting tion takes important steps to help sus- today to introduce legislation that Office reported that up to 10 percent of tain and improve the quality of care would save a historic vessel from the Medicare funds could be lost to fraud, for Medicare beneficiaries suffering scrap heap. The Glacier, a 310 foot, waste and abuse each year. Many ques- from kidney-failure. 8,600 ton icebreaker was commissioned tioned that estimate as too large. They Nationwide, more than 280,000 Ameri- as a vessel of the U.S. Navy in 1955. It said the problem existed, but it wasn’t cans live with end-stage renal disease made 39 trips to the North and South nearly as big as 10 percent. A few years (ESRD). In my state of North Dakota, poles; made the deepest penetration of ago, the Inspector General conducted the number of patients living with the Antarctic by sea in 1961; rescued the first-ever detailed audit of Medi- ESRD is relatively small, just over 600 explorer Sir Vivan Fuchs; and was the care payments. That Chief Financial per year. However, for these patients, largest icebreaker of its time. Cur- Officer Act audit found that fully 14 and others across the country, access rently, the Glacier is part of the re- percent of Medicare payments in 1996, to dialysis treatments means the dif- serve fleet awaiting disposition as or over $23 billion, had been made im- ference between life and death. scrap or transfer to the Glacier Soci- properly. In 1972, the Congress took important ety, a group dedicated to restoring the To combat these substantial losses, steps to ensure that elderly and dis- Glacier. we have put into place the reforms em- abled individuals with kidney-failure This bill would simply convey the bodied in the Health Insurance Port- receive appropriate dialysis care. At Glacier from the reserve fleet to the ability Act and the Balanced Budget that time, Medicare coverage was ex- Glacier Society. The Society is mainly Act. HCFA, the Inspector General and tended to include dialysis treatments composed of active and retired service- the Justice Department also have con- for beneficiaries with ESRD. men who served aboard the Glacier and tinued to aggressively use new author- Over the last three decades, dialysis is headed by Ben Koether, one of the ity to crack down on Medicare fraud, facilities have provided services to in- ship’s former navigators. The group en- waste, and abuse. As a result, we have creasing numbers of kidney-failure pa- visions that the Glacier will operate as seen a dramatic decrease in these im- tients under increasingly strict quality a museum and scientific laboratory. proper payments. According to the standards. However, it has come to my Both in port and underway, the Glacier most recent Inspector General’s report, attention that reimbursement to dialy- Society hopes to provide hands-on improper payments had been reduced sis facilities does not reflect the more training to children and adults while from $23.2 billion in 1996, to $20.3 billion stringent quality requirements placed teaching the history of Polar explo- in 1997, to $12.6 billion in 1998. upon dialysis providers. ration. Since 1983, reimbursement to dialysis By passing the title of the Glacier to While I am very pleased with the suc- facilities has actually declined. Today, the Glacier Society, Congress will save cessful efforts so far in combating according to the Medicare Payment taxpayers roughly $200,000 per year, en- fraud, waste, and abuse, that still Advisory Commission (MedPAC), dialy- able the development of unique edu- amounts to a nearly $13 billion annual sis facilities receive on average $122 per cational opportunities, contribute to ‘‘waste tax’’ on the American people. treatment, compared with $138 per the nation’s maritime heritage and Now is not the time to rest on our lau- treatment that they received in 1983. preserve a piece of history. I look for- rels. We must now question, what is Adjusting for inflation, this means ward to the day when the Glacier Soci- the best way to move forward and fur- that dialysis providers are only receiv- ety’s vision for the Glacier is achieved. ther cut this tax. I know there are no ing about $42 per treatment (in 1983 Passage of this bill would be the first ‘‘magic-wand’’ solutions—this is a com- dollars) to provide nursing, social work step towards realization of that vi- plex problem with many components. and dietitian care, as well as the actual sion.∑ But basically, you need four things: dialysis treatment. well thought out laws, adequate re- I am concerned that a continued ero- By Mr. HARKIN (for himself, Mr. sources, effective implementation and sion in Medicare payments to dialysis HOLLINGS, Mr. BIDEN, and Mr. the help of seniors and health pro- facilities could jeopardize bene- GRAHAM): viders. We’ve made progress on each of ficiaries’ access to dialysis services. S. 1451. A bill to amend titles XI and these fronts over the last couple of According to MedPAC, ‘‘without an in- XVIII of the Social Security Act to im- years, but much more remains to be crease in the payment (i.e. composite prove efforts to combat Medicare done. S9534 CONGRESSIONAL RECORD — SENATE July 28, 1999 Mr. President, we have many thou- Medicare does not pay for claims owed ommendations are to include the sands of dedicated health providers by other plans. Too often, Medicare streamlining of variations between who work very hard to improve the pays claims that are owed by private Medicare and other payers. quality of life for all people. Through insurers because it has no way of Mr. President, while we have made their efforts, Americans have the best knowing a beneficiary is working and changes to medicare in attempts to ex- quality health care in the world. But, has private insurance that should pay tend its solvency thru the next decade, unfortunately, there are a small minor- first. This provision would reduce we urgently need to take other steps to ity of providers who take advantage of Medicare losses by requiring insurers protect and preserve the program for our health care system. This legisla- to report any Medicare beneficiaries the long-term. We should enact the re- tion is directly designed to deal with they insure. Also, Medicare would be forms in this bill to weed out waste, those situations. Further, it is clear given the authority to recover double fraud and abuse as a first priority in that many mispayments to Medicare the amount owed by insurers who pur- this effort. I urge all my colleagues to are the result of a simple lack of under- posely let Medicare pay claims they review this proposal and hope that standing of our often complex Medicare should have paid. they will join me in working to pass it payment system. This legislation also Additionally, coordination between yet this year. addresses this problem by providing in- Medicare and private insurers would be Mr President, I also ask unanimous creased education and assistance for strengthened. Often, those ripping off consent that the bill be printed in the providers and by reducing the paper- Medicare are also defrauding private RECORD. work and administrative hassles that health plans. Yet, too little informa- There being no objection, the bill was can often lead to innocent, but costly, tion on fraud cases is shared between ordered to be printed in the RECORD, as billing errors. Medicare and private plans. In order to follows: The primary goal of this legislation encourage better coordination, health S. 1451 is simply this—to ensure that Medicare plans and their employees could not be Be it enacted by the Senate and House of Rep- pays for all that it should pay for—and held liable for sharing information resentatives of the United States of America in only what it should pay for. with Medicare regarding health care Congress assembled, The Medicare Waste Tax Reduction fraud as long as the information is not SECTION 1. SHORT TITLE; TABLE OF CONTENTS. Act I am introducing today will take a false, or the person providing the infor- (a) SHORT TITLE.—This Act may be cited as number of important steps to stop the mation had no reason to believe the in- the ‘‘Medicare Waste Tax Reduction Act of 1999’’. continued ravaging of Medicare. formation was false. This Bill for example, would direct (b) TABLE OF CONTENTS.—The table of con- Our bill would also expand the Medi- tents of this Act is as follows: HCFA to double and better target au- care Senior Waste Patrol Nationwide. dits and reviews to detect and discour- Sec. 1. Short title; table of contents. Seniors are our front line of defense Sec. 2. Increased medical reviews and anti- age mispayments. Currently only a against Medicare fraud, waste and fraud activities. tiny fraction of Medicare claims are re- abuse. However, too often, seniors Sec. 3. Oversight of home health agencies. viewed before being paid and less than Sec. 4. No markup for drugs or biologicals. don’t have the information they need 2 percent of providers receive a com- Sec. 5. Ensuring that the medicare program to detect and report suspected mis- prehensive audit annually. We must does not reimburse claims owed takes and fraud. By moving the Waste have the ability to separate needed by other payers. Patrol nationwide, implementing im- Sec. 6. Extension of subpoena and injunction care from bill padding and abuse. portant BBA provisions and assuring authority. Our bill would also give Medicare the Sec. 7. Civil monetary penalties for services authority to be a more prudent pur- seniors have access to itemized bills we will strike an important blow to Medi- ordered or prescribed by an ex- chaser. As passed by the Senate, the cluded individual or entity. Balanced Budget Act gave Medicare care waste. Sec. 8. Civil monetary penalties for false Another critical component of any the authority to quickly reduce Part B certification of eligibility to re- payment rates (except those made for successful comprehensive plan to cut ceive partial hospitalization the Medicare waste tax is to focus on and hospice services. physician services) it finds to be gross- Sec. 9. Application of certain provisions of ly excessive when compared to rates prevention. Most of our efforts now look at finding and rectifying the prob- the bankruptcy code. paid by other government programs Sec. 10. Improving private sector coordina- lems after they occur. While this is im- and the private sector. In conference, tion in combatting health care the provision was limited to reductions portant and we need to do even more of fraud. of no more than 15 percent. This bill it, we all know that prevention is much Sec. 11. Fees for agreements with medicare would restore the original Senate lan- more cost effective. The old adage ‘‘A providers and suppliers. Sec. 12. Increased medicare compliance, edu- guage. In addition, to assure that Medi- stitch in time saves nine’’ was never more true. A major component of an cation, and assistance for care gets the price it deserves given its health care providers. status as by far the largest purchaser enhanced prevention effort would be Sec. 13. Paperwork and administrative has- of medical supplies and equipment, the provision of increased assistance sle reduction. Medicare would pay no more than any and education for providers to comply Sec. 14. Clarification of application of sanc- other government program for these with Medicare rules. tions to Federal health care Further, a great deal of the mis-pay- programs. items. Finally, overpayments for pre- Sec. 15. Payments for durable medical scription drugs and biologicals would ments made by Medicare are the result not of fraud or abuse, but of simple equipment. be eliminated by lowering Medicare’s Sec. 16. Implementation of commercial rate to the lowest of either the actual misunderstanding of Medicare billing claims auditing systems. acquisition cost or 83% of the whole- rules by providers. Therefore, this bill Sec. 17. Partial hospitalization payment re- sale cost. provides $10 million a year to fund a forms. Our bill would also give the Sec- major expansion of assistance and edu- Sec. 18. Expansion of medicare senior waste retary of Health and Human Services cation for providers on program integ- patrol nationwide. rity requirements. This bill would also Sec. 19. Application of inherent reasonable- greater flexibility in contracting for ness to all part B services other claims processing and payment func- ensure the reduction of paperwork and than physicians’ services. tions on behalf of Medicare bene- administrative hassle that could prove Sec. 20. Standards regarding payment for ficiaries and providers. It would update daunting to providers. Health profes- certain orthotics and pros- Medicare contracting procedures and sionals have to spend too much time thetics. bring it more in line with standard completing paperwork and dealing with Sec. 21. Increased flexibility in contracting administrative hassles associated with for medicare claims processing. contracting procedures already used Sec. 22. Exemption of Inspectors General across the Federal Government and Medicare and private health plans. In from Paperwork Reduction Act therefore allow Medicare the ability to order to reduce this hassle and provide requirements. more time for patient care, the Insti- get much better value for its con- SEC. 2. INCREASED MEDICAL REVIEWS AND ANTI- tracting dollars. tute of Medicine would be charged with FRAUD ACTIVITIES. The Medicare Waste Tax reduction developing a comprehensive plan by no (a) IN GENERAL.—Section 1893(d) of the So- Act of 1999 would also ensure that later than June 1, 2000. Their rec- cial Security Act (42 U.S.C. 1395ddd(d)) is July 28, 1999 CONGRESSIONAL RECORD — SENATE S9535 amended by inserting after paragraph (3) the not more than $720,000,000’’ and inserting (and adjusted, as the Secretary determines following: ‘‘$870,000,000’’. appropriate, to reflect changes in the cost of ‘‘(4) In the case of fiscal year 2000 and each SEC. 3. OVERSIGHT OF HOME HEALTH AGENCIES. such drug or biological due to inflation, and subsequent fiscal year, procedures to ensure (a) VALIDATION SURVEYS OF HOME HEALTH such other factors as the Secretary deter- that— AGENCIES.—Section 1891(c) of the Social Se- mines appropriate). ‘‘(A) the number of medical reviews, utili- curity Act (42 U.S.C. 1395bbb(c)) is amended ‘‘(D) The amount otherwise determined zation reviews, and fraud reviews in a fiscal by adding at the end the following: under this part. year of providers of services and other indi- ‘‘(3)(A)(i) The Secretary shall conduct on- ‘‘(2) For purposes of paragraph (1)(A), the viduals and entities furnishing items and site surveys of a representative sample of term ‘actual acquisition cost’ means, with services for which payment may be made home health agencies in each State, in a suf- respect to such drug or biological, the cost of under this title is equal to at least twice the ficient number to allow inferences about the the drug or biological based on the most eco- number of such reviews that were conducted adequacies of each State’s surveys conducted nomical case size in inventory on the date of in fiscal year 1999; under this subsection. dispensing or, if less, the most economical ‘‘(B) the number of provider cost reports ‘‘(ii) A survey described in clause (i) shall case size purchased within 6 months of the audited in a fiscal year is equal to at least— be conducted by the Secretary within 2 date of dispensing whether or not that spe- ‘‘(i) 15 percent of those submitted by a months of the date of the survey conducted cific drug or biological was furnished to an home health agency or a skilled nursing fa- by the State and may be conducted concur- individual whether or not enrolled under this cility; and rently with the State survey. part. Such term includes appropriate adjust- ‘‘(ii) twice the number of such reports that ‘‘(iii) In conducting a survey described in ments, as determined by the Secretary, for were audited in fiscal year 1999 for those sub- clause (i), the Secretary shall use the same all discounts, rebates, or any other benefit in mitted by any other provider of services or survey protocols as the State is required to cash or in kind (including travel, equipment, any other individual or entity furnishing use under this subsection. or free products). The Secretary shall in- items and services for which payment may ‘‘(iv) If, through a State survey, the State clude an additional payment for administra- be made under this title; and has determined that a home health agency is tive, storage, and handling costs. ‘‘(C) in determining which providers of in compliance with the requirements speci- ‘‘(3)(A) No payment shall be made under services, individuals, entities, or cost reports fied in or pursuant to section 1861(o), this this part for any drug or biological to a per- to review or audit, priority is placed on pro- section, or this title, but the Secretary de- son whose bill or request for payment for viders, individuals, entities, and areas that termines (after conducting the survey de- such drug or biological does not include a the Secretary determines are subject to scribed in clause (i)) that the facility does statement of the person’s actual acquisition abuse and most likely to result in cost. mispayment or overpayment recoveries.’’. not meet such requirements, the Secretary’s determination as to the facility’s noncompli- ‘‘(B) A person may not bill an individual (b) INCREASE IN APPROPRIATED AMOUNTS enrolled under this part— FOR MEDICARE AND MEDICAID ACTIVITIES.— ance with such requirements is binding and supersedes that of the State survey. ‘‘(i) any amount other than the payment (1) IN GENERAL.—Section 1817(k)(3)(A)(i) of amount specified in paragraph (1) or (4) (plus the Social Security Act (42 U.S.C. ‘‘(B) With respect to each State, the Sec- retary shall conduct surveys under subpara- any applicable deductible and coinsurance 1395i(k)(3)(A)(i)) is amended— amounts), or (A) in subclause (II)— graph (A) each year with respect to at least 5 percent of the number of home health agen- ‘‘(ii) any amount for such drug or biologi- (i) by striking ‘‘through 2003’’ and inserting cal for which payment may not be made pur- ‘‘and 1999’’; and cies surveyed by the State in the year, but in no case less than 5 home health agencies in suant to subparagraph (A). (ii) by striking ‘‘and’’ at the end; ‘‘(C) If a person knowingly and willfully in the State. (B) by redesignating subclause (III) as sub- repeated cases bills 1 or more individuals in ‘‘(C) If the Secretary finds, on the basis of clause (IV); and violation of subparagraph (B), the Secretary such surveys, that a State has failed to per- (C) by inserting after subclause (II) the fol- may apply sanctions against that person in form surveys as required under this sub- lowing: accordance with subsection (j)(2). ‘‘(III) for each of the fiscal years 2000 section or that a State’s survey and certifi- ‘‘(4) The Secretary may pay a reasonable through 2003, the limit for the preceding fis- cation performance otherwise is not ade- dispensing fee (less the applicable deductible cal year, increased by 25 percent; and’’. quate, the Secretary shall provide for an ap- and coinsurance amounts) for any drug or bi- (2) ACTIVITIES.—Section 1817(k)(3)(A)(ii) of propriate remedy, which may include the ological to a licensed pharmacy approved to the Social Security Act (42 U.S.C. training of survey teams in the State. dispense drugs or biologicals under this part, 1395i(k)(3)(A)(ii)) is amended— ‘‘(D) If the Secretary has reason to ques- if payment for such drug or biological is (A) in subclause (IV), by striking ‘‘not less tion the compliance of a home health agency made to the pharmacy.’’. than $110,000,000 and not more than with any of the requirements specified in or (b) EFFECTIVE DATE.—The amendment $120,000,000’’ and inserting ‘‘$160,000,000’’; pursuant to section 1861(o), this section, or made by subsection (a) shall apply to drugs (B) in subclause (V), by striking ‘‘not less this title, the Secretary may conduct a sur- or biologicals furnished on or after January than $120,000,000 and not more than vey of the agency and, on the basis of that 1, 2000. $130,000,000’’ and inserting ‘‘$190,000,000’’; survey, make independent and binding deter- (c) ELIMINATION OF REPORT ON AVERAGE (C) in subclause (VI), by striking ‘‘not less minations concerning the extent to which WHOLESALE PRICE.—Section 4556 of the Bal- than $140,000,000 and not more than the home health agency meets such require- anced Budget Act of 1997 is amended by $150,000,000’’ and inserting ‘‘$230,000,000’’; and ments.’’. striking subsection (c). (D) in subclause (VII), by striking ‘‘not less (b) EFFECTIVE DATE.—The amendment SEC. 5. ENSURING THAT THE MEDICARE PRO- than $150,000,000 and not more than made by subsection (a) shall take effect on GRAM DOES NOT REIMBURSE $160,000,000’’ and inserting ‘‘$260,000,000’’. the date of enactment of this Act. CLAIMS OWED BY OTHER PAYERS. (c) INCREASE IN APPROPRIATED AMOUNTS SEC. 4. NO MARKUP FOR DRUGS OR (a) INFORMATION FROM GROUP HEALTH FOR MEDICARE INTEGRITY PROGRAM.—Section BIOLOGICALS. PLANS.—Section 1862(b) of the Social Secu- 1817(k)(4) of the Social Security Act (42 (a) IN GENERAL.—Section 1842(o) (42 U.S.C. rity Act (42 U.S.C. 1395y(b)) is amended by U.S.C. 1395i(k)(4)(B)) is amended— 1395u(o)) is amended to read as follows: adding at the end the following: (1) in subparagraph (A), by striking ‘‘such ‘‘(o)(1) If a physician’s, supplier’s, or any ‘‘(7) INFORMATION FROM GROUP HEALTH amounts as are necessary to carry out the other person’s bill or request for payment for PLANS.— Medicare Integrity Program under section services includes a charge for a drug or bio- ‘‘(A) PROVISION OF INFORMATION BY GROUP 1893, subject to subparagraph (B) and to’’ and logical for which payment may be made HEALTH PLANS.—The administrator of a inserting ‘‘the amount appropriated under under this part and the drug or biological is group health plan that is subject to the re- subparagraph (B), and such amount shall’’; not paid on a cost or prospective payment quirements of paragraph (1) shall provide the and basis as otherwise provided in this part, the Secretary with the information described in (2) in subparagraph (B)— payment amount established in this sub- subparagraph (C) for each individual covered (A) in clause (iv), by striking ‘‘such section for the drug or biological shall be the under the plan who is entitled to any bene- amount shall be not less than $620,000,000 and lowest of the following: fits under this title. Such information shall not more than $630,000,000’’ and inserting ‘‘(A) The actual acquisition cost, as defined be provided in such manner and at such ‘‘$780,000,000’’; in paragraph (2), to the person submitting times as the Secretary may specify (but in (B) in clause (v), by striking ‘‘such amount the claim for payment for the drug or bio- no case more frequently than 4 times per shall be not less than $670,000,000 and not logical. year). more than $680,000,000’’ and inserting ‘‘(B) 83 percent of the average wholesale ‘‘(B) PROVISION OF INFORMATION BY EMPLOY- ‘‘$830,000,000’’; price of such drug or biological, as deter- ERS AND EMPLOYEE ORGANIZATIONS.—An em- (C) in clause (vi), by striking ‘‘such mined by the Secretary. ployer (or employee organization) that main- amount shall be not less than $690,000,000 and ‘‘(C) For payments for any drug or biologi- tains or participates in a group health plan not more than $700,000,000’’ and inserting cal furnished on or after January 1, 2001, the that is subject to the requirements of para- ‘‘$850,000,000’’; and median actual acquisition cost of all claims graph (1) shall provide to the administrator (D) in clause (vii), by striking ‘‘such for payment for such drug or biological for of the plan the information described in sub- amount shall be not less than $710,000,000 and the 12-month period beginning July 1, 1999 paragraph (C) for each individual covered S9536 CONGRESSIONAL RECORD — SENATE July 28, 1999

under the plan who is entitled to any bene- (b) INJUNCTION AUTHORITY.—Section SEC. 9. APPLICATION OF CERTAIN PROVISIONS fits under this title. Such information shall 1128A(k) of the Social Security Act (42 U.S.C. OF THE BANKRUPTCY CODE. be provided in such manner and at such 1320a–7a(k)) is amended by inserting ‘‘or an (a) RESTRICTED APPLICABILITY OF BANK- times as the Secretary may specify (but in exclusion under section 1128,’’ after ‘‘subject RUPTCY STAY, DISCHARGE, AND PREFERENTIAL no case more frequently than 4 times per to a civil monetary penalty under this sec- TRANSFER PROVISIONS TO MEDICARE AND MED- year). tion,’’. ICAID DEBTS.—Title XI of the Social Security ‘‘(C) INFORMATION.—The information de- (c) CLARIFYING AMENDMENTS.— Act (42 U.S.C. 1301 et seq.) is amended by in- scribed in this subparagraph is as follows: (1) IN GENERAL.—Section 1128A(j)(1) of the serting after section 1143 the following: ‘‘(i) ELEMENTS CONCERNING THE INDI- Social Security Act (42 U.S.C. 1320a–7a(j)(1)) ‘‘APPLICATION OF CERTAIN PROVISIONS OF THE VIDUAL.— is amended— BANKRUPTCY CODE ‘‘(I) The individual’s name. (A) by inserting ‘‘, except that, in so apply- ‘‘SEC. 1144. (a) MEDICARE- AND MEDICAID- ‘‘(II) The individual’s date of birth. ing such sections, any reference therein to RELATED ACTIONS NOT STAYED BY BANK- ‘‘(III) The individual’s sex. the Commissioner of Social Security or the RUPTCY PROCEEDINGS.—The commencement ‘‘(IV) The individual’s social security in- Social Security Administration shall be con- or continuation of any action against a debt- surance number. sidered a reference to the Secretary or the or under this title, title XVIII, or title XIX ‘‘(V) The number assigned by the Secretary Department of Health and Human Services, (other than an action with respect to health to the individual for claims under this title. respectively’’ after ‘‘with respect to title II’’; care services provided to the debtor under ‘‘(VI) The family relationship of the indi- and title XVIII), including any action or pro- vidual to the person who has current or prior (B) by striking the second sentence. ceeding to exclude or suspend the debtor employment status with the employer. (2) AUTHORITY.—Section 1128A(j)(2) of the from program participation, assess civil ‘‘(ii) ELEMENTS CONCERNING THE FAMILY Social Security Act (42 U.S.C. 1320a–7a(j)(2)) money penalties, recoup or set off overpay- MEMBER WITH CURRENT OR PRIOR EMPLOYMENT is amended to read as follows: ments, or deny or suspend payment of claims STATUS.— ‘‘(2) The Secretary may delegate to the In- shall not be subject to the provisions of sec- ‘‘(I) The name of the person in the individ- spector General of the Department of Health tion 362(a) of title 11, United States Code. ual’s family who has current or prior em- and Human Services any or all authority ‘‘(b) MEDICARE- AND MEDICAID-RELATED ployment status with the employer. granted under this section or under section DEBT NOT DISCHARGEABLE IN BANKRUPTCY.— ‘‘(II) That person’s social security insur- 1128.’’. A debt owed to the United States or to a (d) CONFORMING AMENDMENT.—Section 1128 ance number. State for an overpayment under title XVIII of the Social Security Act (42 U.S.C. 1320a–7) or title XIX (other than an overpayment for ‘‘(III) The number or other identifier as- is amended by adding at the end the fol- signed by the plan to that person. health care services provided to the debtor lowing: under title XVIII), or for a penalty, fine, or ‘‘(IV) The periods of coverage for that per- ‘‘(k) For provisions of law concerning the son under the plan. assessment under this title, title XVIII, or Secretary’s subpoena and injunction author- title XIX, shall not be dischargeable under ‘‘(V) The employment status of that person ity with respect to activities under this sec- (current or former employee) during those any provision of title 11, United States Code. tion, see subsections (j) and (k) of section ‘‘(c) REPAYMENT OF CERTAIN DEBTS CONSID- periods of coverage. 1128A.’’. ERED FINAL.—Payments made to repay a ‘‘(VI) The classes (of that person’s family SEC. 7. CIVIL MONETARY PENALTIES FOR SERV- debt to the United States or to a State with members) covered under the plan. ICES ORDERED OR PRESCRIBED BY respect to items or services provided, or ‘‘(iii) PLAN ELEMENTS.— AN EXCLUDED INDIVIDUAL OR ENTI- claims for payment made, under title XVIII ‘‘(I) The items and services covered under TY. or XIX (including repayment of an overpay- the plan. (a) IN GENERAL.—Section 1128A(a)(1) of the ment (other than an overpayment for health ‘‘(II) The name and address to which Social Security Act (42 U.S.C. 1320a–7a(a)(1)) care services provided to the debtor under claims under the plan are to be sent. is amended— (1) in subparagraph (D)— title XVIII)), or to pay a penalty, fine, or as- ‘‘(III) The name, address, and tax identi- sessment under this title, title XVIII, or (A) by inserting ‘‘, ordered, or prescribed fication number of the plan sponsor. title XIX, shall be considered final and not by such person’’ after ‘‘other item or service ‘‘(iv) ELEMENTS CONCERNING THE EM- preferential transfers under section 547 of furnished’’; PLOYER.— title 11, United States Code.’’. (B) by inserting ‘‘(pursuant to this title or ‘‘(I) The employer’s name. (b) MEDICARE RULES APPLICABLE TO BANK- title XVIII)’’ after ‘‘period in which the per- ‘‘(II) The employer’s address. RUPTCY PROCEEDINGS.—Title XVIII of the So- ‘‘(III) The employer identification number son was excluded’’; cial Security Act (42 U.S.C. 1395 et seq.) is of the employer. (C) by striking ‘‘pursuant to a determina- amended by adding at the end the following: ‘‘(IV) The tax identification number of the tion by the Secretary’’ and all that follows ‘‘APPLICATION OF PROVISIONS OF THE employer if different than the number in through ‘‘the provisions of section 1842(j)(2)’’; BANKRUPTCY CODE clause (iii)(III). and ‘‘SEC. 1897. (a) USE OF MEDICARE STAND- ‘‘(D) USE OF IDENTIFIERS.—The adminis- (D) by striking ‘‘or’’ at the end; ARDS AND PROCEDURES.—Notwithstanding trator of a group health plan shall utilize a (2) by redesignating subparagraph (E) as any provision of title 11, United States Code, unique identifier for the plan in providing in- subparagraph (F); and or any other provision of law, in the case of formation under subparagraph (A) and in (3) by adding after subparagraph (D) the claims by a debtor in bankruptcy for pay- other transactions, as may be specified by following: ment under this title, the determination of the Secretary, related to the provisions of ‘‘(E) is for a medical or other item or serv- whether the claim is allowable, and of the this subsection. The Secretary may provide ice ordered or prescribed by a person ex- amount payable, shall be made in accordance to the administrator the unique identifier cluded (pursuant to this title or title XVIII) with the provisions of this title and title XI. described in the preceding sentence. from the program under which the claim was ‘‘(b) NOTICE TO CREDITOR OF BANKRUPTCY ‘‘(E) PENALTY FOR NONCOMPLIANCE.—Any made, and the person furnishing such item or PETITIONER.—In the case of a debt owed to individual or entity that knowingly and will- service knows or should know of such exclu- the United States with respect to items or fully fails to comply with a requirement im- sion, or’’. services provided, or claims for payment posed by this paragraph shall be subject to a (b) EFFECTIVE DATE.—The amendments made, under this title (including a debt aris- civil money penalty not to exceed $1,000 for made by subsection (a) shall apply to claims ing from an overpayment or a penalty, fine, each incident of such failure. The provisions presented on or after the date of enactment or assessment under title XI or this title), of section 1128A (other than subsections (a) of this Act. the notices to the creditor of bankruptcy pe- and (b)) shall apply to a civil money penalty SEC. 8. CIVIL MONETARY PENALTIES FOR FALSE titions, proceedings, and relief required under the previous sentence in the same CERTIFICATION OF ELIGIBILITY TO under title 11, United States Code (including manner as those provisions apply to a pen- RECEIVE PARTIAL HOSPITALIZA- TION AND HOSPICE SERVICES. under section 342 of that title and section alty or proceeding under section 1128A(a). (a) IN GENERAL.—Section 1128A(b)(3) of the 2002(j) of the Federal Rules of Bankruptcy ‘‘(F) GROUP HEALTH PLAN DEFINED.—In this Social Security Act (42 U.S.C. 1320a–7a(b)(3)) Procedure), shall be given to the Secretary. paragraph, the term ‘group health plan’ has is amended— Provision of such notice to a fiscal agent of the meaning given such term in paragraph (1) in subparagraph (A)(ii), by inserting ‘‘, the Secretary shall not be considered to sat- (1)(A)(v).’’. hospice care, or partial hospitalization serv- isfy this requirement. (b) EFFECTIVE DATE.—The amendment ices’’ after ‘‘home health services’’; and ‘‘(c) TURNOVER OF PROPERTY TO THE BANK- made by subsection (a) shall take effect on (2) in subparagraph (B), by inserting ‘‘, sec- RUPTCY ESTATE.—For purposes of section January 1, 2000. tion 1814(a)(7) in the case of hospice care, or 542(b) of title 11, United States Code, a claim SEC. 6. EXTENSION OF SUBPOENA AND INJUNC- section 1835(a)(2)(F) in the case of partial for payment under this title shall not be con- TION AUTHORITY. hospitalization services’’ after ‘‘home health sidered to be a matured debt payable to the (a) SUBPOENA AUTHORITY.—Section services’’. estate of a debtor until such claim has been 1128A(j)(1) of the Social Security Act (42 (b) EFFECTIVE DATE.—The amendments allowed by the Secretary in accordance with U.S.C. 1320a–7a(j)(1)) is amended by inserting made by subsection (a) shall apply to docu- procedures under this title.’’. ‘‘and section 1128’’ after ‘‘with respect to this ments executed on or after the date of enact- (c) EFFECTIVE DATE.—The amendments section’’. ment of this Act. made by this section shall apply to petitions July 28, 1999 CONGRESSIONAL RECORD — SENATE S9537

filed on or after the date of enactment of ‘‘AGREEMENTS WITH PROVIDERS OF SERVICES (2) CONTENTS.—The report required under this Act. AND ENROLLMENT OF OTHER PERSONS FUR- paragraph (1) shall contain a detailed de- SEC. 10. IMPROVING PRIVATE SECTOR COORDI- NISHING SERVICES’’. scription of the matters studied pursuant to NATION IN COMBATTING HEALTH SEC. 12. INCREASED MEDICARE COMPLIANCE, subsection (a) and the recommendations de- CARE FRAUD. EDUCATION, AND ASSISTANCE FOR veloped pursuant to subsection (b), including (a) IN GENERAL.—Title XI of the Social Se- HEALTH CARE PROVIDERS. such legislation and administrative actions curity Act (42 U.S.C. 1301 et seq.) is amended (a) DEVELOPMENT OF PLAN.—Not later than as the committee considers appropriate. by inserting after section 1157 the following: 6 months after the date of enactment of this (d) AUTHORIZATION OF APPROPRIATIONS.— Act, the Secretary of Health and Human (1) IN GENERAL.—There are authorized to be ‘‘IMPROVING PRIVATE SECTOR COORDINATION IN Services shall, in consultation with health appropriated $1,000,000 for fiscal year 2000 to COMBATTING HEALTH CARE FRAUD care provider representatives, develop and carry out the purposes of this section. ‘‘SEC. 1157A. (a) IN GENERAL.—Notwith- implement a comprehensive plan of activi- (2) AVAILABILITY.—Any sums appropriated standing any other provision of law, no ties to— under the authorization contained in this health plan (as defined in section 1128C(c)), (1) maximize health care provider knowl- subsection shall remain available, without issuer of a health plan, or employee of a edge of medicare program integrity require- fiscal year limitation, until expended. health plan shall be held liable in any civil ments, including anti-fraud and abuse laws SEC. 14. CLARIFICATION OF APPLICATION OF action with respect to the provision of infor- and administrative actions; SANCTIONS TO FEDERAL HEALTH mation regarding suspected health care (2) assist health care providers with medi- CARE PROGRAMS. fraud, including Federal health care offenses care program integrity compliance, includ- (a) COVERAGE OF EMPLOYMENT.—Section (as defined in section 24(a) of title 18, United ing educating such providers regarding com- 1128 of the Social Security Act (42 U.S.C. States Code) to an applicable individual un- pliance activities and procedures of the 1320a–7) is amended— less such information is false and the person Health Care Financing Administration and (1) in subsection (a), in the matter pre- providing it knew, or had reason to believe, the Inspector General of the Department of ceding paragraph (1), by inserting ‘‘(includ- that such information was false. Health and Human Services; ing employment under)’’ after ‘‘participation ‘‘(b) APPLICABLE INDIVIDUAL.—In sub- (3) develop improved computer technology in’’; and section (a), the term ‘applicable individual’ for health care providers to both reduce their (2) in subsection (b), in the matter pre- means— administrative hassles and facilitate their ceding paragraph (1), by inserting ‘‘(includ- ‘‘(1) a Federal, State, or local law enforce- compliance with medicare program require- ing employment under)’’ after ‘‘participation ment official responsible for the investiga- ments, including physician evaluation and in’’. tion or prosecution of suspected health care management guidelines; and (b) APPLICATION UNDER CIVIL MONEY PEN- fraud offenses; or (4) otherwise improve compliance among ALTY AUTHORITY.—Section 1128A of the So- ‘‘(2) an employee of a health plan or issuer health care providers with rules and regula- cial Security Act (42 U.S.C. 1320a–7a) is of a health plan. tions under the medicare program. amended— ‘‘(c) ATTORNEY’S FEES.—Any health plan, (b) FUNDING.—Notwithstanding any other (1) in subsection (a)(4), by striking ‘‘pro- provision of law, of the amounts appro- issuer of a health plan, or employee of a gram under title XVIII or a State health priated under section 1817(k)(4) of the Social health plan against whom a civil action is care program’’ and inserting ‘‘Federal health Security Act (42 U.S.C. 1395i(k)(4)) for a fis- brought, and who is found to be entitled to care program’’ each place it appears; cal year, there shall be made available immunity from liability by reason of this (2) in subsection (a)(5)— $10,000,000 in fiscal year 2000 and such sums section, shall be entitled to recover reason- (A) by striking ‘‘title XVIII of this Act, or as are necessary in fiscal years 2001 through able attorney’s fees and costs from the per- under a State health care program (as de- 2004 to carry out the purposes of this section. son who brought the civil action.’’. fined in section 1128(h))’’ and inserting ‘‘a (b) EFFECTIVE DATE.—The amendment SEC. 13. PAPERWORK AND ADMINISTRATIVE HAS- Federal health care program’’; and SLE REDUCTION. made by subsection (a) shall take effect on (B) by striking ‘‘title XVIII, or a State (a) STUDY BY COMMITTEE.— the date of enactment of this Act. health care program (as so defined)’’ and in- (1) ESTABLISHMENT.—Not later than 90 days SEC. 11. FEES FOR AGREEMENTS WITH MEDI- after the date of enactment of this Act, the serting ‘‘such program’’; CARE PROVIDERS AND SUPPLIERS. Secretary of Health and Human Services (3) in the last sentence of subsection (a), by (a) FEES RELATED TO MEDICARE PROVIDER shall contract with the Institute of Medicine striking ‘‘and to direct the appropriate State AND SUPPLIER ENROLLMENT AND REENROLL- of the National Academy of Sciences to es- agency to exclude the person from participa- MENT.—Section 1866 of the Social Security tablish a committee to study medicare pro- tion in any State health care program’’; and Act (42 U.S.C. 1395cc) is amended by adding gram administrative requirements that are (4) in subsection (h), by striking ‘‘State at the end the following: applicable to health care providers under agency or agencies administering or super- ‘‘(j) ENROLLMENT PROCEDURES AND FEES.— such program. vising the administration of State health ‘‘(1) ENROLLMENT OF INDIVIDUALS AND ENTI- care programs (as defined in section 1128(h))’’ (2) COMMITTEE.—The committee described TIES THAT ARE NOT PROVIDERS OF SERVICES.— in paragraph (1) shall be composed of— and inserting ‘‘Federal or State agency or The Secretary may establish a procedure for (A) at least 9 health care providers who agencies administering or supervising the enrollment (and periodic reenrollment) of in- participate in, and have significant experi- administration of any Federal health care dividuals or entities that are not providers of ence working with, the medicare program; program’’. services subject to the provisions of sub- (B) experts in paperwork reduction; and (c) APPLICATION OF WAIVER PROVISIONS TO section (a) but that furnish health care items (C) beneficiaries under the medicare pro- FEDERAL HEALTH CARE PROGRAMS.—Section or services under this title. gram or their representatives. 1128 of the Social Security Act (42 U.S.C. ‘‘(2) FEES.— (b) RECOMMENDATIONS.—The committee de- 1320a–7) is amended— ‘‘(A) IN GENERAL.—The Secretary may im- scribed in subsection (a) shall develop rec- (1) in subsection (c)(3)(B), by striking pose fees for initiation and renewal of pro- ommendations regarding how paperwork and ‘‘upon the request of a State’’ and inserting vider agreements under subsection (a) and administrative requirements under the medi- ‘‘upon the request of the director of a Fed- for enrollment and periodic reenrollment of care program can be minimized in a manner eral health care program’’; other individuals and entities furnishing that— (2) in subsection (d)(3)(B)(i)— health care items or services under this title (1) increases the time health care providers (A) by striking ‘‘State health care pro- under paragraph (1), in amounts up to the that are subject to such requirements have gram’’ and inserting ‘‘Federal health care full amount which the Secretary reasonably to spend in direct patient care; and program’’; and estimates to be sufficient to cover the Sec- (2) maintains medicare program integrity (B) by striking ‘‘State agency’’ and insert- retary’s costs related to the process for initi- and compliance with anti-fraud and abuse re- ing ‘‘Federal or State agency’’; and ating and reviewing such agreements and en- quirements. (3) in subsection (d)(3)(B)(ii), by striking rollments. In developing such recommendations, the ‘‘State health care program’’ and inserting ‘‘(B) FEES CREDITED TO SPECIAL FUND IN committee shall seek to streamline vari- ‘‘Federal health care program (other than TREASURY.—Fees collected pursuant to this ations in administrative and paperwork re- under title XVIII)’’. paragraph shall be credited to a special fund quirements between the medicare program (d) NOTICE PROVISION REGARDING FEDERAL of the United States Treasury, and shall re- and other government health programs and HEALTH CARE PROGRAMS.—Section 1128 of the main available until expended, to the extent private health plans. Social Security Act (42 U.S.C. 1320a–7) is and in such amounts as provided in advance (c) REPORT.— amended— in appropriations Acts, for necessary ex- (1) IN GENERAL.—Not later than June 1, (1) in the heading of subsection (d), by penses for these purposes, including costs of 2000, the committee described in subsection striking ‘‘TO STATE AGENCIES AND EXCLUSION establishing and maintaining procedures and (a) shall submit a report to the Secretary of UNDER STATE HEALTH CARE PROGRAMS’’ and records systems, processing applications, and Health and Human Services, the Committees inserting ‘‘AND EXCLUSION UNDER FEDERAL conducting background investigations.’’. on Finance and Appropriations of the Senate HEALTH CARE PROGRAMS’’; (b) CLERICAL AMENDMENT.—The heading of and the Committees on Ways and Means, (2) in subsection (d)(1), by striking ‘‘State’’ section 1866 of the Social Security Act (42 Commerce, and Appropriations of the House and inserting ‘‘Federal’’; U.S.C. 1395cc) is amended to read as follows: of Representatives. (3) in subsection (d)(2)— S9538 CONGRESSIONAL RECORD — SENATE July 28, 1999

(A) by striking ‘‘State agency’’ and insert- ‘‘(ii) LIMITATION.—In no case may the pay- (1) COMMERCIAL CLAIMS AUDITING SYSTEM.— ing ‘‘Federal or State agency’’ each place it ment rate for an item that is adjusted under The term ‘‘commercial claims auditing sys- appears; and clause (i) exceed the payment rate for such tem’’ means a commercial specialized audit- (B) by striking ‘‘State health care pro- item determined in clauses (i) and (ii) of sub- ing system that includes edits which identify gram’’ and inserting ‘‘Federal health care paragraph (B). inappropriately coded health care claims. program’’ each place it appears; ‘‘(iii) COLLECTION OF INFORMATION.—The (2) COMMERCIAL ITEM.—The term ‘‘commer- (4) in subsection (d)(3)(A), by striking Secretary shall collect from durable medical cial item’’ has the meaning given such term ‘‘State’’ and inserting ‘‘Federal’’; and equipment suppliers that receive reimburse- in section 4 of the Office of Federal Procure- (5) in subsection (g)(3)— ment under Federal health care programs (as ment Policy Act (41 U.S.C. 403). (A) by striking ‘‘State agency’’ and insert- so defined) such information as the Sec- (3) INFORMATION TECHNOLOGY.—The term ing ‘‘Federal or State agency’’; and retary determines is necessary in order to ‘‘information technology’’ has the meaning (B) by striking ‘‘State health care pro- make the determination described in clause given such term in subparagraphs (A) and (B) gram’’ and inserting ‘‘Federal health care (i)(II).’’. of section 5002(3) of the Information Tech- program’’. (b) EFFECTIVE DATE.—The amendments nology Management Reform Act of 1996 (40 (e) USE OF DEFINITION OF FEDERAL HEALTH made by subsection (a) shall apply to items U.S.C. 1401(3)), were such information tech- CARE PROGRAM AND TREATMENT OF FEDERAL provided on or after January 1, 2000. nology to be acquired by an executive agen- EMPLOYEES HEALTH BENEFITS PROGRAM AS A SEC. 16. IMPLEMENTATION OF COMMERCIAL cy. FEDERAL HEALTH CARE PROGRAM.—Section CLAIMS AUDITING SYSTEMS. (4) MEDICARE CARRIER.—The term ‘‘medi- 1128B(f) of the Social Security Act (42 U.S.C. (a) COMMERCIAL CLAIMS AUDITING SYS- care carrier’’ means an entity that has a 1320a–7b(f)) is amended— TEMS.— contract with the Secretary pursuant to sec- (1) in the matter preceding paragraph (1), (1) IN GENERAL.—Not later than 90 days tion 1842(a) of the Social Security Act (42 by inserting ‘‘and sections 1128 and 1128A’’ after the date of enactment of this Act, the U.S.C. 1395u(a)). after ‘‘this section’’; and Secretary shall require medicare carriers to (5) SECRETARY.—The term ‘‘Secretary’’ (2) in paragraph (1), by striking ‘‘(other use commercial claims auditing systems in means the Secretary of Health and Human than the health insurance program under the processing of claims under part B of the Services. chapter 89 of title 5, United States Code)’’. medicare program under title XVIII of the SEC. 17. PARTIAL HOSPITALIZATION PAYMENT (f) AUTHORITY TO EXCLUDE FROM FEDERAL Social Security Act (42 U.S.C. 1395j et seq.) REFORMS. HEALTH CARE PROGRAMS BASED ON PRO REC- for the purpose of identifying billing errors (a) LIMITATION ON LOCATION OF PROVISION OMMENDATIONS.—Section 1156(b)(1) of the So- and abuses. OF SERVICES.— cial Security Act (42 U.S.C. 1320c–5(b)(1)) is (2) SUPPLEMENT TO OTHER TECHNOLOGY.— (1) IN GENERAL.—Section 1861(ff)(2) of the amended— Commercial claims auditing systems re- Social Security Act (42 U.S.C. 1395x(ff)(2)) is (1) in the second sentence, by striking ‘‘eli- quired under paragraph (1) shall be used as a amended in the matter following subpara- gibility to provide services under this Act on supplement to any other information tech- graph (I)— a reimbursable basis’’ and inserting ‘‘partici- nology used by medicare carriers in proc- (A) by striking ‘‘and furnished’’ and insert- pation in any Federal health care program essing claims under the medicare program. ing ‘‘furnished’’; and (as defined in section 1128B(f))’’; and (3) UNIFORMITY.—In order to ensure uni- (B) by inserting ‘‘, and furnished other (2) in the third sentence, by striking ‘‘eligi- formity in processing claims under the medi- than in a skilled nursing facility or in an in- bility to provide services on a reimbursable care program, the Secretary may require dividual’s personal residence’’ before the pe- basis’’ and inserting ‘‘participation in such that medicare carriers utilize 1 or more com- riod. programs’’. mon commercial claims auditing systems, (2) EFFECTIVE DATE.—The amendments (g) EFFECTIVE DATE.— provided that the selection of such system or made by paragraph (1) shall apply to partial (1) IN GENERAL.—Subject to paragraph (2), systems by the Secretary shall be— hospitalization services furnished on or after the amendments made by this section shall (A) after due consideration of competing the first day of the third month beginning take effect on the date of enactment of this alternative systems; but after the date of enactment of this Act. Act. (B) without regard to any provision of law (b) QUALIFICATIONS FOR COMMUNITY MENTAL (2) CONVICTIONS UNDER FEHBP.—The amend- that requires the use of competitive proce- HEALTH CENTERS.—Section 1861(ff)(3)(B) of ment made by subsection (e)(2) shall apply, dures (as defined in section 4 of the Office of the Social Security Act (42 U.S.C. with respect to convictions under the health Federal Procurement Policy Act (41 U.S.C. 1395x(ff)(3)(B)) is amended by striking ‘‘enti- insurance program under chapter 89 of title 403)) or the publication of notice of proposed ty’’ and all that follows and inserting the 5, United States Code, to convictions that procurements. following: ‘‘entity that— occur on or after the date of enactment of (4) IMPLEMENTATION.—Commercial claims ‘‘(i) provides the mental health services de- this Act. auditing systems required under paragraph scribed in paragraph (1) of section 1913(c) of (1) shall be implemented by all medicare car- the Public Health Service Act; SEC. 15. PAYMENTS FOR DURABLE MEDICAL ‘‘(ii) meets applicable licensing or certifi- EQUIPMENT. riers by not later than 180 days after the date of enactment of this Act. cation requirements for community mental (a) IN GENERAL.—Section 1834(a)(1) of the (b) MINIMUM SOFTWARE REQUIREMENTS.— health centers in the State in which it is lo- Social Security Act (42 U.S.C. 1395m(a)(1)) is Any commercial claims auditing system re- cated; and amended— quired to be implemented pursuant to sub- ‘‘(iii) meets such additional standards or (1) in subparagraph (B)— section (a) shall, at a minimum— requirements as the Secretary may specify (A) in clause (i), by striking ‘‘, or’’ at the (1) be a commercial item; to ensure— end and inserting a semicolon; and (2) surpass the capability of systems cur- ‘‘(I) the health and safety of individuals (B) by inserting after clause (ii) the fol- rently used in the processing of claims under being furnished such services; lowing: part B of the medicare program; and ‘‘(II) the effective or efficient furnishing of ‘‘(iii) the least expensive amount that the (3) be modifiable to— such services (including protecting against supplier of the item is paid by a (A) satisfy pertinent statutory require- fraud, waste, and abuse); and Medicare+Choice organization for such item; ments of the medicare program; and ‘‘(III) the compliance of such entity with or (B) conform to policies of the Secretary re- the criteria described in such section.’’. ‘‘(iv) the least expensive amount that the garding claims processing under such pro- (c) REENROLLMENT OF PROVIDERS OF CMHC supplier of the item is paid by any Federal gram. PARTIAL HOSPITALIZATION SERVICES.— health care program (as defined in section (c) DISCLOSURE.— (1) IN GENERAL.—With respect to each com- 1128B(f)) for such item;’’; and (1) IN GENERAL.—Except as provided in munity mental health center that furnishes (2) by adding at the end the following: paragraph (2), notwithstanding any other partial hospitalization services for which ‘‘(E) ADMINISTRATIVE COSTS.— provision of law, any information technology payment is made under title XVIII of the So- ‘‘(i) IN GENERAL.—Except as provided in (or data related thereto) utilized by medi- cial Security Act, the Secretary of Health clause (ii), if— care carriers in establishing a commercial and Human Services shall provide for peri- ‘‘(I) the payment amount for an item is claims auditing system pursuant to sub- odic recertification to ensure that the provi- covered under clauses (iii) or (iv) of subpara- section (a) shall not be subject to public dis- sion of such services complies with section graph (B); and closure. 1913(c) of the Public Health Service Act. ‘‘(II) the Secretary determines that the ad- (2) AUTHORIZED DISCLOSURE.—The Sec- (2) DEADLINE FOR FIRST RECERTIFICATION.— ministrative costs associated with billing retary may authorize the public disclosure of The first recertification under paragraph (1) and receiving reimbursement from the Sec- the information described in paragraph (1) if shall be completed not later than 1 year retary for the item exceeds the administra- the Secretary determines that— after the date of enactment of this Act. tive costs associated with providing such (A) release of such information is in the (d) PROSPECTIVE PAYMENT SYSTEM FOR item to a Medicare+Choice organization or public interest; and PARTIAL HOSPITALIZATION SERVICES.— another Federal health care program (as so (B) the information to be released is not (1) ESTABLISHMENT OF SYSTEM.—Section defined); protected from disclosure under section 1833 of the Social Security Act (42 U.S.C. then the Secretary shall adjust the payment 552(b) of title 5, United States Code. 1395l) is amended by inserting after sub- rate for such item to reflect such excess. (d) DEFINITIONS.—In this section— section (o) the following: July 28, 1999 CONGRESSIONAL RECORD — SENATE S9539 ‘‘(p)(1) The Secretary may establish by reg- SEC. 19. APPLICATION OF INHERENT REASON- ‘‘(bb) accredited and approved by a pro- ulation a prospective payment system for ABLENESS TO ALL PART B SERVICES gram that the Secretary determines has ac- partial hospitalization services provided by a OTHER THAN PHYSICIANS’ SERV- creditation and approval standards that are ICES. essentially equivalent to those of such community mental health center or by a (a) REPEAL OF CERTAIN PROVISIONS OF THE Board. hospital to its outpatients. The system shall BALANCED BUDGET ACT OF 1997.— ‘‘(iii) SYSTEM.—The Secretary, in consulta- provide for appropriate payment levels for (1) REPEAL.—Section 4316 of the Balanced efficient centers and hospitals and take into Budget Act of 1997 (Public Law 105–33; 111 tion with appropriate experts in orthotics account payment levels for similar services Stat. 390), and the amendments made by and prosthetics, shall establish a system furnished by other efficient entities. such section, are repealed effective August 5, under which the Secretary shall— 1997. ‘‘(I) determine which items are applicable ‘‘(2) A prospective payment system estab- items and formulate a list of such items; (2) APPLICABILITY.—Effective August 5, lished pursuant to paragraph (1) shall pro- 1997, the Social Security Act shall be applied ‘‘(II) review the applicable items billed vide for payment amounts for— and administered as if section 4316 of the under the coding system established under ‘‘(A) the first year in which such system Balanced Budget Act of 1997 (Public Law 105– this title; and applies, at a level so that, as estimated by 33; 111 Stat. 390), and the amendments made ‘‘(III) limit payment for applicable items the Secretary, the total aggregate payments by such section, had not been enacted. pursuant to clause (i).’’. under this part (including payments attrib- (b) APPLICATION OF INHERENT REASONABLE- (2) EFFECTIVE DATE.—The amendment utable to deductibles and coinsurance) for NESS TO ALL PART B SERVICES OTHER THAN made by paragraph (1) shall apply to items such year are not greater than the total ag- PHYSICIANS’ SERVICES.— provided on or after January 1, 2000. gregate payments that would have otherwise (1) IN GENERAL.—Section 1842(b)(8) of the (b) REVISION OF DEFINITION OF ORTHOTICS.— been made under this part if such system had Social Security Act (42 U.S.C. 1395u(b)(8)) is (1) IN GENERAL.—Section 1861(s)(9) of the not been implemented (assuming full imple- amended to read as follows: Social Security Act (42 U.S.C. 1395x(s)(9)) is mentation of the provisions contained in ‘‘(8) The Secretary shall describe by regu- amended by inserting ‘‘(including such subsections (a) through (c) of section 17 of lation the factors to be used in determining braces that are used in conjunction with, or the Medicare Waste Tax Reduction Act of the cases (of particular items or services) in as components of, other medical or non-med- 1999); and which the application of this part (other ical equipment when provided by a qualified ‘‘(B) each subsequent year, in an amount than to physicians’ services paid under sec- practitioner (as defined in subclause (II) of equal to the payment amount provided for tion 1848) results in the determination of an section 1834(h)(1)(F))) or a qualified supplier under this paragraph for the preceding year amount that, because of its being grossly ex- (as defined in subclause (III) of such sec- updated by the percentage increase in the cessive or grossly deficient, is not inherently tion)’’ after ‘‘braces’’. Consumer Price Index for all urban con- reasonable, and provide in those cases for the (2) EFFECTIVE DATE.—The amendment sumers (all items; United States city aver- factors to be considered in establishing an made by paragraph (1) shall apply to items age) for the 12-month period ending with amount that is realistic and equitable.’’. provided on or after January 1, 2000. (2) EFFECTIVE DATE.—The amendment September of that preceding year.’’. SEC. 21. INCREASED FLEXIBILITY IN CON- (2) COINSURANCE.—Section 1866(a)(2)(A) of made by this subsection shall take effect Au- TRACTING FOR MEDICARE CLAIMS the Social Security Act (42 U.S.C. gust 5, 1997. PROCESSING. 1395cc(a)(2)(A)) is amended by adding at the SEC. 20. STANDARDS REGARDING PAYMENT FOR (a) CARRIERS TO INCLUDE ENTITIES THAT CERTAIN ORTHOTICS AND PROS- end the following: ‘‘In the case of services de- RE OT NSURANCE OMPANIES THETICS. A N I C .—Section scribed in section 1832(a)(2)(J), clause (ii) of 1842 of the Social Security Act (42 U.S.C. (a) STANDARDS.— the first sentence of this subparagraph shall 1395u) is amended— be applied by substituting the payment basis (1) IN GENERAL.—Section 1834(h)(1) of the Social Security Act (42 U.S.C. 1395m(h)(1)) is (1) in subsection (a), in the matter pre- established under section 1833(p) for the rea- ceding paragraph (1), by striking ‘‘with car- sonable charges.’’. amended by adding at the end the following: ‘‘(F) ESTABLISHMENT OF STANDARDS FOR riers’’ and inserting ‘‘with agencies and orga- (3) CONFORMING AMENDMENTS.— CERTAIN ITEMS.— nizations (in this section referred to as ‘car- (A) Section 1832(a)(2) of the Social Security ‘‘(i) IN GENERAL.—No payment shall be riers’)’’; and Act (42 U.S.C. 1395k(a)(2)) is amended— made for an applicable item unless such item (2) by striking subsection (f). (i) in subparagraph (B), by striking ‘‘or is provided by a qualified practitioner or a (b) SECRETARIAL FLEXIBILITY IN CON- subparagraph (I)’’ and inserting ‘‘, (I), or qualified supplier under the system estab- TRACTING FOR AND IN ASSIGNING FISCAL (J)’’; and lished by the Secretary under clause (iii). INTERMEDIARY AND CARRIER FUNCTIONS.— (ii) in subparagraph (J), by striking ‘‘pro- For purposes of the preceding sentence, if a (1) IN GENERAL.— vided by a community mental health center qualified practitioner or a qualified supplier (A) Section 1816(a) of the Social Security (as described in section 1861(ff)(2)(B))’’. contracts with an entity to provide an appli- Act (42 U.S.C. 1395h(a)) is amended to read as (B) Section 1833(a) of the Social Security cable item, then no payment shall be made follows: Act (42 U.S.C. 1395l(a)) is amended— for such item unless the entity is also a ‘‘(a)(1) The Secretary may enter into con- (i) in paragraph (2) in the matter preceding qualified supplier. tracts with agencies or organizations to per- subparagraph (A), by striking ‘‘(H), and (I)’’ ‘‘(ii) DEFINITIONS.—In this subparagraph— form any or all of the following functions, or and inserting ‘‘(H), (I), and (J)’’; ‘‘(I) APPLICABLE ITEM.—The term ‘applica- parts of those functions (or, to the extent (ii) in paragraph (8), by striking ‘‘and’’ at ble item’ means orthotics and prosthetics provided in a contract, to secure perform- the end; that require education, training, and experi- ance thereof by other organizations) to— (iii) in paragraph (9), by striking the period ence to custom fabricate such item. Such ‘‘(A) determine (subject to the provisions at the end and inserting ‘‘; and’’; and term does not include shoes and shoe inserts. of section 1878 and to such review by the Sec- (iv) by adding at the end the following: ‘‘(II) QUALIFIED PRACTITIONER.—The term retary as may be provided for by the con- ‘‘(10) in the case of partial hospitalization ‘qualified practitioner’ means a physician or tracts) the amount of the payments required services, 80 percent of the payment basis health professional who— pursuant to this part to be made to providers under the prospective payment system estab- ‘‘(aa) is specifically trained and educated of services; lished under section 1833(p).’’. to provide or manage the provision of cus- ‘‘(B) make payments described in subpara- (4) EFFECTIVE DATE.—The amendments tom-designed, fabricated, modified, and graph (A); made by paragraphs (2) and (3) apply to serv- fitted orthotics and prosthetics, and is either ‘‘(C) provide consultative services to insti- ices furnished on or after January 1 of the certified by the American Board for Certifi- tutions or agencies to enable them to estab- first year that begins at least 6 months after cation in Orthotics and Prosthetics, Inc., or lish and maintain fiscal records necessary the date on which regulations are issued is credentialed and approved by a program for purposes of this part and otherwise to under section 1833(p) of the Social Security that the Secretary determines, in consulta- qualify as providers of services; Act (42 U.S.C. 1395l(p)) (as inserted by para- tion with appropriate experts in orthotics ‘‘(D) serve as a center for, and commu- graph (1)). and prosthetics, has training and education nicate to individuals entitled to benefits SEC. 18. EXPANSION OF MEDICARE SENIOR standards that are necessary to provide ap- under this part and to providers of services, WASTE PATROL NATIONWIDE. plicable items; any information or instructions furnished to ‘‘(bb) is licensed in orthotics or prosthetics the agency or organization by the Secretary, There are authorized to be appropriated by the State in which the applicable item is and serve as a channel of communication $25,000,000 in fiscal year 2000, and such sums supplied; or from individuals entitled to benefits under as are necessary for fiscal years 2001 through ‘‘(cc) has completed at least 10 years prac- this part and from providers of services to 2003, for the purpose of carrying out, and ex- tice in the provision of applicable items. the Secretary; panding nationwide, the Health Care Anti- ‘‘(III) QUALIFIED SUPPLIER.—The term ‘‘(E) make such audits of the records of Fraud, Waste and Abuse Community Volun- ‘qualified supplier’ means any entity that providers of services as may be necessary to teer Demonstration Projects conducted by is— ensure that proper payments are made under the Administration on Aging pursuant to the ‘‘(aa) accredited by the American Board for this part; Omnibus Consolidated Appropriations Act, Certification in Orthotics and Prosthetics, ‘‘(F) perform the functions described by 1997 (Public Law 104–208). Inc.; or subsection (d); and S9540 CONGRESSIONAL RECORD — SENATE July 28, 1999 ‘‘(G) perform such other functions as are (i) in the matter preceding paragraph (1), (ii) in paragraph (3), in the matter pre- necessary to carry out the purposes of this by striking ‘‘an agreement’’ and inserting ‘‘a ceding subparagraph (A), by inserting ‘‘(as part. contract’’; appropriate)’’ after ‘‘contract’’; ‘‘(2) As used in this title and title XI, the (ii) in paragraph (1)(B), by striking ‘‘agree- (iii) in paragraph (7)(A), in the matter pre- term ‘fiscal intermediary’ means an agency ment’’ and inserting ‘‘contract’’; and ceding clause (i), by striking ‘‘the carrier’’ or organization with a contract under this (iii) in paragraph (2)(A), by striking and inserting ‘‘a carrier’’; and section.’’. ‘‘agreement’’ and inserting ‘‘contract’’. (iv) in paragraph (11)(A), in the matter pre- (B) Section 1816(b)(1)(A) of the Social Secu- (B) Section 1816(c) of the Social Security ceding clause (i), by inserting ‘‘(as appro- rity Act (42 U.S.C. 1395h(b)(1)(A)) is amended Act (42 U.S.C. 1395h(c)) is amended— priate)’’ after ‘‘each carrier’’. by striking ‘‘after applying the standards, (i) in paragraph (1)— (J) Section 1842(h) of the Social Security criteria, and procedures’’ and inserting (I) in the first sentence, by striking ‘‘An Act (42 U.S.C. 1395u(h)) is amended— ‘‘after evaluating the ability of the agency agreement’’ and inserting ‘‘A contract’’; and (i) in paragraph (2), in the first sentence— or organization to fulfill the contract per- (II) in the last sentence, by striking ‘‘an (I) by striking ‘‘an agreement’’ and insert- formance requirements’’. agreement’’ and inserting ‘‘a contract’’; ing ‘‘a contract’’; and (C) Section 1816(d) of the Social Security (ii) in paragraph (2)(A), in the matter pre- (II) by inserting ‘‘(as appropriate)’’ after Act (42 U.S.C. 1395h(d)) is amended to read as ceding clause (i)— ‘‘shall’’; follows: (I) by striking ‘‘agreement’’ and inserting (ii) in paragraph (3)(A), by striking ‘‘an ‘‘(d) Each provider of services shall have a ‘‘contract’’; and agreement’’ and inserting ‘‘a contract’’; fiscal intermediary that— (II) by inserting ‘‘that provides for making (iii) in paragraph (3)(B), in the third sen- ‘‘(1) acts as a single point of contact for payments under this part’’ after ‘‘this sec- tence, by striking ‘‘agreements’’ and insert- ing ‘‘contracts’’; the provider of services under this part; tion’’; (iv) in paragraph (5)(A), by inserting ‘‘(as ‘‘(2) makes its services sufficiently avail- (iii) in paragraph (2)(C), by striking ‘‘hos- appropriate)’’ after ‘‘carriers’’; and able to meet the needs of the provider of pital, rural primary care hospital, skilled (v) in paragraph (8)— services; and nursing facility, home health agency, hos- (I) by striking ‘‘an agreement’’ and insert- ‘‘(3) is responsible and accountable for ar- pice program, comprehensive outpatient re- ing ‘‘a contract’’; and ranging the resolution of issues raised under habilitation facility, or rehabilitation agen- (II) by striking ‘‘such agreement’’ and in- this part by the provider of services.’’. cy’’ and inserting ‘‘provider of services (as serting ‘‘such contract’’. (D) Section 1816(e) of the Social Security defined in section 1861(u))’’; and (c) ELIMINATION OF SPECIAL PROVISIONS FOR Act (42 U.S.C. 1395h(d)) is amended to read as (iv) in paragraph (3)(A)— follows: TERMINATIONS OF CONTRACTS.— (I) by striking ‘‘agreement’’ and inserting ‘‘(e) The Secretary, in evaluating the per- (1) Section 1816 of the Social Security Act ‘‘contract’’; and (42 U.S.C. 1395h) is amended— formance of a fiscal intermediary, may so- (II) by inserting ‘‘that provides for making licit comments from providers of services.’’. (A) in subsection (b), in the matter pre- payments under this part’’ after ‘‘this sec- (E) Section 1816(f)(1) of the Social Security ceding paragraph (1), by striking ‘‘or renew’’; tion’’. Act (42 U.S.C. 1395h(f)(1)) is amended to read (B) in subsection (c)(1), in the last sen- (C) Section 1816(h) of the Social Security as follows: tence, by striking ‘‘or renewing’’; and Act (42 U.S.C. 1395h(h)) is amended— ‘‘(f)(1) With respect to performance re- (C) by striking subsection (g). (i) by striking ‘‘An agreement’’ and insert- quirements under subsection (a), the Sec- (2) Section 1842(b) of the Social Security ing ‘‘A contract’’; and retary may consult with— Act (42 U.S.C. 1395u(b)(2)) is amended by (ii) by striking ‘‘the agreement’’ each place ‘‘(A) Medicare+Choice organizations under striking paragraph (5). it appears and inserting ‘‘the contract’’. part C of this title; (d) REPEAL OF FISCAL INTERMEDIARY RE- (D) Section 1816(i)(1) of the Social Security ‘‘(B) providers of services and other per- QUIREMENTS THAT ARE NOT COST-EFFEC- Act (42 U.S.C. 1395h(i)(1)) is amended by sons who furnish items or services for which TIVE.—Section 1816(f)(2) of the Social Secu- striking ‘‘an agreement’’ and inserting ‘‘a payment may be made under this title; and rity Act (42 U.S.C. 1395h(f)(2)) is amended to contract’’. read as follows: ‘‘(C) organizations and agencies performing (E) Section 1816(j) of the Social Security ‘‘(2) The contract performance require- functions necessary to carry out the pur- ments described in paragraph (1) shall poses of this part.’’. Act (42 U.S.C. 1395h(j)) is amended in the matter preceding paragraph (1)— include— (F) Section 1842(b)(2) of the Social Security ‘‘(A) with respect to claims for services Act (42 U.S.C. 1395u(b)(2)) is amended— (i) by striking ‘‘An agreement’’ and insert- ing ‘‘A contract’’; and furnished under this part by any provider of (i) in subparagraph (A)— services (as defined in section 1861(u)) other (I) by inserting ‘‘(i)’’ before ‘‘No such con- (ii) by striking ‘‘for home health services, extended care services, or post-hospital ex- than a hospital, whether such agency or or- tract’’; ganization is able to process 75 percent of re- (II) by striking the second sentence and in- tended care services’’. (F) Section 1816(k) of the Social Security considerations within 60 days and 90 percent serting the following: of reconsiderations within 90 days; and’’. ‘‘(ii) With respect to performance require- Act (42 U.S.C. 1395h(k)) is amended— (i) by striking ‘‘An agreement’’ and insert- (e) REPEAL OF COST REIMBURSEMENT RE- ments for contracts under subsection (a), the QUIREMENTS.— Secretary may consult with— ing ‘‘A contract’’; and (ii) by inserting ‘‘(as appropriate)’’ after (1) Section 1816(c)(1) of the Social Security ‘‘(I) Medicare+Choice organizations under Act (42 U.S.C. 1395h(c)(1)) is amended— part C of this title; ‘‘submit’’. (G) Section 1816(l) of the Social Security (A) in the first sentence— ‘‘(II) providers of services and other per- (i) by striking the comma after ‘‘appro- sons who furnish items or services for which Act (42 U.S.C. 1395h(l)) is amended by strik- ing ‘‘an agreement’’ and inserting ‘‘a con- priate’’ and inserting ‘‘and’’; and payment may be made under this title; and (ii) by striking ‘‘, and shall provide for pay- tract’’. ‘‘(III) organizations and agencies per- ment’’ and all that follows before the period; (H) Section 1842(a) of the Social Security forming functions necessary to carry out the and Act (42 U.S.C. 1395u(a)) is amended— purposes of this part.’’; (B) by striking the second and third sen- (i) in the matter preceding paragraph (1) (III) by striking the third sentence; and tences. (as amended by subsection (a)(1))— (IV) by striking the fourth sentence and in- (2) Section 1842(c)(1) of the Social Security (I) by striking ‘‘carriers with which agree- serting the following: Act (42 U.S.C. 1395h(c)(1)) is amended— ments’’ and inserting ‘‘single contracts ‘‘(iii) The Secretary may not require, as a (A) in the first sentence— under section 1816 and this section together, condition of entering into a contract under (i) by striking ‘‘section shall provide’’ and or separate contracts with eligible agencies this section or under section 1871, that a car- inserting ‘‘section may provide’’; and and organizations with which contracts’’; rier match data obtained other than in its (ii) by striking ‘‘, and shall provide’’ and activities under this part with data used in and all that follows before the period; and the administration of this part for purposes (II) by striking ‘‘some or all of the fol- (B) by striking the second and third sen- of identifying situations in which section lowing functions’’ and inserting ‘‘any or all tences. 1862(b) may apply.’’; of the following functions, or parts of those (3) Section 2326 of the Deficit Reduction (ii) in subparagraph (B), in the matter pre- functions’’; and Act of 1984 (42 U.S.C. 1395h note) is amended ceding clause (i), by striking ‘‘establish (ii) in paragraph (3), by inserting ‘‘(to and by striking subsection (a). standards’’ and inserting ‘‘develop contract from individuals enrolled under this part and (f) SECRETARIAL FLEXIBILITY WITH RESPECT performance requirements’’; and to and from physicians and other entities TO RENEWING CONTRACTS AND TRANSFER OF (iii) in subparagraph (D), by striking that furnish items and services)’’ after ‘‘com- FUNCTIONS.— ‘‘standards and criteria’’ each place it ap- munication’’. (1) Section 1816(c) of the Social Security pears and inserting ‘‘contract performance (I) Section 1842(b) of the Social Security Act (42 U.S.C. 1395h(c)) is amended by adding requirements’’. Act (42 U.S.C. 1395u(b)(2)(C)) is amended— at the end the following: (2) CONFORMING AMENDMENTS.— (i) in paragraph (2)(C), in the first sen- ‘‘(4)(A) Except as provided in laws with (A) Section 1816(b) of the Social Security tence, by inserting ‘‘(as appropriate)’’ after general applicability to Federal acquisition Act (42 U.S.C. 1395h(b)) is amended— ‘‘carriers’’; and procurement or in subparagraph (B), the July 28, 1999 CONGRESSIONAL RECORD — SENATE S9541 Secretary shall use competitive procedures (h) WAIVER OF COMPETITIVE REQUIREMENTS those of twenty or even ten years ago, when entering into contracts under this sec- FOR INITIAL CONTRACTS.—Contracts that and that this is the fastest growing tion. have periods that begin before or during the segment of the housing industry. ‘‘(B)(i) The Secretary may renew a con- 1-year period that begins on the first day of tract with a fiscal intermediary under this Today nearly one out of four new sin- the fourth calendar month that begins after gle family homes is a manufactured section from term to term without regard to the date of enactment of this Act may be en- section 5 of title 41, United States Code, or tered into under section 1816(a) or 1842(a) of home, and the industry recently set a any other provision of law requiring com- the Social Security Act (42 U.S.C. 1395h(a) twenty-year sales record. There are petition, if the fiscal intermediary has met and 1395u(a)) without regard to any provision good consumer-oriented reasons for or exceeded the performance requirements of law requiring use of competitive proce- this tremendous growth—manufac- established in the current contract. dures. tured homes offer quality and aestheti- ‘‘(ii) Functions may be transferred among (i) EFFECTIVE DATES.— cally pleasing housing at an average fiscal intermediaries without regard to any (1) The amendments made by subsection cost of $41,100, excluding the land. provision of law requiring competition. How- (c) apply to contracts that have periods end- ever, the Secretary shall ensure that per- Today, manufactured housing has low- ing on or after the end of the third calendar ered the threshold to the American formance quality is considered in such trans- month that begins after the date of enact- fers.’’. ment of this Act. Dream of home ownership for millions (2) Section 1842(b)(1) of the Social Security (2) The amendments made by subsections of Americans, including first-time Act (42 U.S.C. 1395u(b)(1)) is amended to read (a), (b), (d), and (e) apply to contracts that home buyers, senior citizens, young as follows: have periods beginning after the third cal- families, and single parents. ‘‘(b)(1)(A) Except as provided in laws with endar month that begins after the date of en- With 5.3 million American house- general applicability to Federal acquisition actment of this Act. holds in need of affordable housing, I and procurement or in subparagraph (B), the (3) The amendments made by subsection (f) believe it is imperative to update the Secretary shall use competitive procedures apply to contracts that have periods that when entering into contracts under this sec- laws that regulate the private sector begin after the end of the 1-year period speci- solution to affordable housing. In order tion. fied in paragraph (1) of this subsection. ‘‘(B)(i) The Secretary may renew a con- (4) The amendment made by subsection (g) for the manufactured housing industry tract with a carrier under subsection (a) shall take effect on the date of enactment of to remain competitive, Congress must from term to term without regard to section this Act. modernize the National Manufactured 5 of title 41, United States Code, or any other Housing Construction and Safety provision of law requiring competition, if the SEC. 22. EXEMPTION OF INSPECTORS GENERAL FROM PAPERWORK REDUCTION ACT Standards Act of 1974. carrier has met or exceeded the performance REQUIREMENTS. My bill would do just that. MHIA requirements established in the current con- (a) IN GENERAL.—Chapter 35 of title 44, would establish a consensus committee tract. United States Code, is amended by inserting ‘‘(ii) Functions may be transferred among that would submit recommendations to after section 3502 the following: carriers without regard to any provision of the Secretary of Housing and Urban law requiring competition. However, the ‘‘§ 3502a. Exemption of any Office of Inspector Development (HUD) for developing, Secretary shall ensure that performance General amending, and revising the Federal quality is considered in such transfers.’’. ‘‘This chapter shall not apply with respect Manufactured Home Construction and (g) YEAR 2000 COMPLIANCE.— to any Office of Inspector General estab- Safety Standards. In addition, the com- (1) Section 1816(f)(2) of the Social Security lished within an agency under the Inspector Act (42 U.S.C. 1395h(f)(2)) (as amended by General Act of 1978.’’. mittee would be authorized to inter- subsection (d)) is amended by adding at the (b) TABLE OF CONTENTS AMENDMENT.—The pret the standards and recommend ap- end the following: table of contents of chapter 35 of title 44, propriate regulations. Consumers will ‘‘(B) a requirement that, by such time as United States Code, is amended by adding still be protected by HUD because the the Secretary considers reasonable, the in- after the item relating to section 3502 the Secretary will have absolute authority formation technology that is used or ac- following new item: to reject any recommendations, for any quired by the agency or organization to ‘‘3502a. Exemption of any Office of Inspector reason, submitted by the consensus carry out its responsibilities under this title General.’’. committee. (to the extent that the Secretary finds such (c) EFFECTIVE DATE.—The amendments The Manufactured Housing Improve- information technology is under the control made by this section shall take effect on the ment Act would authorize the Sec- of such agency or organization)— date of enactment of this Act. ‘‘(i) meets the definition of ‘Year 2000 com- retary of HUD to use industry label pliant’ under the Federal Acquisition Regu- By Mr. SHELBY (for himself, Mr. fees for the administration of the con- lation (concerning accurate processing of BAYH, Mr. BRYAN, Mr. ROCKE- sensus committee and the hiring of ad- date and time data (including calculating, FELLER, and Mr. BINGAMAN): ditional HUD staff in order to assure comparing, and sequencing) from, into, and S. 1452. A bill to modernize the re- adequate consumer protection. The between the 20th and 21st centuries, and the Secretary of HUD would also be au- years 1999 and 2000 and leap year calcula- quirements under the National Manu- factured Housing Construction and thorized to use industry label fees to tions) but without regard to whether the in- facilitate the availability and afford- formation technology is being acquired; and Safety Standards Act of 1974 and to es- ‘‘(ii) meets such other criteria for Year 2000 tablish a balanced consensus process ability of manufactured homes. This legislation is a very significant compliance as the Secretary considers appro- for the development, revision, and in- step forward in that both consumer and priate.’’. terpretation of Federal construction industry groups such as the Seniors Co- (2) Section 1842(b)(2)(A)(i) of the Social Se- and safety standards for manufactured alition, 60 Plus, and the Council for Af- curity Act (42 U.S.C. 1395u(b)(2)(A)(i)) (as homes; to the Committee on Banking, amended by subsection (b)(1)(F)) is amended fordable and Rural Housing, the Na- Housing, and Urban Affairs. by striking the period and inserting ‘‘, in- tional Association of Affordable Hous- cluding a requirement that, by such time as MANUFACTURING HOUSING IMPROVEMENT ACT. ing Lenders, the North American Steel the Secretary considers reasonable, the in- ∑ Mr. SHELBY. Mr. President, today I Framing Alliance, and the Community formation technology that is used or ac- rise to introduce a bipartisan bill with Associations Institute, along with the quired by such carrier to carry out its re- my colleagues, Senators BAYH, BRYAN, sponsibilities under this title (to the extent Manufactured Housing Institute and ROCKEFELLER and BINGAMAN. Entitled the Manufactured Housing Association that the Secretary finds such information the ‘‘Manufactured Housing Improve- technology is under the control of such car- for Regulatory Reform, have endorsed rier) meets— ment Act,’’ (MHIA) this bill is designed this legislation. ‘‘(I) the definition of ‘Year 2000 compliant’ to modernize the requirements under The industry participants have mod- under the Federal Acquisition Regulation the National Manufactured Housing ernized the quality and technology of (concerning accurate processing of date and Construction and Safety Standards Act manufactured housing. It’s time for time data (including calculating, comparing, of 1974 and to establish a balanced con- Congress to modernize the laws that and sequencing) from, into, and between the sensus process for the development, re- regulate an industry that provides af- 20th and 21st centuries, and the years 1999 vision, and interpretation of Federal fordable housing and contributes more and 2000 and leap year calculations) but construction and safety standards for without regard to whether the information than $33 billion annually to our na- technology is being acquired; and manufactured homes. tion’s economy. ‘‘(II) such other criteria for Year 2000 com- Many do not realize that the major- Similar legislation passed the House pliance as the Secretary considers appro- ity of new manufactured homes of at the end of last Congress on a bipar- priate.’’. today are completely different from tisan basis under suspension of the S9542 CONGRESSIONAL RECORD — SENATE July 28, 1999 rules and has been introduced again Our legislation will remedy this situ- cials overseeing manufactured housing this year. I hope this year the Senate ation by modernizing the program by have declined from 34 staff members at will take the lead and send the MHIA implementing procedures in which all its peak to less than a dozen profes- to the House as soon as possible.∑ proposed construction and safety sional staff now. This decline in staff ∑ Mr. BAYH. Mr. President, I am standards are addressed and considered has occurred at the same time that the pleased to join with my colleague from in a reasonable time frame. The Manu- industry has grown. Unfortunately, due Alabama, Senator SHELBY, to intro- factured Housing Improvement Act re- to a lack of staff, HUD cannot keep duce the Manufactured Housing Im- quires that action on any proposed pace with the need to update the code provement Act. This important legisla- standard or regulation be taken within on a consistent basis and timely man- tion is designed to ensure that the one year after it has been proposed to ner. In fact, between 1989 and 1996, a manufactured housing industry con- the Secretary. This is an important consensus committee made 140 sugges- tinues to provide safe, affordable hous- provision. It requires the Secretary to tions to HUD about changes for the ing by modernizing the requirements act, but protects consumers by author- federal codes on manufactured housing, under the National Manufactured izing the Secretary to reject any pro- and 80 of these provisions are still Housing Construction and Safety posal which is deemed to be adverse to pending in the Department. For exam- Standards Act of 1974. The bill also pro- consumers. ple, the 1999 National Electrical Code vides the Department of Housing and Finally, through the use of industry has new, state-of-the-art standards but Urban Development (HUD) with the re- labeling fees, this legislation provides given staffing shortage, how long will sources necessary to meet its obliga- economic resources to the Secretary it take to update the electrical stand- tions to manufactured homeowners. for the hiring of additional HUD pro- ards? Shouldn’t we address the staffing Manufactured housing has evolved gram staff. The costs of operating this shortage, and get action on the lin- significantly in the last twenty-five program and the re-staffing of the gering recommendations? years; it’s no longer the stereotypical manufactured housing program will In 1990, Congress established a Na- mobile home. In fact, the vast majority tional Commission on Manufactured continue to be borne by the manufac- of manufactured homes installed today Housing, and pushed the commission to tured housing industry, not the tax- are never moved once they have been forge consensus on key issues for this payer. I note that the industry is will- sited. At an average cost of $40,000 for important industry, unfortunately that ing to bear this expense in order to im- a new manufactured home, excluding effort collapsed in 1994. land, manufactured housing is the fast- prove the efficiency of the regulatory This legislation is a new effort to ad- est growing sector of the housing in- system. dress the challenges facing the indus- As we strive to ensure that all Amer- dustry. One in every four new single try. Introduction of the bill is just a icans have access to safe, affordable, family homes sold in the United States first step. We all understand that the and quality housing, we need to ensure is a manufactured home. Manufactured legislative process is designed to seek housing provides many American fami- that best practices are applied to the consensus and improve legislation. I lies with the opportunity to not only housing industry and that we support believe that we must work hard to own their own homes, but to live in the modernization of housing tech- forge consensus among the industry safe, comfortable, and affordable hous- nology. Manufactured housing is a val- and the consumers. This will be a chal- ing. In addition, improvements in con- uable housing resource and provides ac- lenge, but the potential rewards can be struction have led to the development cess to home ownership for many great for both sides. The industry can of aesthetically pleasing homes. Most Americans. I look forward to working win and prosper with a more effective, manufactured homes built today are with my colleagues to enact this legis- streamlined regulatory process that manufactured to resemble traditional lation.∑ keeps pace with improvements and site built homes and are enjoyed by an ∑ Mr. ROCKEFELLER. Mr. President, standards. Consumers will win if safety array of Americans, including first Once again, I am joining Senator SHEL- standards and regulations are adopted time home buyers, senior citizens, and BY and other colleagues to introduce more efficiently. Also, if the industry single parent families. Manufactured legislation intended to strengthen the uses new standards to provide better housing is an industry that not only manufactured housing industry. Manu- housing, manufactured housing could provides affordable housing but also factured housing provides a major be designed to meet a wider variety of creates jobs. In my home state of Indi- source of affordable housing for Amer- needs including modules for assisted ana, the manufactured housing indus- ican families, including seniors. This living. try employees more than 20,000 Hoo- industry represents almost thirty per- The current system of regulations siers and has a total economic impact cent of new single-family homes sold in and oversight is not working for the in- in my state of nearly $3 billion per the United States. In my state of West dustry, nor is it working as well as it year. Virginia, manufactured housing rep- should for consumers, according to a The Manufactured Housing Program resents over 60 percent of new homes. survey by seniors. But when there are at HUD, which oversees the industry, Manufactured housing should play a problems and concerns, all groups need has faced many administrative chal- strong role to increase the availability to work together on a strategy for lenges in the last decade. Lack of re- of affordable housing. This issue will be change. sources has prevented the program especially important to seniors who, This legislation is intended to pro- from keeping up with the changing according to a national survey, forty- mote reform that will help both the in- needs of manufactured housing. While five percent of households living in dustry and the consumers of manufac- the industry has voluntary imple- manufactured homes are headed by a tured housing. My hope is that all sides mented numerous code changes in re- person over 50 years old. will work together to forge consensus cent years, many requests to review Manufactured housing is affordable about reform. standards or regulations currently housing, and it is the fastest growing We should use this as an opportunity await action by HUD or have taken nu- type of housing nationally. The aver- to come together and develop a new, merous years to process, because of in- age cost of a new manufactured home improved strategy for manufactured adequate resources at the Department. without land in 1997 was $38,400, and housing. Affordable housing is a major Ten years ago, the number of HUD em- even with land and installation fees issue for families and communities. ployees assigned to this program was this cost is well below the typical costs Manufactured housing is playing a key 34. Today, only 8 HUD employees are of a newly constructed site-built home. role in affordable housing, but more responsible for this program. With the But this industry faces challenges. could and should be done. To achieve rapid growth in housing technology, it Unlike other housing, manufactured success, we need to develop a bipar- is imperative that HUD not only ad- housing is regulated by the 1974 Na- tisan, consensus approach. We need to dress these standards but do so in a tional Manufactured Housing Construc- help the industry and assure consumers timely fashion, allowing the industry tion and Safety Standards Act by the that safety and standards will be re- to remain competitive while providing Department of Housing and Urban De- tained and improved, not weakened. homeowners with the most advanced velopment, (HUD). Because of reform This is worth our combined effort to housing technology. in HUD management, the federal offi- provide more affordable housing.∑ July 28, 1999 CONGRESSIONAL RECORD — SENATE S9543 ∑ Mr. BINGAMAN. Mr. President, I am owners. Currently, 41.8% of the housing have been very generous as a Nation in pleased to rise today as a cosponsor of in New Mexico is manufactured hous- terms of humanitarian relief, we have the Manufactured Housing Improve- ing. done little to address the causes of the ment Act. This Act has come about as I think this bill is important not war. a result of much negotiation between only to New Mexico but to all owners Along with my colleagues, Senator buyers of manufactured housing, the of manufactured housing. With a focus FEINGOLD, Senator BROWNBACK, and Housing and Urban Development Agen- on construction safety standards, con- Senator LIEBERMAN, I am introducing cy and manufacturers and dealers of sumers will be safer and more secure in the ‘‘Sudan Peace Act,’’ which aims to manufactured housing. I commend the their new homes. Both the manufac- strengthen American policy and re- industry for coming to Congress with tured Housing Industry and the Con- solve to end the status quo. its plan to modify the Federal Manu- gress need to take the concerns raised The timing of this initiative is crit- factured Home Construction and Safe- in the survey conducted by the Amer- ical. The Government of Sudan has ty Standards Act of 1974. Over twenty ican Association of Retired Persons se- publicly announced that they will use years has elapsed since we comprehen- riously. The Consensus Committee cre- incoming oil revenues to increase the sively addressed the topic of safety and ated by this bill will play an important tempo and lethality of the war. An in- manufactured housing. Manufactured role in raising the standards for con- crease in the lethality and tempo of housing has changed significantly in struction and safety. I hope the Com- the war would translate into more the past twenty years. With the rise in mittee thoroughly evaluates the con- death and destruction, more shattered the number of buyers of manufactured struction concerns and safety issues lives and more slaves. Thus, time is of housing, it is time we ensure that safe- raised by those responding to AARP’s the essence in supporting efforts to ty standards are up-to-date and ade- survey. It is critical to the success of reach a comprehensive conclusion to quate to address consumers’ concerns. this program that the owners, the the hostilities. Even under such grim The Senate bill has eleven sections builders and the regulators work to- circumstances, a glimmer of oppor- that cover everything from the estab- gether to achieve a higher level of safe- tunity to push for a comprehensive so- lishment of a Consensus Committee to ty and consumer satisfaction. lution to the conflict may be at hand. a section encouraging secondary mar- I thank Senator SHELBY for intro- We must take full advantage of that ket securitization programs for FHA ducing this bill and I encourage the chance, for without the leadership of manufactured home loans and other Senate to take up this bill and pass the United States, the war will cer- loan programs. The new Consensus this worthwhile legislation.∑ tainly drag on for many more years. Committee will consist of 25 voting By Mr. FRIST (for himself, Mr. International relief operations have members and one non-voting member been in existence for 10 years with lit- FEINGOLD, Mr. BROWNBACK, and representing the Secretary of HUD. tle change. The current arrangement Mr. LIEBERMAN): The Committee will represent a wide allows Khartoum to manipulate our spectrum of interested parties, includ- S. 1453. A bill to facilitate relief ef- forts and a comprehensive solution to food donations as a weapon of mass de- ing but not limited to, home producers, struction by vetoing United Nations’ retailers, lenders, insurers, consumers, the war in Sudan; to the Committee on Foreign Relations. relief flight plans in areas of rebel ac- consumer organizations, local public tivity. Also, at a cost of over $1 million SUDAN PEACE ACT officials, and fire marshals. The Com- per day, the effort is wrought with the ∑ Mr. FRIST. Mr. President, the mittee will be responsible for recom- potential for extreme donor fatigue. mending amendments to the current United States has a tradition of defin- We need a new policy using all points safety standards and enforcement regu- ing our national interests overseas to of pressure and directing all efforts to- lations to HUD. reflect our values: freedom from perse- Most notably, there is no funding cution, freedom from religious intoler- ward a comprehensive negotiated solu- being authorized in this bill. The Sec- ance, and the inalienable rights of self- tion. Reinvigorating and pursuing a retary of HUD is authorized to use the determination and economic oppor- peace process based on the Declaration industry label fees to carry out the re- tunity. In the twentieth century alone, of Principles, signed by the combatants sponsibilities under the Act and to ad- we have sacrificed so much to defend in 1994, is the best means we have to minister the Consensus Committee. those interests worldwide, based on the push for a comprehensive solution at Not only does manufactured housing belief that freedom is truly an inalien- this time. So far, the Government of provide an affordable housing option able right, not simply for Americans, Sudan has refused to negotiate in good for New Mexicans, the overall eco- but for all peoples. Even now, in faith, choosing instead to continue the nomic impact of the manufactured Kosovo and in Bosnia, we have been the brutal war and create political diver- housing industry on New Mexico is sig- world leaders in defending against tyr- sions to any credible, binding process. nificant. In 1998, the total economic anny and oppression, believing that, al- With a set of new or strengthened po- impact on the state was over $264 mil- though far away, injustice must be met litical and humanitarian tools, this lion. Although most New Mexicans are with resolve. legislation aims to push all players to- familiar with the 157 retailers in the Our response to the tragedy and in- ward a comprehensive negotiated solu- state, many are not aware that we also justice in Sudan has not been quite so tion. have two manufacturers located in the aggressive. The radical Islamic regime The Government of Sudan has long state. Last year, these manufacturers in power in Sudan has coordinated a abetted the practice of slavery. Addi- produced over 1,000 homes and the en- systematic campaign of terror against tionally, it has helped organize and co- tire industry was responsible for em- southern Sudan which includes cal- ordinate militia, Popular Defense ploying more than 2,000 people. Anyone culated starvation, slavery, and the Forces, and paramilitary holy warriors driving the highways of New Mexico is killing of innocent women and chil- (‘‘muraheleen’’) to terrorize and some- familiar with the site of a manufac- dren. The war of low-level ethnic times enslave traditional agricultural tured home moving across Interstate 40 cleansing in Sudan has ground on for 16 and pastoralist tribes in the south and or Interstate 25. However, many New years, claiming the lives of nearly 2 in the Nuba Mountains. Mexicans may not know that almost million and displacing over 4 million. The legislation condemns the gross 7,000 homes were shipped into the state That staggering number represents violations of human rights in Sudan— in 1998 alone. more dead than the wars in Bosnia, including slavery, the use of the denial Manufactured housing serves an im- Kosovo, Somalia, Afghanistan, and of access to food as a weapon of mass portant role in New Mexico. With the Chechnya combined. In terms of loss of destruction, and targeting of civil- rising cost of homes in the metropoli- life, it has been the costliest war this ians—and increases pressure for action tan areas, and even in the smaller century since the Second World War. in the United Nations Security Council northern communities, manufactured After 10 years of feeding the starving, and for UN human rights monitors to housing that have an average cost of with the war no closer to resolution be deployed in contested areas. only $42,900 enable many more individ- than it was in 1983 when it began, we The effort to stop the conflict in uals and families to become home- must change our approach. While we Sudan has the best chance of success if S9544 CONGRESSIONAL RECORD — SENATE July 28, 1999 it is a multinational effort. The shame- ed in 1989 in response to the starvation The legislation also provides for an ful lack of resolve among the inter- deaths of 250,000 people in southern independent assessment of the humani- national community to pressure the Sudan. In March and April 1998 the tarian needs of certain regions in combatants has been a factor in the Government of Sudan denied OLS ac- Sudan, which are heavily contested and perpetuation of the conflict. cess to much of Bahr el Ghazal in an ef- thus excluded from most multilateral The legislation does more than sim- fort to starve out rebels. The ban humanitarian operations. The Nuba ply highlight the shameful lack of re- caused severe famine. Mountains and its unique and fast-dis- solve internationally, it seeks to The ability of the Government of appearing people and culture is espe- change our own policy to address the Sudan to veto OLS relief flight plans cially vulnerable. causes of the famine and the war. has allowed Khartoum to use food as a In an effort to reduce the diversion of The legislation gives the Secretary of weapon of mass destruction. It indis- food assistance to combatants, to State clear authority to commit all criminately targets combatants and strengthen the targeted population’s necessary diplomatic efforts toward re- noncombatants alike. Only with the ability to defend themselves, and to invigorating the Inter-governmental cooperation and pressure from the provide for separation of combatants Authority on Development (IGAD) members of the Security Council and from ongoing humanitarian operations peace process, including any necessary those countries which continue normal and the personnel who run them, the support for implementation of a settle- trade relations with Sudan can we ever bill gives the President authority to ment. It calls upon the leadership of hope to achieve success on this point. provide direct food assistance to those the members of IGAD and the IGAD Having a viable alternative to OLS forces protecting noncombatants from Partners Forum (IPF—a grouping of would not only allow for the distribu- attacks by government or government- donors and multilateral organizations) tion of relief should a flight ban be im- sponsored forces. However, such a pro- to give all necessary support. posed, it will immediately discourage gram may only be conducted com- The combination of a Declaration of Khartoum’s use of flight bans as an in- pletely separate from current or future Principles on which a peace process strument of war. humanitarian operations and without This legislation continues to press should be based and the engagement of compromising them. for reform of all humanitarian assist- the IGAD Partners’ Forum bodes well Currently, the majority of relief ance in Sudan. The bill includes meas- for a reinvigoration of what has been a agencies, both within and outside OLS, ures to press for reform of OLS, for the foundering process. The fact that IGAD provide assistance only to noncombat- continued use of relief organizations is a credible regional organization adds ants. As a consequence, hungry rebel outside OLS to deliver the United to its potential success. The Declara- forces routinely divert food aid away States’ relief assistance, and directs tion of Principles provides a first crit- from delivery areas, either by taxation, the Administration to develop a pos- ical, measurable step to which the or by taking the food outright. The re- sible alternative organization to de- combatants can be held accountable. sult is that normal food distribution is liver relief, should Khartoum again The legislation supports the Presi- disrupted and any reasonable separa- place bans on relief flights. tion between combatants and non- dent’s sanctions against Sudan, codi- The use of non-OLS groups to dis- combatants is breached. Providing a fying them into law and protecting tribute relief has two primary benefits. separate mechanism to feed combat- them from piecemeal erosion until First, it fills in holes where OLS is pro- ants—who will be receiving food aid in Sudan makes substantial and verifiable hibited from operating either by Khar- one form or another, regardless of the progress toward peace. The existing toum or by its own security concerns. distribution scheme—hOLSs the possi- sanctions must be used as a pressure It can also strengthen the hand of OLS bility of reducing diversions, maintain- point for peace. with respect to flight bans because ing a clear separation between combat- The United States must maintain or Khartoum is reluctant to exercise its ant and noncombatants, and thus help- strengthen every possible point on veto power when it clearly strengthens which to pressure Sudan to engage in a organizations outside its control. ing to minimize risk to relief agency meaningful peace process. Any relax- The legislation provides new and ex- personnel. Additionally, the necessity ation of any portion of the sanctions panded authority for the Sudan Transi- of pursuing food has seriously under- would essentially be a reward to Khar- tion Assistance for Rehabilitation mined the effectiveness of those forces toum. (STAR) program, which seeks to build to defend the population in areas out- The legislation also requires the the basic civil and economic institu- side of government control, as they President to report to Congress on the tions in areas devastated by the war. must often demobilize for long periods status and means of financing the new The move away from providing only of time to exact food from relief sup- oil fields in Sudan and that financing’s disaster assistance toward providing plies or tend to farming or herding re- relationship to the sanctions, the num- development assistance is critical. sponsibilities. The Administration ber and circumstances of bombings of STAR seeks to build the basic adminis- should make a determination on the civilian targets by the Government of trative and social institutions in areas potential for such a program to meet Sudan, the extent to which humani- outside of government control essen- the goals outlined in the section. This tarian operations are being com- tial for a self sustaining Sudan: civil legislation gives the President the au- promised, and whether progress is administration, civil society, agricul- thority to do so, with strong provisions being made toward peace by all parties. tural extension services, courts, etc. to protect current humanitarian oper- The issue of financing oil fields is es- One of the greatest advantages Khar- ations. Like other capacity building pecially important. The revenues from toum enjoys is a destroyed society in measures in this legislation, enhancing the new sources of oil will add a new the south. Again, a stronger society the ability of those in areas outside of source of hard currency to finance the and economy in the south serves to dis- government control to defend them- war. A key player in making that in- abuse Khartoum of the notion that it selves from government aggression will flux of hard currency into Khartoum is can win outright on the battlefield and ultimately help to dissuade the govern- a Canadian company that is listed on is thus a pressure point to push for ment from continued prosecution of the New York Stock Exchange. Consid- commitment to a viable peace process. the war and will thus strengthen the ering the wording of the sanctions in The reconciliation efforts between the push to engage in a comprehensive the President’s Executive order of 1997, Dinka and Nuer peoples is arguably the peace process. such a financial instrument would most significant development in recent These are all critical measures and seem to be something the United years in terms of strengthening the opportunities which the United States States would not be able to legally fa- areas outside of the government’s con- must seize. Our policy has not done cilitate. It is certainly not something trol and putting pressure on Khartoum enough to change the status quo. Our the United States should want to fa- to come to the table. Support for those generous response, which began in 1989, cilitate. efforts are critical. Finally, this posi- has grown and continued to feed more The United Nations-coordinated re- tion makes no assumption nor policy of the starving, yet as a response to the lief effort in Sudan, known as Oper- statement with regard to the eventual war, it has grown tepid. Unless we do ation Lifeline Sudan (OLS), was found- political status of the south. all we can to end the conflict in Sudan, July 28, 1999 CONGRESSIONAL RECORD — SENATE S9545 we are part of the problem. For sixteen new schools to accommodate the of today’s lower interest rates. The leg- years we have witnessed the destruc- record enrollments of elementary and islation will also make it easier for tion of a nation and the loss of millions secondary students we know are com- small communities to issue a greater of lives, ground into dust as the world ing. It will also help modernize schools number of bonds without being subject misses opportunity after opportunity to ensure that our children have the to onerous arbitrage requirements. All to stop it.∑ benefit of modern technology. And it of these provisions provide states and will help repair old schools which have localities with choices. Under this leg- By Mr. ROBB (for himself, Mr. become outdated and unsafe. islation, our states and localities will LAUTENBERG, Mr. CONRAD, Mr. Mr. President, 14 million children at- be able to avail themselves of those HARKIN, Mr. KENNEDY, Mr. tend schools in need of extensive repair provisions that best suit their financial DASCHLE, Mr. REID, Mrs. MUR- or replacement. Twelve million attend needs. The bill creates a menu of op- RAY, Mr. LEVIN, Mr. CLELAND, schools with leaky roofs, and 7 million tions through which states and local- Mr. DODD, Mr. TORRICELLI, Mr. attend schools with safety code viola- ities can assemble their own financing SCHUMER, Mrs. LINCOLN, Mr. tions. The President of the Maine Edu- packages. JOHNSON, Mr. WELLSTONE, Mr. cation Association testified before the Mr. President, as a former governor, KERRY, Mr. KERREY, and Mr. Health, Education, Labor and Pensions I acknowledge that education is pri- AKAKA): Committee recently and stated that marily a state and local responsibility. S. 1454. A bill to amend the Internal there are schools in Maine that actu- The federal government, however, can Revenue Code of 1986 to expand the in- ally turn the lights out when it rains be a helpful partner in education by centives for the construction and ren- because the electrical wiring is exposed helping to defray the cost of capital ovation of public schools and to pro- under their leaky roofs. improvements without interfering with vide tax incentives for corporations to Compounding the safety problem is the substantive decisions that states participate in cooperative agreements the significant overcrowding in the na- and localities are struggling to make with public schools in distressed areas; tion’s schools. Across the country, regarding their academic reform ef- to the Committee on Finance. there are thousands and thousands of forts. Providing a variety of financing f trailers used for instruction—over 3,000 options to fund capital improvements, are in use in Virginia alone. So instead PUBLIC SCHOOL MODERNIZATION therefore, is an imminently construc- of attending science class equipped AND OVERCROWDING RELIEF tive role for the federal government to with the latest technology to conduct ACT OF 1999 play. For our public education system biology experiments, our children are to be the best in the world, all three Mr. ROBB. Mr. President, I have going to class in poorly-ventilated levels of government—local, state, and come before this chamber on numerous portable trailers that can actually be federal—will have to work together. occasions to urge our colleagues to find harmful to their health. I thank my colleagues who have co- a way to give states and localities the Mr. President, Loudon County, Vir- sponsored this legislation, and I look additional resources they so urgently ginia will need to build 22 new schools forward to working with them to pass need to build and renovate our nation’s over the next six years to accommo- it. It’s flexible. It’s sensible. And it schools. In January, Senator LAUTEN- date its enormous population growth. provides the most financing options of BERG and I, with several other col- Despite the help that our own Virginia any school construction proposal to leagues, introduced the Public School General Assembly has approved, the date. I hope this legislation brings us Modernization Act of 1999. In March, state will only provide two to three one step closer to the compromise I Senators LAUTENBERG, HARKIN, and I percent of Virginia’s total school infra- know we can reach. were successful in offering an amend- structure needs. This isn’t just a Vir- Mr. President, in the 1930’s and again ment to this year’s budget resolution ginia phenomenon; it’s a national cri- in the 1950’s, our grandparents and par- which called for $24.8 billion in zero-in- sis. The National Center for Education ents summoned the political will to terest bonds as well as direct grants for Statistics estimates that by 2003, the build the vast majority of our nation’s school construction and repair. That nation will need to build 2,400 new existing school buildings. It is my hope amendment passed the Senate unani- schools to accommodate record enroll- that we can summon that will again. mously. Regrettably the Senate Fi- ments in our elementary and secondary Our nation’s students and families de- nance Committee tax bill includes only schools. serve no less.∑ minimal school infrastructure assist- In short, school boards should not be ance, despite the opportunity we had in forced to choose between hiring an ad- By Mr. ABRAHAM (for himself Committee to include much more sub- ditional teacher or fixing a leaky roof. and Mr. FEINGOLD): stantial infrastructure relief. School superintendents should be in- S. 1455. A bill to enhance protections Proposals regarding school construc- stalling computer labs, not basic air against fraud in the offering of finan- tion have been offered from both sides conditioning. And students should at- cial assistance for college education, of the aisle. Unfortunately, however, tend schools of the future, not relics of and for other purposes; to the Com- the debate about education infrastruc- the past. mittee on the Judiciary. ture needs and the federal role to ad- The legislation we offer today will THE COLLEGE SCHOLARSHIP FRAUD PREVENTION dress those needs has too often been allow school districts to issue tax-ex- ACT OF 1999 partisan and has been characterized by empt bonds for school construction. Mr. ABRAHAM. Mr. President, I rise an inability or an unwillingness to rec- Localities will be able to save signifi- today with my colleague from Wis- ognize that there is no one-size-fits-all cant amounts of money on capital im- consin, Senator FEINGOLD, to introduce solution to the school construction di- provement projects, as the federal gov- the College Scholarship Fraud Preven- lemma facing many of our nation’s ernment would give bondholders a tax tion Act of 1999. This legislation will school districts. credit in the amount of the interest prevent unscrupulous businesses from So today, I am pleased to be joined that the locality would otherwise be defrauding students seeking to finance by Senators LAUTENBERG, CONRAD, required to pay. The legislation also a college education. HARKIN, KENNEDY, DASCHLE, REID, knocks down a statutory hurdle which Students in Michigan and across the MURRAY, LEVIN, CLELAND, DODD, currently hinders more private sector nation are targeted by corrupt compa- TORRICELLI, SCHUMER, LINCOLN, JOHN- involvement in public education by al- nies preying on their hopes and dreams SON, WELLSTONE, KERRY, KERREY, and lowing private entities to pool re- of a college education. A college di- AKAKA in introducing legislation de- sources with states and localities to ploma is the key that opens the door to signed to combine various bipartisan build and renovate school buildings. many of today’s career opportunities, school construction proposals to create Furthermore, if a state or locality has but the reality is that this diploma is a menu of school construction financ- previously issued bonds at a time when becoming more and more expensive to ing options. The Public School Mod- interest rates were high, this legisla- obtain. A number of organizations have ernization and Overcrowding Relief Act tion would allow them to essentially sprung up to address this problem, and of 1999 will help school districts build refinance that debt to take advantage many of them perform an invaluable S9546 CONGRESSIONAL RECORD — SENATE July 28, 1999 service in providing student financing, five years’ imprisonment and a fine of gitimate sources of scholarship infor- or in providing information to students $250,000—half the dollar amount we mation. To ensure that this web page is concerning institutions to which those know to be the minimum he gained not misused by unscrupulous compa- students may apply for financial assist- through his fraud. nies and individuals, and other provi- ance. Unfortunately, however, a grow- Mr. President, the rapid spread of sion would require the Education De- ing number of individuals are turning scholarship scams such as Christopher partment to consult with the FTC be- student need into a scam opportunity, Nwaigwe’s makes it imperative that we fore including any name on its list. taking financial advantage of students step up prosecutions and impose tough- No organization would be listed on in need of assistance. er sentences. My legislation would en- the web page if it or its operator has Each year, individuals and businesses courage the Justice Department of pur- been prosecuted by the FTC and con- send thousands of letters out to hope- sue and prosecute more scholarship victed of using unfair or deceptive ful students, offering bogus scholar- scam-artists, by providing an addi- practices. In addition, a business or or- ships. The tactics used by these con- tional ten years’ imprisonment and ad- ganization would not be listed if the artists vary, but they nearly always in- ditional fines in fraud cases which in- Department of Education receives a volve misrepresentation and fraud. volve the offering of educational serv- significant number of complaints from Some exclusively use the mails to con- ices. students alleging that the business has duct their illegal activities, while oth- In addition, this legislation would not in good faith delivered on its prom- ers, like the National Scholarship improve the FTC’s ability to enforce ises, or if it is under investigation by Foundation have sent hundreds of orders for disgorgement and redress to the FTC. thousands of postcards to potential col- consumers. Senator FEINGOLD and I Taken together, Mr. President, these lege students, encouraging them to call have been briefed by the FTC on its provision discouraging fraud dissemi- an ‘‘800’’ number for ‘‘free money’’. current problems enforcing judgments, nating information concerning legiti- Students calling the NSF number were and one particularly offensive example mate sources of scholarship informa- told that they were guaranteed $1000 or involves an abuse of consumer bank- tion will help students find the assist- more in scholarships if they would pay ruptcy protections. Often, scholarship ance they need to finance a college a $189 processing fee, to be refunded if scam-artists use their fraudulent gains education. Through this legislation we they did not receive the scholarship. to buy expensive homes. When hit with can fight scholarship scams, put those Students sending $189 to the NSF re- disgorgement and redress orders, they who would defraud students out of ceived only general information about file for bankruptcy. And because most business and increase our Nation’s pool the college application process and the states exempt at least a portion of the of educated workers. costs of a college education—informa- value of residential property from I ask my colleagues for their support, tion readily available for free from bankruptcy estates, these con-artists and ask unanimous consent that the other sources. NSF never provided re- are able to retain their ill-gotten gains bill and a section-by-section analysis in the form of their trophy homes. funds. of the bill be printed in the RECORD. The Federal Trade Commission has After the bankruptcy proceeding clears There being no objection, the mate- been aware of this growing problem; their debts, the scam-artists may then rial was ordered to be printed in the and we have sought their input while sell their estates, keeping the money RECORD, as follows: drafting this legislation. In 1996, the they have defrauded from students. FTC initiated ‘‘Project $cholarship- Our legislation would prevent con- S. 1455 $cam,’’ a nationwide crackdown on artists from using their technique to Be it enacted by the Senate and House of Rep- fraudulent scholarship search services. avoid paying court judgments in this resentatives of the United States of America in But although the FTC is dedicated to fashion. Residential property exemp- Congress assembled, stopping these con artists, it can only tions from bankruptcy estimates are SECTION 1. SHORT TITLE. pursue civil remedies; the Justice De- intended to aid law-abiding people who This Act may be cited as the ‘‘College partment is responsible for prosecuting find themselves in financial difficulty; Scholarship Fraud Prevention Act of 1999’’. these scam-artists criminally upon they were not meant to help scam-art- SEC. 2. FINDINGS. FTC referral, and unfortunately, such ists launder and protect ill-gotten Congress makes the following findings: gains. This legislation takes a cue from (1) A substantial amount of fraud occurs in prosecutions are a rare occurrence. the offering of college education financial as- Even when the Justice Department Congress’ response to the savings and sistance services to consumers. does prosecute scholarship scam-art- loan crisis, and amends the bankruptcy (2) Such fraud includes the following: ists, the penalties are so light as to code so that debts derived from college (A) Misrepresentations regarding the pro- provide little deterrent effect. For ex- financial assistance fraud would be ex- vision of sources from which consumers may ample, this past May a federal jury in cluded from homestead bankruptcy ex- obtain financial assistance (including schol- Maryland convicted Christopher emptions. Legitimate homeowners will arships, grants, loans, tuition, awards, and Nwaigwe of defrauding more than 50,000 still be protected by the bankruptcy other assistance) for purposes of financing a college students of more than $500,000. laws. But con-artists will no longer be college education. (B) Misrepresentations regarding the pro- Mr. Nwaigwe had mailed letters to stu- able to use these laws for their own, vision of portfolios of such assistance tai- dents announcing scholarship offers of fraudulent ends. lored to the needs of specific consumers. $2,500 to $7,500, in exchange for which In addition to these punitive and de- (C) Misrepresentations regarding the pre- students were requested to send Mr. terrent measurers. Mr. President, this selection of students as eligible to receive Nwaigwe a $10 processing fee. In re- legislation also includes measures to such assistance. ality, after the students sent the help student and their families obtain (D) Misrepresentations that such assist- check, they waited in vain for a re- financing help from legitimate organi- ance will be provided to consumers who pur- sponse. zations. We need to make it easier for chase specified services from specified enti- Nwaigwe was ordered by the U.S. students and their families to differen- ties. (E) Misrepresentations regarding the busi- Postal Service to stop sending mis- tiate legitimate companies from con- ness relationships between particular enti- leading letters in 1993, yet, he chose to artists. The FTC currently warns stu- ties and entities that award or may award ignore this warning and continue to de- dents about fraudulent scholarship such assistance. fraud students. In 1996, Nwaigwe was services; while this is commendable, (F) Misrepresentations regarding refunds the subject of a civil action in U.S. Dis- however, in my view, the larger num- of processing fees if consumers are not pro- trict Court, in which he was perma- ber of students who visit the Depart- vided specified amounts of such assistance, nently enjoined from using materials ment of Education web site to find out and other misrepresentations regarding re- to solicit money from students. Yet it about financing option makes it the funds. was only in May—six years after the logical choice for an anti-scam public SEC. 3. ENHANCED CRIMINAL PENALTIES FOR COLLEGE EDUCATION FINANCIAL first official action taken against relations initiative. To that end, this SERVICE ASSISTANCE FRAUD. him—that he finally faced a jury. And legislation would call on the Secretary (a) ENHANCED PENALTIES.—Chapter 63 of the maximum penalty he faces for his of Education to maintain a web page title 18, United States Code, is amended by long course of fraudulent conduct is on the Department’s web site listing le- adding at the end the following: July 28, 1999 CONGRESSIONAL RECORD — SENATE S9547

‘‘§ 1348. Enhanced penalties for college edu- (3) the Department of Education receives a HATCH) was added as a cosponsor of S. cation financial service assistance fraud significant number of complaints, as deter- 391, a bill to provide for payments to ‘‘(a) IN GENERAL.—A person who is con- mined by the Secretary of Education, from children’s hospitals that operate grad- victed of an offense under section 1341, 1342, students alleging the business or organiza- uate medical education programs. or 1343 of this title in connection with the tion has not in good faith delivered on prom- obtaining or providing of any scholarship, ises made by the business or organization; or S. 514 grant, loan, tuition, discount, award, or (4) the business or organization is under in- At the request of Mr. COCHRAN, the other financial assistance for purposes of fi- vestigation by the Federal Trade Commis- name of the Senator from Idaho (Mr. nancing an education at an institution of sion. CRAIG) was added as a cosponsor of S. higher education shall be fined under this 514, a bill to improve the National THE COLLEGE SCHOLARSHIP FRAUD PREVEN- title, imprisoned not more than 10 years, or Writing Project. both. TION ACT OF 1999—SECTION-BY-SECTION ‘‘(b) OTHER PENALTIES.—Any penalties im- ANALYSIS S. 676 posed under this section shall be in addition A bill to enhance protections against fraud At the request of Mr. CAMPBELL, the to any penalties under any of the sections re- in the offering of financial assistance for col- names of the Senator from Tennessee ferred to in subsection (a). lege education, and for other purposes. (Mr. FRIST) and the Senator from Okla- ‘‘(c) INSTITUTION OF HIGHER EDUCATION DE- SECTION 1: FINDINGS homa (Mr. NICKLES) were added as co- FINED.—In this section, the term ‘institution of higher education’ has the meaning given This section sets out Congressional find- sponsors of S. 676, a bill to locate and that term in section 101 of the Higher Edu- ings concerning the high level of fraud that secure the return of Zachary Baumel, a cation Act of 1965 (20 U.S.C. 1001).’’. occurs in the offering of college education fi- citizen of the United States, and other nancial assistance services to consumers. (b) CLERICAL AMENDMENT.—The table of Israeli soldiers missing in action. sections at the beginning of that chapter is SECTION 2: ENHANCED CRIMINAL PENALTIES FOR S. 692 amended by adding at the end the following: COLLEGE EDUCATION FINANCIAL SERVICE ‘‘1348. Enhanced penalties for college edu- DEFINITIONS At the request of Mr. KYL, the name cation financial service assist- This section amends Chapter 63 of Title 18, of the Senator from North Carolina ance fraud.’’. United States Code by adding a section that (Mr. HELMS) was added as a cosponsor SEC. 4. EXCLUSION OF DEBTS RELATING TO COL- provides for a fine, imprisonment for not of S. 692, a bill to prohibit Internet LEGE FINANCIAL ASSISTANCE SERV- more than 10 years, or both, for college edu- gambling, and for other purposes. ICES FRAUD FROM PERMISSIBLE EX- cation financial service assistance fraud. S. 708 EMPTIONS OF PROPERTY FROM ES- SECTION 3: EXCLUSION OF DEBTS RELATING TO TATES IN BANKRUPTCY. At the request of Mr. DEWINE, the COLLEGE FINANCIAL ASSISTANCE SERVICES Section 522(c) of title 11, United States FRAUD FROM PERMISSIBLE EXEMPTIONS OF name of the Senator from California Code, is amended— PROPERTY FROM ESTATES IN BANKRUPTCY (Mrs. FEINSTEIN) was added as a co- (1) by striking ‘‘or’’ at the end of paragraph sponsor of S. 708, a bill to improve the (2); This provision amends Section 522(c) of (2) by striking the period at the end of Title 11 of the United States Code to allow administrative efficiency and effective- paragraph (3) and inserting ‘‘; or’’; and property otherwise exempted in bankruptcy ness of the Nation’s abuse and neglect (3) by adding at the end the following: to be subject to disgorgement and redress or- courts and the quality and availability ‘‘(4) a debt in connection with fraud in the ders resulting from college financial assist- of training for judges, attorneys, and ance services fraud. obtaining or providing of any scholarship, volunteers working in such courts, and grant, loan, tuition, discount, award, or SECTION 4: LIST OF BUSINESSES AND ORGANIZA- for other purposes consistent with the TIONS OFFERING COLLEGE EDUCATION FINAN- other financial assistance for purposes of fi- Adoption and Safe Families Act of 1997. nancing an education at an institution of CIAL ASSISTANCE SERVICES S. 1035 higher education (as that term is defined in This section requires the Secretary of Edu- section 101 of the Higher Education Act of cation to maintain a web page listing busi- At the request of Mr. FEINGOLD, the 1954 (20 U.S.C. 1001)).’’. nesses and organizations offering financial name of the Senator from Arkansas SEC. 5. LIST OF BUSINESSES AND ORGANIZA- assistance for purposes of financing an edu- (Mrs. LINCOLN) was added as a cospon- TIONS OFFERING COLLEGE EDU- cation. The section also requires consulta- sor of S. 1035, a bill to establish a pro- CATION FINANCIAL ASSISTANCE tion between the Secretary of Education and gram to provide grants to expand the SERVICES. the Federal Trade Commission to ensure (a) LIST.—The Secretary of Education shall that a listed business is a legitimate offeror availability of public health dentistry maintain on the Internet web site of the De- of services, and specifies the circumstances programs in medically underserved partment of Education a web page that— under which a business or organization areas, health professional shortage (1) lists businesses and organizations that would be ineligible to be listed. areas, and other Federally-defined offer financial assistance (including scholar- f areas that lack primary dental serv- ships, grants, loans, tuition, awards, and ices. other assistance) for purposes of financing an ADDITIONAL COSPONSORS S. 1070 education at institutions of higher edu- S. 50 cation; and At the request of Mr. BOND, the name At the request of Mrs. HUTCHISON, the (2) provides the Internet web site address of the Senator from Virginia (Mr. WAR- name of the Senator from Montana of such businesses and organizations. NER) was added as a cosponsor of S. (b) APPLICATION FOR PLACEMENT ON THE (Mr. BURNS) was added as a cosponsor 1070, a bill to require the Secretary of LIST.—A business or organization may apply of S. 50, a bill to improve options for Labor to wait for completion of a Na- to the Secretary of Education for placement excellence in education. tional Academy of Sciences study be- on the list. S. 193 (c) CONSULTATION.—The Secretary of Edu- fore promulgating a standard, regula- cation shall consult with the Chairman of At the request of Mrs. BOXER, the tion or guideline on ergonomics. name of the Senator from California the Federal Trade Commission in an effort to S. 1110 ensure that a business or organization apply- (Mrs. FEINSTEIN) was added as a co- At the request of Mr. LOTT, the name ing for placement on the list is a legitimate sponsor of S. 193, a bill to apply the business or organization. same quality and safety standards to of the Senator from Maine (Ms. COL- (d) INELIGIBILITY.—A business or organiza- domestically manufactured handguns LINS) was added as a cosponsor of S. tion shall not be listed on the page if— that are currently applied to imported 1110, a bill to amend the Public Health (1) the business or organization was pros- handguns. Service Act to establish the National ecuted by the Federal Trade Commission and Institute of Biomedical Imaging and S. 345 convicted of using an unfair or deceptive act Engineering. or practice under the Federal Trade Commis- At the request of Mr. ALLARD, the sion Act (15 U.S.C. 41 et seq.) during the 5- name of the Senator from Ohio (Mr. S. 1144 year period preceding the submission of an DEWINE) was added as a cosponsor of S. At the request of Mr. VOINOVICH, the application under subsection (b); 345, a bill to amend the Animal Welfare name of the Senator from New Jersey (2) the business or organization is operated Act to remove the limitation that per- (Mr. TORRICELLI) was added as a co- by an individual who operated a business or mits interstate movement of live birds, sponsor of S. 1144, a bill to provide in- organization that was prosecuted by the Fed- for the purpose of fighting, to States in creased flexibility in use of highway eral Trade Commission and convicted of funding, and for other purposes. using an unfair or deceptive act or practice which animal fighting is lawful. under such Act during the 5-year period pre- S. 391 S. 1199 ceding the submission of an application At the request of Mr. KERREY, the At the request of Mr. ASHCROFT, the under subsection (b); name of the Senator from Utah (Mr. name of the Senator from Oklahoma S9548 CONGRESSIONAL RECORD — SENATE July 28, 1999

(Mr. NICKLES) was added as a cosponsor KULSKI) was added as a cosponsor of reconciliation pursuant to section 104 of S. 1199, a bill to require the Sec- Senate Resolution 99, a resolution des- of the concurrent resolution on the retary of State to report on United ignating November 20, 1999, as ‘‘Na- budget for fiscal year 2000; as follows: States citizens injured or killed by cer- tional Survivors for Prevention of Sui- Beginning on page 11, strike line 18 and all tain terrorist groups. cide Day.’’ that follows through page 32, line 14, and in- S. 1200 AMENDMENT NO. 1069 sert the following: At the request of Ms. SNOWE, the At the request of Mr. STEVENS, the SEC. 201. ELIMINATION OF MARRIAGE PENALTY IN INDIVIDUAL INCOME TAX RATES. name of the Senator from Montana name of the Senator from Alaska (Mr. (a) GENERAL RULE.—Section 1 (relating to (Mr. BAUCUS) was added as a cosponsor MURKOWSKI) was added as a cosponsor tax imposed) is amended by striking sub- of S. 1200, a bill to require equitable of amendment No. 1069 intended to be sections (a) through (e) and inserting the fol- coverage of prescription contraceptive proposed to S. 1233, an original bill lowing: drugs and devices, and contraceptive making appropriations for Agriculture, ‘‘(a) MARRIED INDIVIDUALS FILING JOINT RE- services under health plans. Rural Development, Food and Drug Ad- TURNS AND SURVIVING SPOUSES.—There is S. 1207 ministration, and Related Agencies hereby imposed on the taxable income of— At the request of Mr. BURNS, the programs for the fiscal year ending ‘‘(1) every married individual (as defined in name of the Senator from Indiana (Mr. section 7703) who makes a single return September 30, 2000, and for other pur- jointly with his spouse under section 6013, LUGAR) was added as a cosponsor of S. poses. and 1207, a bill to amend the Internal Rev- f ‘‘(2) every surviving spouse (as defined in enue Code of 1986 to ensure that income section 2(a)), averaging for farmers not increase a SENATE RESOLUTION 168—PAYING a tax determined in accordance with the fol- farmer’s liability for the alternative A GRATUITY TO MARY LYDA lowing table: minimum tax. NANCE ‘‘If taxable income is: The tax is: S. 1293 Mr. HELMS (for himself and Mr. Not over $50,700 ...... 15% of taxable income. Over $50,700 but not over $7,605, plus 28% of the ex- At the request of Mr. COCHRAN, the IDEN B ) submitted the following resolu- $122,800. cess over $50,700. name of the Senator from Utah (Mr. tion; which was considered and agreed Over $122,800 but not over $27,793, plus 31% of the BENNETT) was added as a cosponsor of to: $256,200. excess over $122,800. Over $256,200 but not over $69,147, plus 36% of the S. 1293, a bill to establish a Congres- S. RES. 168 sional Recognition for Excellence in $556,900. excess over $256,200. Resolved, That the Secretary of the Senate Over $556,900 ...... $177,399, plus 39.6% of the Arts Education Board. is authorized and directed to pay, from the excess over $556,900. S. 1310 contingent fund of the Senate, to Mary Lyda ‘‘(b) HEADS OF HOUSEHOLDS.—There is here- At the request of Ms. COLLINS, the Nance, widow of Admiral James W. Nance, by imposed on the taxable income of every name of the Senator from Kansas (Mr. an employee of the Senate at the time of his head of a household (as defined in section 2(b)) a tax determined in accordance with the ROBERTS) was added as a cosponsor of death, the sum of $200,000, that sum to be following table: S. 1310, a bill to amend title XVIII of considered inclusive of funeral expenses and the Social Security Act to modify the all other allowances. ‘‘If taxable income is: The tax is: f Not over $33,950 ...... 15% of taxable income. interim payment system for home Over $33,950 but not over $5,092.50, plus 28% of the health services, and for other purposes. AMENDMENTS SUBMITTED $87,700. excess over $33,950. S. 1345 Over $87,700 but not over $20,142.50, plus 31% of the $142,000. excess over $87,700. At the request of Mr. LAUTENBERG, Over $142,000 but not over $36,975.50, plus 36% of the the name of the Senator from Nevada DEPARTMENT OF THE INTERIOR $278,450. excess over $142,000. (Mr. REID) was added as a cosponsor of AND RELATED AGENCIES APPRO- Over $278,450 ...... $86,097.50, plus 39.6% of S. 1345, a bill to amend title 18, United the excess over $278,450. PRIATIONS ACT, 2000 ‘‘(c) OTHER INDIVIDUALS.—There is hereby States Code, to prohibit certain inter- imposed on the taxable income of every indi- state conduct relating to exotic ani- vidual (other than an individual to whom mals. CRAPO (AND OTHERS) subsection (a) or (b) applies) a tax deter- S. 1362 AMENDMENT NO. 1372 mined in accordance with the following table: At the request of Mr. BURNS, the (Ordered to lie on the table.) name of the Senator from Missouri Mr. CRAPO (for himself, Mr. CRAIG, ‘‘If taxable income is: The tax is: (Mr. ASHCROFT) was added as a cospon- Not over $25,350 ...... 15% of taxable income. and Mr. BURNS) submitted an amend- Over $25,350 but not over $3,802.50, plus 28% of the sor of S. 1362, a bill to establish a com- ment to be proposed by them to the bill $61,400. excess over $25,350. mission to study the airline industry (H.R. 2466) making appropriations for Over $61,400 but not over $13,896.50, plus 31% of the $128,100. excess over $61,400. and to recommend policies to ensure the Department of the Interior and re- consumer information and choice. Over $128,100 but not over $34,573.50, plus 36% of the lated agencies for the fiscal year end- $278,450. excess over $128,100. SENATE CONCURRENT RESOLUTION 9 ing September 30, 2000, and for other Over $278,450 ...... $88,699.50, plus 39.6% of At the request of Ms. SNOWE, the purposes; as follows: the excess over $278,450. names of the Senator from South Caro- ‘‘(d) ESTATES AND TRUSTS.—There is hereby On page 10, line 16, after ‘‘herein,’’ insert imposed on the taxable income of— lina (Mr. THURMOND), the Senator from the following: ‘‘of which not less than ‘‘(1) every estate, and West Virginia (Mr. ROCKEFELLER), the $750,000 shall be available for the develop- ‘‘(2) every trust, Senator from Maine (Ms. COLLINS), and ment of a voluntary enrollment habitat con- taxable under this subsection a tax deter- the Senator from North Carolina (Mr. servation plan for cold water fish in coopera- mined in accordance with the following EDWARDS) were added as cosponsors of tion with the States of Idaho and Montana table: Senate Concurrent Resolution 9, a con- (of which $150,000 shall be used to fund full- time positions of personnel to assist in the ‘‘If taxable income is: The tax is: current resolution calling for a United Not over $1,700 ...... 15% of taxable income. States effort to end restrictions on the development of the plan and $300,000 shall be Over $1,700 but not over $255, plus 28% of the ex- made available to each State for data collec- $4,000. cess over $1,700. freedoms and human rights of the tion, organizational, and related activities), Over $4,000 but not over $899, plus 31% of the ex- enclaved people in the occupied area of and of which not more than $64,626,000 shall $6,100. cess over $4,000. Cyprus. be available for habitat conservation, and’’. Over $6,100 but not over $1,550, plus 36% of the ex- $8,350. cess over $6,100. SENATE RESOLUTION 95 f Over $8,350 ...... $2,360, plus 39.6% of the At the request of Mr. THURMOND, the excess over $8,350.’’. name of the Senator from New Mexico TAXPAYER REFUND ACT OF 1999 (b) INFLATION ADJUSTMENT TO APPLY IN DE- (Mr. DOMENICI) was added as a cospon- TERMINING RATES FOR 2000.—Subsection (f) of sor of Senate Resolution 95, a resolu- section 1 is amended— tion designating August 16, 1999, as BROWNBACK AMENDMENT NO. 1373 (1) by striking ‘‘1993’’ in paragraph (1) and ‘‘National Airborne Day.’’ inserting ‘‘1999’’, (Ordered to lie on the table.) (2) by striking ‘‘1992’’ in paragraph (3)(B) SENATE RESOLUTION 99 Mr. BROWNBACK submitted an and inserting ‘‘1997’’, and At the request of Mr. REID, the name amendment intended to be proposed by (3) by striking paragraph (7). of the Senator from Maryland (Ms. MI- him to the bill (S. 1429) to provide for (c) CONFORMING AMENDMENTS.— July 28, 1999 CONGRESSIONAL RECORD — SENATE S9549 (1) The following provisions are each endar year after 1999, each dollar amount taxpayer shall be deemed to have employ- amended by striking ‘‘1992’’ and inserting contained in paragraph (2) or (5) or sub- ment-related expenses for the taxable year ‘‘1997’’ each place it appears: section (f) shall be increased by an amount with respect to each such qualifying indi- (A) Section 25A(h). equal to— vidual in an amount equal to the sum of— (B) Section 32(j)(1)(B). ‘‘(A) such dollar amount, multiplied by ‘‘(i) $200 for each month in such taxable (C) Section 41(e)(5)(C). ‘‘(B) the cost-of-living adjustment deter- year during which such qualifying individual (D) Section 68(b)(2)(B). mined under section 1(f)(3) for the calendar is under the age of 1, and (E) Section 135(b)(2)(B)(ii). year in which the taxable year begins.’’ ‘‘(ii) the amount of employment-related (F) Section 151(d)(4). (2) Subparagraph (A) of section 63(c)(5) is expenses otherwise incurred for such quali- (G) Section 221(g)(1)(B). amended by striking ‘‘$500’’ and inserting fying individual for the taxable year (deter- (H) Section 512(d)(2)(B). ‘‘$700’’. mined under this section without regard to (I) Section 513(h)(2)(C)(ii). (3) Subsection (f) of section 63 is amended this paragraph). (J) Section 877(a)(2). by striking ‘‘$600’’ each place it appears and ‘‘(B) ELECTION TO NOT APPLY THIS PARA- (K) Section 911(b)(2)(D)(ii)(II). inserting ‘‘$850’’ and by striking ‘‘$750’’ in GRAPH.—This paragraph shall not apply with (L) Section 4001(e)(1)(B). paragraph (3) and inserting ‘‘$1,050’’. respect to any qualifying individual for any (M) Section 4261(e)(4)(A)(ii). (4) Subparagraph (B) of section 1(f)(6) is taxable year if the taxpayer elects to not (N) Section 6039F(d). amended by striking ‘‘subsection (c)(4) of have this paragraph apply to such qualifying (O) Section 6334(g)(1)(B). section 63 (as it applies to subsections individual for such taxable year.’’. (P) Section 7430(c)(1). (c)(5)(A) and (f) of such section)’’ and insert- On page 21, line 1, strike ‘‘(c)’’ and insert (2) Subclause (II) of section 42(h)(6)(G)(i) is ing ‘‘section 63(c)(4)’’. ‘‘(d)’’. amended by striking ‘‘1987’’ and inserting (c) EFFECTIVE DATE.—The amendments On page 195, strike lines 4 through 23. ‘‘1997’’. made by this section shall apply to taxable (3) Subparagraph (B) of section 59(j)(2) is years beginning after December 31, 1999. amended by striking ‘‘, determined by sub- On page 9, line 12, strike ‘‘2000’’ and insert DASCHLE (AND OTHERS) stituting ‘1997’ for ‘1992’ in subparagraph (B) ‘‘2002’’. AMENDMENT NO. 1376 thereof’’. Beginning on page 10, strike line 17 and all (Ordered to lie on the table.) (4) Subparagraph (B) of section 132(f)(6) is that follows through page 11, line 12, and in- Mr. DASCHLE (for himself, Mr. amended by inserting before the period ‘‘, de- sert the following: BYRD, Mr. BAUCUS, Mr. BINGAMAN, and termined by substituting ‘calendar year 1992’ ‘‘(i) JOINT RETURNS AND SURVIVING Mr. KERREY) submitted an amendment for ‘calendar year 1997’ in subparagraph (B) SPOUSES.—In the case of the table contained thereof’’. in subsection (a)— intended to be proposed by him to the (5) Paragraph (2) of section 220(g) of such bill, S. 1429, supra; as follows: Code is amended by striking ‘‘by sub- Applicable ‘‘Calendar year: dollar amount: At the end of the bill add the following: stituting ‘calendar year 1997’ for ‘calendar 2007 or 2008 ...... $4,000 year 1992’ in subparagraph (B) thereof’’. DIVISION II—ENERGY SECURITY TAX 2009 and thereafter ...... $5,000. (6) Subparagraph (B) of section 685(c)(3) is INCENTIVES ‘‘(ii) OTHER TABLES.—In the case of the amended by striking ‘‘, by substituting ‘cal- SECTION 1. SHORT TITLE; AMENDMENT OF 1986 table contained in subsection (b), (c), or (d)— endar year 1997’ for ‘calendar year 1992’ in CODE; TABLE OF CONTENTS. subparagraph (B) thereof’’. Applicable (a) SHORT TITLE.—This division may be (7) Subparagraph (B) of section 2032A(a)(3) ‘‘Calendar year: dollar amount: cited as the ‘‘Energy Security Tax Act of is amended by striking ‘‘by substituting ‘cal- 2007 or 2008 ...... $2,000 1999’’. endar year 1997’ for ‘calendar year 1992’ in 2009 and thereafter ...... $2,500. (b) AMENDMENT OF 1986 CODE.—Except as subparagraph (B) thereof’’. ‘‘(B) COST-OF-LIVING ADJUSTMENT.—In the otherwise expressly provided, whenever in (8) Subparagraph (B) of section 2503(b)(2) is case of any taxable year beginning in any this division an amendment or repeal is ex- amended by striking ‘‘by substituting ‘cal- calendar year after 2009, the applicable dollar pressed in terms of an amendment to, or re- endar year 1997’ for ‘calendar year 1992’ in amount shall be increased by an amount peal of, a section or other provision, the ref- subparagraph (B) thereof’’. equal to— erence shall be considered to be made to a (9) Paragraph (2) of section 2631(c) is ‘‘(i) such dollar amount, multiplied by section or other provision of the Internal amended by striking ‘‘by substituting ‘cal- ‘‘(ii) the cost-of living adjustment deter- Revenue Code of 1986. endar year 1997’ for ‘calendar year 1992’ in mined under paragraph (3) for the calendar (c) TABLE OF CONTENTS.— year in which the taxable year begins, deter- subparagraph (B) thereof’’. Sec. 1. Short title; amendment of 1986 Code; mined by substituting ‘calendar year 2007’ (10) Subparagraph (B) of section 6601(j)(3) is table of contents. amended by striking ‘‘by substituting ‘cal- for ‘calendar year 1992’ in subparagraph (B) thereof.’’ TITLE I—ENERGY-EFFICIENT PROPERTY endar year 1997’ for ‘calendar year 1992’ in USED IN BUSINESS subparagraph (B) thereof’’. (11) Sections 468B(b)(1), 511(b)(1), 641(a), GREGG AMENDMENTS NOS. 1374– Sec. 101. Credit for certain energy-efficient 641(d)(2)(A), and 685(d) are each amended by 1375 property used in business. striking ‘‘section 1(e)’’ each place it appears TITLE II—NONBUSINESS ENERGY and inserting ‘‘section 1(d)’’. (Ordered to lie on the table.) SYSTEMS (12) Sections 1(f)(2) and 904(b)(3)(E)(ii) are Mr. GREGG submitted two amend- Sec. 201. Credit for certain nonbusiness en- each amended by striking ‘‘(d), or (e)’’ and ments intended to be proposed by him ergy systems. inserting ‘‘or (d)’’. to the bill, S. 1429, supra; as follows: TITLE III—ALTERNATIVE FUELS (13) Paragraph (1) of section 1(f) is amended AMENDMENT NO. 1374 by striking ‘‘(d), and (e)’’ and inserting ‘‘and Sec. 301. Allocation of alcohol fuels credit to At the appropriate place in the bill, insert patrons of a cooperative. (d)’’. the following: (d) EFFECTIVE DATE.—The amendments TITLE IV—AUTOMOBILES SEC. ll. ONE-YEAR EXTENSION OF PERIOD OF made by this section shall apply to taxable Sec. 401. Credit for purchase of fuel cell, years beginning after December 31, 1999. TAX MORATORIUM UNDER INTER- NET TAX FREEDOM ACT. electric, and hybrid electric ve- SEC. 202. ELIMINATION OF MARRIAGE PENALTY Section 1101(a) of the Internet Tax Free- hicles. IN STANDARD DEDUCTION. dom Act (title XI of division C of Public Law TITLE V—CLEAN COAL TECHNOLOGIES (a) IN GENERAL.—Paragraph (2) of section 63(c) (relating to standard deduction) is 105–277; 112 Stat. 2681–719; 47 U.S.C. 151 note) Sec. 501. Credit for investment in qualifying amended to read as follows: is amended by striking ‘‘3 years after the clean coal technology. ‘‘(2) BASIC STANDARD DEDUCTION.—For pur- date of the enactment of this Act’’ and in- Sec. 502. Credit for production from quali- poses of paragraph (1), the basic standard de- serting ‘‘4 years after October 21, 1998’’. fying clean coal technology. duction is— Sec. 503. Risk pool for qualifying clean coal ‘‘(A) $8,500 in the case of— AMENDMENT NO. 1375 technology. ‘‘(i) a joint return, or On page 21, before line 1, insert: TITLE VI—METHANE RECOVERY (c) MINIMUM DEPENDENT CARE CREDIT AL- ‘‘(ii) a surviving spouse (as defined in sec- Sec. 601. Expansion of section 29 tax credit. LOWED FOR STAY-AT-HOME PARENTS.—Section tion 2(a)), Sec. 602. Credit for capture of coalbed meth- 21(e) (relating to special rules) is amended by ‘‘(B) $6,250 in the case of a head of house- ane gas. hold (as defined in section 2(b)), or adding at the end the following: ‘‘(C) $4,250 in any other case.’’ ‘‘(11) MINIMUM CREDIT ALLOWED FOR STAY- TITLE VII—OIL AND GAS PRODUCTION (b) TECHNICAL AMENDMENTS.— AT-HOME PARENTS.— Sec. 701. Credit for production of re-refined (1) Paragraph (4) of section 63(c) is amend- ‘‘(A) IN GENERAL.—Notwithstanding sub- lubricating oil. ed to read as follows: section (d), in the case of any taxpayer with Sec. 702. Repeal certain adjustments based ‘‘(4) ADJUSTMENTS FOR INFLATION.—In the 1 or more qualifying individuals described in on adjusted current earnings case of any taxable year beginning in a cal- subsection (b)(1)(A) under the age of 1, such relating to oil and gas assets. S9550 CONGRESSIONAL RECORD — SENATE July 28, 1999 Sec. 703. 10-year carryback for percentage ‘‘(B)(i) the construction, reconstruction, or structural component of the structure on depletion for oil and gas prop- erection of which is completed by the tax- which it is installed. erty. payer, or ‘‘(2) GEOTHERMAL ENERGY PROPERTY.— TITLE VIII—RENEWABLE POWER ‘‘(ii) which is acquired by the taxpayer if ‘‘(A) IN GENERAL.—The term ‘geothermal GENERATION the original use of such property commences energy property’ means equipment used to with the taxpayer, produce, distribute, or use energy derived Sec. 801. Credit for investment in photo- ‘‘(C) which can reasonably be expected to from a geothermal deposit (within the mean- voltaic and wind property man- remain in operation for at least 5 years, ing of section 613(e)(2)), but only, in the case ufacturing facilities. ‘‘(D) with respect to which depreciation (or of electricity generated by geothermal Sec. 802. Modifications to credit for elec- amortization in lieu of depreciation) is al- tricity produced from renew- power, up to (but not including) the elec- lowable, and able resources. trical transmission stage. ‘‘(E) which meets the performance and Sec. 803. Proportional credit for producing ‘‘(B) HIGH RISK GEOTHERMAL WELL.—The quality standards (if any) which— electricity through co-firing. term ‘high risk geothermal well’ means a ‘‘(i) have been prescribed by the Secretary Sec. 804. Credit for capital costs of qualified geothermal deposit (within the meaning of by regulations (after consultation with the biomass-based generating sys- section 613(e)(2)) which requires high risk Secretary of Energy), and tem. drilling techniques. Such deposit may not be ‘‘(ii) are in effect at the time of the acqui- located in a State or national park or in an Sec. 805. Pass-through of renewable energy sition of the property. production incentive payments area in which the relevant State park au- ‘‘(2) EXCEPTIONS.— to end-users. thority or the National Park Service deter- ‘‘(A) PUBLIC UTILITY PROPERTY.—Such term mines the development of such a deposit will TITLE IX—STEELMAKING shall not include any property which is pub- negatively impact on a State or national Sec. 901. Credit for energy-efficient lic utility property (as defined in section park. steelmaking capacity. 46(f)(5) as in effect on the day before the date ‘‘(3) ENERGY-EFFICIENT BUILDING PROP- Sec. 902. Extension of credit for electricity of the enactment of the Revenue Reconcili- ERTY.— to production from steel cogen- ation Act of 1990), except for property de- ‘‘(A) IN GENERAL.—The term ‘energy-effi- eration. scribed in paragraph (1)(A)(iv). cient building property’ means— TITLE X—AGRICULTURE ‘‘(B) CERTAIN WIND EQUIPMENT.—Such term ‘‘(i) a fuel cell that— shall not include equipment described in ‘‘(I) generates electricity and heat using an Sec. 1001. Agricultural conservation tax paragraph (1)(A)(viii) which is taken into ac- credit. electrochemical process, count for purposes of section 45 for the tax- ‘‘(II) has an electricity-only generation ef- TITLE I—ENERGY-EFFICIENT PROPERTY able year. ficiency greater than 35 percent, and USED IN BUSINESS ‘‘(d) DEFINITIONS RELATING TO TYPES OF ‘‘(III) has a minimum generating capacity SEC. 101. CREDIT FOR CERTAIN ENERGY-EFFI- ENERGY PROPERTY.—For purposes of this of 5 kilowatts, CIENT PROPERTY USED IN BUSI- section— ‘‘(ii) an electric heat pump hot water heat- NESS. ‘‘(1) SOLAR ENERGY PROPERTY.— er that yields an energy factor of 1.7 or (a) IN GENERAL.—Subpart E of part IV of ‘‘(A) IN GENERAL.—The term ‘solar energy greater under standards prescribed by the subchapter A of chapter 1 (relating to rules property’ means general solar energy prop- Secretary of Energy, for computing investment credit) is amended erty, solar water heating property, and pho- ‘‘(iii) an electric heat pump that has a by inserting after section 48 the following: tovoltaic property. heating system performance factor (HSPF) ‘‘SEC. 48A. ENERGY CREDIT. ‘‘(B) GENERAL SOLAR ENERGY PROPERTY.— of 9 or greater and a cooling seasonal energy ‘‘(a) IN GENERAL.—For purposes of section The term ‘general solar energy property’ efficiency ratio (SEER) of 13 or greater, 46, the energy credit for any taxable year is means equipment which uses solar energy to ‘‘(iv) a natural gas heat pump that has a the sum of— generate electricity, to heat or cool a struc- coefficient of performance of not less than ‘‘(1) the amount equal to the energy per- ture, or to provide solar process heat. 1.25 for heating and not less than 0.60 for centage of the basis of each energy property ‘‘(C) SOLAR WATER HEATING PROPERTY.— cooling, placed in service during such taxable year, ‘‘(i) IN GENERAL.—The term ‘solar water ‘‘(v) a central air conditioner that has a and heating property’ means property which, cooling seasonal energy efficiency ratio ‘‘(2) the credit amount for each qualified when installed in connection with a struc- (SEER) of 13 or greater, hybrid vehicle placed in service during the ture, uses solar energy for the purpose of ‘‘(vi) an advanced natural gas water heater taxable year. providing hot water for use within such that— ‘‘(b) ENERGY PERCENTAGE.— structure. ‘‘(I) increases steady state efficiency and ‘‘(1) IN GENERAL.—The energy percentage ‘‘(ii) LIMITATION ON AMOUNT OF CREDIT.— reduces standby and vent losses, and is— The credit under subsection (a)(1) for the ‘‘(II) has an energy factor of at least 0.65, ‘‘(A) except as otherwise provided in this taxable year with respect to solar water ‘‘(vii) an advanced natural gas furnace that subparagraph, 10 percent, heating property shall not exceed $1,000. achieves a 95 percent AFUE, and ‘‘(B) in the case of energy property de- ‘‘(iii) ELECTION TO TREAT PROPERTY AS ‘‘(viii) natural gas cooling equipment— scribed in clauses (i), (iii), (vi), (vii), and SOLAR WATER HEATING PROPERTY.—Property ‘‘(I) that has a coefficient of performance (viii) of subsection (c)(1)(A), 20 percent, that is both general solar energy property of not less than .60, or ‘‘(C) in the case of energy property de- and solar water heating property shall be ‘‘(II) that uses desiccant technology and scribed in subsection (c)(1)(A)(v), 15 percent, treated as general solar energy property for has an efficiency rating of 40 percent. and purposes of this section unless the taxpayer ‘‘(B) LIMITATIONS.—The credit under sub- ‘‘(D) in the case of energy property de- elects to treat such property as being only section (a)(1) for the taxable year may not scribed in subsection (c)(1)(A)(ii) relating to solar water heating property. If such an elec- exceed— a high risk geothermal well, 20 percent. tion is made the energy percentage under ‘‘(i) $500 in the case of property described ‘‘(2) COORDINATION WITH REHABILITATION.— subsection (b)(1) shall be 15 percent in lieu of in subparagraph (A) other than clauses (i) The energy percentage shall not apply to 10 percent. and (iv) thereof, that portion of the basis of any property ‘‘(D) PHOTOVOLTAIC PROPERTY.— ‘‘(ii) $500 for each kilowatt of capacity in which is attributable to qualified rehabilita- ‘‘(i) IN GENERAL.—The term ‘photovoltaic the case of a fuel cell described in subpara- tion expenditures. property’ means property which, when in- graph (A)(i), and ‘‘(c) ENERGY PROPERTY DEFINED.— stalled in connection with a structure, uses a ‘‘(iii) $1,000 in the case of a natural gas ‘‘(1) IN GENERAL.—For purposes of this sub- solar photovoltaic process to generate elec- heat pump described in subparagraph (A)(iv). part, the term ‘energy property’ means any tricity for use in such dwelling. ‘‘(4) COMBINED HEAT AND POWER SYSTEM property— ‘‘(ii) LIMITATION ON AMOUNT OF CREDIT.— PROPERTY.— ‘‘(A) which is— The credit under subsection (a)(1) for the ‘‘(A) IN GENERAL.—The term ‘combined ‘‘(i) solar energy property, taxable year with respect to photovoltaic heat and power system property’ means ‘‘(ii) geothermal energy property, property shall not exceed $2,000. property— ‘‘(iii) energy-efficient building property, ‘‘(E) SWIMMING POOLS, ETC., USED AS STOR- ‘‘(i) comprising a system for using the ‘‘(iv) combined heat and power system AGE MEDIUM.—The term ‘solar energy prop- same energy source for the sequential gen- property, erty’ shall not include property with respect eration of electrical power, mechanical shaft ‘‘(v) low core loss distribution transformer to which expenditures are properly allocable power, or both, in combination with steam, property, to a swimming pool, hot tub, or any other heat, or other forms of useful energy, ‘‘(vi) fuel-efficient farm equipment prop- energy storage medium which has a function ‘‘(ii) that has an electrical capacity of erty, other than the function of such storage. more than 50 kilowatts, and ‘‘(vii) qualified aerobic digester property, ‘‘(F) SOLAR PANELS.—No solar panel or ‘‘(iii) that produces at least 20 percent of or other property installed as a roof (or portion its total useful energy in the form of both ‘‘(viii) qualified wind energy systems thereof) shall fail to be treated as solar en- thermal energy and electrical or mechanical equipment property, ergy property solely because it constitutes a power. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9551

‘‘(B) ACCOUNTING RULE FOR PUBLIC UTILITY ‘‘(3) MAXIMUM AVAILABLE POWER.—The shall apply to property placed in service PROPERTY.—In the case that combined heat term ‘maximum available power’ means the after December 31, 1999, and before January and power system property is public utility maximum value of the sum of the heat en- 1, 2004. property (as defined in section 46(f)(5) as in gine and electric drive system power or other ‘‘(2) EXCEPTIONS.— effect on the day before the date of the en- non-heat energy conversion devices available ‘‘(A) SOLAR ENERGY, GEOTHERMAL ENERGY, actment of the Revenue Reconciliation Act for a driver’s command for maximum accel- AND LOW CORE LOSS DISTRIBUTION TRANS- of 1990), the taxpayer may only claim the eration at vehicle speeds under 75 miles per FORMER PROPERTY.—Paragraph (1) shall not credit under subsection (a)(1) if, with respect hour. apply to general solar energy property or to such property, the taxpayer uses a nor- ‘‘(4) AUTOMOBILE.—The term ‘automobile’ geothermal energy property. malization method of accounting. has the meaning given such term by section ‘‘(B) PHOTOVOLTAIC PROPERTY.—In the case ‘‘(5) LOW CORE LOSS DISTRIBUTION TRANS- 4064(b)(1) (without regard to subparagraphs of photovoltaic property, this section shall FORMER PROPERTY.—The term ‘low core loss (B) and (C) thereof). A vehicle shall not fail apply to property placed in service after De- distribution transformer property’ means a to be treated as an automobile solely by rea- cember 31, 1999, and before January 1, 2006. distribution transformer which has energy son of weight if such vehicle is rated at 8,500 ‘‘(C) FUEL CELL PROPERTY.—In the case of savings from a highly efficient core of at pounds gross vehicle weight rating or less. property that is a fuel cell described in sub- least 20 percent more than the average for ‘‘(5) DOUBLE BENEFIT; PROPERTY USED OUT- section (d)(3)(A)(i), this section shall apply power ratings reported by studies required SIDE UNITED STATES, ETC., NOT QUALIFIED.—No to property placed in service after December under section 124 of the Energy Policy Act of credit shall be allowed under subsection 31, 1999, and before January 1, 2005.’’ 1992. (a)(2) with respect to— (b) ENERGY CREDIT ALLOWABLE AGAINST ‘‘(6) FUEL-EFFICIENT FARM EQUIPMENT PROP- ‘‘(A) any property for which a credit is al- ENTIRE REGULAR TAX AND ALTERNATIVE MIN- ERTY.—The term ‘fuel-efficient farm equip- lowed under section 25B or 30, IMUM TAX.— ment property’ means equipment used in a ‘‘(B) any property referred to in section (1) IN GENERAL.—Section 38(c) (relating to farming business (as defined in section 50(b), and limitation based on amount of tax) is amend- 263A(e)(4)) which achieves a fuel efficiency ‘‘(C) the portion of the cost of any property ed by redesignating paragraph (3) as para- level equal to or greater than the 90th per- taken into account under section 179 or 179A. graph (4) and by inserting after paragraph (2) centile of that type of equipment for the ‘‘(6) REGULATIONS.— the following: year in which such equipment is placed in ‘‘(A) TREASURY.—The Secretary shall pre- ‘‘(3) SPECIAL RULES FOR ENERGY CREDIT.— service. scribe such regulations as may be necessary ‘‘(A) IN GENERAL.—In the case of a C cor- ‘‘(7) QUALIFIED AEROBIC DIGESTER PROP- or appropriate to carry out the purposes of poration, this section and section 39 shall be ERTY.—The term ‘qualified aerobic digester this subsection. applied separately— property’ means an aerobic digester for ma- ‘‘(B) ENVIRONMENTAL PROTECTION AGENCY.— ‘‘(i) first with respect to so much of the nure or crop waste that achieves at least 65 The Administrator of the Environmental credit allowed by subsection (a) as is not at- percent efficiency measured in terms of the Protection Agency shall prescribe such regu- tributable to the energy credit, and fraction of energy input converted to elec- lations as may be necessary or appropriate ‘‘(ii) then with respect to the energy cred- tricity and useful thermal energy. to specify the testing and calculation proce- it. ‘‘(8) QUALIFIED WIND ENERGY SYSTEMS dures that would be used to determine ‘‘(B) RULES FOR APPLICATION OF ENERGY EQUIPMENT PROPERTY.—The term ‘qualified whether a vehicle meets the qualifications CREDIT.— wind energy systems equipment property’ for a credit under this subsection. ‘‘(i) IN GENERAL.—In the case of the energy means wind energy systems equipment with ‘‘(7) TERMINATION.—Paragraph (2) shall not credit, in lieu of applying the preceding a turbine size of not more than 50 kilowatts apply with respect to any vehicle placed in paragraphs of this subsection, the amount of rated capacity. service during a calendar year ending before such credit allowed under subsection (a) for ‘‘(e) QUALIFIED HYBRID VEHICLES.—For pur- poses of subsection (a)(2)— January 1, 2003, or after December 31, 2006. any taxable year shall not exceed the net PECIAL ULES ‘‘(1) CREDIT AMOUNT.— ‘‘(f) S R .—For purposes of this chapter 1 tax for such year. ‘‘(A) IN GENERAL.—The credit amount for section— ‘‘(ii) NET CHAPTER 1 TAX.—For purposes of each qualified hybrid vehicle with a re- ‘‘(1) SPECIAL RULE FOR PROPERTY FINANCED clause (i), the term ‘net chapter 1 tax’ means chargeable energy storage system that pro- BY SUBSIDIZED ENERGY FINANCING OR INDUS- the sum of the regular tax liability for the vides the applicable percentage of the max- TRIAL DEVELOPMENT BONDS.— taxable year and the tax imposed by section imum available power shall be the amount ‘‘(A) REDUCTION OF BASIS.—For purposes of 55 for the taxable year, reduced by the sum specified in the following table: applying the energy percentage to any prop- of the credits allowable under this part for erty, if such property is financed in whole or the taxable year (other than under section 34 in part by— and other than the energy credit). ‘‘Applicable percentage ‘‘(i) subsidized energy financing, or ‘‘(C) ENERGY CREDIT.—For purposes of this Credit amount is: ‘‘(ii) the proceeds of a private activity bond paragraph, the term ‘energy credit’ means Greater than or equal to— Less than— (within the meaning of section 141) the inter- the portion of the credit under subsection (a) 5 percent ...... 10 percent $ 500 est on which is exempt from tax under sec- which is attributable to the credit deter- 10 percent ...... 20 percent $1,000 tion 103, mined under section 48A and allowable under 20 percent ...... 30 percent $1,500 section 46 (relating to energy credit).’’ 30 percent ...... $2,000 the amount taken into account as the basis of such property shall not exceed the amount (2) CONFORMING AMENDMENT.—Section which (but for this subparagraph) would be 38(c)(2)(A)(ii)(II) is amended by striking ‘‘(B) INCREASE IN CREDIT AMOUNT FOR RE- so taken into account multiplied by the frac- ‘‘(other than the empowerment zone employ- GENERATIVE BRAKING SYSTEM.—In the case of ment credit)’’ and inserting ‘‘(other than the a qualified hybrid vehicle that actively em- tion determined under subparagraph (B). ‘‘(B) DETERMINATION OF FRACTION.—For credits described in this paragraph and para- ploys a regenerative braking system which graph (3))’’. supplies to the rechargeable energy storage purposes of subparagraph (A), the fraction (c) CONFORMING AMENDMENTS.— system the applicable percentage of the en- determined under this subparagraph is 1 re- duced by a fraction— (1) Section 48 is amended to read as fol- ergy available from braking in a typical 60 lows: miles per hour to 0 miles per hour braking ‘‘(i) the numerator of which is that portion event, the credit amount determined under of the basis of the property which is allo- ‘‘SEC. 48. REFORESTATION CREDIT. subparagraph (A) shall be increased by the cable to such financing or proceeds, and ‘‘(a) IN GENERAL.—For purposes of section amount specified in the following table: ‘‘(ii) the denominator of which is the basis 46, the reforestation credit for any taxable of the property. year is 20 percent of the portion of the amor- ‘‘(C) SUBSIDIZED ENERGY FINANCING.—For tizable basis of any qualified timber property ‘‘Applicable percentage Credit amount in- purposes of subparagraph (A), the term ‘sub- which was acquired during such taxable year sidized energy financing’ means financing and which is taken into account under sec- Greater than or equal to— Less than— crease is: provided under a Federal, State, or local pro- tion 194 (after the application of section 20 percent ...... 40 percent $ 250 gram a principal purpose of which is to pro- 194(b)(1)). 40 percent ...... 60 percent $ 500 vide subsidized financing for projects de- ‘‘(b) DEFINITIONS.—For purposes of this 60 percent ...... $1,000 signed to conserve or produce energy. subpart, the terms ‘amortizable basis’ and ‘‘(2) CERTAIN PROGRESS EXPENDITURE RULES ‘qualified timber property’ have the respec- ‘‘(2) QUALIFIED HYBRID VEHICLE.—The term MADE APPLICABLE.—Rules similar to the rules tive meanings given to such terms by section ‘qualified hybrid vehicle means an auto- of subsections (c)(4) and (d) of section 46 (as 194.’’ mobile that meets all applicable regulatory in effect on the day before the date of the en- (2) Section 39(d) is amended by adding at requirements and that can draw propulsion actment of the Revenue Reconciliation Act the end the following: energy from both of the following on-board of 1990) shall apply for purposes of this sec- ‘‘(9) NO CARRYBACK OF ENERGY CREDIT BE- sources of stored energy: tion. FORE EFFECTIVE DATE.—No portion of the un- ‘‘(A) A consumable fuel. ‘‘(g) APPLICATION OF SECTION.— used business credit for any taxable year ‘‘(B) A rechargeable energy storage sys- ‘‘(1) IN GENERAL.—Except as provided by which is attributable to the energy credit de- tem. paragraph (2) and subsection (e), this section termined under section 48A may be carried S9552 CONGRESSIONAL RECORD — SENATE July 28, 1999 back to a taxable year ending before the date ‘‘New, Highly Energy- Credit Amount: paragraph, the provisions of subparagraphs of the enactment of section 48A.’’ Efficient Principal (D) and (E) section 48A(e)(1) shall apply. (3) Section 280C is amended by adding at Residence: ‘‘(3) ENERGY-EFFICIENT BUILDING PROP- the end the following: 30 percent property ...... $1,000. ERTY.—The term ‘energy-efficient building ‘‘(d) CREDIT FOR ENERGY PROPERTY EX- 40 percent property ...... $1,500. property’ has the meaning given to such PENSES.— 50 percent property ...... $2,000. term by paragraphs (3) and (4) of section ‘‘(2) APPLICABLE PERCENTAGE.— ‘‘(1) IN GENERAL.—No deduction shall be al- 48A(e). ‘‘(A) IN GENERAL.—The applicable percent- lowed for that portion of the expenses for en- ‘‘(4) SOLAR WATER HEATING PROPERTY.—The age shall be determined in accordance with ergy property (as defined in section 48A(c)) term ‘solar water heating property’ means the following table: otherwise allowable as a deduction for the property which, when installed in connection taxable year which is equal to the amount of with a structure, uses solar energy for the the credit determined for such taxable year ‘‘Column A—De- Column B— Ap- Column C—Period purpose of providing hot water for use within under section 48A(a). scription plicable Percent- such structure. ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP- age For the period: ‘‘(5) PHOTOVOLTAIC PROPERTY.—The term ITALIZES RATHER THAN DEDUCTS EXPENSES.— In the case of: The applicable ‘photovoltaic property’ has the meaning If— percentage is: Beginning on: Ending on: ‘‘(A) the amount of the credit allowable for given to such term by section 48A(e)(1)(C). the taxable year under section 48A (deter- 20 percent en- 20 percent 1/1/2000 12/31/2003 ‘‘(6) NEW, HIGHLY ENERGY-EFFICIENT PRIN- mined without regard to section 38(c)), ex- ergy-efficient CIPAL RESIDENCE.— ceeds building prop- ‘‘(A) IN GENERAL.—Property is a new, high- ‘‘(B) the amount allowable as a deduction erty ly energy-efficient principal residence if— 10 percent en- 10 percent 1/1/2000 12/31/2001 for the taxable year for expenses for energy ‘‘(i) such property is located in the United ergy-efficient States, property (determined without regard to building prop- paragraph (1)), erty ‘‘(ii) the original use of such property com- the amount chargeable to capital account for Solar water heat- 15 percent 1/1/2000 12/31/2006 mences with the taxpayer and is, at the time the taxable year for such expenses shall be ing property of such use, the principal residence of the Photovoltaic prop- 15 percent 1/1/2000 12/31/2006. taxpayer, and reduced by the amount of such excess. erty ‘‘(3) CONTROLLED GROUPS.—Paragraph (3) of ‘‘(iii) such property is certified before such subsection (b) shall apply for purposes of this use commences as being 50 percent property, ‘‘(B) PERIODS FOR WHICH PERCENTAGE NOT subsection.’’ 40 percent property, or 30 percent property. SPECIFIED.—In the case of any residential en- ‘‘(B) 50, 40, OR 30 PERCENT PROPERTY.— (4) Section 29(b)(3)(A)(i)(III) is amended by ergy property, the applicable percentage striking ‘‘section 48(a)(4)(C)’’ and inserting ‘‘(i) IN GENERAL.—For purposes of subpara- shall be zero for any period for which an ap- graph (A), property is 50 percent property, 40 ‘‘section 48A(f)(1)(C)’’. plicable percentage is not specified for such (5) Section 50(a)(2)(E) is amended by strik- percent property, or 30 percent property if property under subparagraph (A). the projected energy usage of such property ing ‘‘section 48(a)(5)’’ and inserting ‘‘section ‘‘(b) MAXIMUM CREDIT.— is reduced by 50 percent, 40 percent, or 30 48A(f)(2)’’. ‘‘(1) IN GENERAL.—In the case of property percent, respectively, compared to the en- (6) Section 168(e)(3)(B) is amended— described in the following table, the amount ergy usage of a reference house that com- (A) by striking clause (vi)(I) and inserting of the credit allowed under subsection plies with minimum standard practice, such the following: (a)(1)(A) for the taxable year for each item of as the 1998 International Energy Conserva- ‘‘(I) is described in paragraph (1)(B) or (2) such property with respect to a dwelling unit of section 48A(d) (or would be so described if shall not exceed the amount specified for tion Code of the International Code Council, ‘solar and wind’ were substituted for ‘solar’ such property in such table: as determined according to the requirements in paragraph (1)(B)),’’, and specified in clause (ii). (B) in the last sentence by striking ‘‘sec- ‘‘(ii) PROCEDURES.— tion 48(a)(3)’’ and inserting ‘‘section ‘‘(I) IN GENERAL.—For purposes of clause ‘‘Description of property item: Maximum allowable credit 48A(c)(2)(A)’’. amount is: (i), energy usage shall be demonstrated ei- (d) CLERICAL AMENDMENT.—The table of ther by a component-based approach or a sections for subpart E of part IV of sub- 20 percent energy-efficient building property $500. performance-based approach. chapter A of chapter 1 is amended by strik- (other than a fuel cell or natural gas heat pump). ‘‘(II) COMPONENT APPROACH.—Compliance ing the item relating to section 48 and in- 20 percent energy-efficient building property: by the component approach is achieved when serting the following: fuel cell described in section 48A(e) $ 500 per each kw/hr all of the components of the house comply ‘‘Sec. 48. Reforestation credit. (3)(A). of capacity. with the requirements of prescriptive pack- natural gas heat pump described in $1,000. ‘‘Sec. 48A. Energy credit.’’ ages established by the Secretary of Energy, section 48A(e) (3)(D). in consultation with the Administrator of (e) EFFECTIVE DATE.—The amendments 10 percent energy-efficient building property $ 250. made by this section shall apply to property Solar water heating property ...... $1,000. the Environmental Protection Agency, such placed in service after December 31, 1999, Photovoltaic property ...... $2,000. that they are equivalent to the results of under rules similar to the rules of section using the performance-based approach of 48(m) of the Internal Revenue Code of 1986 ‘‘(2) COORDINATION OF LIMITATIONS.—If a subclause (III) to achieve the required reduc- (as in effect on the day before the date of the credit is allowed to the taxpayer for any tax- tion in energy usage. enactment of the Revenue Reconciliation able year by reason of an acquisition of a ‘‘(III) PERFORMANCE-BASED APPROACH.— Act of 1990). new, highly energy-efficient principal resi- Performance-based compliance shall be dem- TITLE II—NONBUSINESS ENERGY dence, no other credit shall be allowed under onstrated in terms of the required percent- SYSTEMS subsection (a)(1)(A) with respect to such resi- age reductions in projected energy use. Com- puter software used in support of perform- SEC. 201. CREDIT FOR CERTAIN NONBUSINESS dence during the 1-taxable year period begin- ENERGY SYSTEMS. ning with such taxable year. ance-based compliance must meet all of the (a) IN GENERAL.—Subpart A of part IV of ‘‘(c) DEFINITIONS.—For purposes of this procedures and methods for calculating en- subchapter A of chapter 1 (relating to non- section— ergy savings reductions that are promul- refundable personal credits) is amended by ‘‘(1) RESIDENTIAL ENERGY PROPERTY EX- gated by the Secretary of Energy. Such regu- inserting after section 25A the following: PENDITURES.—The term ‘residential energy lations on the specifications for software ‘‘SEC. 25B. NONBUSINESS ENERGY PROPERTY. property expenditures’ means expenditures shall be based in the 1998 California Residen- ‘‘(a) ALLOWANCE OF CREDIT.— made by the taxpayer for qualified energy tial Alternative Calculation Method Ap- ‘‘(1) IN GENERAL.—In the case of an indi- property installed on or in connection with a proval Manual, except that the calculation vidual, there shall be allowed as a credit dwelling unit which— procedures shall be developed such that the against the tax imposed by this chapter for ‘‘(A) is located in the United States, and same energy efficiency measures qualify a the taxable year an amount equal to the sum ‘‘(B) is used by the taxpayer as a residence. home for tax credits regardless of whether of— Such term includes expenditures for labor the home uses a gas or oil furnace or boiler, ‘‘(A) the applicable percentage of residen- costs properly allocable to the onsite prepa- or an electric heat pump. tial energy property expenditures made by ration, assembly, or original installation of ‘‘(IV) APPROVAL OF SOFTWARE SUBMIS- the taxpayer during such year, the property. SIONS.—The Secretary of Energy shall ap- ‘‘(B) the credit amount (determined under ‘‘(2) QUALIFIED ENERGY PROPERTY.— prove software submissions that comply with section 48A(f)) for each vehicle purchased ‘‘(A) IN GENERAL.—The term ‘qualified en- the calculation requirements of subclause during the taxable year which is a qualified ergy property’ means— (III). hybrid vehicle (as defined in section ‘‘(i) energy-efficient building property, ‘‘(C) DETERMINATIONS OF COMPLIANCE.—A 48A(f)(2)), and ‘‘(ii) solar water heating property, and determination of compliance made for the ‘‘(C) the credit amount specified in the fol- ‘‘(iii) photovoltaic property. purposes of this paragraph shall be filed with lowing table for a new, highly energy-effi- ‘‘(B) SWIMMING POOL, ETC., USED AS STORAGE the Secretary of Energy within 1 year of the cient principal residence: MEDIUM; SOLAR PANELS.—For purposes of this date of such determination and shall include July 28, 1999 CONGRESSIONAL RECORD — SENATE S9553 the TIN of the certifier, the address of the penditure was made with respect to 2 or (1) Section 1016(a) is amended by striking building in compliance, and the identity of more dwelling units. ‘‘and’’ at the end of paragraph (26), by strik- the person for whom such determination was ‘‘(B) LIMITS APPLIED SEPARATELY.—In the ing the period at the end of paragraph (27) performed. Determinations of compliance case of any expenditure described in subpara- and inserting ‘‘; and’’, and by adding at the filed with the Secretary of Energy shall be graph (A), the amount of the credit allowable end the following: available for inspection by the Secretary. under subsection (a) shall (subject to para- ‘‘(28) to the extent provided in section ‘‘(D) COMPLIANCE.— graph (1)) be computed separately with re- 25B(e), in the case of amounts with respect ‘‘(i) IN GENERAL.—The Secretary of Energy spect to the amount of the expenditure made to which a credit has been allowed under sec- in consultation with the Secretary of the for each dwelling unit. tion 25B.’’ Treasury shall establish requirements for ‘‘(5) ALLOCATION IN CERTAIN CASES.— (2) The table of sections for subpart A of certification and compliance procedures ‘‘(A) IN GENERAL.—Except as provided in part IV of subchapter A of chapter 1 is after examining the requirements for energy subparagraph (B), if less than 80 percent of amended by inserting after the item relating consultants and home energy ratings pro- the use of an item is for nonbusiness pur- to section 25A the following: viders specified by the Mortgage Industry poses, only that portion of the expenditures ‘‘Sec. 25B. Nonbusiness energy property.’’ National Accreditation Procedures for Home for such item which is properly allocable to (c) EFFECTIVE DATE.—The amendments Energy Rating Systems. use for nonbusiness purposes shall be taken made by this section shall apply to expendi- ‘‘(ii) INDIVIDUALS QUALIFIED TO DETERMINE into account. For purposes of this paragraph, tures after December 31, 1999. COMPLIANCE.—Individuals qualified to deter- use for a swimming pool shall be treated as mine compliance shall be only those individ- use which is not for nonbusiness purposes. TITLE III—ALTERNATIVE FUELS uals who are recognized by an organization ‘‘(B) SPECIAL RULE FOR VEHICLES.—For pur- SEC. 301. ALLOCATION OF ALCOHOL FUELS certified by the Secretary of Energy for such poses of this section and section 48A, a vehi- CREDIT TO PATRONS OF A COOPER- ATIVE. purposes. cle shall be treated as used entirely for busi- (a) IN GENERAL.—Section 40(d) (relating to ‘‘(D) PRINCIPAL RESIDENCE.—The term ness or nonbusiness purposes if the majority alcohol used as fuel) is amended by adding at ‘principal residence’ has the same meaning of the use of such vehicle is for business or the end the following: as when used in section 121, except that the nonbusiness purposes, as the case may be. ‘‘(6) ALLOCATION OF SMALL ETHANOL PRO- period for which a building is treated as the ‘‘(6) DOUBLE BENEFIT; PROPERTY USED OUT- DUCER CREDIT TO PATRONS OF COOPERATIVE.— principal residence of the taxpayer shall also SIDE UNITED STATES, ETC., NOT QUALIFIED.— ‘‘(A) IN GENERAL.—In the case of a coopera- include the 60-day period ending on the 1st No credit shall be allowed under subsection tive organization described in section 1381(a), day on which it would (but for this subpara- (a)(1)(B) with respect to— any portion of the credit determined under graph) first be treated as his principal resi- ‘‘(A) any property for which a credit is al- subsection (a)(3) for the taxable year may, at dence. lowed under section 30 or 48A, the election of the organization made on a ‘‘(d) SPECIAL RULES.—For purposes of this ‘‘(B) any property referred to in section timely filed return (including extensions) for section— 50(b), and such year, be apportioned pro rata among pa- ‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC- ‘‘(C) the portion of the cost of any property trons of the organization on the basis of the CUPANCY.—In the case of any dwelling unit taken into account under section 179 or 179A. quantity or value of business done with or which if jointly occupied and used during ‘‘(7) WHEN EXPENDITURE MADE; AMOUNT OF for such patrons for the taxable year. Such any calendar year as a residence by 2 or EXPENDITURE.— an election, once made, shall be irrevocable more individuals the following shall apply: ‘‘(A) IN GENERAL.—Except as provided in for such taxable year. subparagraph (B), an expenditure with re- ‘‘(A) The amount of the credit allowable ‘‘(B) TREATMENT OF ORGANIZATIONS AND PA- spect to an item shall be treated as made under subsection (a) by reason of expendi- TRONS.—The amount of the credit appor- tures made during such calendar year by any when the original installation of the item is tioned to patrons pursuant to subparagraph of such individuals with respect to such completed. (A)— dwelling unit shall be determined by treat- ‘‘(B) EXPENDITURES PART OF BUILDING CON- ‘‘(i) shall not be included in the amount de- ing all of such individuals as 1 taxpayer STRUCTION.—In the case of an expenditure in termined under subsection (a) for the taxable whose taxable year is such calendar year. connection with the construction of a struc- year of the organization, and ‘‘(B) There shall be allowable with respect ture, such expenditure shall be treated as ‘‘(ii) shall be included in the amount deter- to such expenditures to each of such individ- made when the original use of the con- mined under subsection (a) for the taxable uals, a credit under subsection (a) for the structed structure by the taxpayer begins. year of each patron in which the patronage taxable year in which such calendar year ‘‘(C) AMOUNT.—The amount of any expendi- dividend for the taxable year referred to in ends in an amount which bears the same ture shall be the cost thereof. subparagraph (A) is includible in gross in- ratio to the amount determined under sub- ‘‘(8) PROPERTY FINANCED BY SUBSIDIZED EN- come. ERGY FINANCING.— paragraph (A) as the amount of such expend- ‘‘(C) SPECIAL RULE FOR DECREASING CREDIT ‘‘(A) REDUCTION OF EXPENDITURES.—For itures made by such individual during such FOR TAXABLE YEAR.—If the amount of the calendar year bears to the aggregate of such purposes of determining the amount of resi- credit of a cooperative organization deter- expenditures made by all of such individuals dential energy property expenditures made mined under subsection (a)(3) for a taxable during such calendar year. by any individual with respect to any dwell- year is less than the amount of such credit ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE ing unit, there shall not be taken in to ac- shown on the cooperative organization’s re- HOUSING CORPORATION.—In the case of an in- count expenditures which are made from turn for such year, an amount equal to the dividual who is a tenant-stockholder (as de- subsidized energy financing (as defined in excess of such reduction over the amount not fined in section 216) in a cooperative housing section 48A(g)(1)). apportioned to the patrons under subpara- corporation (as defined in such section), such ‘‘(B) DOLLAR LIMITS REDUCED.—The dollar graph (A) for the taxable year shall be treat- individual shall be treated as having made amounts in the table contained in subsection ed as an increase in tax imposed by this his tenant-stockholder’s proportionate share (b)(1) with respect to each property pur- chapter on the organization. Any such in- (as defined in section 216(b)(3)) of any ex- chased for such dwelling unit for any taxable crease shall not be treated as tax imposed by penditures of such corporation. year of such taxpayer shall be reduced pro- this chapter for purposes of determining the ‘‘(3) CONDOMINIUMS.— portionately by an amount equal to the sum amount of any credit under this subpart or ‘‘(A) IN GENERAL.—In the case of an indi- of— subpart A, B, E, or G of this part.’’ vidual who is a member of a condominium ‘‘(i) the amount of the expenditures made (b) TECHNICAL AMENDMENT.—Section 1388 management association with respect to a by the taxpayer during such taxable year (relating to definitions and special rules for condominium which he owns, such individual with respect to such dwelling unit and not cooperative organizations) is amended by shall be treated as having made his propor- taken into account by reason of subpara- adding at the end the following: tionate share of any expenditures of such as- graph (A), and ‘‘(k) CROSS REFERENCE.— sociation. ‘‘(ii) the amount of any Federal, State, or ‘‘For provisions relating to the apportion- ‘‘(B) CONDOMINIUM MANAGEMENT ASSOCIA- local grant received by the taxpayer during ment of the alcohol fuels credit between co- TION.—For purposes of this paragraph, the such taxable year which is used to make res- operative organizations and their patrons, term ‘condominium management associa- idential energy property expenditures with see section 40(d)(6).’’ tion’ means an organization which meets the respect to the dwelling unit and is not in- (c) EFFECTIVE DATE.—The amendments requirements of paragraph (1) of section cluded in the gross income of such taxpayer. made by this section shall apply to taxable 528(c) (other than subparagraph (E) thereof) ‘‘(e) BASIS ADJUSTMENTS.—For purposes of years beginning after December 31, 1999. with respect to a condominium project sub- this subtitle, if a credit is allowed under this TITLE IV—AUTOMOBILES stantially all of the units of which are used section for any expenditure with respect to SEC. 401. EXTENSION OF CREDIT FOR QUALIFIED as residences. any property, the increase in the basis of ELECTRIC VEHICLES. ‘‘(4) JOINT OWNERSHIP OF ENERGY ITEMS.— such property which would (but for this sub- (a) EXTENSION OF CREDIT FOR QUALIFIED ‘‘(A) IN GENERAL.—Any expenditure other- section) result from such expenditure shall ELECTRIC VEHICLES.—Subsection (f) of sec- wise qualifying as a residential energy prop- be reduced by the amount of the credit so al- tion 30 (relating to termination) is amended erty expenditure shall not be treated as fail- lowed.’’. by striking ‘‘December 31, 2004’’ and insert- ing to so qualify merely because such ex- (b) CONFORMING AMENDMENTS.— ing ‘‘December 31, 2006’’. S9554 CONGRESSIONAL RECORD — SENATE July 28, 1999

(b) REPEAL OF PHASEOUT.—Subsection (b) to any property if the lessee and lessor of ‘‘(c) QUALIFIED INVESTMENT.—For purposes of section 30 (relating to limitations) is such property make an election under this of subsection (a), the term ‘qualified invest- amended by striking paragraph (2) and redes- sentence. Such an election, once made, may ment’ means, with respect to any taxable ignating paragraph (3) as paragraph (2). be revoked only with the consent of the Sec- year, the basis of a qualifying clean coal (c) NO DOUBLE BENEFIT.— retary. technology facility placed in service by the (1) Subsection (d) of section 30 (relating to ‘‘(3) QUALIFYING CLEAN COAL TECHNOLOGY.— taxpayer during such taxable year. special rules) is amended by adding at the For purposes of paragraph (1)(D)— ‘‘(d) QUALIFIED PROGRESS EXPENDITURES.— end the following: ‘‘(A) IN GENERAL.—The term ‘qualifying ‘‘(1) INCREASE IN QUALIFIED INVESTMENT.— ‘‘(5) NO DOUBLE BENEFIT.—No credit shall clean coal technology’ means, with respect In the case of a taxpayer who has made an be allowed under subsection (a) with respect to clean coal technology— election under paragraph (5), the amount of to any vehicle if the taxpayer claims a credit ‘‘(i) applications totaling 1,000 megawatts the qualified investment of such taxpayer for for such vehicle under section 25B(a)(1)(B) or of advanced pulverized coal or atmospheric the taxable year (determined under sub- 48A(e).’’ fluidized bed combustion technology in- section (c) without regard to this section) (2) Paragraph (3) of section 30(d) (relating stalled as a new, retrofit, or repowering ap- shall be increased by an amount equal to the to property used outside United States, etc., plication and operated between 2000 and 2013 aggregate of each qualified progress expendi- not qualified) is amended by striking ‘‘sec- that has a design average net heat rate of ture for the taxable year with respect to tion 50(b)’’ and inserting ‘‘section 25B, 48A, not more than 8,750 Btu’s per kilowatt hour, progress expenditure property. or 50(b)’’. ‘‘(ii) applications totaling 1,500 megawatts ‘‘(2) PROGRESS EXPENDITURE PROPERTY DE- (3) Paragraph (5) of section 179A(e) (relat- of pressurized fluidized bed combustion tech- FINED.—For purposes of this subsection, the ing to property used outside United States, nology installed as a new, retrofit, or term ‘progress expenditure property’ means etc., not qualified) is amended by striking repowering application and operated between any property being constructed by or for the ‘‘section 50(b)’’ and inserting ‘‘section 25B, 2000 and 2013 that has a design average net taxpayer and which it is reasonable to be- 48A, or 50(b)’’. heat rate of not more than 8,400 Btu’s per lieve will qualify as a qualifying clean coal (d) EFFECTIVE DATE.—The amendments kilowatt hour, technology facility which is being con- made by this section shall apply to property ‘‘(iii) applications totaling 1,500 megawatts structed by or for the taxpayer when it is placed in service after the date of the enact- of integrated gasification combined cycle placed in service. technology installed as a new, retrofit, or ment of this Act. ‘‘(3) QUALIFIED PROGRESS EXPENDITURES DE- repowering application and operated between TITLE V—CLEAN COAL TECHNOLOGIES FINED.—For purposes of this subsection— 2000 and 2013 that has a design average net ‘‘(A) SELF-CONSTRUCTED PROPERTY.—In the SEC. 501. CREDIT FOR INVESTMENT IN QUALI- heat rate of not more than 8,550 Btu’s per FYING CLEAN COAL TECHNOLOGY. case of any self-constructed property, the kilowatt hour, and (a) ALLOWANCE OF QUALIFYING CLEAN COAL term ‘qualified progress expenditures’ means ‘‘(iv) applications totaling 2,000 megawatts TECHNOLOGY FACILITY CREDIT.—Section 46 the amount which, for purposes of this sub- or equivalent of technology for the produc- (relating to amount of credit) is amended by part, is properly chargeable (during such tax- tion of electricity installed as a new, ret- striking ‘‘and’’ at the end of paragraph (2), able year) to capital account with respect to rofit, or repowering application and operated by striking the period at the end of para- such property. between 2000 and 2013 that has a carbon emis- ‘‘(B) NON-SELF-CONSTRUCTED PROPERTY.—In graph (3) and inserting ‘‘, and’’, and by add- sion rate that is not more than 85 percent of the case of non-self-constructed property, ing at the end the following: conventional technology. ‘‘(4) the qualifying clean coal technology the term ‘qualified progress expenditures’ ‘‘(B) EXCEPTIONS.—Such term shall not in- facility credit.’’ clude clean coal technology projects receiv- means the amount paid during the taxable (b) AMOUNT OF QUALIFYING CLEAN COAL ing or scheduled to receive funding under the year to another person for the construction TECHNOLOGY FACILITY CREDIT.—Subpart E of Clean Coal Technology Program of the De- of such property. part IV of subchapter A of chapter 1 (relating partment of Energy. ‘‘(4) OTHER DEFINITIONS.—For purposes of to rules for computing investment credit), as this subsection— ‘‘(C) CLEAN COAL TECHNOLOGY.—The term amended by section 101(a), is amended by in- ‘clean coal technology’ means advanced ‘‘(A) SELF-CONSTRUCTED PROPERTY.—The serting after section 48A the following: technology that utilizes coal to produce 50 term ‘self-constructed property’ means prop- ‘‘SEC. 48B. QUALIFYING CLEAN COAL TECH- percent or more of its thermal output as erty for which it is reasonable to believe NOLOGY FACILITY CREDIT. electricity including advanced pulverized that more than half of the construction ex- ‘‘(a) IN GENERAL.—For purposes of section coal or atmospheric fluidized bed combus- penditures will be made directly by the tax- 46, the qualifying clean coal technology fa- tion, pressurized fluidized bed combustion, payer. cility credit for any taxable year is an integrated gasification combined cycle, and ‘‘(B) NON-SELF-CONSTRUCTED PROPERTY.— amount equal to 10 percent of the qualified any other technology for the production of The term ‘non-self-constructed property’ investment in a qualifying clean coal tech- electricity that exceeds the performance of means property which is not self-constructed nology facility for such taxable year. conventional technology. property. ‘‘(b) QUALIFYING CLEAN COAL TECHNOLOGY ‘‘(D) CONVENTIONAL TECHNOLOGY.—The ‘‘(C) CONSTRUCTION, ETC.—The term ‘con- FACILITY.— term ‘conventional technology’ means— struction’ includes reconstruction and erec- ‘‘(1) IN GENERAL.—For purposes of sub- ‘‘(i) coal-fired combustion technology with tion, and the term ‘constructed’ includes re- section (a), the term ‘qualifying clean coal a design average net heat rate of not less constructed and erected. technology facility’ means a facility of the than 9,300 Btu’s per kilowatt hour (HHV) and ‘‘(D) ONLY CONSTRUCTION OF QUALIFYING taxpayer— a carbon equivalents emission rate of not CLEAN COAL TECHNOLOGY FACILITY TO BE ‘‘(A)(i) the original use of which com- more than 0.53 pounds of carbon per kilowatt TAKEN INTO ACCOUNT.—Construction shall be mences with the taxpayer or the reconstruc- hour; or taken into account only if, for purposes of tion of which is completed by the taxpayer ‘‘(ii) natural gas-fired combustion tech- this subpart, expenditures therefor are prop- (but only with respect to that portion of the nology with a design average net heat rate of erly chargeable to capital account with re- basis which is properly attributable to such not less than 7,500 Btu’s per kilowatt hour spect to the property. reconstruction), or (HHV) and a carbon equivalents emission ‘‘(5) ELECTION.—An election under this sub- ‘‘(ii) that is acquired through purchase (as rate of not more than 0.24 pounds of carbon section may be made at such time and in defined by section 179(d)(2)), per kilowatt hour. such manner as the Secretary may by regu- ‘‘(B) that is depreciable under section 167, ‘‘(E) DESIGN AVERAGE NET HEAT RATE.—The lations prescribe. Such an election shall ‘‘(C) that has a useful life of not less than term ‘design average net heat rate’ shall be apply to the taxable year for which made and 4 years, and based on the design average annual heat to all subsequent taxable years. Such an ‘‘(D) that is used for qualifying clean coal input to and the design average annual net election, once made, may not be revoked ex- technology. electrical output from the qualifying clean cept with the consent of the Secretary. ‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.— coal technology (determined without regard ‘‘(e) COORDINATION WITH OTHER CREDITS.— For purposes of subparagraph (A) of para- to such technology’s co-generation of This section shall not apply to any property graph (1), in the case of a facility that— steam). with respect to which the rehabilitation ‘‘(A) is originally placed in service by a ‘‘(F) SELECTION CRITERIA.—Selection cri- credit under section 47 or the energy credit person, and teria for clean coal technology facilities— under section 48A is allowed unless the tax- ‘‘(B) is sold and leased back by such per- ‘‘(i) shall be established by the Secretary payer elects to waive the application of such son, or is leased to such person, within 3 of Energy as part of a competitive solicita- credit to such property.’’ months after the date such facility was tion, (c) RECAPTURE.—Section 50(a) (relating to originally placed in service, for a period of ‘‘(ii) shall include primary criteria of min- other special rules) is amended by adding at not less than 12 years, imum design average net heat rate, max- the end the following: such facility shall be treated as originally imum design average thermal efficiency, and ‘‘(6) SPECIAL RULES RELATING TO QUALI- placed in service not earlier than the date on lowest cost to the government, and FYING CLEAN COAL TECHNOLOGY FACILITY.— which such property is used under the lease- ‘‘(iii) shall include supplemental criteria as For purposes of applying this subsection in back (or lease) referred to in subparagraph determined appropriate by the Secretary of the case of any credit allowable by reason of (B). The preceding sentence shall not apply Energy. section 48B, the following shall apply: July 28, 1999 CONGRESSIONAL RECORD — SENATE S9555

‘‘(A) GENERAL RULE.—In lieu of the amount inserting ‘‘, and’’, and by adding at the end ‘‘The facility design average The applicable amount is: of the increase in tax under paragraph (1), the following: net heat rate, Btu/kWh the increase in tax shall be an amount equal ‘‘(iv) the portion of the basis of any quali- For 1st 5 years of For 2d 5 years of (HHV) is equal to: such service such service to the investment tax credit allowed under fying clean coal technology facility attrib- section 38 for all prior taxable years with re- utable to any qualified investment (as de- More than 7720 but not $.0070 $.0045. spect to a qualifying clean coal technology fined by section 48B(c)).’’ more than 7380. facility (as defined by section 48B(b)) multi- (2) Section 50(a)(4) is amended by striking plied by a fraction whose numerator is the ‘‘and (2)’’ and inserting ‘‘, (2), and (6)’’. ‘‘(c) INFLATION ADJUSTMENT FACTOR.—Each number of years remaining to fully depre- (3) The table of sections for subpart E of amount in paragraphs (1), (2), and (3) shall ciate under this title the qualifying clean part IV of subchapter A of chapter 1, as each be adjusted by multiplying such coal technology facility disposed of, and amended by section 101(e), is amended by in- amount by the inflation adjustment factor whose denominator is the total number of serting after the item relating to section 48A for the calendar year in which the amount is years over which such facility would other- the following: applied. If any amount as increased under wise have been subject to depreciation. For the preceding sentence is not a multiple of ‘‘Sec. 48B. Qualifying clean coal technology purposes of the preceding sentence, the year 0.01 cent, such amount shall be rounded to facility credit.’’ of disposition of the qualifying clean coal the nearest multiple of 0.01 cent. (g) EFFECTIVE DATE.—The amendments technology facility property shall be treated ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For made by this section shall apply to periods as a year of remaining depreciation. purposes of this section— after December 31, 1999, and before January ‘‘(1) any term used in this section which is ‘‘(B) PROPERTY CEASES TO QUALIFY FOR 1, 2013, under rules similar to the rules of also used in section 48B shall have the mean- PROGRESS EXPENDITURES.—Rules similar to section 48(m) of the Internal Revenue Code of the rules of paragraph (2) shall apply in the ing given such term in section 48B, 1986 (as in effect on the day before the date case of qualified progress expenditures for a ‘‘(2) the rules of paragraphs (3), (4), and (5) of the enactment of the Revenue Reconcili- qualifying clean coal technology facility of section 45 shall apply, ation Act of 1990). under section 48B, except that the amount of ‘‘(3) the term ‘inflation adjustment factor’ the increase in tax under subparagraph (A) of SEC. 502. CREDIT FOR PRODUCTION FROM means, with respect to a calendar year, a QUALIFYING CLEAN COAL TECH- fraction the numerator of which is the GDP this paragraph shall be substituted in lieu of NOLOGY. the amount described in such paragraph (2). implicit price deflator for the preceding cal- (a) CREDIT FOR PRODUCTION FROM QUALI- endar year and the denominator of which is ‘‘(C) APPLICATION OF PARAGRAPH.—This FYING CLEAN COAL TECHNOLOGY.—Subpart D the GDP implicit price deflator for the cal- paragraph shall be applied separately with of part IV of subchapter A of chapter 1 (re- respect to the credit allowed under section 38 endar year 1998, and lating to business related credits) is amend- ‘‘(4) the term ‘GDP implicit price deflator’ regarding a qualifying clean coal technology ed by adding at the end the following: facility.’’ means the most recent revision of the im- ‘‘SEC. 45D. CREDIT FOR PRODUCTION FROM plicit price deflator for the gross domestic (d) TRANSITIONAL RULE.—Section 39(d) of QUALIFYING CLEAN COAL TECH- product as computed by the Department of the Internal Revenue Code of 1986 (relating NOLOGY. Commerce before March 15 of the calendar to transitional rules), as amended by section ‘‘(a) GENERAL RULE.—For purposes of sec- year.’’ 101(c)(2), is amended by adding at the end the tion 38, the qualifying clean coal technology (b) CREDIT TREATED AS BUSINESS CREDIT.— following: production credit of any taxpayer for any Section 38(b) is amended by striking ‘‘plus’’ ‘‘(10) NO CARRYBACK OF SECTION 48B CREDIT taxable year is equal to the applicable at the end of paragraph (11), by striking the BEFORE EFFECTIVE DATE.—No portion of the amount for each kilowatt hour— period at the end of paragraph (12) and in- unused business credit for any taxable year ‘‘(1) produced by the taxpayer at a quali- serting ‘‘, plus’’, and by adding at the end the which is attributable to the qualifying clean fying clean coal technology facility during following: coal technology facility credit determined the 10-year period beginning on the date the ‘‘(13) the qualifying clean coal technology under section 48B may be carried back to a facility was originally placed in service, and production credit determined under section taxable year ending before the date of the ‘‘(2) sold by the taxpayer to an unrelated 45D(a).’’ enactment of section 48B.’’ person during such taxable year. (c) TRANSITIONAL RULE.—Section 39(d) (re- (e) CREDIT ALLOWED AGAINST MINIMUM ‘‘(b) APPLICABLE AMOUNT.—For purposes of lating to transitional rules), as amended by TAX.— this section, the applicable amount with re- section 501(d), is amended by adding at the (1) IN GENERAL.—Section 38(c) of the Inter- spect to production from a qualifying clean end the following: nal Revenue Code of 1986 (relating to limita- coal technology facility shall be determined ‘‘(11) NO CARRYBACK OF CERTAIN CREDITS BE- tion based on amount of tax), as amended by as follows: FORE EFFECTIVE DATE.—No portion of the un- section 101(b)(1), is amended by redesig- ‘‘(1) In the case of a facility originally used business credit for any taxable year nating paragraph (4) as paragraph (5) and by placed in service before 2006, if— which is attributable to the credits allowable inserting after paragraph (3) the following: under any section added to this subpart by ‘‘(4) SPECIAL RULES FOR CLEAN COAL TECH- the amendments made by the Energy Secu- NOLOGY CREDIT.— ‘‘The facility design average The applicable amount is: rity Tax Act of 1999 may be carried back to ‘‘(A) IN GENERAL.—In the case of the quali- net heat rate, Btu/kWh a taxable year ending before the date of the (HHV) is equal to: For 1st 5 years of For 2d 5 years of fying clean coal technology facility credit— such service such service enactment of such Act.’’ ‘‘(i) this section and section 39 shall be ap- (d) CREDIT ALLOWED AGAINST MINIMUM plied separately with respect to the credit, Not more than 8400 ...... $.0130 $.0110 TAX.— More than 8400 but not $.0100 $.0085 and (1) IN GENERAL.—Section 38(c) (relating to more than 8550. ‘‘(ii) in applying paragraph (1) to the More than 8550 but not $.0090 $.0070. limitation based on amount of tax), as credit— more than 8750. amended by section 501(e)(1), is amended by ‘‘(I) subparagraph (A) shall not apply, and redesignating paragraph (5) as paragraph (6) ‘‘(II) the limitation under paragraph (1) (as ‘‘(2) In the case of a facility originally and by inserting after paragraph (4) the fol- modified by subclause (I)) shall be reduced placed in service after 2005 and before 2010, lowing: by the credit allowed under subsection (a) for if— ‘‘(5) SPECIAL RULES FOR CLEAN COAL PRO- the taxable year (other than the credits de- DUCTION CREDIT.— scribed in this paragraph and paragraphs (2) ‘‘(A) IN GENERAL.—In the case of the quali- and (3)). ‘‘The facility design average The applicable amount is: fying clean coal technology production UALIFYING CLEAN COAL TECHNOLOGY ‘‘(B) Q net heat rate, Btu/kWh For 1st 5 years of For 2d 5 years of credit— FACILITY CREDIT.—For purposes of this para- (HHV) is equal to: such service such service ‘‘(i) this section and section 39 shall be ap- graph, the term ‘qualifying clean coal tech- plied separately with respect to the credit, nology facility credit’ means the portion of Not more than 7770 ...... $.0100 $.0080 and the credit under subsection (a) which is at- More than 7770 but not $.0080 $.0065 ‘‘(ii) in applying paragraph (1) to the tributable to the credit determined under more than 8125. credit— More than 8125 but not $.0070 $.0055. section 48B.’’ more than 8350. ‘‘(I) subparagraph (A) shall not apply, and (2) CONFORMING AMENDMENT.—Section ‘‘(II) the limitation under paragraph (1) (as 38(c)(2)(A)(ii)(II) of such Code, as amended by ‘‘(3) In the case of a facility originally modified by subclause (I)) shall be reduced section 101(b)(2), is amended by striking placed in service after 2009 and before 2014, by the credit allowed under subsection (a) for ‘‘(other than the credits described in this if— the taxable year (other than the credits de- paragraph and paragraph (3))’’ and inserting scribed in this paragraph and paragraphs (2), ‘‘(other than the credits described in this (3), and (4)). paragraph and paragraphs (3) and (4))’’. ‘‘The facility design average The applicable amount is: ‘‘(B) QUALIFYING CLEAN COAL TECHNOLOGY (f) TECHNICAL AMENDMENTS.— PRODUCTION CREDIT.—For purposes of this net heat rate, Btu/kWh For 1st 5 years of For 2d 5 years of (1) Section 49(a)(1)(C) is amended by strik- (HHV) is equal to: such service such service paragraph, the term ‘qualifying clean coal ing ‘‘and’’ at the end of clause (ii), by strik- technology production credit’ means the por- ing the period at the end of clause (iii) and Not more than 7720 ...... $.0085 $.0070 tion of the credit under subsection (a) which S9556 CONGRESSIONAL RECORD — SENATE July 28, 1999

is attributable to the credit determined ‘‘SEC. 45E. CREDIT FOR CAPTURE OF COALBED (c) CLERICAL AMENDMENT.—The table of under section 45D.’’ METHANE GAS. sections for subpart D of part IV of sub- (2) CONFORMING AMENDMENT.—Section ‘‘For purposes of section 38, the coalbed chapter A of chapter 1, as amended by sec- 38(c)(2)(A)(ii)(II), as amended by section methane gas capture credit of any taxpayer tion 602(c), is amended by adding at the end 501(e)(2), is amended by striking ‘‘(other than for any taxable year is $10 for each ton of the following: the credits described in this paragraph and carbon-equivalent coalbed methane gas cap- paragraphs (3) and (4))’’ and inserting ‘‘(other tured by the taxpayer during such taxable ‘‘Sec. 45F. Credit for producing re-refined lu- than the credits described in this paragraph year.’’ bricating oil.’’ and paragraphs (3), (4), and (5))’’. (b) CREDIT TREATED AS BUSINESS CREDIT.— (d) EFFECTIVE DATE.—The amendments (e) CLERICAL AMENDMENT.—The table of Section 38(b), as amended by section 502(b), made by this section shall apply to produc- sections for subpart D of part IV of sub- is amended by striking ‘‘plus’’ at the end of tion after the date of the enactment of this chapter A of chapter 1 is amended by adding paragraph (12), by striking the period at the Act. at the end the following: end of paragraph (13) and inserting ‘‘, plus’’, SEC. 702. REPEAL CERTAIN ADJUSTMENTS and by adding at the end the following: BASED ON ADJUSTED CURRENT ‘‘Sec. 45D. Credit for production from quali- ‘‘(14) the coalbed methane gas capture EARNINGS RELATING TO OIL AND fying clean coal technology.’’ credit determined under section 45E(a).’’ GAS ASSETS. (f) EFFECTIVE DATE.—The amendments (c) CLERICAL AMENDMENT.—The table of (a) INTANGIBLE DRILLING COSTS.—Clause (i) made by this section shall apply to produc- sections for subpart D of part IV of sub- of section 56(g)(4)(D) (relating to certain tion after the date of the enactment of this chapter A of chapter 1, as amended by sec- other earnings and profits adjustments) is Act. tion 502(e), is amended by adding at the end amended by striking the second sentence and SEC. 503. RISK POOL FOR QUALIFYING CLEAN the following: inserting the following: ‘‘In the case of any COAL TECHNOLOGY. ‘‘Sec. 45E. Credit for capture of coalbed oil or gas well, this clause shall not apply to (a) ESTABLISHMENT.—The Secretary of the methane gas.’’ amounts paid or incurred in taxable years Treasury shall establish a financial risk pool (d) EFFECTIVE DATE.—The amendments beginning after December 31, 1999.’’ which shall be available to any United made by this section shall apply to produc- (b) DEPLETION.—Clause (ii) of section States owner of qualifying clean coal tech- tion after the date of the enactment of this 56(g)(4)(F) (relating to depletion) is amended nology (as defined in section 48B(b)(3) of the Act. to read as follows: Internal Revenue Code of 1986) to offset for TITLE VII—OIL AND GAS PRODUCTION ‘‘(ii) EXCEPTION FOR OIL AND GAS WELLS.—In the first 3 three years of the operation of the case of any taxable year beginning after such technology the costs (not to exceed 5 SEC. 701. CREDIT FOR PRODUCTION OF RE-RE- December 31, 1999, clause (i) (and subpara- FINED LUBRICATING OIL. percent of the total cost of installation) for graph (C)(i)) shall not apply to any deduction (a) IN GENERAL.—Subpart D of part IV of modifications resulting from the tech- for depletion computed in accordance with subchapter A of chapter 1 (relating to busi- nology’s failure to achieve its design per- section 613A.’’ formance. ness related credits), as amended by section (c) EFFECTIVE DATE.—The amendments (b) AUTHORIZATION OF APPROPRIATIONS.— 602(a), is amended by adding at the end the made by this section shall apply to taxable There is authorized to be appropriated such following: years beginning after December 31, 1999. sums as are necessary to carry out the pur- ‘‘SEC. 45F. CREDIT FOR PRODUCING RE-REFINED poses of this section. LUBRICATING OIL. SEC. 202. 10-YEAR CARRYBACK FOR PERCENTAGE DEPLETION FOR OIL AND GAS PROP- TITLE VI—METHANE RECOVERY ‘‘(a) GENERAL RULE.—For purposes of sec- tion 38, the re-refined lubricating oil produc- ERTY. SEC. 601. EXPANSION OF SECTION 29 TAX CREDIT. tion credit of any taxpayer for any taxable (a) IN GENERAL.—Subsection (d)(1) of sec- (a) 10-YEAR EXTENSION.—Section 29(f) (re- year is equal to $4.05 per barrel of qualified tion 613A (relating to limitations on percent- lating to application of section) is re-refined lubricating oil production which is age depletion in case of oil and gas wells) is amended— attributable to the taxpayer (within the amended to read as follows: (1) by inserting ‘‘and after December 31, meaning of section 29(d)(3)). ‘‘(1) LIMITATION BASED ON TAXABLE IN- 1999, and before January 1, 2009,’’ after ‘‘(b) QUALIFIED RE-REFINED LUBRICATING COME.— ‘‘1993,’’ in paragraphs (1)(A) and (1)(B), and OIL PRODUCTION.—For purposes of this ‘‘(A) IN GENERAL.—The deduction for the (2) by striking ‘‘2003’’ in paragraph (2) and section— taxable year attributable to the application inserting ‘‘2013’’. ‘‘(1) IN GENERAL.—The term ‘qualified re- of subsection (c) shall not exceed so much of (b) EXPANSION OF DEFINITION OF BIOMASS.— refined lubricating oil production’ means a the taxpayer’s taxable income for the year as (1) IN GENERAL.—Section 29(c)(3) is amend- base oil manufactured from at least 95 per- the taxpayer elects under subparagraph ed to read as follows: cent used oil and not more than 2 percent of (B)(iii) computed without regard to— ‘‘(3) BIOMASS.—The term ‘biomass’ means— previously unused oil by a re-refining process ‘‘(i) any depletion on production from an ‘‘(A) any organic material other than— which effectively removes physical and oil or gas property which is subject to the ‘‘(i) oil and natural gas (or any product chemical impurities and spent and unspent provisions of subsection (c), thereof), and additives to the extent that such base oil ‘‘(ii) any net operating loss carryback to ‘‘(ii) coal (including lignite) or any product meets industry standards for engine oil as the taxable year under section 172, thereof, and defined by the American Petroleum Institute ‘‘(iii) any capital loss carryback to the tax- ‘‘(B) any solid, nonhazardous, cellulosic document API 1509 as in effect on the date of able year under section 1212, and waste material, which is segregated from the enactment of this section. ‘‘(iv) in the case of a trust, any distribu- other waste materials, and which is derived ‘‘(2) LIMITATION ON AMOUNT OF PRODUCTION tions to its beneficiary, except in the case of from— WHICH MAY QUALIFY.—Re-refined lubricating any trust where any beneficiary of such trust ‘‘(i) any of the following forest-related re- oil produced during any taxable year shall is a member of the family (as defined in sec- sources: mill residues, precommercial not be treated as qualified re-refined lubri- tion 267(c)(4)) of a settlor who created inter thinnings, slash, and brush, but not includ- cating oil production but only to the extent vivos and testamentary trusts for members ing old-growth timber, average daily production during the taxable of the family and such settlor died within ‘‘(ii) urban sources, including waste pal- year exceeds 7,000 barrels. the last six days of the fifth month in 1970, lets, crates, and dunnage, manufacturing and ‘‘(3) BARREL.—The term ‘barrel’ has the and the law in the jurisdiction in which such construction wood wastes, and landscape or meaning given such term by section trust was created requires all or a portion of right-of-way tree trimmings, but not includ- 613A(e)(4). the gross or net proceeds of any royalty or ing unsegregated municipal solid waste (gar- ‘‘(c) INFLATION ADJUSTMENT.—In the case other interest in oil, gas, or other mineral bage), or of any taxable year beginning in a calendar representing any percentage depletion allow- ‘‘(iii) agriculture sources, including or- year after 1999, the dollar amount contained ance to be allocated to the principal of the chard tree crops, vineyard, grain, legumes, in subsection (a) shall be increased to an trust. poultry litter, animal manure, sugar, and amount equal to such dollar amount multi- ‘‘(B) CARRYBACKS AND CARRYFORWARDS.— other crop by-products or residues.’’ plied by the inflation adjustment factor for ‘‘(i) IN GENERAL.—If any amount is dis- (2) EFFECTIVE DATE.—The amendment such calendar year (determined under sec- allowed as a deduction for the taxable year made by this subsection shall apply to pro- tion 29(d)(2)(B) by substituting ‘1998’ for (in this subparagraph referred to as the ‘un- duction after the date of the enactment of ‘1979’).’’ used depletion year’) by reason of the appli- this Act. (b) CREDIT TREATED AS BUSINESS CREDIT.— cation of subparagraph (A), the disallowed SEC. 602. CREDIT FOR CAPTURE OF COALBED Section 38(b) (relating to current year busi- amount shall be treated as an amount allow- METHANE GAS. ness credit), as amended by section 602(b), is able as a deduction under subsection (c) for— (a) CREDIT FOR CAPTURE OF COALBED METH- amended by striking ‘‘plus’’ at the end of ‘‘(I) each of the 10 taxable years preceding ANE GAS.—Subpart D of part IV of sub- paragraph (13), by striking the period at the the unused depletion year, and chapter A of chapter 1 (relating to business end of paragraph (14) and inserting ‘‘, plus’’, ‘‘(II) the taxable year following the unused related credits), as amended by section and by adding at the end the following: depletion year, 502(a), is amended by adding at the end the ‘‘(15) the re-refined lubricating oil produc- subject to the application of subparagraph following: tion credit determined under section 45F(a).’’ (A) to such taxable year. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9557

‘‘(ii) APPLICABLE RULES.—Rules similar to such facility shall be treated as originally ‘‘(5) ELECTION.—An election under this sub- the rules of section 39 shall apply for pur- placed in service not earlier than the date on section may be made at such time and in poses of this subparagraph. which such property is used under the lease- such manner as the Secretary may by regu- ‘‘(iii) ELECTION TO WAIVE CARRYBACK.—Any back (or lease) referred to in subparagraph lations prescribe. Such an election shall taxpayer entitled to a carryback period (B). The preceding sentence shall not apply apply to the taxable year for which made and under this subparagraph may elect to waive to any property if the lessee and lessor of to all subsequent taxable years. Such an such carryback for any of the taxable years such property make an election under this election, once made, may not be revoked ex- to which such carryback would apply. Such sentence. Such an election, once made, may cept with the consent of the Secretary. election made in any taxable year may be re- be revoked only with the consent of the Sec- ‘‘(e) COORDINATION WITH OTHER CREDITS.— vised in the next succeeding taxable year in retary. This section shall not apply to any property such manner as the Secretary may prescribe. ‘‘(3) PHOTOVOLTAIC OR WIND PROPERTY.—For with respect to which the energy credit ‘‘(C) ALLOCATION OF DISALLOWED purposes of paragraph (1)(D)— under section 48A or the rehabilitation cred- AMOUNTS.—For purposes of basis adjustments ‘‘(A) PHOTOVOLTAIC PROPERTY.—The term it under section 47 is allowed unless the tax- and determining whether cost depletion ex- ‘photovoltaic property’ has the meaning payer elects to waive the application of such ceeds percentage depletion with respect to given to such term by section 48A(d)(1)(D). credits to such property.’’ ‘‘(B) WIND PROPERTY.—The term ‘wind the production from a property, any amount (c) RECAPTURE.—Section 50(a) (relating to property’ has the meaning given to the term disallowed as a deduction on the application other special rules), as amended by section ‘qualified wind energy systems equipment of this paragraph shall be allocated to the re- 501(c), is amended by adding at the end the property’ by section 48A(d)(8). spective properties from which the oil or gas following: was produced in proportion to the percentage ‘‘(c) QUALIFIED INVESTMENT.—For purposes of subsection (a), the term ‘qualified invest- ‘‘(7) SPECIAL RULES RELATING TO PHOTO- depletion otherwise allowable to such prop- VOLTAIC OR WIND PROPERTY MANUFACTURING erties under subsection (c).’’ ment’ means, with respect to any taxable year, the basis of a photovoltaic or wind FACILITY.—For purposes of applying this sub- (b) EFFECTIVE DATE.—The amendment section in the case of any credit allowable by made by this section shall apply to taxable property manufacturing facility placed in service by the taxpayer during such taxable reason of section 48C, the following shall years beginning after December 31, 1999, and apply: to any taxable year beginning on or before year in an aggregate amount of not less than $5,000,000. ‘‘(A) GENERAL RULE.—In lieu of the amount such date to the extent necessary to apply ‘‘(d) QUALIFIED PROGRESS EXPENDITURES.— of the increase in tax under paragraph (1), section 613A(d)(1)(B) of the Internal Revenue ‘‘(1) INCREASE IN QUALIFIED INVESTMENT.— the increase in tax shall be an amount equal Code of 1986 (as added by subsection (a)). In the case of a taxpayer who has made an to the investment tax credit allowed under TITLE VIII—RENEWABLE POWER election under paragraph (5), the amount of section 38 for all prior taxable years with re- GENERATION the qualified investment of such taxpayer for spect to a photovoltaic or wind property SEC. 801. CREDIT FOR INVESTMENT IN PHOTO- the taxable year (determined under sub- manufacturing facility (as defined by section VOLTAIC AND WIND PROPERTY MAN- section (c) without regard to this section) 48C(b)) multiplied by a fraction whose nu- UFACTURING FACILITIES. shall be increased by an amount equal to the merator is the number of years remaining to (a) ALLOWANCE OF PHOTOVOLTAIC OR WIND aggregate of each qualified progress expendi- fully depreciate under this title the photo- PROPERTY MANUFACTURING FACILITY CRED- ture for the taxable year with respect to voltaic or wind property manufacturing fa- IT.—Section 46 (relating to amount of cred- progress expenditure property. cility disposed of, and whose denominator is it), as amended by section 501(a), is amended ‘‘(2) PROGRESS EXPENDITURE PROPERTY DE- the total number of years over which such by striking ‘‘and’’ at the end of paragraph FINED.—For purposes of this subsection, the facility would otherwise have been subject to (3), by striking the period at the end of para- term ‘progress expenditure property’ means depreciation. For purposes of the preceding graph (4) and inserting ‘‘, and’’, and by add- any property being constructed by or for the sentence, the year of disposition of the pho- ing at the end the following: taxpayer and which— tovoltaic or wind property manufacturing fa- ‘‘(5) the photovoltaic or wind property ‘‘(A) cannot reasonably be expected to be cility shall be treated as a year of remaining manufacturing facility credit.’’ completed in less than 18 months, and depreciation. (b) AMOUNT OF CREDIT.—Subpart E of part ‘‘(B) it is reasonable to believe will qualify ‘‘(B) PROPERTY CEASES TO QUALIFY FOR IV of subchapter A of chapter 1 (relating to as a photovoltaic or wind property manufac- PROGRESS EXPENDITURES.—Rules similar to rules for computing investment credit), as turing facility which is being constructed by the rules of paragraph (2) shall apply in the amended by section 501(b), is amended by in- or for the taxpayer when it is placed in serv- case of qualified progress expenditures for a serting after section 48B the following: ice. photovoltaic or wind property manufac- ‘‘SEC. 48C. PHOTOVOLTAIC OR WIND PROPERTY ‘‘(3) QUALIFIED PROGRESS EXPENDITURES DE- turing facility under section 48C, except that MANUFACTURING FACILITY CREDIT. FINED.—For purposes of this subsection— the amount of the increase in tax under sub- ‘‘(a) IN GENERAL.—For purposes of section ‘‘(A) SELF-CONSTRUCTED PROPERTY.—In the paragraph (A) of this paragraph shall be sub- 46, the photovoltaic or wind property manu- case of any self-constructed property, the stituted in lieu of the amount described in facturing facility credit for any taxable year term ‘qualified progress expenditures’ means such paragraph (2). is an amount equal to 10 percent of the quali- the amount which, for purposes of this sub- ‘‘(C) APPLICATION OF PARAGRAPH.—This fied investment in a photovoltaic or wind part, is properly chargeable (during such tax- paragraph shall be applied separately with property manufacturing facility for such able year) to capital account with respect to respect to the credit allowed under section 38 taxable year. such property. regarding a photovoltaic or wind property ‘‘(b) PHOTOVOLTAIC OR WIND PROPERTY ‘‘(B) NON-SELF-CONSTRUCTED PROPERTY.—In manufacturing facility.’’ MANUFACTURING FACILITY.— the case of non-self-constructed property, (d) TECHNICAL AMENDMENTS.— ‘‘(1) IN GENERAL.—For purposes of sub- the term ‘qualified progress expenditures’ (1) Section 49(a)(1)(C), as amended by sec- section (a), the term ‘photovoltaic or wind means the amount paid during the taxable tion 501(f), is amended by striking ‘‘and’’ at property manufacturing facility’ means a fa- year to another person for the construction the end of clause (iii), by striking the period cility of the taxpayer— of such property. at the end of clause (iv) and inserting ‘‘, ‘‘(A)(i) the original use of which com- ‘‘(4) OTHER DEFINITIONS.—For purposes of and’’, and by adding at the end the following: mences with the taxpayer or the reconstruc- this subsection— ‘‘(v) the portion of the basis of any photo- tion of which is completed by the taxpayer ‘‘(A) SELF-CONSTRUCTED PROPERTY.—The voltaic or wind property manufacturing fa- (but only with respect to that portion of the term ‘self-constructed property’ means prop- cility attributable to any qualified invest- basis which is properly attributable to such erty for which it is reasonable to believe ment (as defined by section 48C(c)).’’ reconstruction), or that more than half of the construction ex- (2) Section 50(a)(4), as amended by section ‘‘(ii) that is acquired through purchase (as penditures will be made directly by the tax- 504(f), is amended by striking ‘‘and (6)’’ and defined by section 179(d)(2)), payer. inserting ‘‘, (6), and (7)’’. ‘‘(B) that is depreciable under section 167, ‘‘(B) NON-SELF-CONSTRUCTED PROPERTY.— (3) The table of sections for subpart E of ‘‘(C) that has a useful life of not less than The term ‘non-self-constructed property’ part IV of subchapter A of chapter 1, as 4 years, and means property which is not self-constructed amended by section 501(f), is amended by in- ‘‘(D) that is used to manufacture photo- property. serting after the item relating to section 48B voltaic or wind property. ‘‘(C) CONSTRUCTION, ETC.—The term ‘con- the following: ‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.— struction’ includes reconstruction and erec- For purposes of subparagraph (A) of para- tion, and the term ‘constructed’ includes re- ‘‘Sec. 48C. Photovoltaic or wind property graph (1), in the case of a facility that— constructed and erected. manufacturing facility credit.’’ ‘‘(A) is originally placed in service by a ‘‘(D) ONLY CONSTRUCTION OF PHOTOVOLTAIC (e) EFFECTIVE DATE.—The amendments person, and OR WIND PROPERTY MANUFACTURING FACILITY made by this section shall apply to periods ‘‘(B) is sold and leased back by such per- TO BE TAKEN INTO ACCOUNT.—Construction after December 31, 1999, under rules similar son, or is leased to such person, within 3 shall be taken into account only if, for pur- to the rules of section 48(m) of the Internal months after the date such facility was poses of this subpart, expenditures therefor Revenue Code of 1986 (as in effect on the day originally placed in service, for a period of are properly chargeable to capital account before the date of the enactment of the Rev- not less than 12 years, with respect to the property. enue Reconciliation Act of 1990). S9558 CONGRESSIONAL RECORD — SENATE July 28, 1999

SEC. 802. MODIFICATIONS TO CREDIT FOR ELEC- ‘‘(4) PROPORTIONAL CREDIT FOR CO-FIRING.— ment’ means, with respect to any taxable TRICITY PRODUCED FROM RENEW- In the case of a qualified facility as defined year, the basis of a qualified biomass-based ABLE RESOURCES. in subsection (c)(3)(B) using coal to co-fire generating system facility placed in service (a) QUALIFIED FACILITIES INCLUDE ALL BIO- with biomass, the amount of the credit de- by the taxpayer during such taxable year. MASS FACILITIES.— termined under subsection (a) for the taxable ‘‘(d) QUALIFIED PROGRESS EXPENDITURES.— (1) IN GENERAL.—Subparagraph (B) of sec- year shall be reduced by the percentage coal ‘‘(1) INCREASE IN QUALIFIED INVESTMENT.— tion 45(c)(1) (relating to credit for electricity comprises (on a Btu basis) of the average fuel In the case of a taxpayer who has made an produced from certain renewable resources) input of the facility for the taxable year.’’ election under paragraph (5), the amount of is amended to read as follows: (b) EFFECTIVE DATE.—The amendment the qualified investment of such taxpayer for ‘‘(B) biomass.’’ made by this section shall apply to elec- the taxable year (determined under sub- (2) BIOMASS DEFINED.—Paragraph (2) of sec- tricity produced after the date of the enact- section (c) without regard to this section) tion 45(c) is amended to read as follows: ment of this Act. shall be increased by an amount equal to the ‘‘(2) BIOMASS.—The term ‘biomass’ means— SEC. 804. CREDIT FOR CAPITAL COSTS OF QUALI- aggregate of each qualified progress expendi- ‘‘(A) any organic material from a plant FIED BIOMASS-BASED GENERATING ture for the taxable year with respect to which is planted exclusively for purposes of SYSTEM. progress expenditure property. being used at a qualified facility to produce (a) ALLOWANCE OF QUALIFIED BIOMASS- ‘‘(2) PROGRESS EXPENDITURE PROPERTY DE- electricity, and BASED GENERATING SYSTEM FACILITY CRED- FINED.—For purposes of this subsection, the IT.—Section 46 (relating to amount of cred- ‘‘(B) any solid, nonhazardous, cellulosic term ‘progress expenditure property’ means it), as amended by section 801(a), is amended waste material which is segregated from any property being constructed by or for the by striking ‘‘and’’ at the end of paragraph other waste materials and which is derived taxpayer and which— (5), by striking the period at the end of para- from— ‘‘(A) cannot reasonably be expected to be graph (5) and inserting ‘‘, and’’, and by add- ‘‘(i) any of the following forest-related re- completed in less than 18 months, and ing at the end the following: sources: mill residues, precommercial ‘‘(B) it is reasonable to believe will qualify ‘‘(6) the qualified biomass-based generating thinnings, slash, and brush, but not includ- as a qualified biomass-based generating sys- system facility credit.’’ ing old-growth timber, tem facility which is being constructed by or (b) AMOUNT OF CREDIT.—Subpart E of part ‘‘(ii) urban sources, including waste pal- for the taxpayer when it is placed in service. lets, crates, and dunnage, manufacturing and IV of subchapter A of chapter 1 (relating to ‘‘(3) QUALIFIED PROGRESS EXPENDITURES DE- construction wood wastes, and landscape or rules for computing investment credit), as FINED.—For purposes of this subsection— right-of-way tree trimmings, but not includ- amended by section 801(b), is amended by in- ‘‘(A) SELF-CONSTRUCTED PROPERTY.—In the serting after section 48C the following: ing unsegregated municipal solid waste (gar- case of any self-constructed property, the ‘‘SEC. 48D. QUALIFIED BIOMASS-BASED GENER- bage), term ‘qualified progress expenditures’ means ‘‘(iii) agriculture sources, including or- ATING SYSTEM FACILITY CREDIT. ‘‘(a) IN GENERAL.—For purposes of section the amount which, for purposes of this sub- chard tree crops, vineyard, grain, legumes, part, is properly chargeable (during such tax- sugar, and other crop by-products or resi- 46, the qualified biomass-based generating system facility credit for any taxable year is able year) to capital account with respect to dues, or such property. ‘‘(iv) poultry waste.’’ an amount equal to 20 percent of the quali- ‘‘(B) NON-SELF-CONSTRUCTED PROPERTY.—In (b) EXTENSION AND MODIFICATION OF PLACED fied investment in a qualified biomass-based the case of non-self-constructed property, IN SERVICE RULES.—Paragraph (3) of section generating system facility for such taxable the term ‘qualified progress expenditures’ 45(c) is amended to read as follows: year. means the amount paid during the taxable ‘‘(3) QUALIFIED FACILITY.— ‘‘(b) QUALIFIED BIOMASS-BASED GENERATING year to another person for the construction ‘‘(A) WIND FACILITIES.—In the case of a fa- SYSTEM FACILITY.— of such property. cility using wind to produce electricity, the ‘‘(1) IN GENERAL.—For purposes of sub- ‘‘(4) OTHER DEFINITIONS.—For purposes of term ‘qualified facility’ means any facility section (a), the term ‘qualified biomass- this subsection— owned by the taxpayer which is originally based generating system facility’ means a fa- ‘‘(A) SELF-CONSTRUCTED PROPERTY.—The placed in service after December 31, 1993, and cility of the taxpayer— term ‘self-constructed property’ means prop- before July 1, 2004. ‘‘(A)(i) the original use of which com- erty for which it is reasonable to believe ‘‘(B) BIOMASS FACILITIES.— mences with the taxpayer or the reconstruc- that more than half of the construction ex- ‘‘(i) IN GENERAL.—In the case of a facility tion of which is completed by the taxpayer penditures will be made directly by the tax- using biomass to produce electricity, the (but only with respect to that portion of the payer. term ‘qualified facility’ means any facility basis which is properly attributable to such ‘‘(B) NON-SELF-CONSTRUCTED PROPERTY.— owned by the taxpayer which is originally reconstruction), or The term ‘non-self-constructed property’ placed in service before July 1, 2004. ‘‘(ii) that is acquired through purchase (as means property which is not self-constructed ‘‘(ii) COMBINED PRODUCTION FACILITIES IN- defined by section 179(d)(2)), property. CLUDED.—For purposes of clause (i), the term ‘‘(B) that is depreciable under section 167, ‘‘(C) CONSTRUCTION, ETC.—The term ‘con- ‘qualified facility’ shall include a facility ‘‘(C) that has a useful life of not less than struction’ includes reconstruction and erec- using biomass to produce electricity and eth- 4 years, and tion, and the term ‘constructed’ includes re- anol. ‘‘(D) that uses a qualified biomass-based constructed and erected. ‘‘(iii) SPECIAL RULES.—In the case of a generating system. ‘‘(D) ONLY CONSTRUCTION OF QUALIFIED BIO- qualified facility described in this ‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.— MASS-BASED GENERATING SYSTEM FACILITY TO subparagraph— For purposes of subparagraph (A) of para- BE TAKEN INTO ACCOUNT.—Construction shall ‘‘(I) the 10-year period referred to in sub- graph (1), in the case of a facility that— be taken into account only if, for purposes of section (a) shall be treated as beginning no ‘‘(A) is originally placed in service by a this subpart, expenditures therefor are prop- earlier than the date of the enactment of person, and erly chargeable to capital account with re- this paragraph, and ‘‘(B) is sold and leased back by such per- spect to the property. ‘‘(II) subsection (b)(3) shall not apply to son, or is leased to such person, within 3 ‘‘(5) ELECTION.—An election under this sub- any such facility originally placed in service months after the date such facility was section may be made at such time and in before January 1, 1997.’’ originally placed in service, for a period of such manner as the Secretary may by regu- (c) COORDINATION WITH OTHER CREDITS.— not less than 12 years, Section 45(d) (relating to definitions and spe- such facility shall be treated as originally lations prescribe. Such an election shall cial rules) is amended by adding at the end placed in service not earlier than the date on apply to the taxable year for which made and the following: which such property is used under the lease- to all subsequent taxable years. Such an election, once made, may not be revoked ex- ‘‘(6) COORDINATION WITH OTHER CREDITS.— back (or lease) referred to in subparagraph This section shall not apply to any produc- (B). The preceding sentence shall not apply cept with the consent of the Secretary. tion with respect to which the clean coal to any property if the lessee and lessor of ‘‘(e) COORDINATION WITH OTHER CREDITS.— technology production credit under section such property make an election under this This section shall not apply to any property 45B is allowed unless the taxpayer elects to sentence. Such an election, once made, may with respect to which the energy credit waive the application of such credit to such be revoked only with the consent of the Sec- under section 48A or the rehabilitation cred- production.’’ retary. it under section 47 is allowed unless the tax- (d) EFFECTIVE DATE.—The amendments ‘‘(3) QUALIFIED BIOMASS-BASED GENERATING payer elects to waive the application of such made by this section shall apply to elec- SYSTEM.—For purposes of paragraph (1)(D), credits to such property.’’ tricity produced after the date of the enact- the term ‘qualified biomass-based generating (c) RECAPTURE.—Section 50(a) (relating to ment of this Act. system’ means a biomass-based integrated other special rules), as amended by section SEC. 803. PROPORTIONAL CREDIT FOR PRO- gasification combined cycle (IGCC) gener- 801(c), is amended by adding at the end the DUCING ELECTRICITY THROUGH CO- ating system which has an electricity-only following: FIRING. generation efficiency greater than 40 per- ‘‘(8) SPECIAL RULES RELATING TO QUALIFIED (a) IN GENERAL.—Section 45(b) (relating to cent. BIOMASS-BASED GENERATING SYSTEM FACIL- limitations and adjustments) is amended by ‘‘(c) QUALIFIED INVESTMENT.—For purposes ITY.—For purposes of applying this sub- adding at the end the following: of subsection (a), the term ‘qualified invest- section in the case of any credit allowable by July 28, 1999 CONGRESSIONAL RECORD — SENATE S9559 reason of section 48D, the following shall from a renewable energy public power facil- ‘‘(16) the energy-efficient steelmaking ca- apply: ity under a separate rate schedule for a sin- pacity credit determined under section ‘‘(A) GENERAL RULE.—In lieu of the amount gle 10-year period. 45G(a).’’ of the increase in tax under paragraph (1), ‘‘(c) RENEWABLE ENERGY PUBLIC POWER FA- (c) CREDIT ALLOWED AGAINST MINIMUM the increase in tax shall be an amount equal CILITY.—For purposes of this section, the TAX.— to the investment tax credit allowed under term ‘renewable energy public power facil- (1) IN GENERAL.—Section 38(c) (relating to section 38 for all prior taxable years with re- ity’ means, with respect to any taxable year, limitation based on amount of tax), as spect to a qualified biomass-based gener- a facility which would have been eligible for amended by section 502(c)(1), is amended by ating system facility (as defined by section a credit under section 45 for electricity pro- redesignating paragraph (6) as paragraph (7) 48D(b)) multiplied by a fraction whose nu- duced during such year if such facility had and by inserting after paragraph (5) the fol- merator is the number of years remaining to been privately owned. lowing: fully depreciate under this title the qualified ‘‘(d) RENEWABLE ENERGY PRODUCTION PER- ‘‘(6) SPECIAL RULES FOR ENERGY-EFFICIENT biomass-based generating system facility CENTAGE.—For purposes of this section, the STEELMAKING CAPACITY CREDIT.— disposed of, and whose denominator is the renewable energy production percentage for ‘‘(A) IN GENERAL.—In the case of the en- total number of years over which such facil- any taxable year is equal to ll. ergy-efficient steelmaking capacity credit— ity would otherwise have been subject to de- ‘‘(e) RENEWABLE ENERGY PUBLIC POWER ‘‘(i) this section and section 39 shall be ap- preciation. For purposes of the preceding PRODUCTION AMOUNT.—For purposes of this plied separately with respect to such credits, sentence, the year of disposition of the quali- section, the renewable energy public power and fied biomass-based generating system facil- production amount for any taxpayer is equal ‘‘(ii) in applying paragraph (1) to such ity shall be treated as a year of remaining to the amount of kilowatt hours of elec- credits— depreciation. tricity purchased during the 10-year period ‘‘(I) subparagraph (A) shall not apply, and ‘‘(B) PROPERTY CEASES TO QUALIFY FOR described in subsection (b) and reported to ‘‘(II) the limitation under paragraph (1) (as PROGRESS EXPENDITURES.—Rules similar to the taxpayer by the renewable energy public modified by subclause (I)) shall be reduced the rules of paragraph (2) shall apply in the power facility under the agreement described by the credit allowed under subsection (a) for case of qualified progress expenditures for a in such subsection. the taxable year (other than the credits de- qualified biomass-based generating system ‘‘(f) CARRYFORWARD OF UNUSED CREDIT.—If scribed in this paragraph and paragraphs (2), facility under section 48D, except that the the credit allowable under subsection (a) ex- (3), (4), and (5)). amount of the increase in tax under subpara- ceeds the limitation imposed by section 26(a) ‘‘(B) ENERGY-EFFICIENT STEELMAKING CA- graph (A) of this paragraph shall be sub- for such taxable year reduced by the sum of PACITY CREDIT.—For purposes of this para- stituted in lieu of the amount described in the credits allowable under subpart A of part graph, the term ‘energy-efficient such paragraph (2). IV of subchapter A (other than this section), steelmaking capacity credit’ means the por- ‘‘(C) APPLICATION OF PARAGRAPH.—This such excess shall be carried to each suc- tion of the credit under subsection (a) which paragraph shall be applied separately with ceeding taxable year.’’ is attributable to the credit determined respect to the credit allowed under section 38 (b) CONFORMING AMENDMENTS.— under section 45G(a).’’ regarding a qualified biomass-based gener- (1) Subsection (c) of section 23 is amended (2) CONFORMING AMENDMENT.—Section ating system facility.’’ by inserting ‘‘, section 25C, and section 38(c)(2)(A)(ii)(II), as amended by section (d) TECHNICAL AMENDMENTS.— 1400C’’ after ‘‘other than this section’’. 502(c)(2), is amended by striking ‘‘(other than (1) Section 49(a)(1)(C), as amended by sec- (2) Subparagraph (C) of section 25(e)(1) is the credits described in this paragraph and tion 801(d), is amended by striking ‘‘and’’ at amended by striking ‘‘section 23’’ and insert- paragraphs (3), (4), and (5))’’ and inserting the end of clause (iv), by striking the period ing ‘‘sections 23, 25C, and 1400C’’. ‘‘(other than the credits described in this at the end of clause (v) and inserting ‘‘, and’’, (3) Subsection (d) of section 1400C is paragraph and paragraphs (3), (4), (5), and and by adding at the end the following: amended by inserting ‘‘and section 25C’’ (6))’’. ‘‘(vi) the portion of the basis of any quali- after ‘‘other than this section’’. (d) CLERICAL AMENDMENT.—The table of fied biomass-based generating system facil- (4) The table of sections for subpart A of sections for subpart D of part IV of sub- ity attributable to any qualified investment part IV of subchapter A of chapter 1, as chapter A of chapter 1, as amended by sec- (as defined by section 48D(c)).’’ amended by section 201(b), is amended by in- tion 701(c), is amended by adding at the end (2) Section 50(a)(4), as amended by section serting after the item relating to section 25B the following: 801(d), is amended by striking ‘‘and (7)’’ and the following new item: inserting ‘‘, (7), and (8)’’. ‘‘Sec. 25C. Purchase of renewable energy pub- ‘‘Sec. 45G. Energy-efficient steelmaking ca- (3) The table of sections for subpart E of pacity credit.’’ part IV of subchapter A of chapter 1, as lic power production.’’ amended by section 801(d), is amended by in- (c) EFFECTIVE DATE.—The amendments (e) EFFECTIVE DATE.—The amendments serting after the item relating to section 48C made by this section shall apply to agree- made by this section shall apply to produc- the following: ments entered into after December 31, 1999. tion after the date of the enactment of this TITLE IX—STEELMAKING Act. ‘‘Sec. 48D. Qualified biomass-based gener- ating system facility credit.’’ SEC. 901. CREDIT FOR ENERGY-EFFICIENT SEC. 902. EXTENSION OF CREDIT FOR ELEC- STEELMAKING CAPACITY. TRICITY TO PRODUCTION FROM (e) EFFECTIVE DATE.—The amendments STEEL COGENERATION. made by this section shall apply to periods (a) ALLOWANCE OF ENERGY-EFFICIENT after December 31, 1999, under rules similar STEELMAKING CAPACITY CREDIT.—Subpart D (a) EXTENSION OF CREDIT FOR COKE PRODUC- to the rules of section 48(m) of the Internal of part IV of subchapter A of chapter 1 (re- TION AND STEEL MANUFACTURING FACILI- Revenue Code of 1986 (as in effect on the day lating to business related credits), as amend- TIES.—Section 45(c)(1) (defining qualified en- before the date of the enactment of the Rev- ed by section 701(a), is amended by adding at ergy resources), as amended by section enue Reconciliation Act of 1990). the end the following: 802(a)(1), is amended by striking ‘‘and’’ at the end of subparagraph (A), by striking the SEC. 805. PASS-THROUGH OF RENEWABLE EN- ‘‘SEC. 45G. ENERGY-EFFICIENT STEELMAKING CA- ERGY PRODUCTION INCENTIVE PAY- PACITY CREDIT. period at the end of subparagraph (B) and in- MENTS TO END-USERS. ‘‘(a) IN GENERAL.—For purposes of section serting ‘‘, and’’, and by adding at the end the (a) IN GENERAL.—Subpart A of part IV of 38, the energy-efficient steelmaking capacity following: subchapter A of chapter 1 (relating to non- credit for any taxable year is an amount ‘‘(C) steel cogeneration.’’ refundable personal credits), as amended by equal to the product of— (b) STEEL COGENERATION.—Section 45(c) is section 201(a), is amended by inserting after ‘‘(1) $50, multiplied by amended by adding at the end the following: section 25B the following new section: ‘‘(2) the metric tons of steel produced dur- ‘‘(4) STEEL COGENERATION.—The term ‘steel ‘‘SEC. 25C. PURCHASE OF RENEWABLE ENERGY ing such taxable year from a qualified cogeneration’ means the production of steam PUBLIC POWER PRODUCTION. steelmaking system placed in service by the or other form of thermal energy of at least 20 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of taxpayer or that is acquired through pur- percent of total production and the produc- an eligible individual, there shall be allowed chase (as defined by section 179(d)(2)) by such tion of electricity or mechanical energy (or as a credit against the tax imposed by this taxpayer. both) of at least 20 percent of total produc- chapter for the 1st taxable year beginning ‘‘(b) QUALIFIED STEELMAKING SYSTEM.—For tion which meet regulatory energy-effi- after the 10-year period described in sub- purposes of this section, the term ‘qualified ciency standards established by the Sec- section (b) an amount equal to— steelmaking system’ means a system which retary, to the extent that such energy is pro- ‘‘(1) the renewable energy production per- produces steel at a maximum net specific en- duced from— centage for such year, times ergy consumption of 17 GJ per metric ton.’’ ‘‘(A) gases or heat generated during the ‘‘(2) the taxpayer’s renewable energy public (b) CREDIT TREATED AS BUSINESS CREDIT.— production of coke, power production amount. Section 38(b), as amended by section 701(b), ‘‘(B) blast furnace gases or heat generated ‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of is amended by striking ‘‘plus’’ at the end of during the production of iron, or this section, the term ‘eligible individual’ paragraph (14), by striking the period at the ‘‘(C) waste gases or heat generated from means an individual who, pursuant to a writ- end of paragraph (15) and inserting ‘‘, plus’’, the manufacture of steel that uses at least 20 ten agreement, has purchased electricity and by adding at the end the following: percent recycled material.’’ S9560 CONGRESSIONAL RECORD — SENATE July 28, 1999

(c) MODIFICATION OF PLACED IN SERVICE which will improve the efficiency of existing owned or operated by such private founda- RULES FOR STEEL COGENERATION FACILI- irrigation systems used in the trade or busi- tion. TIES.—Section 45(c)(3) (defining qualified fa- ness of the taxpayer, including— (b) LIMITATIONS.—Subsection (a) shall only cility), as amended by section 802(b), is ‘‘(i) spray jets or nozzles which improve apply to costs— amended by adding at the end the following: water distribution efficiency, (1) incurred with respect to hazardous sub- ‘‘(C) STEEL COGENERATION FACILITIES.—In ‘‘(ii) irrigation well meters, stances disposed of at a facility owned or op- the case of a facility using steel cogenera- ‘‘(iii) surge valves and surge irrigation sys- erated by the private foundation but only tion to produce electricity, the term ‘quali- tems, and if— fied facility’ means any facility meeting the ‘‘(iv) conversion of equipment from gravity (A) such facility was transferred to such environmental requirements of the Clean Air irrigation to sprinkler or drip irrigation, in- foundation by bequest before December 11, Act Amendments of 1990 which is owned by cluding center pivot systems, and 1980, and the taxpayer and originally placed in service ‘‘(B) for service required to schedule the (B) the active operation of such facility by after December 31, 1999, and before January use of such irrigation equipment as nec- such foundation was terminated before De- 1, 2005. Such a facility may be treated as essary to manage water application to the cember 12, 1980, and originally placed in service when such facil- crop requirement based on local evaporation (2) which were not incurred pursuant to a ity was last upgraded to increase efficiency and transpiration rates or soil moisture. pending order issued to the private founda- or generation capability.’’ ‘‘(e) SPECIAL RULES.— tion unilaterally by the President or the (d) CONFORMING AMENDMENTS.— ‘‘(1) REDUCTION IN BASIS.—For purposes of President’s assignee under section 106 of the (1) The heading for section 45 is amended this subtitle, if a credit is determined under Comprehensive Environmental Response, by inserting ‘‘and waste energy’’ after ‘‘renew- this section with respect to any property, Compensation, and Liability Act of 1980 (42 able’’. the basis of such property shall be reduced U.S.C. 9606), or pursuant to a nonconsensual (2) The item relating to section 45 in the by the amount of the credit so determined. judgment against the private foundation table of sections subpart D of part IV of sub- ‘‘(2) PASS-THRU IN THE CASE OF ESTATES AND issued in a governmental cost recovery ac- chapter A of chapter 1 is amended by insert- TRUSTS.—For purposes of this section, under tion under section 107 of such Act (42 U.S.C. ing ‘‘and waste energy’’ after ‘‘renewable’’. regulations prescribed by the Secretary, 9607). (e) EFFECTIVE DATE.—The amendments rules similar to the rules of subsection (d) of (c) HAZARDOUS SUBSTANCE.—For purposes made by this section shall apply to elec- section 52 shall apply. of this section, the term ‘‘hazardous sub- tricity produced in taxable years beginning ‘‘(3) ALLOCATION IN THE CASE OF PARTNER- stance’’ has the meaning given such term by after December 31, 2001, and before January SHIPS.—For purposes of this section, in the section 101(14) of the Comprehensive Envi- 1, 2005. case of partnerships, the credit shall be allo- ronmental Response, Compensation, and Li- TITLE X—AGRICULTURE cated among partners under regulations pre- ability Act of 1980 (42 U.S.C. 9601(14)). SEC. 1001. AGRICULTURAL CONSERVATION TAX scribed by the Secretary. CREDIT. ‘‘(4) DENIAL OF DOUBLE BENEFIT.—No other ALLARD (AND ROBB) AMENDMENT (a) IN GENERAL.—Subpart D of part IV of deduction or credit shall be allowed to the NO. 1378 subchapter A of chapter 1 (relating to busi- taxpayer under this chapter for any amount ness related credits), as amended by section taken into account in determining the credit (Ordered to lie on the table.) 901(a), is amended by adding at the end the under this section.’’ Mr. ALLARD (for himself and Mr. following: (b) CONFORMING AMENDMENTS.— ROBB) submitted an amendment to be ‘‘SEC. 45H. AGRICULTURAL CONSERVATION (1) Section 38(b), as amended by section proposed by them to the bill, S. 1429, CREDIT. 901(b), is amended by striking ‘‘plus’’ at the supra; as follows: ‘‘(a) IN GENERAL.—For purposes of section end of paragraph (15), by striking the period 38, in the case of an eligible person, the agri- at the end of paragraph (16), and inserting ‘‘, At the end, add the following: cultural conservation credit determined plus’’, and by adding at the end the fol- TITLE ll—SMALL BUSINESS AND under this section for the taxable year is an lowing: FINANCIAL INSTITUTIONS TAX RELIEF amount equal to— ‘‘(17) the agricultural conservation credit SEC. ll0. SHORT TITLE. ‘‘(1) 25 percent of the eligible conservation determined under section 45H.’’ This title may be cited as the ‘‘Small Busi- tillage equipment expenses, and (2) The table of sections for subpart D of ness and Financial Institutions Tax Relief ‘‘(2) 25 percent of the eligible irrigation part IV of subchapter A of chapter 1, as Act of 1999’’. equipment expenses, amended by section 901(d), is amended by Subtitle A—Tax Relief paid or incurred by such person in connec- adding at the end the following: tion with the active conduct of the trade or SEC. ll1. EXPANSION OF S CORPORATION ELI- business of farming for the taxable year. ‘‘Sec. 45H. Agricultural conservation credit.’’ GIBLE SHAREHOLDERS TO INCLUDE ‘‘(b) ELIGIBLE PERSON.—For purposes of (3) Section 1016(a), as amended by section IRAS. this section, the term ‘eligible person’ 201(b)(1), is amended by striking ‘‘and’’ at (a) IN GENERAL.—Section 1361(c)(2)(A) (re- means, with respect to any taxable year, any the end of paragraph (27), striking the period lating to certain trusts permitted as share- person if the average annual gross receipts of at the end of paragraph (28) and inserting ‘‘; holders) is amended by inserting after clause such person for the 3 preceding taxable years and’’, and adding at the end the following: (v) the following: do not exceed $1,000,000. For purposes of the ‘‘(29) in the case of property with respect ‘‘(vi) A trust which constitutes an indi- preceding sentence, rules similar to the rules to which a credit was allowed under section vidual retirement account under section of section 448(c)(3) shall apply. 45H, to the extent provided in section 408(a), including one designated as a Roth ‘‘(c) LIMITATION.—The amount of the credit 45H(d)(1).’’ IRA under section 408A.’’ allowed under subsection (a) for any taxable (c) EFFECTIVE DATE.—The amendments (b) TREATMENT AS SHAREHOLDER.—Section year shall not exceed $2,500 for each credit made by this section shall apply to taxable 1361(c)(2)(B) (relating to treatment as share- determined under paragraph (1) or (2) of such years beginning after December 31, 1999. holders) is amended by adding at the end the subsection. following: ‘‘(d) DEFINITIONS.—For purposes of this BUNNING AMENDMENT NO. 1377 ‘‘(vi) In the case of a trust described in section— clause (vi) of subparagraph (A), the indi- ‘‘(1) ELIGIBLE CONSERVATION TILLAGE EQUIP- (Ordered to lie on the table.) vidual for whose benefit the trust was cre- MENT EXPENSES.— Mr. BUNNING submitted an amend- ated shall be treated as a shareholder.’’ ‘‘(A) IN GENERAL.—The term ‘eligible con- ment to be proposed by him to the bill, (c) SALE OF STOCK IN IRA RELATING TO S servation tillage equipment expenses’ means S. 1429, supra; as follows: CORPORATION ELECTION EXEMPT FROM PRO- amounts paid or incurred by a taxpayer to On page 268, between lines 3 and 4, insert HIBITED TRANSACTION RULES.—Section 4975(d) purchase and install conservation tillage the following: (relating to exemptions) is amended by equipment for use in the trade or business of SEC. ll CERTAIN COSTS OF PRIVATE FOUNDA- striking ‘‘or’’ at the end of paragraph (14), by the taxpayer. TION IN REMOVING HAZARDOUS striking the period at the end of paragraph ‘‘(B) CONSERVATION TILLAGE EQUIPMENT.— SUBSTANCES TREATED AS QUALI- (15) and inserting ‘‘; or’’, and by adding at The term ‘conservation tillage equipment’ FYING DISTRIBUTION. the end the following: means a no-till planter or drill designed to (a) IN GENERAL.—In the case of any taxable ‘‘(16) a sale of stock held by a trust which minimize the disturbance of the soil in year beginning after December 31, 1999, the constitutes an individual retirement account planting crops, including such planters or distributable amount of a private foundation under section 408(a) to the individual for drills which may be attached to equipment for such taxable year for purposes of section whose benefit such account is established if already owned by the taxpayer. 4942 of the Internal Revenue Code of 1986 such sale is pursuant to an election under ‘‘(2) ELIGIBLE IRRIGATION EQUIPMENT EX- shall be reduced (but not below zero) by any section 1362(a).’’ PENSES.—The term ‘eligible irrigation equip- amount paid or incurred (or set aside) by (d) CONFORMING AMENDMENT.—Section ment expenses’ means amounts paid or in- such private foundation for the investigatory 512(e)(1) is amended by inserting curred by a taxpayer— costs and direct costs of removal or taking ‘‘1361(c)(2)(A)(vi) or’’ before ‘‘1361(c)(6)’’. ‘‘(A) to purchase and install on currently remedial action with respect to a hazardous (e) EFFECTIVE DATE.—The amendments irrigated lands new or upgraded equipment substance released at a facility which was made by this section shall apply to trusts July 28, 1999 CONGRESSIONAL RECORD — SENATE S9561 which constitute individual retirement ac- 1361(f)(3) shall be apportioned or allocated to currently subject to tax under this chapter counts on the date of the enactment of this such income.’’ as of the date accrued by the taxpayer if Act in taxable years beginning after Decem- (c) EFFECTIVE DATE.—The amendments such payment— ber 31, 2000. made by this section shall apply to taxable ‘‘(i) is includible in the gross income of the SEC. ll2. EXCLUSION OF INVESTMENT SECURI- years beginning after December 31, 2000. foreign person as of such date, and TIES INCOME FROM PASSIVE IN- SEC. ll4. ISSUANCE OF PREFERRED STOCK ‘‘(ii)(I) is effectively connected with the COME TEST FOR BANK S CORPORA- PERMITTED. conduct by the foreign person of a trade or TIONS. (a) IN GENERAL.—Section 1361, as amended business within the United States, or (a) IN GENERAL.—Section 1362(d)(3)(C) (de- by section ll6(a), is amended by adding at ‘‘(II) is includible in the gross income of fining passive investment income) is amend- the end the following: any citizen or resident of the United States ed by adding at the end the following: ‘‘(g) TREATMENT OF QUALIFIED PREFERRED or any domestic corporation for the taxable ‘‘(v) EXCEPTION FOR BANKS; ETC.—In the STOCK.— year of such citizen, resident, or corporation case of a bank (as defined in section 581), a ‘‘(1) IN GENERAL.—For purposes of this in which the taxable year of the foreign per- bank holding company (as defined in section subchapter— son ends. 246A(c)(3)(B)(ii)), or a qualified subchapter S ‘‘(A) qualified preferred stock shall not be The preceding sentence shall not apply if the subsidiary bank, the term ‘passive invest- treated as a second class of stock, and payment is exempt from taxation (or is sub- ment income’ shall not include— ‘‘(B) no person shall be treated as a share- ject to a reduced rate of tax) pursuant to a ‘‘(I) interest income earned by such bank, holder of the corporation by reason of hold- treaty obligation of the United States. bank holding company, or qualified sub- ing qualified preferred stock. ‘‘(C) EXCEPTION FOR PAYMENTS IN ORDINARY chapter S subsidiary bank, or ‘‘(2) QUALIFIED PREFERRED STOCK DE- COURSE OF BUSINESS.—Subparagraph (A) shall ‘‘(II) dividends on assets required to be FINED.—For purposes of this subsection, the not apply to any payment made in the ordi- held by such bank, bank holding company, or term ‘qualified preferred stock’ means stock nary course of the trade or business in which qualified subchapter S subsidiary bank to which meets the requirements of subpara- the payor is predominantly engaged if such conduct a banking business, including stock graphs (A), (B), and (C) of section 1504(a)(4). payment is made within a reasonable period in the Federal Reserve Bank, the Federal Stock shall not fail to be treated as qualified after the day on which such payment would Home Loan Bank, or the Federal Agricul- preferred stock solely because it is convert- be allowable as a deduction but for this para- tural Mortgage Bank or participation certifi- ible into other stock. graph. cates issued by a Federal Intermediate Cred- ‘‘(3) DISTRIBUTIONS.—A distribution (not in ‘‘(D) OTHER EXCEPTIONS.—The Secretary it Bank.’’ part or full payment in exchange for stock) may by regulation provide exceptions (con- (b) EFFECTIVE DATE.—The amendment made by the corporation with respect to sistent with the purposes of this paragraph) made by this section shall apply to taxable qualified preferred stock shall be includible to the application of subparagraph (A).’’ years beginning after December 31, 2000. as ordinary income of the holder and deduct- (b) CONFORMING AMENDMENTS.— ll SEC. 3. TREATMENT OF QUALIFYING DIREC- ible to the corporation as an expense in com- (1) Subsection (e) of section 163 is amended TOR SHARES. puting taxable income under section 1363(b) by striking paragraph (3) and by redesig- (a) IN GENERAL.—Section 1361 is amended in the year such distribution is received.’’ nating paragraphs (4), (5), and (6) as para- by adding at the end the following: (b) CONFORMING AMENDMENTS.— graphs (3), (4), and (5), respectively. ‘‘(f) TREATMENT OF QUALIFYING DIRECTOR (1) Section 1361(b)(1), as amended by sec- (2) Paragraph (5) of section 163(e) (as redes- SHARES.— ll tion 6(b)(1), is amended by striking ‘‘sub- ignated by paragraph (1)) is amended by add- ‘‘(1) IN GENERAL.—For purposes of this section (f)’’ and inserting ‘‘subsections (f) ing at the end the following: subchapter— and (g)’’. ‘‘(A) qualifying director shares shall not be (2) Section 1366(a), as amended by section ‘‘For treatment of original issue discount treated as a second class of stock, and ll6(b)(2), is amended by adding at the end on obligations held by related foreign per- ‘‘(B) no person shall be treated as a share- the following: sons, see section 267(a)(3).’’ (c) EFFECTIVE DATE.—The amendments holder of the corporation by reason of hold- ‘‘(4) ALLOCATION WITH RESPECT TO QUALI- made by this section shall apply to payments ing qualifying director shares. FIED PREFERRED STOCK.—The holders of accrued after the date of enactment of this ‘‘(2) QUALIFYING DIRECTOR SHARES DE- qualified preferred stock (as defined in sec- Act. FINED.—For purposes of this subsection, the tion 1361(g)) shall not, with respect to such term ‘qualifying director shares’ means any stock, be allocated any of the items de- shares of stock in a bank (as defined in sec- scribed in paragraph (1).’’ MCCONNELL AMENDMENT NO. 1379 tion 581) or in a bank holding company reg- (3) Section 1373(a)(3), as added by section (Ordered to lie on the table.) istered as such with the Federal Reserve ll 6(b)(3), is amended by inserting ‘‘or Mr. MCCONNELL. submitted an System— 1361(g)(3)’’ after ‘‘section 1361(f)(3)’’. amendment intended to be proposed by ‘‘(i) which are held by an individual solely (c) EFFECTIVE DATE.—The amendments by reason of status as a director of such bank made by this section shall apply to taxable him to the bill. S. 1429, supra; as fol- or company or its controlled subsidiary; and years beginning after December 31, 1999. lows: ‘‘(ii) which are subject to an agreement Subtitle B—Revenue Offsets On page 268, between lines 3 and 4, insert pursuant to which the holder is required to SEC. ll11. PREVENTION OF MISMATCHING OF the following: dispose of the shares of stock upon termi- DEDUCTIONS AND INCOME IN SEC. . HOLDING PERIOD REDUCED TO 12 nation of the holder’s status as a director at TRANSACTIONS WITH RELATED FOR- MONTHS FOR PURPOSES OF DETER- the same price as the individual acquired EIGN PERSONS. MINING WHETHER HORSES ARE SEC- such shares of stock. (a) IN GENERAL.—Paragraph (3) of section TION 1231 ASSETS. ‘‘(3) DISTRIBUTIONS.—A distribution (not in 267(a) (relating to losses, expenses, and inter- (a) IN GENERAL.—Subparagraph (A) of sec- part or full payment in exchange for stock) est with respect to transactions between re- tion 1231(b)(3) (relating to definition of prop- made by the corporation with respect to lated taxpayers) is amended to read as fol- erty used in the trade or business) is amend- qualifying director shares shall be includible lows: ed by striking ‘‘and horses’’. as ordinary income of the holder and deduct- ‘‘(3) PAYMENTS TO FOREIGN PERSONS.— (b) EFFECTIVE DATE.—The amendment ible to the corporation as an expense in com- ‘‘(A) IN GENERAL.—If— made by this section shall apply to taxable puting taxable income under section 1363(b) ‘‘(i) a payment is to be made by a taxpayer years beginning after December 31, 2000. in the year such distribution is received.’’ using an accrual method of accounting to a On page 286, line 6, strike ‘‘1999’’ and in- (b) CONFORMING AMENDMENTS.— foreign person, serting ‘‘2000’’. (1) Section 1361(b)(1) is amended by insert- ‘‘(ii) such payment is not, as of the date ac- ing ‘‘, except as provided in subsection (f),’’ crued by the taxpayer, currently subject to ABRAHAM AMENDMENT NO. 1380 before ‘‘which does not’’. tax under this chapter, and (Ordered to lie on the table.) (2) Section 1366(a) is amended by adding at ‘‘(iii) at the close of the taxable year of the the end the following: taxpayer for which (but for this paragraph) Mr. ABRAHAM submitted an amend- ‘‘(3) ALLOCATION WITH RESPECT TO QUALI- the amount would be deductible under this ment intended to be proposed by him FYING DIRECTOR SHARES.—The holders of chapter, both the taxpayer and the person to to the bill. S. 1429, supra; as follows: qualifying director shares (as defined in sec- whom the payment is to be made are persons At the appropriate place in title XI, insert tion 1361(f)) shall not, with respect to such specified in any of the paragraphs of sub- the following: shares of stock, be allocated any of the items section (b), SECTON 11 . THE CADDIE RELIEF ACT. described in paragraph (1).’’ then any deduction allowable under this (a) SHORT TITLE.—This section may be (3) Section 1373(a) is amended by striking chapter in respect of such amount shall be cited as the ‘‘Caddie Relief Act of 1999’’. ‘‘and’’ at the end of paragraph (1), by strik- allowable as of the day as of which such (b) TREATMENT OF GOLF CADDIES. ing the period at the end of paragraph (2) and amount is paid (or, if earlier, the day on (1) IN GENERAL.—Subsection (a) of section inserting ‘‘, and’’, and adding at the end the which includible in the gross income of any 3508 of the Internal Revenue Code of 1986 (re- following: United States person). lating to treatment of real estate agents and ‘‘(3) no amount of an expense deductible ‘‘(B) CURRENTLY SUBJECT TO TAX.—For pur- direct sellers) is amended by striking ‘‘quali- under this subchapter by reason of section poses of subparagraph (A)(ii), a payment is fied real estate agent or as a direct seller’’ S9562 CONGRESSIONAL RECORD — SENATE July 28, 1999

and insert ‘‘qualified real estate agent, di- (2) NON-OPERATING CLASS III RAILROAD.— ‘‘SEC. 48. ENERGY CREDIT; REFORESTATION rect seller, or golf caddie’’. The term ‘‘non-operating class III railroad’’ CREDIT; DRY CLEANING EQUIPMENT (2) DEFINITION.—Subsection (b) of section has the meaning given such term by part A CREDIT.’’ 3508 of such Code is amended by redesig- of subtitle IV of title 49, United States Code (B) The item relating to section 48 in the nating paragraph (3) as paragraph (4) and by (49 U.S.C. 10101 et seq.) and the regulations table of sections for subpart E of part IV of inserting after paragraph (2) the following thereunder. subchapter A of chapter 1 is amended to read new paragraph: (3) STATE.—The term ‘‘State’’ includes— as follows: ‘‘(3) GOLF CADDIE.—The term ‘‘golf caddie’’ (A) the District of Columbia and any pos- ‘‘Sec. 48. Energy credit; reforestation credit; means an individual who performs the serv- session of the United States, and dry cleaning equipment credit.’’ ice of carrying golf clubs for, or otherwise (B) any authority, agency, or public cor- (4) EFFECTIVE DATE.—The amendments assisting, a non-professional golfer and, with poration of a State. made by this section shall apply to property respect to whom, substantially all the remu- (e) APPLICABILITY.—This section shall placed in service on or after January 1, 1999. neration (whether or not paid in cash) for apply on and after the date of any acquisi- (b) CLARIFICATION OF COORDINATION OF EX- the performance of such service is— tion described in subsection (a). PENSE ALLOCATION REGULATIONS AND TREA- ‘‘(A) directly related to performing such TIES OF THE UNITED STATES.— services rather than to the number of hours (1) IN GENERAL.—In the case of any non- AMENDMENT NO. 1382 worked, and resident alien individual or foreign corpora- ‘‘(B) paid to such individual directly by the At the end of title XI, insert: tion having a permanent establishment in golfer or by a third party as an agent of the ll the United States, the allocation of items golfer where the third party incurs no obli- SEC. . CREDIT FOR DRY CLEANING EQUIP- MENT USING REDUCED AMOUNTS with respect to the permanent establishment gation itself to pay such remuneration.’’. OF HAZARDOUS SUBSTANCES; REV- in accordance with Treasury Regulation (3) CLERICAL AMENDMENTS.— ENUE OFFSET. (A) The heading of section 3508 of such § 1.861–8 or § 1.882–5 shall not be treated as in- (a) CREDIT.— Code is amended to read as follows: consistent with any treaty of the United (1) IN GENERAL.—Section 46 (relating to States. ‘‘SEC. 3508. TREATMENT OF REAL ESTATE amount of investment credit) is amended by FFECTIVE DATE AGENTS, DIRECT SELLERS, AND (2) E .— GOLF CADDIES.’’. striking ‘‘and’’ at the end of paragraph (2), (A) IN GENERAL.—This subsection shall (B) The item relating to section 3508 in the by striking the period at the end of para- apply to taxable years beginning before, on, table of sections for chapter 25 of such Code graph (3) and inserting ‘‘, and’’, and by add- or after the date of the enactment of this is amended to read as follows: ing at the end thereof the following para- Act. graph: (B) EXCEPTION.—This subsection shall not ‘‘Sec. 3508. Treatment of real estate agents, ‘‘(4) the dry cleaning equipment credit.’’ apply to any taxpayer for any taxable year direct sellers, and golf cad- (2) DRY CLEANING EQUIPMENT CREDIT.—Sec- beginning on or before such date of enact- dies.’’. tion 48 is amended by adding at the end the ment if— (4) EFFECTIVE DATE.—The amendments following new subsection: (i) there has been a decision by a Federal made by this section shall apply to remu- ‘‘(c) DRY CLEANING EQUIPMENT USING RE- court on or before such date reaching a re- neration paid for services performed in tax- DUCED AMOUNTS OF HAZARDOUS SUB- sult inconsistent with the provisions of this able years ending after the date of the enact- STANCES.— subsection, and ment of this Act. ‘‘(1) IN GENERAL.—For purposes of section (ii) such decision is not overturned on ap- 46, the dry cleaning equipment credit for any peal. HELMS AMENDMENTS NOS. 1381– taxable year is 20 percent of the basis of each 1382 qualified dry cleaning property placed in KENNEDY AMENDMENT NO. 1383 (Ordered to lie on the table.) service during the taxable year. (Ordered to lie on the table.) Mr. HELMS submitted an amend- ‘‘(2) LIMITATION.—The credit under this subsection for the taxable year shall apply to Mr. KENNEDY submitted an amend- ment intended to be proposed by him only one qualified dry cleaning property ment intended to be proposed by him to the bill. S. 1429, supra; as follows: placed in service during such year at each to the bill, S. 1429, supra; as follows: AMENDMENT NO. 1381 business premise of the taxpayer. On page 371, between lines 16 and 17, insert On page 371, between lines 16 and 17, insert ‘‘(3) QUALIFIED DRY CLEANING PROPERTY.— the following: ll the following: For purposes of this subsection, the term SEC. . FAIR MINIMUM WAGE. ‘qualified dry cleaning property’ means (a) SHORT TITLE.—This section may be SEC. ll. TAX TREATMENT OF STATE ACQUISI- TION OF RAILROAD REAL ESTATE equipment designed primarily to dry clean cited as the ‘‘Fair Minimum Wage Act of INVESTMENT TRUST. clothing and other fabric if— 1999’’. (b) MINIMUM WAGE INCREASE.— (a) IN GENERAL.—If a State acquires all of ‘‘(A) such equipment does not use any haz- the outstanding stock of a real estate invest- ardous solvent as the primary process sol- (1) WAGE.—Paragraph (1) of section 6(a) of ment trust which is a non-operating class III vent, the Fair Labor Standards Act of 1938 (29 railroad and substantially all of the activi- ‘‘(B) the original use of such property com- U.S.C. 206(a)(1)) is amended to read as fol- ties of which consist of the ownership, leas- mences with the taxpayer, and lows: ing, and operation by such trust of facilities, ‘‘(C) with respect to which depreciation (or ‘‘(1) except as otherwise provided in this equipment, and other property used by the amortization in lieu of depreciation) is al- section, not less than— trust or other persons in railroad transpor- lowable. ‘‘(A) $5.65 an hour during the year begin- tation, then, for purposes of section 115 of ‘‘(4) HAZARDOUS SOLVENT.—For purposes of ning on September 1, 1999; and the Internal Revenue Code of 1986— paragraph (3)— ‘‘(B) $6.15 an hour beginning on September (1) such activities shall be treated as the ‘‘(A) IN GENERAL.—The term ‘hazardous 1, 2000;’’. exercise of an essential governmental func- solvent’ means any solvent any portion of (2) EFFECTIVE DATE.—The amendment tion, and which consists of a chlorinated solvent, a pe- made by paragraph (1) takes effect on Sep- (2) income derived from such activities troleum-based solvent, or any other haz- tember 1, 1999. (c) APPLICABILITY OF MINIMUM WAGE TO THE shall be treated as accruing to the State. ardous or regulated substance. COMMONWEALTH OF THE NORTHERN MARIANA (b) GAIN OR LOSS NOT RECOGNIZED ON CON- ‘‘(B) EXCEPTION.—Such term shall not in- ISLANDS.—The provisions of section 6 of the VERSION.—Notwithstanding section 337(d) of clude any solvent— Fair Labor Standards Act of 1938 (29 U.S.C. the Internal Revenue Code of 1986, no gain or ‘‘(i) not more than 10 percent of which con- sists of petroleum or petroleum derivatives, 206) shall apply to the Commonwealth of the loss shall be recognized under section 336 or Northern Mariana Islands. 337 of such Code because of the change of sta- and tus of the real estate investment trust to a ‘‘(ii) which does not contain any substance tax-exempt entity by reason of the applica- determined by the Administrator of the En- MOYNIHAN (AND OTHERS) tion of subsection (a). vironmental Protection Agency, the Director AMENDMENT NO. 1384 (c) TAX-EXEMPT FINANCING.—Any obliga- of the National Institute for Occupational Mr. MOYNIHAN (for himself, Mr. Safety and Health, the Director of the Inter- tion issued by the entity described in sub- BAUCUS, Mr. ROCKEFELLER, Mr. section (a) shall be treated as an obligation national Agency for Research on Cancer, the BREAUX, Mr. CONRAD, Mr. GRAHAM, Mr. of the State for purposes of applying section Director of the National Institute of Envi- 103 and part IV of subchapter B of chapter 1 ronmental Health Sciences’ National Toxi- BRYAN, Mr. KERREY, and Mr. ROBB) pro- of the Internal Revenue Code of 1986. cology Program, or the director of any other posed an amendment to the bill, S. (d) DEFINITIONS.—For purposes of this appropriate Federal agency to possess— 1429, supra; as follows: section— ‘‘(I) carcinogenic potential in humans, or Strike all after the first word and insert: (1) REAL ESTATE INVESTMENT TRUST.—The ‘‘(II) bioaccumulative properties.’’ 1. SHORT TITLE; ETC. term ‘‘real estate investment trust’’ has the (3) CLERICAL AMENDMENTS.— (a) SHORT TITLE.—This Act may be cited as meaning given such term by section 856(a) of (A) The section heading for section 48 is the ‘‘Tax and Public Debt Reduction Act of the Internal Revenue Code of 1986. amended to read as follows: 1999’’. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9563

(b) AMENDMENT OF 1986 CODE.—Except as Sec. 605. Treatment of qualified public edu- Sec. 824. Hardship exception to 60-day rule. otherwise expressly provided, whenever in cational facility bonds as ex- Sec. 825. Treatment of forms of distribution. this Act an amendment or repeal is ex- empt facility bonds. Sec. 826. Rationalization of restrictions on pressed in terms of an amendment to, or re- Sec. 606. Permanent extension of exclusion distributions. peal of, a section or other provision, the ref- for employer-provided edu- Sec. 827. Purchase of service credit in gov- erence shall be considered to be made to a cational assistance. ernmental defined benefit section or other provision of the Internal Sec. 607. Expansion of deduction for com- plans. Revenue Code of 1986. puter donations to schools. Sec. 828. Employers may disregard rollovers (c) SECTION 15 NOT TO APPLY.—No amend- Sec. 608. Credit for information technology for purposes of cash-out ment made by this Act shall be treated as a training program expenses. amounts. change in a rate of tax for purposes of sec- Sec. 609. Charitable contributions to certain Subtitle D—Strengthening Pension Security tion 15 of the Internal Revenue Code of 1986. low income schools may be and Enforcement (d) TABLE OF CONTENTS.—The table of con- made in next taxable year. Sec. 831. Treatment of multiemployer plans tents for this Act is as follows: Sec. 610. Exclusion of National Service Edu- under section 415. Sec. 1. Short title; etc. cational Awards. Sec. 832. Extension of missing participants TITLE I—TAX RELIEF FOR WORKING TITLE VII—ENVIRONMENTAL program to multiemployer FAMILIES CONSERVATION AND PROTECTION plans. Sec. 833. Civil penalties for breach of fidu- Subtitle A—Better America Bonds Sec. 101. Increase in standard deduction. ciary responsibility. Sec. 102. Deduction for two-earner married Sec. 701. Credit for holders of Better Amer- Sec. 834. Failure to provide notice by de- couples. ica bonds. fined benefit plans significantly TITLE II—HEALTH CARE Sec. 702. Better America Bonds Board. reducing future benefit accru- AFFORDABILITY AND ACCESSIBILITY Subtitle B—Conservation Incentives als. Sec. 201. Deduction for 100 percent of health Sec. 711. Tax exclusion for cost-sharing pay- Subtitle E—Encouraging Retirement insurance costs of self-em- ments under Partners for Wild- Education ployed individuals. life Program. Sec. 841. Periodic pension benefits State- Sec. 202. Refundable credit for health insur- Sec. 712. Enhanced deduction for the dona- ments. ance costs of employees. tion of a conservation ease- Sec. 842. Clarification of treatment of em- Sec. 203. Deduction for premiums for long- ment. ployer-provided retirement ad- term care insurance. Sec. 713. National wildlife refuge conserva- Sec. 204. Long-term care tax credit. vice. tion easements. Subtitle F—Reducing Red Tape Sec. 205. Credit for clinical testing research Sec. 714. Exclusion of 50 percent of gain on expenses attributable to certain sales of land or interests in land Sec. 851. ESOP dividends may be reinvested qualified academic institutions or water to eligible entities for without loss of dividend deduc- including teaching hospitals. conservation purposes. tion. Sec. 206. Treatment of certain hospital sup- Sec. 852. Reduced PBGC premium for new port organizations as qualified Subtitle C—Alternative Fuels Incentives plans of small employers. organizations for purposes of Sec. 721. Extension and expansion of credit Sec. 853. Reduction of additional PBGC pre- determining acquisition indebt- for purchase of electric vehi- mium for new plans. edness. cles. Sec. 854. Elimination of user fee for requests Sec. 207. Technical amendments related to Sec. 722. Additional deduction for cost of in- to IRS regarding new pension Vaccine Injury Compensation stallation of alternative fueling plans. Trust Fund. stations. Sec. 855. Distributional analysis of pension TITLE III—ESTATE TAX PROVISIONS Sec. 723. Credit for retail sale of clean burn- tax benefits. ing fuels as motor vehicle fuel. Sec. 301. Increase in unified estate and gift Subtitle G—Other Provisions tax credit. Subtitle C—Other Provisions Sec. 303. Tax credit for matching contribu- Sec. 302. Increase in estate tax deduction for Sec. 731. Expansion of section 29 tax credit. tions to Individual Develop- family-owned business interest. Sec. 732. Uniform dollar limitation for all ment Accounts. TITLE IV—ALTERNATIVE MINIMUM TAX types of transportation fringe Sec. 862. Federal employee retirement con- REFORMS benefits. tributions. TITLE VIII—SAVINGS AND PENSION Sec. 863. Exclusion from income of sever- Sec. 401. Allowance of nonrefundable per- ance payment amounts sonal credits fully against reg- PROVISIONS Subtitle H—Plan Amendments ular tax liability. Subtitle A—Expanding Coverage for Small Sec. 402. Repeal of foreign tax credit limita- Business Sec. 871. Provisions relating to plan amend- ments. tion under alternative min- Sec. 801. Plan loans for subchapter S owners, imum tax. partners, and sole proprietors. TITLE IX—FARM RELIEF AND ECONOMIC Sec. 403. Income averaging for farmers not Sec. 802. Contributions to IRAs through pay- DEVELOPMENT to increase alternative min- roll deductions. Sec. 901. Farm and ranch risk management imum tax liability. Sec. 803. Modification of top-heavy rules. accounts. Sec. 404. Long-term unused credits allowed Sec. 804. Credit for small employer pension Sec. 902. Lease agreement relating to exclu- against minimum tax. plan contributions and start-up sion of certain farm rental in- TITLE V—EXTENSION OF EXPIRING costs. come from net earnings from INCENTIVES Sec. 805. Increasing limits for deferrals to self-employment. Sec. 501. Work opportunity credit and wel- simple plans. Sec. 903. Exclusion of gain from sale of cer- fare-to-work credit. Sec. 806. Elective deferrals not taken into tain farmland. Sec. 502. Electricity produced from certain account for purposes of limits. Sec. 904. Exemption of small issue agri- culture bonds from State vol- nonrenewable resources credit. Subtitle B—Increasing Pension Access and ume cap. Sec. 503. Subpart F exemption for active fi- Fairness for Women nancing income. Sec. 905. Capital gain realized from transfer Sec. 504. Extension of expensing of environ- Sec. 811. Equitable treatment for contribu- of farm property in complete or mental remediation costs. tions of employees to defined partial satisfaction of qualified Sec. 505. Virgin Islands and Puerto Rico rum contribution plans. farm indebtedness excluded cover over. Sec. 812. Faster vesting of certain employer from gross income. Sec. 506. Modifications of Puerto Rican eco- matching contributions. Sec. 906. Exclusion of discharge of qualified nomic activity credit. Sec. 813. Deferred annuities for surviving farm indebtedness from gross TITLE VI—QUALITY EDUCATION spouses of Federal employees. income increased for certain INITIATIVES Sec. 814. Clarification of tax treatment of solvent farmers. division of section 457 plan ben- Sec. 601. Expansion of incentives for public Sec. 907. Net operating loss of farmers. efits upon divorce. Sec. 908. Certain cash rentals of farmland schools. Sec. 815. Spouses’ right to know proposal. Sec. 602. Modifications to qualified tuition not to cause recapture of spe- programs. Subtitle C—Increasing Portability of cial estate tax valuation. Sec. 603. Elimination of 60-month limit on Pension Plans Sec. 909. Declaratory judgment remedy re- student loan interest deduc- Sec. 821. Rollovers allowed among various lating to status and classifica- tion. types of plans. tion of farmers’ cooperatives. Sec. 604. Additional increase in arbitrage re- Sec. 822. Rollovers of IRAs into workplace TITLE X—TECHNOLOGY AND ECONOMIC bate exception for govern- retirement plans. DEVELOPMENT mental bonds used to finance Sec. 823. Rollovers of after-tax contribu- Sec. 1001. Permanent extension and modi- educational facilities. tions. fication of research credit. S9564 CONGRESSIONAL RECORD — SENATE July 28, 1999 Sec. 1002. New markets tax credit. Sec. 1203. Returns relating to cancellations Applicable Sec. 1003. Increase in State ceiling on low- of indebtedness by organiza- ‘‘Calendar year: dollar amount: income housing credit. tions lending money. 2003 or 2004 ...... $1,000 Sec. 1004. Increase in volume cap on private Sec. 1204. Extension of Internal Revenue 2005 or 2006 ...... $1,500 activity bonds. Service user fees. 2007 and thereafter ...... $2,150. Sec. 1005. Spaceports treated like airports Sec. 1205. Charitable split-dollar life insur- ‘‘(III) INDIVIDUAL.—In the case of the $3,000 under exempt facility bond ance, annuity, and endowment amount under paragraph (2)(C)— rules. contracts. Applicable Sec. 1006. Increase in expense treatment for Sec. 1206. Transfer of excess defined benefit ‘‘Calendar year: dollar amount: small businesses. plan assets for retiree health 2001 or 2002 ...... $300 TITLE XI—MISCELLANEOUS INCENTIVES benefits. 2003 or 2004 ...... $600 Subtitle A—Miscellaneous Provisions Sec. 1207. Limitations on welfare benefit 2005 or 2006 ...... $900 funds of 10 or more employer Sec. 1101. Oil and gas incentives. 2007 and thereafter ...... $1,300. plans. Sec. 1102. Treatment of certain revenues of ‘‘(IV) MARRIED FILING SEPARATELY.—In the Sec. 1208. Modification of installment meth- electric cooperatives. case of the $2,500 amount under paragraph od and repeal of installment Sec. 1103. Tax-exempt bond financing of cer- (2)(D)— method for accrual method tax- tain electric facilities. Applicable payers. Sec. 1104. Modifications to special rules for ‘‘Calendar year: dollar amount: Sec. 1209. Inclusion of certain vaccines nuclear decommissioning costs. 2001 or 2002 ...... $500 Sec. 1105. Modification of dependent care against streptococcus 2003 or 2004 ...... $1,000 credit. pneumoniae to list of taxable 2005 or 2006 ...... $1,500 Sec. 1106. Allowance of credit for employer vaccines. 2007 and thereafter ...... $2,175. Sec. 1210. Restoration of phase-out of unified expenses for child care assist- ‘‘(ii) COST-OF-LIVING ADJUSTMENT.—In the ance. credit. case of any taxable year beginning in a cal- Sec. 1107. Recovery period for depreciation Sec. 1211. Repeal of lower-of-cost-or-market endar year after 2007, the applicable dollar of certain leasehold improve- method of accounting for inven- amount under clause (i) shall be increased by ments. tories. an amount equal to such dollar amount mul- Sec. 1212. Consistent amortization periods Sec. 1108. Exemption from income tax for tiplied by the cost-of-living adjustment de- for intangibles. State-created organizations termined under section 1(f)(3) for the cal- Sec. 1213. Extension of hazardous substance providing property and cas- endar year in which the taxable year begins, Superfund taxes. ualty insurance for property for except that subparagraph (B) thereof shall be Sec. 1214. Controlled entities ineligible for which such coverage is other- applied by substituting ‘calendar year 2006’ REIT status. wise unavailable. for ‘calendar year 1992’. If any amount as ad- Sec. 1215. Increase in elective withholding Sec. 1109. Disclosure of tax information to justed under this subparagraph is not a mul- rate for nonperiodic distribu- facilitate combined employ- tiple of $50, such amount shall be rounded to tions from deferred compensa- ment tax reporting. the next lowest multiple of $50.’’ tion plans. Sec. 1110. Increase in limit on certain chari- SEC. 102. DEDUCTION FOR TWO-EARNER MAR- table contributions as percent- Sec. 1216. Treatment of gain from construc- tive ownership transactions. RIED COUPLES. age of AGI. (a) IN GENERAL.—Part VII of subchapter B Sec. 1111. Low-income second mortgage tax Sec. 1217. Restriction on use of real estate investment trusts to avoid esti- of chapter 1 (relating to additional itemized credit. deductions for individuals) is amended by re- Sec. 1112. Coordination of child tax credit mated tax payment require- ments. designating section 222 as section 223 and by and earned income credit with inserting after section 221 the following: certain means-tested programs. Sec. 1218. Prohibited allocations of S cor- Sec. 1113. No Federal income tax on poration stock held by an ‘‘SEC. 222. DEDUCTION FOR MARRIED COUPLES ESOP. TO ELIMINATE THE MARRIAGE PEN- amounts received by Holocaust ALTY. victims or their heirs. Sec. 1219. Modification of anti-abuse rules related to assumption of liabil- ‘‘(a) IN GENERAL.—In the case of a joint re- Sec. 1114. Tax treatment of special pay for turn under section 6013 for the taxable year, members of the Armed Forces. ity. Sec. 1220. Allocation of basis on transfers of there shall be allowed as a deduction an Subtitle B—Provisions Relating to Real intangibles in certain non- amount equal to the lesser of— Estate Investment Trusts recognition transactions. ‘‘(1) the applicable dollar amount, or PART I—TREATMENT OF INCOME AND SERVICES Sec. 1221. Distributions to a corporate part- ‘‘(2) the applicable percentage of the quali- PROVIDED BY TAXABLE REIT SUBSIDIARIES ner of stock in another corpora- fied earned income of the spouse with the Sec. 1121. Modifications to asset diversifica- tion. lower qualified earned income for the tax- able year. tion test. TITLE I—TAX RELIEF FOR WORKING ‘‘(b) APPLICABLE PERCENTAGE.—For pur- Sec. 1122. Treatment of income and services FAMILIES provided by taxable REIT sub- poses of this section— sidiaries. SEC. 101. INCREASE IN STANDARD DEDUCTION. ‘‘(1) IN GENERAL.—The term ‘applicable per- Sec. 1123. Taxable REIT subsidiary. Subsection (c) of section 63 (relating to centage’ means 20 percent, reduced (but not Sec. 1124. Limitation on earnings stripping. standard deduction) is amended by adding at below zero) by 1 percentage point for each Sec. 1125. 100 percent tax on improperly allo- the end the following new paragraph: $1,000 (or fraction thereof) by which the tax- cated amounts. ‘‘(7) INCREASE IN AMOUNT.— payer’s modified adjusted gross income for Sec. 1126. Effective date. ‘‘(A) IN GENERAL.—In the case of taxable the taxable year exceeds $75,000. PART II—HEALTH CARE REITS years beginning in any calendar year begin- ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— ning after 2000, the dollar amounts deter- Sec. 1131. Health care REITs. For purposes of this subsection, the term mined under paragraph (2) (after any in- ‘modified adjusted gross income’ means ad- PART III—CONFORMITY WITH REGULATED crease under paragraph (4)) shall be in- justed gross income determined— INVESTMENT COMPANY RULES creased by the applicable dollar amount for ‘‘(A) after application of sections 86, 219, Sec. 1141. Conformity with regulated invest- such calendar year. and 469, and ment company rules. ‘‘(B) APPLICABLE DOLLAR AMOUNT.— ‘‘(B) without regard to sections 135, 137, PART IV—CLARIFICATION OF EXCEPTION FROM ‘‘(i) AMOUNT.—The applicable dollar 221, and 911 or the deduction allowable under IMPERMISSIBLE TENANT SERVICE INCOME amount for any calendar year shall be deter- this section. Sec. 1151. Clarification of exception for inde- mined as follows: ‘‘(c) APPLICABLE DOLLAR AMOUNT.—For pendent operators. ‘‘(I) JOINT RETURNS AND SURVIVING purposes of this section— SPOUSES.—In the case of the $5,000 amount ‘‘(1) IN GENERAL.—The applicable dollar PART V—MODIFICATION OF EARNINGS AND under paragraph (2)(A)— amount shall be determined in accordance PROFITS RULES Applicable with the following table: Sec. 1161. Modification of earnings and prof- ‘‘Calendar year: dollar amount: its rules. ‘‘Taxable year begin- 2001 or 2002 ...... $1,000 ning in calendar Applicable TITLE XII—REVENUE OFFSETS 2003 or 2004 ...... $2,000 year: dollar amount: Subtitle A—General Provisions 2005 or 2006 ...... $3,000 2001 or 2002 ...... $1,000 Sec. 1201. Modification to foreign tax credit 2007 and thereafter ...... $4,350. 2003 or 2004 ...... $2,000 carryback and carryover peri- ‘‘(II) HEAD OF HOUSEHOLD.—In the case of 2005 or 2006 ...... $3,000 ods. the $4,400 amount under paragraph (2)(B)— 2007 and thereafter ...... $4,350. Sec. 1202. Limitation on use of non-accrual Applicable ‘‘(2) COST-OF-LIVING ADJUSTMENT.—In the experience method of account- ‘‘Calendar year: dollar amount: case of any taxable year beginning in a cal- ing. 2001 or 2002 ...... $500 endar year after 2007, the applicable dollar July 28, 1999 CONGRESSIONAL RECORD — SENATE S9565

amount under paragraph (1) shall be in- an amount equal to 100 percent of the ‘‘(d) LIMITATION BASED ON ADJUSTED GROSS creased by an amount equal to such dollar amount paid during the taxable year for in- INCOME.— amount multiplied by the cost-of-living ad- surance which constitutes medical care for ‘‘(1) IN GENERAL.—No credit shall be al- justment determined under section 1(f)(3) for the taxpayer and the taxpayer’s spouse and lowed under subsection (a) for any taxable the calendar year in which the taxable year dependents.’’ year for which the taxpayer’s adjusted gross begins, except that subparagraph (B) thereof (b) EFFECTIVE DATE.—The amendment income exceeds the applicable dollar shall be applied by substituting ‘calendar made by this section shall apply to taxable amount. year 2006’ for ‘calendar year 1992’. If any years beginning after December 31, 2000. ‘‘(2) APPLICABLE DOLLAR AMOUNT.—The amount as adjusted under this paragraph is SEC. 202. REFUNDABLE CREDIT FOR HEALTH IN- term ‘applicable dollar amount’ means— not a multiple of $50, such amount shall be SURANCE COSTS OF EMPLOYEES. ‘‘(A) in the case of a taxpayer filing a joint rounded to the next lowest multiple of $50. (a) IN GENERAL.—Subpart C of part IV of return, $40,000, ‘‘(d) QUALIFIED EARNED INCOME DEFINED.— subchapter A of chapter 1 (relating to re- ‘‘(B) in the case of any other taxpayer, ‘‘(1) IN GENERAL.—For purposes of this sec- fundable personal credits) is amended by re- $20,000. tion, the term ‘qualified earned income’ designating section 35 as section 36 and by ‘‘(3) COST-OF-LIVING ADJUSTMENT.— means an amount equal to the excess of— inserting after section 34 the following new ‘‘(A) IN GENERAL.—In the case of a taxable ‘‘(A) the earned income of the spouse for section: year beginning after 2003, each dollar the taxable year, over ‘‘SEC. 35. HEALTH INSURANCE COSTS OF EM- amount under paragraph (2) shall be in- ‘‘(B) an amount equal to the sum of the de- PLOYEES. creased by an amount equal to— ductions described in paragraphs (1), (2), (7), ‘‘(a) IN GENERAL.—In the case of an indi- ‘‘(i) such dollar amount, multiplied by and (15) of section 62(a) to the extent such vidual, there shall be allowed as a credit ‘‘(ii) the cost-of-living adjustment deter- deductions are properly allocable to or against the tax imposed by this subtitle an mined under section 1(f)(3) for the calendar chargeable against earned income described amount equal to 30 percent of the amount year in which the taxable year begins, deter- in subparagraph (A). paid during the taxable year for qualified mined by substituting ‘calendar year 2002’ The amount of qualified earned income shall health insurance. for ‘calendar year 1992’ in subparagraph (B) be determined without regard to any com- ‘‘(b) QUALIFIED HEALTH INSURANCE.— thereof. munity property laws. ‘‘(1) IN GENERAL.—For purposes of this sec- ‘‘(B) ROUNDING RULES.—If any amount after ‘‘(2) EARNED INCOME.—For purposes of para- tion, the term ‘qualified health insurance’ adjustment under subparagraph (A) is not a graph (1), the term ‘earned income’ means means health insurance which constitutes multiple of $50, such amount shall be round- income which is earned income within the medical care for the taxpayer, his spouse, ed to the next lower multiple of $50. meaning of section 911(d)(2) or 401(c)(2)(C), and dependents, and which meet the require- ‘‘(4) SPECIAL RULE FOR MARRIED INDIVID- except that— ments of paragraphs (2), (3), and (4). UALS FILING SEPARATELY AND LIVING APART.— ‘‘(A) such term shall not include any ‘‘(2) BENEFITS PACKAGE.—Health insurance A husband and wife who— amount— meets the requirement of this paragraph if ‘‘(A) file separate returns for any taxable ‘‘(i) not includible in gross income, such insurance provides coverage equivalent year, and ‘‘(ii) received as a pension or annuity, to the standard Blue Cross/Blue Shield pre- ‘‘(B) live apart at all times during such ‘‘(iii) paid or distributed out of an indi- ferred provider option service benefit plan, taxable year, vidual retirement plan (within the meaning described in and offered under section 8903(1) shall not be treated as married individuals of section 7701(a)(37)), of title 5, United States Code. for purposes of this paragraph. ‘‘(iv) received as deferred compensation, or ‘‘(3) HIPAA STANDARDS.—Health insurance ‘‘(e) LIMITATION BASED ON AMOUNT OF ‘‘(v) received for services performed by an meets the requirement of this paragraph if TAX.— individual in the employ of his spouse (with- such insurance meets standards similar to ‘‘(1) IN GENERAL.—The credit allowed by in the meaning of section 3121(b)(3)(A)), and the standards under chapter 100. subsection (a) for the taxable year (deter- ‘‘(B) section 911(d)(2)(B) shall be applied ‘‘(4) PREMIUM STANDARDS.—Health insur- mined after the application of subsections (c) without regard to the phrase ‘not in excess ance meets the requirement of this para- and (d)) shall not exceed the sum of— of 30 percent of his share of net profits of graph if the premium rate for such insurance ‘‘(A) the tax imposed by this chapter for such trade or business’.’’ for any calendar year does not exceed by the taxable year (reduced by the credits al- (b) DEDUCTION TO BE ABOVE-THE-LINE.— more than 100 percent the average base pre- lowable against such tax other than the Section 62(a) (defining adjusted gross in- mium rate for the same or similar health in- credits allowable under this subpart), and come) is amended by adding after paragraph surance offered by the 5 insurers with the ‘‘(B) the taxpayer’s social security taxes (17) the following: highest premium volume during the pre- for such taxable year. ‘‘(18) DEDUCTION FOR TWO-EARNER MARRIED ceding calendar year. ‘‘(2) SOCIAL SECURITY TAXES.—For purposes COUPLES.—The deduction allowed by section ‘‘(c) LIMITATIONS.— of paragraph (1)— 222.’’ ‘‘(1) POLICY LIMITATIONS.—The amount ‘‘(A) IN GENERAL.—The term ‘social secu- (c) EARNED INCOME CREDIT PHASEOUT TO which may be taken into account under sub- rity taxes’ means, with respect to any tax- REFLECT DEDUCTION.—Section 32(c)(2) (defin- section (a) shall not exceed— payer for any taxable year— ing earned income) is amended by adding at ‘‘(A) in the case of self-only coverage, ‘‘(i) the amount of the taxes imposed by the end the following: $1,000, and sections 3101, 3111, 3201(a), and 3221(a) on ‘‘(C) MARRIAGE PENALTY REDUCTION.—Sole- ‘‘(B) in the case of family coverage, $2,000. amounts received by the taxpayer during the ly for purposes of applying subsection ‘‘(2) LIMITATION BASED ON EMPLOYEE COM- calendar year in which the taxable year be- (a)(2)(B), earned income for any taxable year PENSATION.—The payments taken into ac- gins, shall be reduced by an amount equal to the count under subsection (a) for any taxable ‘‘(ii) the taxes imposed by section 1401 on amount of the deduction allowed to the tax- year shall not exceed the taxpayer’s wages, the self-employment income of the taxpayer payer for such taxable year under section salaries, tips, and other employee compensa- for the taxable year, and 222.’’ tion includible in gross income for such tax- ‘‘(iii) the taxes imposed by section (d) CLERICAL AMENDMENT.—The table of able year. 3211(a)(1) on amounts received by the tax- sections for part VII of subchapter B of chap- ‘‘(3) LIMITATION BASED ON OTHER COV- payer during the calendar year in which the ter 1 is amended by striking the item relat- ERAGE.—Subsection (a) shall not apply to— taxable year begins. ing to section 222 and inserting the fol- ‘‘(A) any taxpayer for any calendar month ‘‘(B) COORDINATION WITH SPECIAL REFUND OF lowing: for which the taxpayer is eligible to partici- SOCIAL SECURITY TAXES.—The term ‘social se- ‘‘Sec. 222. Deduction for married couples to pate in any subsidized health plan main- curity taxes’ shall not include any taxes to eliminate the marriage penalty. tained by any employer of the taxpayer or of the extent the taxpayer is entitled to a spe- the spouse of the taxpayer, or cial refund of such taxes under section ‘‘Sec. 223. Cross reference.’’ ‘‘(B) amounts paid for coverage under any 6413(c). (e) EFFECTIVE DATE.—The amendments medical care program described in— ‘‘(C) SPECIAL RULE.—Any amounts paid made by this section shall apply to taxable ‘‘(i) title XVIII, XIX, or XXI of the Social pursuant to an agreement under section years beginning after December 31, 2000. Security Act, 3121(l) (relating to agreements entered into TITLE II—HEALTH CARE AFFORDABILITY ‘‘(ii) chapter 55 of title 10, United States by American employers with respect to for- AND ACCESSIBILITY Code, eign affiliates) which are equivalent to the SEC. 201. DEDUCTION FOR 100 PERCENT OF ‘‘(iii) chapter 17 of title 38, United States taxes referred to in subparagraph (A)(i) shall HEALTH INSURANCE COSTS OF Code, be treated as taxes referred to in such sub- SELF-EMPLOYED INDIVIDUALS. ‘‘(iv) chapter 89 of title 5, United States paragraph. (a) IN GENERAL.—Paragraph (1) of section Code, or ‘‘(f) COORDINATION WITH OTHER PROVI- 162(l) is amended to read as follows: ‘‘(v) the Indian Health Care Improvement SIONS.— ‘‘(1) ALLOWANCE OF DEDUCTION.—In the case Act. ‘‘(1) DEDUCTION FOR MEDICAL EXPENSES.— of an individual who is an employee within Subparagraph (B)(iv) shall not apply to The amount taken into account in com- the meaning of section 401(c)(1), there shall coverage which is comparable to continu- puting the credit under subsection (a) shall be allowed as a deduction under this section ation coverage under section 4980B. not be taken into account in computing the S9566 CONGRESSIONAL RECORD — SENATE July 28, 1999 amount allowable to the taxpayer as a de- the case of a qualified long-term care insur- ‘‘SEC. 24. FAMILY CARE CREDIT.’’ duction under section 213(a). ance contract (as so defined), only eligible (C) The table of sections for subpart A of ‘‘(2) DEDUCTION FOR HEALTH INSURANCE long-term care premiums (as defined in sec- part IV of subchapter A of chapter 1 is COSTS OF SELF-EMPLOYED INDIVIDUALS.—No tion 213(d)(10)) may be taken into account amended by striking the item relating to amount taken into account under section under subsection (a). section 24 and inserting the following new 162(l) may be taken into account under this ‘‘(e) SPECIAL RULES.—For purposes of this item: section. section— ‘‘Sec. 24. Family care credit.’’. ‘‘(g) EXPENSES MUST BE SUBSTANTIATED.— ‘‘(1) COORDINATION WITH DEDUCTION FOR (b) DEFINITIONS.—Section 24(c) (defining A payment for insurance to which subsection HEALTH INSURANCE COSTS OF SELF-EMPLOYED qualifying child) is amended to read as fol- (a) applies may be taken into account under INDIVIDUALS.—The amount taken into ac- lows: this section only if the taxpayer substan- count by the taxpayer in computing the de- ‘‘(c) DEFINITIONS.—For purposes of this tiates such payment in such form as the Sec- duction under section 162(l) shall not be section— retary may prescribe. taken into account under this section. ‘‘(1) QUALIFYING CHILD.— ‘‘(h) SECTION NOT TO APPLY TO LONG-TERM ‘‘(2) COORDINATION WITH MEDICAL EXPENSE ‘‘(A) IN GENERAL.—The term ‘qualifying CARE INSURANCE.—This section shall not DEDUCTION.—The amount taken into account child’ means any individual if— apply to insurance which constitutes med- by the taxpayer in computing the deduction ‘‘(i) the taxpayer is allowed a deduction ical care by reason of section 213(d)(1)(C).’’ under this section shall not be taken into ac- under section 151 with respect to such indi- (b) CLERICAL AMENDMENT.—The table of count under section 213. vidual for the taxable year, sections for subpart C of part IV of sub- ‘‘(f) REGULATIONS.—The Secretary shall ‘‘(ii) such individual has not attained the chapter A of chapter 1 is amended by strik- prescribe such regulations as may be appro- age of 17 as of the close of the calendar year ing the last item and inserting the following priate to carry out this section, including in which the taxable year of the taxpayer be- new items: regulations requiring employers to report to gins, and their employees and the Secretary such in- ‘‘(iii) such individual bears a relationship ‘‘Sec. 35. Health insurance costs of employ- formation as the Secretary determines to be ees. to the taxpayer described in section appropriate.’’ 32(c)(3)(B). ‘‘Sec. 36. Overpayments of tax.’’ (b) DEDUCTION ALLOWED WHETHER OR NOT ‘‘(B) EXCEPTION FOR CERTAIN NONCITIZENS.— (c) EFFECTIVE DATE.—The amendments TAXPAYER ITEMIZES OTHER DEDUCTIONS.— The term ‘qualifying child’ shall not include made by this section shall apply to taxable Subsection (a) of section 62 is amended by in- any individual who would not be a dependent years beginning after December 31, 2002. serting after paragraph (17) the following if the first sentence of section 152(b)(3) were new item: SEC. 203. DEDUCTION FOR PREMIUMS FOR LONG- applied without regard to all that follows ‘‘(18) LONG-TERM CARE INSURANCE COSTS.— TERM CARE INSURANCE. ‘resident of the United States’. The deduction allowed by section 222.’’ (a) IN GENERAL.—Part VII of subchapter B ‘‘(2) APPLICABLE INDIVIDUAL.— (c) CLERICAL AMENDMENT.—The table of of chapter 1 is amended by redesignating sec- ‘‘(A) IN GENERAL.—The term ‘applicable in- sections for part VII of subchapter B of chap- tion 222 as section 223 and by inserting after dividual’ means, with respect to any taxable ter 1 is amended by striking the last item section 221 the following new section: year, any individual who has been certified, and inserting the following new items: ‘‘SEC. 222. PREMIUMS FOR LONG-TERM CARE IN- before the due date for filing the return of SURANCE. ‘‘Sec. 222. Long-term care insurance costs. tax for the taxable year (without exten- ‘‘(a) IN GENERAL.—In the case of an indi- ‘‘Sec. 223. Cross reference.’’ sions), by a physician (as defined in section vidual, there shall be allowed as a deduction (c) EFFECTIVE DATE.—The amendments 1861(r)(1) of the Social Security Act) as being an amount equal to the applicable percent- made by this section shall apply to taxable an individual with long-term care needs de- age of the amount paid during the taxable years beginning after December 31, 2000. scribed in subparagraph (B) for a period— year for any qualified long-term care insur- SEC. 204. LONG-TERM CARE TAX CREDIT. ‘‘(i) which is at least 180 consecutive days, ance contract (as defined in section 7702B(b)) (a) ALLOWANCE OF CREDIT.— and which constitutes medical care for the tax- (1) IN GENERAL.—Section 24(a) (relating to ‘‘(ii) a portion of which occurs within the payer, his spouse, and dependents. allowance of child tax credit) is amended to taxable year. ‘‘(b) APPLICABLE PERCENTAGE.—For pur- read as follows: Such term shall not include any individual poses of subsection (a), the applicable per- ‘‘(a) ALLOWANCE OF CREDIT.— otherwise meeting the requirements of the centage shall be determined in accordance 1 ‘‘(1) IN GENERAL.—There shall be allowed as preceding sentence unless within the 39- ⁄2 with the following table: a credit against the tax imposed by this month period ending on such due date (or ‘‘For taxable years beginning The applicable chapter for the taxable year an amount such other period as the Secretary pre- in calendar year— percentage is— equal to the sum of— scribes) a physician (as so defined) has cer- 2001 and 2002 ...... 10 ‘‘(A) $500 multiplied by the number of tified that such individual meets such re- 2003 and 2004 ...... 25 qualifying children of the taxpayer, plus quirements. 2005 and 2006 ...... 35 ‘‘(B) the applicable dollar amount multi- ‘‘(B) INDIVIDUALS WITH LONG-TERM CARE 2007 and thereafter ...... 50. plied by the number of applicable individuals NEEDS.—An individual is described in this ‘‘(c) LIMITATION BASED ON COVERAGE UNDER with respect to whom the taxpayer is an eli- subparagraph if the individual meets any of CERTAIN SUBSIDIZED EMPLOYER PLANS.— gible caregiver for the taxable year.’’ the following requirements: ‘‘(1) IN GENERAL.—Subsection (a) shall not ‘‘(2) APPLICABLE DOLLAR AMOUNT.—For pur- ‘‘(i) The individual is at least 6 years of age apply to any taxpayer for any calendar poses of paragraph (1)(B), the applicable dol- and— month for which the taxpayer participates in lar amount for taxable years beginning in ‘‘(I) is unable to perform (without substan- any plan which includes coverage for quali- any calendar year shall be determined in ac- tial assistance from another individual) at fied long-term care services (as so defined) or cordance with the following table: least 3 activities of daily living (as defined in is a qualified long-term care insurance con- Applicable section 7702B(c)(2)(B)) due to a loss of func- tract (as so defined) maintained by any em- ‘‘Calendar year: dollar amount: tional capacity, or ployer of the taxpayer or of the spouse of the 2003, 2004, or 2005 ...... $250 ‘‘(II) requires substantial supervision to taxpayer if 50 percent or more of the cost of 2006 or 2007 ...... $500 protect such individual from threats to coverage under such plan (determined under 2008 and thereafter ...... $1,000.’’ health and safety due to severe cognitive im- section 4980B) is paid or incurred by the em- (2) ADDITIONAL CREDIT FOR TAXPAYER WITH 3 pairment and is unable to perform at least 1 ployer. OR MORE SEPARATE CREDIT AMOUNTS.—So activity of daily living (as so defined) or to ‘‘(2) EMPLOYER CONTRIBUTIONS TO CAFE- much of section 24(d) as precedes paragraph the extent provided in regulations prescribed TERIA PLANS OR FLEXIBLE SPENDING ARRANGE- (1)(A) thereof is amended to read as follows: by the Secretary (in consultation with the MENTS.—Employer contributions to a cafe- ‘‘(d) ADDITIONAL CREDIT FOR TAXPAYERS Secretary of Health and Human Services), is teria plan or a flexible spending or similar WITH 3 OR MORE SEPARATE CREDIT unable to engage in age appropriate activi- arrangement which are excluded from gross AMOUNTS.— ties. income under section 106 shall be treated for ‘‘(1) IN GENERAL.—If the sum of the number ‘‘(ii) The individual is at least 2 but not 6 purposes of paragraph (1) as paid by the em- of qualifying children of the taxpayer and years of age and is unable due to a loss of ployer. the number of applicable individuals with re- functional capacity to perform (without sub- ‘‘(3) AGGREGATION OF PLANS OF EMPLOYER.— spect to which the taxpayer is an eligible stantial assistance from another individual) A plan which is not otherwise described in caregiver is 3 or more for any taxable year, at least 2 of the following activities: eating, paragraph (1) shall be treated as described in the aggregate credits allowed under subpart transferring, or mobility. such paragraph if such plan would be so de- C shall be increased by the lesser of—’’. ‘‘(iii) The individual is under 2 years of age scribed if all such plans of persons treated as (3) CONFORMING AMENDMENTS.— and requires specific durable medical equip- a single employer under subsections (b), (c), (A) The heading for section 32(n) is amend- ment by reason of a severe health condition (m), or (o) of section 414 were treated as one ed by striking ‘‘CHILD’’ and inserting ‘‘FAM- or requires a skilled practitioner trained to plan. ILY CARE’’. address the individual’s condition to be ‘‘(d) DEDUCTION LIMITED TO QUALIFIED (B) The heading for section 24 is amended available if the individual’s parents or LONG-TERM CARE INSURANCE CONTRACTS.—In to read as follows: guardians are absent. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9567

‘‘(3) ELIGIBLE CAREGIVER.— SEC. 205. CREDIT FOR CLINICAL TESTING RE- ing with the taxable year immediately pre- ‘‘(A) IN GENERAL.—A taxpayer shall be SEARCH EXPENSES ATTRIBUTABLE ceding the first taxable year of the taxpayer treated as an eligible caregiver for any tax- TO CERTAIN QUALIFIED ACADEMIC beginning after December 31, 2000. INSTITUTIONS INCLUDING TEACH- ‘‘(d) SPECIAL RULES.— able year with respect to the following indi- ING HOSPITALS. viduals: ‘‘(1) LIMITATION ON FOREIGN TESTING.—No (a) IN GENERAL.—Subpart D of part IV of credit shall be allowed under this section ‘‘(i) The taxpayer. subchapter A of chapter 1 (relating to busi- with respect to any clinical testing research ‘‘(ii) The taxpayer’s spouse. ness related credits) is amended by inserting activities conducted outside the United ‘‘(iii) An individual with respect to whom after section 41 the following: the taxpayer is allowed a deduction under States. ‘‘SEC. 41A. CREDIT FOR MEDICAL INNOVATION ‘‘(2) CERTAIN RULES MADE APPLICABLE.— section 151 for the taxable year. EXPENSES. Rules similar to the rules of subsections (f) ‘‘(iv) An individual who would be described ‘‘(a) GENERAL RULE.—For purposes of sec- and (g) of section 41 shall apply for purposes in clause (iii) for the taxable year if section tion 38, the medical innovation credit deter- of this section. 151(c)(1)(A) were applied by substituting for mined under this section for the taxable year ‘‘(3) ELECTION.—This section shall apply to the exemption amount an amount equal to shall be an amount equal to 40 percent of the any taxpayer for any taxable year only if the sum of the exemption amount, the stand- excess (if any) of— such taxpayer elects to have this section ard deduction under section 63(c)(2)(C), and ‘‘(1) the qualified medical innovation ex- apply for such taxable year. any additional standard deduction under sec- penses for the taxable year, over ‘‘(4) COORDINATION WITH CREDIT FOR IN- tion 63(c)(3) which would be applicable to the ‘‘(2) the medical innovation base period individual if clause (iii) applied. amount. CREASING RESEARCH EXPENDITURES AND WITH CREDIT FOR CLINICAL TESTING EXPENSES FOR ‘‘(v) An individual who would be described ‘‘(b) QUALIFIED MEDICAL INNOVATION EX- CERTAIN DRUGS FOR RARE DISEASES.—Any in clause (iii) for the taxable year if— PENSES.—For purposes of this section— qualified medical innovation expense for a ‘‘(I) the requirements of clause (iv) are met ‘‘(1) IN GENERAL.—The term ‘qualified med- with respect to the individual, and ical innovation expenses’ means the amounts taxable year to which an election under this ‘‘(II) the requirements of subparagraph (B) which are paid or incurred by the taxpayer section applies shall not be taken into ac- are met with respect to the individual in lieu during the taxable year directly or indirectly count for purposes of determining the credit of the support test of section 152(a). to any qualified academic institution for allowable under section 41 or 45C for such ‘‘(B) RESIDENCY TEST.—The requirements clinical testing research activities. taxable year. ‘‘(e) TERMINATION.—This section shall not of this subparagraph are met if an individual ‘‘(2) CLINICAL TESTING RESEARCH ACTIVI- apply to any expense paid or incurred after has as his principal place of abode the home TIES.— the date specified in section 41(h)(1)(B).’’ of the taxpayer and— ‘‘(A) IN GENERAL.—The term ‘clinical test- (b) CREDIT TO BE PART OF GENERAL BUSI- ‘‘(i) in the case of an individual who is an ing research activities’ means human clin- NESS CREDIT.— ancestor or descendant of the taxpayer or ical testing conducted at any qualified aca- (1) IN GENERAL.—Section 38(b) (relating to the taxpayer’s spouse, is a member of the demic institution in the development of any current year business credits) is amended by taxpayer’s household for over half the tax- product, which occurs before— striking ‘‘plus’’ at the end of paragraph (11), able year, or ‘‘(i) the date on which an application with by striking the period at the end of para- ‘‘(ii) in the case of any other individual, is respect to such product is approved under graph (12) and inserting ‘‘, plus’’, and by add- a member of the taxpayer’s household for the section 505(b), 506, or 507 of the Federal Food, ing at the end the following: entire taxable year. Drug, and Cosmetic Act, ‘‘(13) the medical innovation expenses cred- ‘‘(C) SPECIAL RULES WHERE MORE THAN 1 ELI- ‘‘(ii) the date on which a license for such it determined under section 41A(a).’’ GIBLE CAREGIVER.— product is issued under section 351 of the (2) TRANSITION RULE.—Section 39(d) is ‘‘(i) IN GENERAL.—If more than 1 individual Public Health Service Act, or amended by adding at the end the following is an eligible caregiver with respect to the ‘‘(iii) the date classification or approval of new paragraph: same applicable individual for taxable years such product which is a device intended for ‘‘(9) NO CARRYBACK OF SECTION 41A CREDIT ending with or within the same calendar human use is given under section 513, 514, or BEFORE ENACTMENT.—No portion of the un- year, a taxpayer shall be treated as the eligi- 515 of the Federal Food, Drug, and Cosmetic used business credit for any taxable year ble caregiver if each such individual (other Act. which is attributable to the medical innova- than the taxpayer) files a written declara- ‘‘(B) PRODUCT.—The term ‘product’ means tion credit determined under section 41A tion (in such form and manner as the Sec- any drug, biologic, or medical device. may be carried back to a taxable year begin- retary may prescribe) that such individual ‘‘(3) QUALIFIED ACADEMIC INSTITUTION.—The ning before January 1, 1999.’’ will not claim such applicable individual for term ‘qualified academic institution’ means (c) DENIAL OF DOUBLE BENEFIT.—Section the credit under this section. any of the following institutions: 280C is amended by adding at the end the fol- ‘‘(ii) NO AGREEMENT.—If each individual re- ‘‘(A) EDUCATIONAL INSTITUTION.—A quali- lowing new subsection: quired under clause (i) to file a written dec- fied organization described in section ‘‘(d) CREDIT FOR INCREASING MEDICAL INNO- laration under clause (i) does not do so, the 170(b)(1)(A)(iii) which is owned or affiliated VATION EXPENSES.— individual with the highest modified ad- with an institution of higher education as ‘‘(1) IN GENERAL.—No deduction shall be al- justed gross income (as defined in section described in section 3304(f). lowed for that portion of the qualified med- 32(c)(5)) shall be treated as the eligible care- ‘‘(B) TEACHING HOSPITAL.—A teaching hos- ical innovation expenses (as defined in sec- giver. pital which— tion 41A(b)) otherwise allowable as a deduc- ‘‘(iii) MARRIED INDIVIDUALS FILING SEPA- ‘‘(i) is publicly supported or owned by an tion for the taxable year which is equal to RATELY.—In the case of married individuals organization described in section 501(c)(3), the amount of the credit determined for such filing separately, the determination under and taxable year under section 41A(a). this subparagraph as to whether the husband ‘‘(ii) is affiliated with an organization ‘‘(2) CERTAIN RULES TO APPLY.—Rules simi- or wife is the eligible caregiver shall be made meeting the requirements of subparagraph lar to the rules of paragraphs (2), (3), and (4) under the rules of clause (ii) (whether or not (A). of subsection (c) shall apply for purposes of one of them has filed a written declaration ‘‘(C) FOUNDATION.—A medical research or- this subsection.’’ under clause (i)).’’ ganization described in section 501(c)(3) (d) DEDUCTION FOR UNUSED PORTION OF (other than a private foundation) which is af- (c) IDENTIFICATION REQUIREMENTS.— CREDIT.—Section 196(c) (defining qualified filiated with, or owned by— (1) IN GENERAL.—Section 24(e) is amended business credits) is amended by redesig- by adding at the end the following new sen- ‘‘(i) an organization meeting the require- nating paragraphs (5) through (8) as para- tence: ‘‘No credit shall be allowed under this ments of subparagraph (A), or graphs (6) through (9), respectively, and by section to a taxpayer with respect to any ap- ‘‘(ii) a teaching hospital meeting the re- inserting after paragraph (4) the following plicable individual unless the taxpayer in- quirements of subparagraph (B). new paragraph: cludes the name and taxpayer identification ‘‘(D) CHARITABLE RESEARCH HOSPITAL.—A ‘‘(5) the medical innovation expenses credit number of such individual, and the identi- hospital that is designated as a cancer center determined under section 41A(a) (other than fication number of the physician certifying by the National Cancer Institute. such credit determined under the rules of such individual, on the return of tax for the ‘‘(4) EXCLUSION FOR AMOUNTS FUNDED BY section 280C(d)(2)),’’. GRANTS, ETC.—The term ‘qualified medical taxable year.’’ (e) CLERICAL AMENDMENT.—The table of (2) ASSESSMENT.—Section 6213(g)(2)(I) is innovation expenses’ shall not include any sections for subpart D of part IV of sub- amended— amount to the extent such amount is funded chapter A of chapter 1 is amended by adding (A) by inserting ‘‘or physician identifica- by any grant, contract, or otherwise by an- after the item relating to section 41 the fol- tion’’ after ‘‘correct TIN’’, and other person (or any governmental entity). lowing: (B) by striking ‘‘child’’ and inserting ‘‘fam- ‘‘(c) MEDICAL INNOVATION BASE PERIOD ‘‘Sec. 41A. Credit for medical innovation ex- ily care’’. AMOUNT.—For purposes of this section, the term ‘medical innovation base period penses.’’ (d) EFFECTIVE DATE.—The amendments amount’ means the average annual qualified (f) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable medical innovation expenses paid by the tax- made by this section shall apply to taxable years beginning after December 31, 2002. payer during the 3-taxable year period end- years beginning after December 31, 2000. S9568 CONGRESSIONAL RECORD — SENATE July 28, 1999 SEC. 206. TREATMENT OF CERTAIN HOSPITAL ‘‘In the case of estates of ‘‘(ii) 20 percent of the taxpayer’s tentative SUPPORT ORGANIZATIONS AS decedents The applicable minimum tax. QUALIFIED ORGANIZATIONS FOR dying, and gifts made, exclusion amount ‘‘(iii) The excess (if any) of the amount PURPOSES OF DETERMINING ACQUI- during: is: SITION INDEBTEDNESS. under paragraph (1)(B) over the amount 2000 and 2001 ...... $675,000 under paragraph (1)(A). (a) IN GENERAL.—Subparagraph (C) of sec- 2002 ...... $700,000 tion 514(c)(9) is amended by striking ‘‘or’’ at ‘‘(C) LONG-TERM UNUSED MINIMUM TAX CRED- 2003 ...... $740,000 IT.—For purposes of this paragraph— the end of clause (ii), by striking the period 2004 and thereafter ... $1,000,000.’’ ‘‘(i) IN GENERAL.—The long-term unused at the end of clause (iii) and inserting ‘‘; or’’, (b) EFFECTIVE DATE.—The amendment minimum tax credit for any taxable year is and by adding at the end the following new made by this section shall apply to the es- the portion of the minimum tax credit deter- clause: tates of decedents dying, and gifts made, mined under subsection (b) attributable to ‘‘(iv) a qualified hospital support organiza- after December 31, 1999. tion (as defined in subparagraph (I)).’’ the adjusted net minimum tax for taxable SEC. 302. INCREASE IN ESTATE TAX DEDUCTION (b) QUALIFIED HOSPITAL SUPPORT ORGANI- years beginning after 1986 and before 2000 and FOR FAMILY-OWNED BUSINESS IN- which ended before the 5th taxable year im- ZATIONS.—Paragraph (9) of section 514(c) is TEREST. amended by adding at the end the following mediately preceding the taxable year for (a) IN GENERAL.—Section 2057(a)(2) (relat- which the determination is being made. new subparagraph: ing to maximum deduction) is amended by ‘‘(I) QUALIFIED HOSPITAL SUPPORT ORGANI- ‘‘(ii) FIRST-IN, FIRST-OUT ORDERING RULE.— striking ‘‘$675,000’’ and inserting ‘‘$1,125,000’’. ZATIONS.—For purposes of subparagraph For purposes of clause (i), credits shall be (b) CONFORMING AMENDMENTS.—Section (C)(iv), the term ‘qualified hospital support 2057(a)(3)(B) (relating to coordination with treated as allowed under subsection (a) on a organization’ means, with respect to any in- unified credit) is amended by striking first-in, first-out basis.’’ debtedness, a support organization (as de- (b) CONFORMING AMENDMENTS.—Section ‘‘$675,000’’ each place it appears in the text fined in section 509(a)(3)) which supports a 53(c) (as in effect before the amendment and heading and inserting ‘‘$1,125,000’’. hospital described in section 170(b)(1)(A)(iii) made by subsection (a)) is amended— (c) EFFECTIVE DATE.—The amendments and with respect to which— made by this section shall apply to estates of (1) by striking ‘‘The’’ and inserting the fol- ‘‘(i) more than half of its assets (by value) decedents dying after December 31, 2002. lowing: at any time since its organization— ‘‘(1) IN GENERAL.—The’’; and ‘‘(I) were acquired, directly or indirectly, TITLE IV—ALTERNATIVE MINIMUM TAX (2) by redesignating paragraphs (1) and (2) by gift or devise, and REFORMS as subparagraphs (A) and (B), respectively. ‘‘(II) consisted of real property, SEC. 401. ALLOWANCE OF NONREFUNDABLE PER- (c) EFFECTIVE DATE.—The amendments ‘‘(ii) the fair market value of the organiza- SONAL CREDITS FULLY AGAINST made by this section shall apply to taxable tion’s unimproved real estate acquired, di- REGULAR TAX LIABILITY. years beginning after December 31, 2000. The second sentence of section 26(a) (relat- rectly or indirectly, by gift or devise, exceed- TITLE V—EXTENSION OF EXPIRING ing to limitations based on amount of tax) is ed 10 percent of the fair market value of all INCENTIVES investment assets held by the organization amended by striking ‘‘1998’’ and inserting ‘‘calendar years 1998 through 2003’’. SEC. 501. WORK OPPORTUNITY CREDIT AND WEL- immediately prior to the time that the in- FARE-TO-WORK CREDIT. SEC. 402. REPEAL OF FOREIGN TAX CREDIT LIMI- debtedness was incurred, and (a) TEMPORARY EXTENSION.—Sections ‘‘(iii) no member of the organization’s gov- TATION UNDER ALTERNATIVE MIN- IMUM TAX. 51(c)(4)(B) and 51A(f) (relating to termi- erning body was a disqualified person (as de- nation) are each amended by striking ‘‘June fined in section 4946 but not including any (a) IN GENERAL.—Section 59(a) (relating to alternative minimum tax foreign tax credit) 30, 1999’’ and inserting ‘‘June 30, 2001’’. foundation manager) at any time during the (b) CLARIFICATION OF FIRST YEAR OF EM- is amended by striking paragraph (2) and by taxable year in which the indebtedness was PLOYMENT.—Paragraph (2) of section 51(i) is redesignating paragraphs (3) and (4) as para- incurred. amended by striking ‘‘during which he was graphs (2) and (3), respectively. In the case of any refinancing not in excess not a member of a targeted group’’. (b) CONFORMING AMENDMENT.—Section of the indebtedness being refinanced, the de- (c) EFFECTIVE DATE.—The amendments 53(d)(1)(B)(i)(II) is amended by striking ‘‘and terminations under clauses (ii) and (iii) shall made by this section shall apply to individ- if section 59(a)(2) did not apply’’. be made by reference to the earliest date in- uals who begin work for the employer after (c) EFFECTIVE DATE.—The amendments debtedness meeting the requirements of this June 30, 1999. made by this section shall apply to taxable subparagraph (and involved in the chain of years beginning after December 31, 2000. SEC. 502. ELECTRICITY PRODUCED FROM CER- indebtedness being refinanced) was in- TAIN NONRENEWABLE RESOURCES curred.’’ SEC. 403. INCOME AVERAGING FOR FARMERS CREDIT. NOT TO INCREASE ALTERNATIVE (c) EFFECTIVE DATE.—The amendments (a) TEMPORARY EXTENSION.—Section MINIMUM TAX LIABILITY. made by this section shall apply to indebted- 45(c)(3) (relating to qualified facility) is (a) IN GENERAL.—Section 55(c) of the Inter- ness incurred in taxable years beginning amended by striking ‘‘1999’’ and inserting nal Revenue Code of 1986 (defining regular after December 31, 2000. ‘‘2001’’. tax) is amended by redesignating paragraph SECTION 207. TECHNICAL AMENDMENTS RE- (b) EFFECTIVE DATE.—The amendment LATED TO VACCINE INJURY COM- (2) as paragraph (3) and by inserting after made by this section shall apply to facilities PENSATION TRUST FUND. paragraph (1) the following: placed in service after June 30, 1999. ‘‘(2) COORDINATION WITH INCOME AVERAGING (a) REPEAL OF MUTUALLY CONFLICTING SEC. 503. SUBPART F EXEMPTION FOR ACTIVE FI- AMENDMENTS.— FOR FARMERS.—Solely for purposes of this NANCING INCOME. (1) IN GENERAL.—Section 1504 of Division C section, section 1301 (relating to averaging of (a) IN GENERAL.—Sections 953(e)(10) and of the Omnibus Consolidated and Emergency farm income) shall not apply in computing 954(h)(9) are each amended— Supplemental Appropriations Act, 1999 (re- the regular tax.’’ (1) by striking ‘‘the first taxable year’’ and lating to Vaccine Injury Compensation Trust (b) EFFECTIVE DATE.—The amendments inserting ‘‘taxable years’’, and Fund) is repealed. made by this section shall apply to taxable (2) by striking ‘‘January 1, 2000’’ and in- (2) EFFECT OF REPEAL.—The Internal Rev- years beginning after December 31, 2000. serting ‘‘January 1, 2002’’. enue Code of 1986 shall be applied and admin- SEC. 404. LONG-TERM UNUSED CREDITS AL- (b) EFFECTIVE DATE.—The amendment istered as if the section repealed by para- LOWED AGAINST MINIMUM TAX. made by this section shall apply to taxable graph (1) had never been enacted. (a) IN GENERAL.—Subsection (c) of section years beginning after December 31, 1999. (b) CONFORMING AMENDMENTS.—Section 53 (relating to limitation) is amended by SEC. 504. EXTENSION OF EXPENSING OF ENVI- 9510(c)(1) (relating to expenditures from adding at the end the following: RONMENTAL REMEDIATION COSTS. Trust Fund) is amended— ‘‘(2) SPECIAL RULE FOR CORPORATIONS WITH Section 198(h) (relating to termination) is (1) by striking ‘‘August 5, 1997’’ in subpara- LONG-TERM UNUSED CREDITS.— amended by striking ‘‘December 31, 2000’’ and graph (A) and inserting ‘‘October 21, 1998’’, ‘‘(A) IN GENERAL.—If— inserting ‘‘June 30, 2001’’. and ‘‘(i) a corporation to which section 56(g) SEC. 505. VIRGIN ISLANDS AND PUERTO RICO (2) by striking ‘‘$9,500,000’’ in subparagraph applies has a long-term unused minimum tax RUM COVER OVER. (B) and inserting ‘‘$10,000,000’’. credit for a taxable year, and (a) IN GENERAL.—Section 7652(f)(1) (relat- (c) EFFECTIVE DATE.—The amendments ‘‘(ii) no credit would be allowable under ing to limitation on cover over of tax on dis- made by subsection (b) shall take effect as if this section for the taxable year by reason of tilled spirits) is amended to read as follows: included in the Omnibus Consolidated and paragraph (1), ‘‘(1) $10.50 ($13.50 in the case of distilled Emergency Supplemental Appropriations then there shall be allowed a credit under spirits brought into the United States after Act, 1999. subsection (a) for the taxable year in the June 30, 1999, and before July 1, 2001), or’’. TITLE III—ESTATE TAX PROVISIONS amount determined under subparagraph (B). (b) EFFECTIVE DATE.—The amendment SEC. 301. INCREASE IN UNIFIED ESTATE AND ‘‘(B) AMOUNT OF CREDIT.—For purposes of made by this section shall take effect on GIFT TAX CREDIT. subparagraph (A), the amount of the credit July 1, 1999. (a) IN GENERAL.—The table in section shall be equal to the least of the following SEC. 506. MODIFICATIONS OF PUERTO RICAN 2010(c) of the Internal Revenue Code (relat- for the taxable year: ECONOMIC ACTIVITY CREDIT. ing to applicable credit amount) is amended ‘‘(i) The long-term unused minimum tax (a) TAXPAYERS OTHER THAN EXISTING to read as follows: credit. CLAIMANTS ELIGIBLE FOR CREDIT.—Section July 28, 1999 CONGRESSIONAL RECORD — SENATE S9569

30A(a)(2) (defining qualified domestic cor- issued during the 3-month period ending on a ‘‘(2) CERTAIN RULES TO APPLY.—In the case poration) is amended to read as follows: credit allowance date, the amount of the of a separation described in paragraph (1), ‘‘(2) QUALIFIED DOMESTIC CORPORATION.— credit determined under this subsection with the rules of section 1286 shall apply to the For purposes of paragraph (1), the term respect to such credit allowance date shall qualified public school modernization bond ‘qualified domestic corporation’ means a do- be a ratable portion of the credit otherwise as if it were a stripped bond and to the credit mestic corporation with respect to which determined based on the portion of the 3- under this section as if it were a stripped section 936(a)(4)(B) does not apply for the month period during which the bond is out- coupon. taxable year.’’ standing. A similar rule shall apply when the ‘‘(i) TREATMENT FOR ESTIMATED TAX PUR- (b) REPEAL OF BASE PERIOD CAP.—Section bond is redeemed. POSES.—Solely for purposes of sections 6654 30A(a)(1) is amended by striking the last sen- ‘‘(c) LIMITATION BASED ON AMOUNT OF and 6655, the credit allowed by this section tence. TAX.— to a taxpayer by reason of holding a quali- (c) CONFORMING AMENDMENTS.— ‘‘(1) IN GENERAL.—The credit allowed under fied public school modernization bonds on a (1) Section 30A(a)(3) is amended to read as subsection (a) for any taxable year shall not credit allowance date shall be treated as if it follows: exceed the excess of— were a payment of estimated tax made by ‘‘(3) SEPARATE APPLICATION.—For purposes ‘‘(A) the sum of the regular tax liability the taxpayer on such date. of determining the amount of the credit al- (as defined in section 26(b)) plus the tax im- ‘‘(j) CREDIT MAY BE TRANSFERRED.—Noth- lowed under this section, this section (and so posed by section 55, over ing in any law or rule of law shall be con- much of section 936 as relates to this section) ‘‘(B) the sum of the credits allowable under strued to limit the transferability of the shall be applied separately with respect to part IV of subchapter A (other than subpart credit allowed by this section through sale Puerto Rico.’’ C thereof, relating to refundable credits). and repurchase agreements. (2) Section 30A(e)(1) is amended by insert- ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the ‘‘(k) REPORTING.—Issuers of qualified pub- ing ‘‘but not including subsection (j) there- credit allowable under subsection (a) exceeds lic school modernization bonds shall submit of’’ after ‘‘thereunder’’. the limitation imposed by paragraph (1) for reports similar to the reports required under (d) EFFECTIVE DATE.—The amendments such taxable year, such excess shall be car- section 149(e). ried to the succeeding taxable year and made by this section shall apply to taxable ‘‘PART II—QUALIFIED SCHOOL added to the credit allowable under sub- years beginning after December 31, 1999, and CONSTRUCTION BONDS before January 1, 2003. section (a) for such taxable year. ‘‘(d) QUALIFIED PUBLIC SCHOOL MODERNIZA- ‘‘Sec. 1400G. Qualified school construction TITLE VI—QUALITY EDUCATION TION BOND; CREDIT ALLOWANCE DATE.—For bonds. INITIATIVES purposes of this section— ‘‘SEC. 1400G. QUALIFIED SCHOOL CONSTRUCTION SEC. 601. EXPANSION OF INCENTIVES FOR PUB- ‘‘(1) QUALIFIED PUBLIC SCHOOL MODERNIZA- BONDS. LIC SCHOOLS. TION BOND.—The term ‘qualified public ‘‘(a) QUALIFIED SCHOOL CONSTRUCTION (a) IN GENERAL.—Chapter 1 is amended by school modernization bond’ means— BOND.—For purposes of this subchapter, the adding at the end the following new sub- ‘‘(A) a qualified school construction bond, term ‘qualified school construction bond’ chapter: and means any bond issued as part of an issue ‘‘Subchapter X—Public School Modernization ‘‘(B) a qualified zone academy bond. if— Provisions ‘‘(2) CREDIT ALLOWANCE DATE.—The term ‘‘(1) 95 percent or more of the proceeds of ‘‘Part I. Credit to holders of qualified public ‘credit allowance date’ means— such issue are to be used for the construc- school modernization bonds. ‘‘(A) March 15, tion, rehabilitation, or repair of a public ‘‘(B) June 15, ‘‘Part II. Qualified school construction school facility or for the acquisition of land ‘‘(C) September 15, and bonds. on which such a facility is to be constructed ‘‘(D) December 15. with part of the proceeds of such issue, ‘‘Part III. Incentives for education zones. Such term includes the last day on which the ‘‘(2) the bond is issued by a State or local ‘‘PART I—CREDIT TO HOLDERS OF QUALI- bond is outstanding. government within the jurisdiction of which FIED PUBLIC SCHOOL MODERNIZATION ‘‘(e) OTHER DEFINITIONS.—For purposes of such school is located, BONDS this subchapter— ‘‘(3) the issuer designates such bond for ‘‘Sec. 1400F. Credit to holders of qualified ‘‘(1) LOCAL EDUCATIONAL AGENCY.—The purposes of this section, and public school modernization term ‘local educational agency’ has the ‘‘(4) the term of each bond which is part of bonds. meaning given to such term by section 14101 such issue does not exceed 15 years. of the Elementary and Secondary Education ‘‘SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED ‘‘(b) LIMITATION ON AMOUNT OF BONDS DES- PUBLIC SCHOOL MODERNIZATION Act of 1965. Such term includes the local edu- IGNATED.—The maximum aggregate face BONDS. cational agency that serves the District of amount of bonds issued during any calendar ‘‘(a) ALLOWANCE OF CREDIT.—In the case of Columbia but does not include any other year which may be designated under sub- a taxpayer who holds a qualified public State agency. section (a) by any issuer shall not exceed the school modernization bond on a credit allow- ‘‘(2) BOND.—The term ‘bond’ includes any sum of— ance date of such bond which occurs during obligation. ‘‘(1) the limitation amount allocated under the taxable year, there shall be allowed as a ‘‘(3) STATE.—The term ‘State’ includes the subsection (d) for such calendar year to such credit against the tax imposed by this chap- District of Columbia and any possession of issuer, and ter for such taxable year an amount equal to the United States. ‘‘(2) if such issuer is a large local edu- the sum of the credits determined under sub- ‘‘(4) PUBLIC SCHOOL FACILITY.—The term cational agency (as defined in subsection section (b) with respect to credit allowance ‘public school facility’ shall not include any (e)(4)) or is issuing on behalf of such an agen- dates during such year on which the tax- facility which is not owned by a State or cy, the limitation amount allocated under payer holds such bond. local government or any agency or instru- subsection (e) for such calendar year to such mentality of a State or local government. ‘‘(b) AMOUNT OF CREDIT.— agency. ‘‘(f) CREDIT INCLUDED IN GROSS INCOME.— ‘‘(1) IN GENERAL.—The amount of the credit ‘‘(c) NATIONAL LIMITATION ON AMOUNT OF Gross income includes the amount of the determined under this subsection with re- BONDS DESIGNATED.—There is a national credit allowed to the taxpayer under this spect to any credit allowance date for a section (determined without regard to sub- qualified school construction bond limita- qualified public school modernization bond is section (c)) and the amount so included shall tion for each calendar year. Such limitation 25 percent of the annual credit determined be treated as interest income. is— with respect to such bond. ‘‘(g) BONDS HELD BY REGULATED INVEST- ‘‘(1) $11,800,000,000 for 2001, ‘‘(2) ANNUAL CREDIT.—The annual credit de- MENT COMPANIES.—If any qualified public ‘‘(2) $11,800,000,000 for 2005, and termined with respect to any qualified public school modernization bond is held by a regu- ‘‘(3) except as provided in subsection (f), school modernization bond is the product lated investment company, the credit deter- zero after 2001 and before 2005, and after 2005. of— mined under subsection (a) shall be allowed ‘‘(d) SIXTY-FIVE PERCENT OF LIMITATION ‘‘(A) the applicable credit rate, multiplied to shareholders of such company under pro- ALLOCATED AMONG STATES.— by cedures prescribed by the Secretary. ‘‘(1) IN GENERAL.—Sixty-five percent of the ‘‘(B) the outstanding face amount of the ‘‘(h) CREDITS MAY BE STRIPPED.—Under limitation applicable under subsection (c) for bond. regulations prescribed by the Secretary— any calendar year shall be allocated among ‘‘(3) APPLICABLE CREDIT RATE.—For pur- ‘‘(1) IN GENERAL.—There may be a separa- the States under paragraph (2) by the Sec- poses of paragraph (1), the applicable credit tion (including at issuance) of the ownership retary. The limitation amount allocated to a rate with respect to an issue is the rate of a qualified public school modernization State under the preceding sentence shall be equal to an average market yield (as of the bond and the entitlement to the credit under allocated by the State to issuers within such day before the date of issuance of the issue) this section with respect to such bond. In State and such allocations may be made only on outstanding long-term corporate debt ob- case of any such separation, the credit under if there is an approved State application. ligations (determined under regulations pre- this section shall be allowed to the person ‘‘(2) ALLOCATION FORMULA.—The amount to scribed by the Secretary). who on the credit allowance date holds the be allocated under paragraph (1) for any cal- ‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE- instrument evidencing the entitlement to endar year shall be allocated among the DEMPTION.—In the case of a bond which is the credit and not to the holder of the bond. States in proportion to the respective S9570 CONGRESSIONAL RECORD — SENATE July 28, 1999 amounts each such State received for Basic ‘‘(ii) use its allocation under this sub- ‘‘(iii) the extent to which the agency’s Grants under subpart 2 of part A of title I of section to assist localities that lack the fis- schools offer the physical infrastructure the Elementary and Secondary Education cal capacity to issue bonds on their own, and needed to provide a high-quality education Act of 1965 (20 U.S.C. 6331 et seq.) for the ‘‘(iii) ensure that its allocation under this to all students, most recent fiscal year ending before such subsection is used only to supplement, and ‘‘(B) a description of how the local edu- calendar year. For purposes of the preceding not supplant, the amount of school construc- cational agency will use its allocation under sentence, Basic Grants attributable to large tion, rehabilitation, and repair in the State this subsection to address the needs identi- local educational agencies (as defined in sub- that would have occurred in the absence of fied under subparagraph (A), including a de- section (e)) shall be disregarded. such allocation. scription of how the agency will— ‘‘(3) MINIMUM ALLOCATIONS TO STATES.— Any allocation under paragraph (1) by a ‘‘(i) give high priority to localities with ‘‘(A) IN GENERAL.—The Secretary shall ad- State shall be binding if such State reason- the greatest needs, as demonstrated by inad- just the allocations under this subsection for ably determined that the allocation was in equate school facilities coupled with a low any calendar year for each State to the ex- accordance with the plan approved under level of resources to meet those needs, tent necessary to ensure that the sum of— this paragraph. ‘‘(ii) use its allocation under this sub- ‘‘(i) the amount allocated to such State ‘‘(e) THIRTY-FIVE PERCENT OF LIMITATION section to assist localities that lack the fis- under this subsection for such year, and ALLOCATED AMONG LARGEST SCHOOL DIS- cal capacity to issue bonds on their own, ‘‘(ii) the aggregate amounts allocated TRICTS.— ‘‘(iii) ensure that its allocation under this under subsection (e) to large local edu- ‘‘(1) IN GENERAL.—Thirty-five percent of subsection is used only to supplement, and cational agencies in such State for such the limitation applicable under subsection not supplant, the amount of school construc- year, (c) for any calendar year shall be allocated tion, rehabilitation, and repair in the State is not less than an amount equal to such under paragraph (2) by the Secretary among that would have occurred in the absence of State’s minimum percentage of the amount local educational agencies which are large such allocation, and to be allocated under paragraph (1) for the local educational agencies for such year. No ‘‘(iv) ensure that the needs of both rural calendar year. qualified school construction bond may be and urban areas are recognized, and ‘‘(B) MINIMUM PERCENTAGE.—A State’s min- issued by reason of an allocation to a large ‘‘(C) a description of how the local edu- imum percentage for any calendar year is local educational agency under the preceding cational agency will ensure that its alloca- sentence unless such agency has an approved the minimum percentage described in sec- tion under this subsection is used only to local application. tion 1124(d) of the Elementary and Secondary supplement, and not supplant, the amount of ‘‘(2) ALLOCATION FORMULA.—The amount to Education Act of 1965 (20 U.S.C. 6334(d)) for school construction, rehabilitation, or repair be allocated under paragraph (1) for any cal- such State for the most recent fiscal year in the locality that would have occurred in endar year shall be allocated among large ending before such calendar year. the absence of such allocation. local educational agencies in proportion to ‘‘(4) ALLOCATIONS TO CERTAIN POSSES- A rule similar to the rule of the last sen- the respective amounts each such agency re- SIONS.—The amount to be allocated under tence of subsection (d)(6) shall apply for pur- ceived for Basic Grants under subpart 2 of paragraph (1) to any possession of the United poses of this paragraph. part A of title I of the Elementary and Sec- States other than Puerto Rico shall be the ‘‘(f) CARRYOVER OF UNUSED LIMITATION.—If ondary Education Act of 1965 (20 U.S.C. 6331 amount which would have been allocated if for any calendar year— et seq.) for the most recent fiscal year end- all allocations under paragraph (1) were ‘‘(1) the amount allocated under subsection ing before such calendar year. made on the basis of respective populations (d) to any State, exceeds ‘‘(3) ALLOCATION OF UNUSED LIMITATION TO of individuals below the poverty line (as de- ‘‘(2) the amount of bonds issued during STATE.—The amount allocated under this fined by the Office of Management and Budg- such year which are designated under sub- subsection to a large local educational agen- et). In making other allocations, the amount section (a) pursuant to such allocation, cy for any calendar year may be reallocated to be allocated under paragraph (1) shall be the limitation amount under such subsection by such agency to the State in which such reduced by the aggregate amount allocated for such State for the following calendar agency is located for such calendar year. under this paragraph to possessions of the year shall be increased by the amount of Any amount reallocated to a State under the United States. such excess. A similar rule shall apply to the preceding sentence may be allocated as pro- ‘‘(5) ALLOCATIONS FOR INDIAN SCHOOLS.—In amounts allocated under subsection (d)(5) or vided in subsection (d)(1). addition to the amounts otherwise allocated (e). ‘‘(4) LARGE LOCAL EDUCATIONAL AGENCY.— under this subsection, $200,000,000 for cal- ‘‘(g) SPECIAL RULES RELATING TO ARBI- endar year 2001, and $200,000,000 for calendar For purposes of this section, the term ‘large TRAGE.— year 2005, shall be allocated by the Secretary local educational agency’ means, with re- ‘‘(1) IN GENERAL.—A bond shall not be spect to a calendar year, any local edu- of the Interior for purposes of the construc- treated as failing to meet the requirement of cational agency if such agency is— tion, rehabilitation, and repair of schools subsection (a)(1) solely by reason of the fact ‘‘(A) among the 100 local educational agen- funded by the Bureau of Indian Affairs. In that the proceeds of the issue of which such the case of amounts allocated under the pre- cies with the largest numbers of children bond is a part are invested for a temporary ceding sentence, Indian tribal governments aged 5 through 17 from families living below period (but not more than 36 months) until (as defined in section 7871) shall be treated as the poverty level, as determined by the Sec- such proceeds are needed for the purpose for qualified issuers for purposes of this sub- retary using the most recent data available which such issue was issued. chapter. from the Department of Commerce that are ‘‘(2) BINDING COMMITMENT REQUIREMENT.— ‘‘(6) APPROVED STATE APPLICATION.—For satisfactory to the Secretary, or Paragraph (1) shall apply to an issue only if, purposes of paragraph (1), the term ‘approved ‘‘(B) 1 of not more than 25 local edu- as of the date of issuance, there is a reason- State application’ means an application cational agencies (other than those described able expectation that— which is approved by the Secretary of Edu- in subparagraph (A)) that the Secretary of ‘‘(A) at least 10 percent of the proceeds of cation and which includes— Education determines (based on the most re- the issue will be spent within the 6-month ‘‘(A) the results of a recent publicly-avail- cent data available satisfactory to the Sec- period beginning on such date for the pur- able survey (undertaken by the State with retary) are in particular need of assistance, pose for which such issue was issued, and the involvement of local education officials, based on a low level of resources for school ‘‘(B) the remaining proceeds of the issue members of the public, and experts in school construction, a high level of enrollment will be spent with due diligence for such pur- construction and management) of such growth, or such other factors as the Sec- pose. State’s needs for public school facilities, in- retary deems appropriate. ‘‘(3) EARNINGS ON PROCEEDS.—Any earnings cluding descriptions of— ‘‘(5) APPROVED LOCAL APPLICATION.—For on proceeds during the temporary period ‘‘(i) health and safety problems at such fa- purposes of paragraph (1), the term ‘approved shall be treated as proceeds of the issue for cilities, local application’ means an application purposes of applying subsection (a)(1) and ‘‘(ii) the capacity of public schools in the which is approved by the Secretary of Edu- paragraph (1) of this subsection. State to house projected enrollments, and cation and which includes— ‘‘(iii) the extent to which the public ‘‘(A) the results of a recent publicly-avail- ‘‘PART III—INCENTIVES FOR EDUCATION schools in the State offer the physical infra- able survey (undertaken by the local edu- ZONES structure needed to provide a high-quality cational agency or the State with the in- ‘‘Sec. 1400H. Qualified zone academy bonds. education to all students, and volvement of school officials, members of the ‘‘SEC. 1400H. QUALIFIED ZONE ACADEMY BONDS. ‘‘(B) a description of how the State will al- public, and experts in school construction ‘‘(a) QUALIFIED ZONE ACADEMY BOND.—For locate to local educational agencies, or oth- and management) of such agency’s needs for purposes of this subchapter— erwise use, its allocation under this sub- public school facilities, including descrip- ‘‘(1) IN GENERAL.—The term ‘qualified zone section to address the needs identified under tions of— academy bond’ means any bond issued as subparagraph (A), including a description of ‘‘(i) the overall condition of the local edu- part of an issue if— how it will— cational agency’s school facilities, including ‘‘(A) 95 percent or more of the proceeds of ‘‘(i) give highest priority to localities with health and safety problems, such issue are to be used for a qualified pur- the greatest needs, as demonstrated by inad- ‘‘(ii) the overcrowded conditions of the pose with respect to a qualified zone acad- equate school facilities coupled with a low agency’s schools and the capacity of such emy established by a local educational agen- level of resources to meet those needs, schools to house projected enrollments, and cy, July 28, 1999 CONGRESSIONAL RECORD — SENATE S9571 ‘‘(B) the bond is issued by a State or local ‘‘(A) constructing, rehabilitating, or re- in the case of any interest described in sub- government within the jurisdiction of which pairing the public school facility in which paragraph (A) of this paragraph, subsection such academy is located, the academy is established, (b)(4) of this section shall be applied without ‘‘(C) the issuer— ‘‘(B) acquiring the land on which such fa- regard to subparagraphs (A), (H), (I), (J), (K), ‘‘(i) designates such bond for purposes of cility is to be constructed with part of the and (L)(i). this section, proceeds of such issue, ‘‘(C) REGULATORY AUTHORITY.—The Sec- ‘‘(ii) certifies that it has written assur- ‘‘(C) providing equipment for use at such retary may prescribe such regulations as are ances that the private business contribution academy, necessary or appropriate to carry out the requirement of paragraph (2) will be met ‘‘(D) developing course materials for edu- purposes of this paragraph, including regula- with respect to such academy, and cation to be provided at such academy, and tions which require more frequent or more ‘‘(iii) certifies that it has the written ap- ‘‘(E) training teachers and other school detailed reporting.’’ proval of the local educational agency for personnel in such academy. (c) CONFORMING AMENDMENTS.— ‘‘(b) LIMITATIONS ON AMOUNT OF BONDS such bond issuance, and (1) Subchapter U of chapter 1 of the Inter- DESIGNATED.— ‘‘(D) the term of each bond which is part of nal Revenue Code of 1986 is amended by ‘‘(1) IN GENERAL.—There is a national zone such issue does not exceed 15 years. striking part IV, by redesignating part V as academy bond limitation for each calendar part IV, and by redesignating section 1397F Rules similar to the rules of section 1400G(g) year. Such limitation is— shall apply for purposes of paragraph (1). as section 1397E. ‘‘(A) $400,000,000 for 1998, (2) The table of subchapters for chapter 1 of ‘‘(2) PRIVATE BUSINESS CONTRIBUTION RE- ‘‘(B) $400,000,000 for 1999, such Code is amended by adding at the end QUIREMENT.— ‘‘(C) $400,000,000 for 2001, the following new item: ‘‘(A) IN GENERAL.—For purposes of para- ‘‘(D) $400,000,000 for 2005, and graph (1), the private business contribution ‘‘(E) except as provided in paragraph (3), ‘‘Subchapter X. Public school modernization requirement of this paragraph is met with zero after 1999 and before 2001, zero after 2001 provisions.’’ respect to any issue if the local educational and before 2005, and zero after 2005. (3) The table of parts of subchapter U of agency that established the qualified zone ‘‘(2) ALLOCATION OF LIMITATION.— chapter 1 of such Code is amended by strik- academy has written commitments from pri- ‘‘(A) ALLOCATION AMONG STATES.— ing the last 2 items and inserting the fol- vate entities to make qualified contributions ‘‘(i) 1998 and 1999 LIMITATIONS.—The na- lowing item: having a present value (as of the date of tional zone academy bond limitations for ‘‘Part IV. Regulations.’’ issuance of the issue) of not less than 10 per- calendar years 1998 and 1999 shall be allo- cent of the proceeds of the issue. cated by the Secretary among the States on (d) USE OF NET PROCEEDS.—Notwith- standing any other provision of law— ‘‘(B) QUALIFIED CONTRIBUTIONS.—For pur- the basis of their respective populations of poses of subparagraph (A), the term ‘quali- individuals below the poverty line (as de- (1) section 439(a) of the General Education fied contribution’ means any contribution fined by the Office of Management and Budg- Provisions Act shall apply with respect to (of a type and quality acceptable to the local et). the construction, reconstruction, rehabilita- tion, or repair of any school facility to the educational agency) of— ‘‘(ii) LIMITATION AFTER 1999.—The national extent funded by net proceeds obtained ‘‘(i) equipment for use in the qualified zone zone academy bond limitation for any cal- through any provision enacted or amended academy (including state-of-the-art tech- endar year after 1999 shall be allocated by by this Act, and nology and vocational equipment), the Secretary among the States in the man- (2) such net proceeds may not be used to ‘‘(ii) technical assistance in developing ner prescribed by section 1400G(d); except fund the construction, reconstruction, reha- curriculum or in training teachers in order that in making the allocation under this bilitation, or repair of any stadium or other to promote appropriate market driven tech- clause, the Secretary shall take into facility primarily used for athletic or non- nology in the classroom, account— academic events. ‘‘(iii) services of employees as volunteer ‘‘(I) Basic Grants attributable to large (e) EFFECTIVE DATE.— mentors, local educational agencies (as defined in sec- tion 1400G(e)(4)). (1) IN GENERAL.—Except as provided in ‘‘(iv) internships, field trips, or other edu- paragraph (2), the amendments made by this cational opportunities outside the academy ‘‘(II) the national zone academy bond limi- tation. section shall apply to obligations issued for students, or after December 31, 1999. ‘‘(v) any other property or service specified ‘‘(B) ALLOCATION TO LOCAL EDUCATIONAL (2) REPEAL OF RESTRICTION ON ZONE ACAD- by the local educational agency. AGENCIES.—The limitation amount allocated to a State under subparagraph (A) shall be EMY BOND HOLDERS.—In the case of bonds to ‘‘(3) QUALIFIED ZONE ACADEMY.—The term which section 1397E of the Internal Revenue ‘qualified zone academy’ means any public allocated by the State education agency to qualified zone academies within such State. Code of 1986 (as in effect before the date of school (or academic program within a public the enactment of this Act) applies, the limi- school) which is established by and operated ‘‘(C) DESIGNATION SUBJECT TO LIMITATION AMOUNT.—The maximum aggregate face tation of such section to eligible taxpayers under the supervision of a local educational (as defined in subsection (d)(6) of such sec- agency to provide education or training amount of bonds issued during any calendar year which may be designated under sub- tion) shall not apply after the date of the en- below the postsecondary level if— actment of this Act. ‘‘(A) such public school or program (as the section (a) with respect to any qualified zone SEC. 602. MODIFICATIONS TO QUALIFIED TUI- case may be) is designed in cooperation with academy shall not exceed the limitation amount allocated to such academy under TION PROGRAMS. business to enhance the academic cur- subparagraph (B) for such calendar year. (a) ELIGIBLE EDUCATIONAL INSTITUTIONS riculum, increase graduation and employ- ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If PERMITTED TO MAINTAIN QUALIFIED TUITION ment rates, and better prepare students for for any calendar year— PROGRAMS.— the rigors of college and the increasingly ‘‘(A) the limitation amount under this sub- (1) IN GENERAL.—Section 529(b)(1) (defining complex workforce, section for any State, exceeds qualified State tuition program) is amended ‘‘(B) students in such public school or pro- ‘‘(B) the amount of bonds issued during by inserting ‘‘or by 1 or more eligible edu- gram (as the case may be) will be subject to such year which are designated under sub- cational institutions’’ after ‘‘maintained by the same academic standards and assess- section (a) (or the corresponding provisions a State or agency or instrumentality there- ments as other students educated by the of prior law) with respect to qualified zone of ’’. local educational agency, academies within such State, (2) PRIVATE QUALIFIED TUITION PROGRAMS ‘‘(C) the comprehensive education plan of the limitation amount under this subsection LIMITED TO BENEFIT PLANS.—Clause (ii) of such public school or program is approved by for such State for the following calendar section 529(b)(1)(A) is amended by inserting the local educational agency, and year shall be increased by the amount of ‘‘in the case of a program established and ‘‘(D)(i) such public school is located in an such excess.’’ maintained by a State or agency or instru- empowerment zone or enterprise community (b) REPORTING.—Subsection (d) of section mentality thereof,’’ before ‘‘may make’’. (including any such zone or community des- 6049 of the Internal Revenue Code of 1986 (re- (3) CONFORMING AMENDMENTS.— ignated after the date of the enactment of lating to returns regarding payments of in- (A) Sections 72(e)(9), 135(c)(2)(C), this section), or terest) is amended by adding at the end the 135(d)(1)(D), 529, 530(b)(2)(B), 4973(e), and ‘‘(ii) there is a reasonable expectation (as following new paragraph: 6693(a)(2)(C) are each amended by striking of the date of issuance of the bonds) that at ‘‘(8) REPORTING OF CREDIT ON QUALIFIED ‘‘qualified State tuition’’ each place it ap- least 35 percent of the students attending PUBLIC SCHOOL MODERNIZATION BONDS.— pears and inserting ‘‘qualified tuition’’. such school or participating in such program ‘‘(A) IN GENERAL.—For purposes of sub- (B) The headings for sections 72(e)(9) and (as the case may be) will be eligible for free section (a), the term ‘interest’ includes 135(c)(2)(C) are each amended by striking or reduced-cost lunches under the school amounts includible in gross income under ‘‘QUALIFIED STATE TUITION’’ and inserting lunch program established under the Na- section 1400F(f) and such amounts shall be ‘‘QUALIFIED TUITION’’. tional School Lunch Act. treated as paid on the credit allowance date (C) The headings for sections 529(b) and ‘‘(4) QUALIFIED PURPOSE.—The term ‘quali- (as defined in section 1400F(d)(2)). 530(b)(2)(B) are each amended by striking fied purpose’ means, with respect to any ‘‘(B) REPORTING TO CORPORATIONS, ETC.— ‘‘QUALIFIED STATE TUITION’’ and inserting qualified zone academy— Except as otherwise provided in regulations, ‘‘QUALIFIED TUITION’’. S9572 CONGRESSIONAL RECORD — SENATE July 28, 1999 (D) The heading for section 529 is amended (g) as subsections (d), (e), and (f), respec- (a)(13) if the aggregate face amount of bonds by striking ‘‘state’’. tively. issued by the State pursuant thereto (when (E) The item relating to section 529 in the (b) CONFORMING AMENDMENT.—Section added to the aggregate face amount of bonds table of sections for part VIII of subchapter 6050S(e) is amended by striking ‘‘section previously so issued during the calendar F of chapter 1 is amended by striking 221(e)(1)’’ and inserting ‘‘section 221(d)(1)’’. year) exceeds an amount equal to the greater ‘‘State’’. (c) EFFECTIVE DATE.—The amendments of— (b) EXCLUSION FROM GROSS INCOME OF EDU- made by this subsection shall apply with re- ‘‘(i) $10 multiplied by the State population, CATION DISTRIBUTIONS FROM QUALIFIED TUI- spect to any loan interest paid after Decem- or TION PROGRAMS.— ber 31, 1999, in taxable years ending after ‘‘(ii) $5,000,000. such date. (1) IN GENERAL.—Section 529(c)(3)(B) (relat- ‘‘(B) ALLOCATION RULES.— ing to distributions) is amended to read as SEC. 604. ADDITIONAL INCREASE IN ARBITRAGE ‘‘(i) IN GENERAL.—Except as otherwise pro- follows: REBATE EXCEPTION FOR GOVERN- vided in this subparagraph, the State may ‘‘(B) DISTRIBUTIONS FOR QUALIFIED HIGHER MENTAL BONDS USED TO FINANCE EDUCATIONAL FACILITIES. allocate the amount described in subpara- EDUCATION EXPENSES.—For purposes of this (a) IN GENERAL.—Section 148(f)(4)(D)(vii) graph (A) for any calendar year in such man- paragraph— (relating to increase in exception for bonds ner as the State determines appropriate. ‘‘(i) IN-KIND DISTRIBUTIONS.—No amount financing public school capital expenditures) ‘‘(ii) RULES FOR CARRYFORWARD OF UNUSED shall be includible in gross income under is amended by striking ‘‘$5,000,000’’ the sec- LIMITATION.—A State may elect to carry for- subparagraph (A) by reason of a distribution ond place it appears and inserting ward an unused limitation for any calendar which consists of providing a benefit to the ‘‘$10,000,000’’. year for 3 calendar years following the cal- distributee which, if paid for by the dis- (b) EFFECTIVE DATE.—The amendment endar year in which the unused limitation tributee, would constitute payment of a made by subsection (a) shall apply to obliga- arose under rules similar to the rules of sec- qualified higher education expense. tions issued in calendar years beginning tion 146(f), except that the only purpose for ‘‘(ii) CASH DISTRIBUTIONS.—In the case of after December 31, 2000. which the carryforward may be elected is the distributions not described in clause (i), if— SEC. 605. TREATMENT OF QUALIFIED PUBLIC issuance of exempt facility bonds described ‘‘(I) such distributions do not exceed the EDUCATIONAL FACILITY BONDS AS in subsection (a)(13).’’ qualified higher education expenses (reduced EXEMPT FACILITY BONDS. (c) EXEMPTION FROM GENERAL STATE VOL- by expenses described in clause (i)), no (a) TREATMENT AS EXEMPT FACILITY UME CAPS.—Paragraph (3) of section 146(g) amount shall be includible in gross income, BOND.—Subsection (a) of section 142 (relating (relating to exception for certain bonds) is and to exempt facility bond) is amended by strik- amended— ‘‘(II) in any other case, the amount other- ing ‘‘or’’ at the end of paragraph (11), by (1) by striking ‘‘or (12)’’ and inserting ‘‘(12), wise includible in gross income shall be re- striking the period at the end of paragraph or (13)’’, and duced by an amount which bears the same (12) and inserting ‘‘, or’’, and by adding at (2) by striking ‘‘and environmental en- ratio to such amount as such expenses bear the end the following new paragraph: hancements of hydroelectric generating fa- to such distributions. ‘‘(13) qualified public educational facili- cilities’’ and inserting ‘‘environmental en- ‘‘(iii) EXCEPTION FOR INSTITUTIONAL PRO- ties.’’ hancements of hydroelectric generating fa- (b) QUALIFIED PUBLIC EDUCATIONAL FACILI- GRAMS.—In the case of any taxable year be- cilities, and qualified public educational fa- TIES.—Section 142 (relating to exempt facil- ginning before January 1, 2004, clauses (i) cilities’’. ity bond) is amended by adding at the end and (ii) shall not apply with respect to any (d) EXEMPTION FROM LIMITATION ON USE the following new subsection: distribution during such taxable year under FOR LAND ACQUISITION.—Section 147(h) (relat- ‘‘(k) QUALIFIED PUBLIC EDUCATIONAL FA- a qualified tuition program established and ing to certain rules not to apply to mortgage CILITIES.— maintained by 1 or more eligible educational revenue bonds, qualified student loan bonds, ‘‘(1) IN GENERAL.—For purposes of sub- institutions. and qualified 501(c)(3) bonds) is amended by section (a)(13), the term ‘qualified public ‘‘(iv) TREATMENT AS DISTRIBUTIONS.—Any adding at the end the following new para- educational facility’ means any school facil- benefit furnished to a designated beneficiary graph: ity which is— under a qualified tuition program shall be ‘‘(3) EXEMPT FACILITY BONDS FOR QUALIFIED ‘‘(A) part of a public elementary school or treated as a distribution to the beneficiary PUBLIC-PRIVATE SCHOOLS.—Subsection (c) a public secondary school, and for purposes of this paragraph. shall not apply to any exempt facility bond ‘‘(B) owned by a private, for-profit corpora- ‘‘(v) COORDINATION WITH HOPE AND LIFETIME issued as part of an issue described in section tion pursuant to a public-private partnership LEARNING CREDITS.—The total amount of 142(a)(13) (relating to qualified public edu- agreement with a State or local educational qualified higher education expenses with re- cational facilities).’’ agency described in paragraph (2). spect to an individual for the taxable year (e) CONFORMING AMENDMENT.—The heading ‘‘(2) PUBLIC-PRIVATE PARTNERSHIP AGREE- shall be reduced— for section 147(h) is amended by striking MENT DESCRIBED.—A public-private partner- ‘‘(I) as provided in section 25A(g)(2), and ‘‘MORTGAGE REVENUE BONDS, QUALIFIED STU- ship agreement is described in this para- ‘‘(II) by the amount of such expenses which DENT LOAN BONDS, AND QUALIFIED 501(c)(3) graph if it is an agreement— were taken into account in determining the BONDS’’ and inserting ‘‘CERTAIN BONDS’’. ‘‘(A) under which the corporation agrees— credit allowed to the taxpayer or any other (f) EFFECTIVE DATE.—The amendments person under section 25A. ‘‘(i) to do 1 or more of the following: con- made by this section shall apply to bonds struct, rehabilitate, refurbish, or equip a ‘‘(vi) COORDINATION WITH EDUCATION INDI- issued after December 31, 2000. school facility, and VIDUAL RETIREMENT ACCOUNTS.—If, with re- SEC. 606. PERMANENT EXTENSION OF EXCLU- spect to an individual for any taxable year— ‘‘(ii) at the end of the term of the agree- SION FOR EMPLOYER-PROVIDED ‘‘(I) the aggregate distributions to which ment, to transfer the school facility to such EDUCATIONAL ASSISTANCE. clauses (i) and (ii) and section 530(d)(2)(A) agency for no additional consideration, and (a) IN GENERAL.—Section 127 (relating to apply, exceed ‘‘(B) the term of which does not exceed the exclusion for educational assistance pro- ‘‘(II) the total amount of qualified higher last maturity date of any bond which is a grams) is amended by striking subsection education expenses otherwise taken into ac- part of the issue to be used to finance the ac- (d). count under clauses (i) and (ii) (after the ap- tivities described in subparagraph (A)(i). (b) REPEAL OF LIMITATION ON GRADUATE plication of clause (v)) for such year, ‘‘(3) SCHOOL FACILITY.—For purposes of this EDUCATION.— the taxpayer shall allocate such expenses subsection, the term ‘school facility’ (1) IN GENERAL.—The last sentence of sec- among such distributions for purposes of de- means— tion 127(c)(1) is amended by striking ‘‘, and termining the amount of the exclusion under ‘‘(A) school buildings, such term also does not include any payment clauses (i) and (ii) and section 530(d)(2)(A).’’ ‘‘(B) functionally related and subordinate for, or the provision of any benefits with re- facilities and land with respect to such build- spect to, any graduate level course of a kind (2) CONFORMING AMENDMENTS.— (A) Section 135(d)(2)(B) is amended by ings, including any stadium or other facility normally taken by an individual pursuing a striking ‘‘the exclusion under section primarily used for school events, and program leading to a law, business, medical, 530(d)(2)’’ and inserting ‘‘the exclusions ‘‘(C) any property, to which section 168 ap- or other advanced academic or professional under sections 529(c)(3)(B)(i) and 530(d)(2)’’. plies (or would apply but for section 179), for degree’’. (B) Section 221(e)(2)(A) is amended by in- use in the facility. (2) EFFECTIVE DATE.—The amendment serting ‘‘529,’’ after ‘‘135,’’. ‘‘(4) PUBLIC SCHOOLS.—For purposes of this made by paragraph (1) shall apply with re- (c) EFFECTIVE DATE.—The amendments subsection, the terms ‘elementary school’ spect to expenses relating to courses begin- made by this section shall apply to taxable and ‘secondary school’ have the meanings ning after December 31, 1999. years beginning after December 31, 1999. given such terms by section 14101 of the Ele- SEC. 607. EXPANSION OF DEDUCTION FOR COM- SEC. 603. ELIMINATION OF 60-MONTH LIMIT ON mentary and Secondary Education Act of PUTER DONATIONS TO SCHOOLS. STUDENT LOAN INTEREST DEDUC- 1965 (20 U.S.C. 8801), as in effect on the date (a) IN GENERAL.—Section 170(e)(6)(A) (re- TION. of the enactment of this subsection. lating to limit on reduction) is amended by (a) ELIMINATION OF 60-MONTH LIMIT.—Sec- ‘‘(5) ANNUAL AGGREGATE FACE AMOUNT OF inserting ‘‘(determined by substituting ‘90 tion 221 (relating to interest on education TAX-EXEMPT FINANCING.— percent’ for ‘one-half’’ in clause (i) and with- loans) is amended by striking subsection (d) ‘‘(A) IN GENERAL.—An issue shall not be out regard to clause (ii) thereof)’’ after and by redesignating subsections (e), (f), and treated as an issue described in subsection ‘‘paragraph (3)(B)’’. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9573

(b) REACQUIRED COMPUTERS ELIGIBLE FOR means expenses paid or incurred by reason of (e) EFFECTIVE DATE.—The amendments DONATION.— the participation of the employer in any in- made by this section shall apply to taxable (1) IN GENERAL.—Section 170(e)(6)(B)(iii) formation technology training program. years beginning after December 31, 2000. (defining qualified elementary or secondary ‘‘(2) INFORMATION TECHNOLOGY TRAINING educational contribution) is amended by in- PROGRAM.—The term ‘information tech- SEC. 609. CHARITABLE CONTRIBUTIONS TO CER- serting ‘‘, the person from whom the donor nology training program’ means a program— TAIN LOW INCOME SCHOOLS MAY BE reacquires the property,’’ after ‘‘the donor’’. ‘‘(A) for the training of— MADE IN NEXT TAXABLE YEAR. (2) REACQUIRED COMPUTER EQUIVALENT TO ‘‘(i) computer programmers, systems ana- (a) IN GENERAL.—Section 170(f) (relating to NEW COMPUTER.—Section 170(e)(6)(B) is lysts, and computer scientists or engineers disallowance of deduction in certain cases amended by striking ‘‘and’’ at the end of (as such occupations are defined by the Bu- and special rules) is amended by adding at clause (vi), by redesignating clause (vii) as reau of Labor Statistics), and the end the following new paragraph: clause (viii), and by inserting after clause ‘‘(ii) such other occupations as determined ‘‘(10) TIME WHEN CERTAIN CONTRIBUTIONS (vi) the following: by the Secretary, after consultation with a DEEMED MADE.— ‘‘(vii) the contribution of any reacquired working group broadly solicited by the Sec- ‘‘(A) IN GENERAL.—At the election of the computer technology or equipment is made retary and open to all interested information taxpayer, a qualified low-income school con- only after such computer technology or technology entities and trade and profes- tribution shall be deemed to be made on the equipment is refurbished to a standard sional associations, last day of the preceding taxable year if the equivalent to newly constructed computer ‘‘(B) involving a partnership of— contribution is made on account of such tax- technology or equipment, and’’. ‘‘(i) employers, and able year and is made not later than the (3) CONFORMING AMENDMENT.—Section ‘‘(ii) State training programs, school dis- time prescribed by law for filing the return 170(e)(6)(B)(ii) is amended by inserting ‘‘or tricts, university systems, tribal colleges, or for such taxable year (not including exten- reaquired’’ after ‘‘acquired’’. certified commercial information technology sions thereof). The election may be made at (c) EXTENSION OF DEDUCTION.—Section training providers, and the time of the filing of the return for such 170(e)(6)(F) (relating to termination) is ‘‘(C) at least 50 percent of the costs of table year, and shall be made and substan- amended by striking ‘‘2000’’ and inserting which is paid or incurred by the employers. tiated in such manner as the Secretary shall ‘‘2001’’. ‘‘(3) CERTIFIED COMMERCIAL INFORMATION by regulations prescribe. (d) EFFECTIVE DATE.—The amendments TECHNOLOGY TRAINING PROVIDER.—The term ‘‘(B) QUALIFIED LOW-INCOME SCHOOL CON- made by this section shall apply to contribu- ‘certified commercial information tech- TRIBUTION.—For purposes of subparagraph tions made after December 31, 1999. nology training providers’ means a private (A), the term ‘qualified low-income school SEC. 608. CREDIT FOR INFORMATION TECH- sector provider of educational products and contribution’ means a charitable contribu- NOLOGY TRAINING PROGRAM EX- services utilized for training in information tion to an educational organization de- PENSES. technology which is certified with respect (a) IN GENERAL.—Subpart D of part IV of scribed in subsection (b)(1)(A)(ii)— to— ‘‘(i) which is a public, private, or sectarian subchapter A of chapter 1 (relating to busi- ‘‘(A) the curriculum that is used for the ness-related credits) is amended by adding at school which provides elementary or sec- training, or ondary education (through grade 12), as de- the end the following: ‘‘(B) the technical knowledge of the in- ‘‘SEC. 45D. INFORMATION TECHNOLOGY TRAIN- termined under State law, and structors of such provider, ‘‘(ii) with respect to which at least 50 per- ING PROGRAM EXPENSES. by 1 or more software publishers or hardware ‘‘(a) GENERAL RULE.—For purposes of sec- cent of the students attending such school manufacturers the products of which are a tion 38, in the case of an employer, the infor- are eligible for free or reduced-cost lunches subject of the training. mation technology training program credit under the school lunch program established ‘‘(e) SMALL EMPLOYER.—For purposes of under the National School Lunch Act.’’ determined under this section is an amount this section, the term ‘small employer’ equal to 20 percent of information tech- means, with respect to any calendar year, (b) EFFECTIVE DATE.—The amendment nology training program expenses paid or in- any employer if such employer employed 200 made by this section shall apply to taxable curred by the taxpayer during the taxable or fewer employees on each business day in years beginning after December 31, 2000. year. each of 20 or more calendar weeks in such ‘‘(b) ADDITIONAL CREDIT PERCENTAGE FOR year or the preceding calendar year. SEC. 610. EXCLUSION OF NATIONAL SERVICE CERTAIN PROGRAMS.—The percentage under EDUCATIONAL AWARDS. ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No de- subsection (a) shall be increased by 5 per- duction or credit under any other provision (a) IN GENERAL.—Section 117 (relating to centage points for information technology of this chapter shall be allowed with respect qualified scholarships) is amended by adding training program expenses paid or incurred— to information technology training program ‘‘(1) by the taxpayer with respect to a pro- at the end the following: expenses (determined without regard to the gram operated in— ‘‘(e) QUALIFIED NATIONAL SERVICE EDU- limitation under subsection (c)). ‘‘(A) an empowerment zone or enterprise ‘‘(g) CERTAIN RULES MADE APPLICABLE.—For CATIONAL AWARDS.— community designated under part I of sub- purposes of this section, rules similar to the ‘‘(1) IN GENERAL.—Gross income for any chapter U, rules of section 45A(e)(2) and subsections (c), taxable year shall not include any qualified ‘‘(B) a school district in which at least 50 (d), and (e) of section 52 shall apply.’’ national service educational award. percent of the students attending schools in (b) CREDIT TO BE PART OF GENERAL BUSI- ‘‘(2) QUALIFIED NATIONAL SERVICE EDU- such district are eligible for free or reduced- NESS CREDIT.—Section 38(b) (relating to cur- CATIONAL AWARD.—For purposes of this cost lunches under the school lunch program rent year business credit), as amended by subsection— established under the National School Lunch section 205(b)(1), is amended by striking ‘‘(A) IN GENERAL.—The term ‘qualified na- Act, ‘‘plus’’ at the end of paragraph (12), by strik- tional service educational award’ means any ‘‘(C) an area designated as a disaster area ing the period at the end of paragraph (13) amount received by an individual in a tax- by the Secretary of Agriculture or by the and inserting ‘‘, plus’’, and by adding at the able year as a national service educational President under the Disaster Relief and end the following: award or other amount under section 148 of Emergency Assistance Act in the taxable ‘‘(14) the information technology training the National and Community Service Act of year or the 4 preceding taxable years, program credit determined under section 1990 (42 U.S.C. 12604) to the extent the indi- ‘‘(D) a rural enterprise community des- 45D.’’ vidual establishes that, in accordance with ignated under section 766 of the Agriculture, (c) NO CARRYBACKS.—Subsection (d) of sec- the conditions of such award or other Rural Development, Food and Drug Adminis- tion 39 (relating to carryback and amount, such award or other amount was tration, and Related Agencies Appropria- carryforward of unused credits), as amended used for qualified tuition and related ex- tions Act, 1999, by section 205(c), is amended by adding at penses (as defined in subsection (b)(2)) of the ‘‘(E) an area designated by the Secretary of the end the following: individual. Agriculture as a Rural Economic Area Part- ‘‘(10) NO CARRYBACK OF SECTION 45D CREDIT ‘‘(B) LIMITATION.—The total amount of the nership Zone, or BEFORE EFFECTIVE DATE.—No portion of the qualified tuition and related expenses (as so ‘‘(F) an area designated by the Secretary of unused business credit for any taxable year defined) which may be taken into account Agriculture as a Champion Community, or which is attributable to the information under subparagraph (A) with respect to an ‘‘(2) by a small employer. technology training program credit deter- individual shall be reduced by the amount of ‘‘(c) LIMITATION.—The amount of informa- mined under section 45D may be carried back such expenses which were taken into account tion technology training program expenses to a taxable year ending before the date of in determining the credit allowed to the tax- with respect to an individual which may be the enactment of section 45D.’’ payer or any other person under section 25A taken into account under subsection (a) for (d) CLERICAL AMENDMENT.—The table of with respect to such expenses in any taxable the taxable year shall not exceed $6,000. sections for subpart D of part IV of sub- year.’’ ‘‘(d) INFORMATION TECHNOLOGY TRAINING chapter A of chapter 1 is amended by adding PROGRAM EXPENSES.—For purposes of this (b) EFFECTIVE DATE.—The amendment at the end the following: section— made by this section shall apply to amounts ‘‘(1) IN GENERAL.—The term ‘information ‘‘Sec. 45D. Information technology training received in taxable years beginning after De- technology training program expenses’ program expenses.’’ cember 31, 1999. S9574 CONGRESSIONAL RECORD — SENATE July 28, 1999 TITLE VII—ENVIRONMENTAL ‘‘(C) the issuer— such property is included, or proposed to be CONSERVATION AND PROTECTION ‘‘(i) designates such bond for purposes of included, in the national priorities list under Subtitle A—Better America Bonds this section, section 105(a)(8)(B) of the Comprehensive En- ‘‘(ii) has a reasonable expectation that at SEC. 701. CREDIT FOR HOLDERS OF BETTER vironmental Response, Compensation, and AMERICA BONDS. least 10 percent of the proceeds of such issue Liability Act of 1980 (42 U.S.C. 9605(a)(8)(B)). (a) IN GENERAL.—Part IV of subchapter A will be spent for qualifying environmental ‘‘(E) LIMIT ON DISPOSITION OF PROPERTY.— of chapter 1 of the Internal Revenue Code of infrastructure projects within 6 months of Any disposition of any interest in property 1986 (relating to credits against tax) is the date such bonds are issued, acquired or improved in connection with a amended by adding at the end the following ‘‘(iii) certifies such proceeds will be used qualified environmental project described in with due diligence for qualified environ- new subpart: this paragraph (except a project described in mental infrastructure projects, and subparagraph (A)(v)) shall contain an option ‘‘Subpart H—Nonrefundable Credit for ‘‘(iv) has a reasonable expectation that any (recorded pursuant to applicable State or Holders of Better America Bonds property acquired or improved in connection ‘‘Sec. 54. Credit to holders of Better America with the proceeds of such issue, other than local law) to purchase such property for an bonds. property improved in connection with a amount equal to the original acquisition ‘‘SEC. 54. CREDIT TO HOLDERS OF BETTER AMER- qualified environmental infrastructure price of such property for any interested or- ICA BONDS. project described in paragraph (2)(A)(v), shall ganizations described in subparagraph ‘‘(a) ALLOWANCE OF CREDIT.—In the case of continue to be dedicated to a qualified use (B)(i)(II) if such organization purchases such a taxpayer who holds a Better America bond for a period of not less than 15 years from the property subject to a restrictive covenant re- on a credit allowance date which occurs dur- date of such issue, quiring a continued qualified use of such ing the taxable year, there shall be allowed ‘‘(D) such bond satisfies public approval re- property. as a credit against the tax imposed by this quirements similar to the requirements of ‘‘(3) TEMPORARY PERIOD EXCEPTION.— chapter for such taxable year an amount section 147(f)(2), ‘‘(A) IN GENERAL.—A bond shall not be equal to the sum of the credits determined ‘‘(E) except as provided in paragraph (4)(B), treated as failing to meet the requirement of under subsection (b) with respect to credit the payment of the principal of such issue is paragraph (1)(A) solely by reason of the fact allowance dates during such year on which secured by taxes of general applicability im- that the proceeds of the issue of which such the taxpayer holds such bonds. posed by a general purpose governmental bond is a part— ‘‘(b) AMOUNT OF CREDIT.— unit, and ‘‘(i) are invested for a reasonable tem- ‘‘(1) IN GENERAL.—The amount of the credit ‘‘(F) the term of each bond which is part of determined under this subsection with re- porary period (but not more than 36 months) such issue does not exceed 15 years. until such proceeds are needed for the pur- spect to any credit allowance date for a Bet- ‘‘(2) QUALIFIED ENVIRONMENTAL INFRA- pose for which such issue was issued, or ter America bond is an amount equal to the STRUCTURE PROJECT.— ‘‘(ii) are used within 90 days of the close of product of— ‘‘(A) IN GENERAL.—The term ‘qualified en- ‘‘(A) the credit rate determined by the Sec- vironmental infrastructure project’ means— such temporary period to redeem bonds retary under paragraph (2), multiplied by ‘‘(i) acquisition of qualified property for which are a part of such issue. ‘‘(B) the face amount of the bond held by use as open space, wetlands, public parks, or Any earnings on such proceeds during the pe- the taxpayer on the credit allowance date. greenways, or to improve access to public riod under clause (i) shall be treated as pro- ‘‘(2) DETERMINATION.—During each cal- lands by non-motorized means, ceeds of the issue for purposes of applying endar month, the Secretary shall determine ‘‘(ii) construction, rehabilitation, or repair paragraph (1)(A). a credit rate which shall apply to bonds of a visitor facility in connection with quali- ‘‘(B) INVESTMENT OF PROCEEDS.—For pur- issued during the following calendar month. fied property, including nature centers, poses of subparagraph (A), proceeds shall The credit rate for any 3-month period end- campgrounds, and hiking or biking trails, only be invested in— ing on a credit allowance date is the percent- ‘‘(iii) remediation of qualified property to ‘‘(i) Government securities, and age which the Secretary estimates will on enhance water quality by— ‘‘(ii) in the case of a sinking fund estab- average equal the yield on corporate bonds ‘‘(I) restoring natural hydrology or plant- lished by the issuer, State and local govern- outstanding on the day before the date of ing trees and streamside vegetation, ment securities issued by the Treasury. such determination. ‘‘(II) controlling erosion, ‘‘(4) SPECIAL RULES FOR PROJECTS DE- ‘‘(3) SPECIAL RULE FOR ISSUANCE AND RE- ‘‘(III) restoring wetlands, or SCRIBED IN PARAGRAPH (2)(A)(v).— DEMPTION.—In the case of a bond which is ‘‘(IV) treating conditions caused by the ‘‘(A) LIMIT ON USE OF PROCEEDS FOR issued during the 3-month period ending on a prior disposal of toxic or other waste, credit allowance date, the amount of the ‘‘(iv) acquisition of a qualified easement in PROJECT.—This subsection shall not apply to credit determined under this subsection with order to maintain the use and character of any bond issued as part of an issue if an respect to such credit allowance date shall the property in connection to which such amount of the proceeds from such issue are be a ratable portion of the credit otherwise easement is granted as open space, including used for a qualified environmental infra- determined based on the portion of the 3- an easement to allow access to public land structure project described in paragraph month period during which the bond is out- by non-motorized means, and (2)(A)(v) and involving public infrastructure standing. A similar rule shall apply when the ‘‘(v) environmental assessment and reme- in excess of an amount equal to 5 percent of bond is redeemed. diation of real property and public infra- the total amount of such proceeds used for ‘‘(c) LIMITATION BASED ON AMOUNT OF structure owned by a governmental unit and all projects described in such paragraph TAX.— located in an area where or on which there (2)(A)(v). ‘‘(1) IN GENERAL.—The credit allowed under has been a release (or threat of release) or ‘‘(B) PRIVATE USE AND REPAYMENT OF PRO- subsection (a) for any taxable year shall not disposal of any hazardous substance (within CEEDS.—In the case of proceeds of an issue exceed the excess of— the meaning of section 198), not including which are used for a qualified environmental ‘‘(A) the sum of the regular tax liability any property described in subparagraph (D). infrastructure project described in paragraph (as defined in section 26(b)) plus the tax im- ‘‘(B) QUALIFIED PROPERTY.—The term (2)(A)(v), the issue of which such bonds are a posed by section 55, over ‘qualified property’ means real property— part shall not fail to meet the requirements ‘‘(B) the sum of the credits allowable under ‘‘(i) which is, or is to be, owned by— of this subsection solely because the pro- this part (other than this subpart and sub- ‘‘(I) a governmental unit, or ceeds of a disposition of any interest in such part C). ‘‘(II) an organization described in section property are used to redeem such bonds as ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.—If 501(c)(3) and exempt from taxation under sec- long as the purchaser of such property the credit allowable under subsection (a) ex- tion 501(a) and which has as one if its pur- makes an irrevocable election not to claim ceeds the limitation imposed by paragraph poses environmental preservation, and any deduction with respect to such project (1) for such taxable year, such excess shall be ‘‘(ii) which is reasonably anticipated to be under section 198. available for use by members of the general carried to each of the 5 taxable years fol- ‘‘(5) RECAPTURE OF CREDIT AMOUNT.— public, unless such use would change the lowing the unused credit year and added to ‘‘(A) IN GENERAL.—If, during the taxable character of the property and be contrary to the credit allowable under subsection (a) for year, any bond that is part of an issue under the qualified use of the property. each such taxable year, subject to the appli- this section fails to meet the requirements of ‘‘(C) SAFE HARBOR FOR MANAGEMENT CON- cation of paragraph (1) to such taxable year. this subsection— ‘‘(d) BETTER AMERICA BOND.—For purposes TRACTS.—For purposes of subparagraph (B), ‘‘(i) such bond shall not be treated as a of this section— property shall not be treated as qualified Better America bond for such taxable year ‘‘(1) IN GENERAL.—The term ‘Better Amer- property if any rights or benefits of such ica bond’ means any bond issued as part of property inure to a private person other than and any succeeding taxable year, and an issue if— rights or benefits under a management con- ‘‘(ii) the issuer of such bond shall be liable ‘‘(A) 95 percent or more of the proceeds of tract or similar type of operating agreement for payment to the United States of the cred- such issue are to be used for a qualified envi- to which rules similar to the rules applicable it recapture amount. ronmental infrastructure project, to tax-exempt bonds apply. Such payment shall be made at such time ‘‘(B) the bond is issued by a State or local ‘‘(D) CERCLA PROPERTY.—Property is de- and in such manner as determined by the government, scribed in this subparagraph if any portion of Secretary. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9575

‘‘(B) CREDIT RECAPTURE AMOUNT.—For pur- ‘‘(g) CREDIT INCLUDED IN GROSS INCOME.— Bonds Board (in this section referred to as poses of subparagraph (A), the credit recap- Gross income includes the amount of the the ‘‘Board’’). ture amount is an amount equal to the sum credit allowed to the taxpayer under this (b) MEMBERSHIP.— of— section and the amount so included shall be (1) COMPOSITION.—The Board shall be com- ‘‘(i) the aggregate amount of credit allowed treated as interest income. posed of 12 members, as follows: with respect to such bond for the 3 preceding ‘‘(h) BONDS HELD BY REGULATED INVEST- (A) 3 members shall be individuals who are taxable years, plus MENT COMPANIES.—If any Better America not otherwise Federal officers or employees ‘‘(ii) interest (at the underpayment rate es- bond is held by a regulated investment com- and who are appointed by the President, by tablished under section 6621) on the credit pany, the credit determined under subsection and with the advice and consent of the Sen- amount from the date such credit was al- (a) shall be allowed to shareholders of such ate. lowed to the payment date under subpara- company under procedures prescribed by the (B) 2 members, not be affiliated with the graph (A). Secretary. same political party, shall be individuals ‘‘(i) CREDITS MAY BE STRIPPED.—Under reg- ‘‘(e) LIMITATIONS ON AMOUNT OF BONDS DES- who represent Governors, or other chief ex- ulations prescribed by the Secretary— IGNATED.— ecutive officers, of a State, mayors, and ‘‘(1) IN GENERAL.—There may be a separa- ‘‘(1) IN GENERAL.—There is a Better Amer- county commissioners and who are ap- tion (including at issuance) of the ownership ica bond limitation for each calendar year pointed by the President, by and with the ad- of a Better America bond and the entitle- equal to— vice and consent of the Senate. ment to the credit under this section with ‘‘(A) $1,900,000,000 for each of years 2001 (C) 1 member shall be the Administrator of respect to such bond. In case of any such sep- through 2005, and the Environmental Protection Agency or the aration, the credit under this section shall ‘‘(B) except as provided in paragraph (3), Administrator’s designee. be allowed to the person which, on the credit zero after 2005. (D) 1 member shall be the Secretary of Ag- allowance date, holds the instrument evi- ‘‘(2) ALLOCATION OF LIMITATION AMONG riculture or the Secretary’s designee. dencing the entitlement to the credit and STATES AND LOCAL GOVERNMENTS.— (E) 1 member shall be the Secretary of not to the holder of the bond. ‘‘(A) IN GENERAL.—The limitation amount Housing and Urban Development or the Sec- ‘‘(2) CERTAIN RULES TO APPLY.—In the case to be allocated under paragraph (1) for any retary’s designee. of a separation described in paragraph (1), calendar year shall be allocated among (F) 1 member shall be the Secretary of In- the rules of section 1286 shall apply to the States and local governments with an ap- terior or the Secretary’s designee. Better America bond as if it were a stripped proved application on a competitive basis by (G) 1 member shall be the Secretary of bond and to the credit under this section as the Better America Bonds Board (referred to Transportation or the Secretary’s designee. if it were a stripped coupon. in this subsection as the ‘Board’) established (H) 1 member shall be the Secretary of the ‘‘(j) TREATMENT FOR ESTIMATED TAX PUR- under section 702 of the Tax and Public Debt Treasury or the Secretary’s designee. POSES.—Solely for purposes of sections 6654 Reduction Act of 1999. and 6655, the credit allowed by this section (I) 1 member shall be the Director of the ‘‘(B) APPROVED APPLICATION.—For purposes to a taxpayer by reason of holding a Better Federal Emergency Management Agency or of subparagraph (A), the term ‘approved ap- America bond on a credit allowance date the Director’s designee. plication’ means an application which is ap- shall be treated as if it were a payment of es- (2) QUALIFICATIONS AND TERMS.— proved by the Board, and which includes timated tax made by the taxpayer on such (A) QUALIFICATIONS.—Members of the such information as the Board requires. date. Board described in paragraph (1)(A) shall be ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If ‘‘(k) CREDIT MAY BE TRANSFERRED.—Noth- appointed without regard to political affili- for any calendar year— ing in any law or rule of law shall be con- ation and solely on the basis of their profes- ‘‘(A) the limitation amount under para- strued to limit the transferability of the sional experience and expertise in 1 or more graph (1), exceeds credit allowed by this section through sale of the following areas: ‘‘(B) the aggregate limitation amount allo- and repurchase agreements. (i) Tax-exempt organizations which have as cated to States and local governments under ‘‘(l) REPORTING.—Issuers of Better America a principal purpose environmental protec- this section, bonds shall submit reports similar to the re- tion and land conservation. the limitation amount under paragraph (1) ports required under section 149(e).’’ (ii) Community planning. for the following calendar year shall be in- (b) REPORTING.—Subsection (d) of section (iii) Real estate investment and bond fi- creased by the amount of such excess. No 6049 of the Internal Revenue Code of 1986 (re- nancing. limitation amount shall be carried forward lating to returns regarding payments of in- In the aggregate, the members of the Board under this paragraph more than 3 years. terest) is amended by adding at the end the described in paragraph (1)(A) should collec- ‘‘(f) OTHER DEFINITIONS; SPECIAL RULES.— following: tively bring to bear expertise in all of the For purposes of this subpart— ‘‘(8) REPORTING OF CREDIT ON BETTER areas described in the preceding sentence. ‘‘(1) BOND.—The term ‘bond’ includes any AMERICA BONDS.— (B) TERMS.—Each member who is described obligation. ‘‘(A) IN GENERAL.—For purposes of sub- in subparagraph (A) or (B) of paragraph (1) ‘‘(2) CREDIT ALLOWANCE DATE.—The term section (a), the term ‘interest’ includes shall be appointed for a term of 3 years, ex- ‘credit allowance date’ means— amounts includible in gross income under cept that of the members first appointed— ‘‘(A) March 15, section 54(f) and such amounts shall be treat- (i) 1 member shall be appointed for a term ‘‘(B) June 15, ed as paid on the credit allowance date (as of 1 year, ‘‘(C) September 15, and defined in section 54(f)(2)). (ii) 2 members shall be appointed for a ‘‘(D) December 15. ‘‘(B) REPORTING TO CORPORATIONS, ETC.— term of 2 years, and Such term includes the last day on which the Except as otherwise provided in regulations, (iii) 2 members shall be appointed for a bond is outstanding. in the case of any interest described in sub- term of 3 years. ‘‘(3) QUALIFIED EASEMENT.—The term paragraph (A) of this paragraph, subsection (C) REAPPOINTMENT.—An individual who is ‘qualified easement’ means a perpetual (b)(4) of this section shall be applied without described in subparagraph (A) or (B) of para- easement— regard to subparagraphs (A), (H), (I), (J), (K), graph (1) may be appointed to no more than ‘‘(A) which would be a qualified conserva- and (L)(i). one 3-year term on the Board. tion contribution under section 170(h) if such ‘‘(C) REGULATORY AUTHORITY.—The Sec- (D) VACANCY.—Any vacancy on the Board easement were a contribution under such retary may prescribe such regulations as are shall be filled in the same manner as the section, and necessary or appropriate to carry out the original appointment. Any member ap- ‘‘(B) which is to be held by an entity de- purposes of this paragraph, including regula- pointed to fill a vacancy occurring before the scribed in subclause (I) or (II) of subsection tions which require more frequent or more expiration of the term for which the mem- (d)(2)(B)(i). detailed reporting.’’ ber’s predecessor was appointed shall be ap- (c) CLERICAL AMENDMENTS.— ‘‘(4) QUALIFIED USE.—The term ‘qualified pointed for the remainder of that term. (1) The table of subparts for part IV of sub- use’ means, with respect to property, a use (3) INITIAL MEETING.—Not later than 30 chapter A of chapter 1 of the Internal Rev- which is consistent with the purpose of the days after the date on which all members of enue Code of 1986 is amended by adding at qualified environmental infrastructure the Board have been appointed, the Board the end the following: project related to such property. shall hold its first meeting. Subsequent ‘‘(5) STATE.—The term ‘State’ includes the ‘‘Subpart H. Nonrefundable Credit for Hold- meetings shall be determined by the Board District of Columbia, any possession of the ers of Better America Bonds.’’ by majority vote. United States, and any Indian tribe (as de- (2) Section 6401(b)(1) of such Code is amend- (4) QUORUM.—A majority of the members of fined in section 45A(c)(6)). ed by striking ‘‘and G’’ and inserting ‘‘G, and the Board shall constitute a quorum, but a ‘‘(6) PARTNERSHIP; S CORPORATION; AND H’’. lesser number of members may hold hear- OTHER PASS-THRU ENTITIES.—Under regula- (d) EFFECTIVE DATE.—The amendments ings. tions prescribed by the Secretary, in the case made by this section shall apply to obliga- (5) CHAIRPERSON.—The member described of a partnership, trust, S corporation, or tions issued after December 31, 2000. in paragraph (1)(C) shall serve as the Chair- other pass-thru entity, rules similar to the SEC. 702. BETTER AMERICA BONDS BOARD. person of the Board and shall have the sole rules of section 41(g) shall apply with respect (a) ESTABLISHMENT.—There is established a power to call a meeting of the Board. to the credit allowable under subsection (a). board to be known as the Better America (6) REMOVAL.— S9576 CONGRESSIONAL RECORD — SENATE July 28, 1999

(A) IN GENERAL.—Any member of the Board basic pay prescribed for level III of the Exec- Subtitle B—Conservation Incentives appointed under subparagraph (A) or (B) of utive Schedule under section 5315 of title 5, SEC. 711. TAX EXCLUSION FOR COST-SHARING paragraph (1) may be removed at the will of United States Code, for each day (including PAYMENTS UNDER PARTNERS FOR the President. travel time) during which such member is WILDLIFE PROGRAM. (B) SECRETARIES; DIRECTOR; ADMINIS- engaged in the performance of the duties of (a) IN GENERAL.—Section 126(a) (relating to TRATOR.—An individual described in subpara- the Board. All members of the Board who certain cost-sharing payments) is amended graphs (C) through (I) of paragraph (1) shall otherwise are officers or employees of the by redesignating paragraph (10) as paragraph be removed upon termination of service in United States shall serve without compensa- (11) and by inserting after paragraph (9) the the office described in each such subpara- tion in addition to that received for their following: graph. services as officers or employees of the ‘‘(10) The Partners for Wildlife Program (c) DUTIES OF THE BOARD.— United States. authorized by the Fish and Wildlife Act of (1) IN GENERAL.—The Board shall review 1956 (16 U.S.C. 742a et seq.).’’. (2) TRAVEL EXPENSES.—The members of the applications for allocation of the Better (b) EFFECTIVE DATE.—The amendments Board shall be allowed travel expenses, in- America bond limitation amounts under sec- made by this section shall apply to taxable tion 54(e)(2) of the Internal Revenue Code of cluding per diem in lieu of subsistence, at years beginning after December 31, 2000. rates authorized for employees of agencies 1986 and approve applications in accordance SEC. 712. ENHANCED DEDUCTION FOR THE DO- with published criteria. under subchapter I of chapter 57 of title 5, NATION OF A CONSERVATION EASE- (2) CRITERIA FOR APPROVAL.—The Board United States Code, while away from their MENT. shall consider the following criteria in ap- homes or regular places of business in the (a) IN GENERAL.—Paragraph (1) of section proving an application under paragraph (1): performance of services for the Board. 170(b) of the Internal Revenue Code of 1986 (A) A distribution pattern of the overall (3) STAFF.— (relating to percentage limitations) is limitation amount available for the year (A) IN GENERAL.—The Chairperson of the amended by adding at the end the following: which results in the financing of each cat- Board may, without regard to the civil serv- ‘‘(G) SPECIAL RULES FOR QUALIFIED CON- egory of qualified environmental infrastruc- ice laws and regulations, appoint and termi- SERVATION CONTRIBUTIONS.—In the case of a ture project and results in an even distribu- nate an executive director and such other ad- qualified conservation contribution by an in- tion among different regions of the country ditional personnel as may be necessary to dividual (as defined in subsection (h)(1), ex- and sizes of communities. enable the Board to perform its duties. The cept that the phrase ‘or a certified historic (B) State or local government support of employment of an executive director shall be structure’ in clause (iv) of subsection proposed projects. subject to confirmation by the Board. (h)(4)(A) shall not apply): (C) Proposed projects which meet local and (B) COMPENSATION.—The Chairperson of the ‘‘(i) 50 PERCENT LIMITATION TO APPLY.— regional environmental protection or plan- Board may fix the compensation of the exec- Such a contribution shall be treated for pur- ning goals and leverage or make more effi- utive director and other personnel without poses of this section as described in subpara- cient or innovative the use of other public or regard to the provisions of chapter 51 and graph (A). private resources. subchapter III of chapter 53 of title 5, United ‘‘(ii) 20 -YEAR CARRY FORWARD.—Subsection (D) Proposed projects which are intended States Code, relating to classification of po- (d)(1) shall be applied by substituting ‘20 to maintain the viability of existing central sitions and General Schedule pay rates, ex- years’ for ‘5 years’ each place it appears and business districts, preserve the community’s cept that the rate of pay for the executive di- with appropriate adjustments in the applica- distinct character and values, and encourage rector and other personnel may not exceed tion of subparagraph (A)(ii) thereof. the reuse of property already served by pub- the rate payable for level IV of the Executive ‘‘(iii) UNUSED DEDUCTION CARRYOVER AL- lic infrastructure. Schedule under section 5316 of such title. LOWED ON TAXPAYER’S LAST RETURN.—If the (E) The extent of expected improvement in taxpayer dies before the close of the last tax- (4) DETAIL OF GOVERNMENT EMPLOYEES.— environmental quality, outdoor recreation able year for which a deduction could have Any Federal Government employee may be opportunities, and access to public lands. been allowed under subsection (d)(1), any detailed to the Board without additional re- (3) ANNUAL REPORT.—The Board shall annu- portion of the deduction for such contribu- imbursement (other than the employee’s reg- ally report with respect to the conduct of its tion which has not been allowed shall be al- ular compensation), and such detail shall be responsibilities under this section to the lowed as a deduction under subsection (a) President and Congress and such report shall without interruption or loss of civil service (without regard to this subsection) for the include— status or privilege. taxable year in which such death occurs or (A) the overall progress of the Better (5) PROCUREMENT OF TEMPORARY AND INTER- such portion may be used as a deduction America bond program, and MITTENT SERVICES.—The Chairperson of the against the gross estate of the taxpayer.’’ (B) the overall limitation amount allo- Board may procure temporary and intermit- (b) EFFECTIVE DATE.—The amendment cated during the year and a description of tent services under section 3109(b) of title 5, made by this section shall apply to taxable the amount, region, and qualified environ- United States Code, at rates for individuals years beginning after December 31, 2000. mental infrastructure project financed by which do not exceed the daily equivalent of SEC. 713. NATIONAL WILDLIFE REFUGE CON- each allocation. the annual rate of basic pay prescribed for SERVATION EASEMENTS. (4) CONFLICT OF INTEREST.—The Board shall level V of the Executive Schedule under sec- (a) LAND SUBJECT TOA QUALIFIED CON- carry out its duties under this subsection in tion 5316 of such title. SERVATION EASEMENT TO INCLUDE LAND NEAR A NATIONAL WILDLIFE REFUGE.—Section such a way to ensure that all conflicts of in- (f) DEFINITIONS.—For purposes of this 2031(c)(8)(A)(i)(II) (defining land subject to a terest of its members are avoided. section— (d) POWERS OF THE BOARD.— qualified conservation easement) is (1) STATE.—The term ‘State’ includes the (1) HEARINGS.—The Board may hold such amended— District of Columbia, any possession of the hearings, sit and act at such times and (1) by inserting ‘‘, national wildlife ref- United States, and any Indian tribe (as de- places, take such testimony, and receive uge,’’ after ‘‘national park’’, and such evidence as the Board considers advis- fined in section 45A(c)(6)). (2) by inserting ‘‘, refuge,’’ after ‘‘such a able to carry out the purposes of this sec- (2) QUALIFIED ENVIRONMENTAL INFRASTRUC- park’’. tion. TURE PROJECT.—The term ‘qualified environ- (b) EFFECTIVE DATE.—The amendments mental infrastructure project’ has the same (2) INFORMATION FROM FEDERAL AGENCIES.— made by this section shall apply to estates of The Board may secure directly from any meaning given that term in section 54(d)(2) decedents dying after December 31, 2000. Federal department or agency such informa- of the Internal Revenue Code of 1986. SEC. 714. EXCLUSION OF 50 PERCENT OF GAIN ON tion as the Board considers necessary to (g) AUTHORIZATION OF APPROPRIATIONS.— SALES OF LAND OR INTERESTS IN carry out the provisions of this section, in- LAND OR WATER TO ELIGIBLE ENTI- There are authorized to be appropriated to TIES FOR CONSERVATION PUR- cluding the published and unpublished data the Board such sums as are necessary to POSES. and analytical products of the Bureau of carry out the purposes of this section. (a) IN GENERAL.—Part I of subchapter P of Labor Statistics. Upon request of the Chair- chapter 1 (relating to treatment of capital (h) EFFECTIVE DATES.— person of the Board, the head of such depart- gains) is amended by adding at the end the (1) IN GENERAL.—The amendments made by ment or agency shall furnish such informa- following new section: tion to the Board. this section shall take effect on the date of the enactment of this Act. ‘‘SEC. 1203. 50-PERCENT EXCLUSION OF GAIN ON (3) POSTAL SERVICES.—The Board may use SALES OF LAND OR INTERESTS IN the United States mails in the same manner (2) INITIAL NOMINATIONS.—The President LAND OR WATER TO ELIGIBLE ENTI- and under the same conditions as other de- shall submit the initial nominations under TIES FOR CONSERVATION PUR- partments and agencies of the Federal Gov- subparagraphs (A) and (B) of subsection (b)(1) POSES. ernment. to the Senate not later than 90 days after the ‘‘(a) EXCLUSION.—Gross income shall not (e) BOARD PERSONNEL MATTERS.— date of the enactment of this Act. include 50 percent of any gain from the sale (1) COMPENSATION OF MEMBERS.—Each (3) REGULATIONS.—Not later than January of land or an interest in land or water (deter- member of the Board who is not otherwise an 1, 2001, the Board shall publish in the Federal mined without regard to any improvements) officer or employee of the Federal Govern- Register the guidelines and criteria for sub- to an eligible entity if— ment shall be compensated at a rate equal to mission and approval of applications under ‘‘(1) such land or interest in land or water the daily equivalent of the annual rate of subsection (c). was owned by the taxpayer or a member of July 28, 1999 CONGRESSIONAL RECORD — SENATE S9577 the taxpayer’s family (as defined in section (A) by striking ‘‘2002’’ in subparagraph (A) sold at retail, then such use shall be treated 2032A(e)(2)) at all times during the 3-year pe- and inserting ‘‘2008’’, in the same manner as if such fuel were sold riod ending on the date of the sale, and (B) by striking ‘‘2003’’ in subparagraph (B) at retail as a fuel to propel such a vehicle by ‘‘(2) such land or interest in land or water and inserting ‘‘2009’’, and such person. is being acquired by an eligible entity which (C) by striking ‘‘2004’’ in subparagraph (C) ‘‘(c) NO DOUBLE BENEFIT.—The amount of provides the taxpayer, at the time of acquisi- and inserting ‘‘2010’’. the credit determined under subsection (a) tion, a written letter of intent which shall (c) EFFECTIVE DATE.—The amendments shall be reduced by the amount of any deduc- include the following statement: ‘The pur- made by this section shall apply to property tion or credit allowable under this chapter chaser’s intent is that this acquisition will placed in service in taxable years beginning for fuel taken into account in computing the serve 1 or more of the conservation purposes after December 31, 2000. amount of such credit. specified in clause (i), (ii), or (iii) of section SEC. 722. ADDITIONAL DEDUCTION FOR COST OF ‘‘(d) TERMINATION.—This section shall not 170(h)(4)(A).’ INSTALLATION OF ALTERNATIVE apply to any fuel sold at retail after Decem- ‘‘(b) ELIGIBLE ENTITY.—For purposes of this FUELING STATIONS. ber 31, 2007.’’. section, the term ‘eligible entity’ means— (a) IN GENERAL.—Subparagraph (A) of sec- ‘‘(1) any agency of the United States or of tion 179A(b)(2) (relating to qualified clean- (b) CREDIT TREATED AS BUSINESS CREDIT.— any State or local government, or fuel vehicle refueling property) is amended Section 38(b) (relating to current year busi- ‘‘(2) any other organization that— to read as follows: ness credit) is amended by striking ‘‘plus’’ at ‘‘(A) is organized and at all times operated ‘‘(A) IN GENERAL.—The aggregate cost the end of paragraph (11), by striking the pe- principally for 1 or more of the conservation which may be taken into account under sub- riod at the end of paragraph (12) and insert- purposes specified in clause (i), (ii), or (iii) of section (a)(1)(B) with respect to qualified ing ‘‘, plus’’, and by adding at the end the section 170(h)(4)(A), clean-fuel vehicle refueling property placed following: ‘‘(B) is described in section 501(c)(3) and ex- in service during the taxable year at a loca- ‘‘(13) the clean burning fuel retail sales empt from tax under section 501(a), and tion shall not exceed the sum of— credit determined under section 40A(a).’’. ‘‘(C)(i) meets the requirements of section ‘‘(i) with respect to costs not described in (c) TRANSITIONAL RULE.—Section 39(d) (re- 509(a)(2), or clause (ii), the excess (if any) of— lating to transitional rules) is amended by ‘‘(ii) meets the requirements of section ‘‘(I) $100,000, over adding at the end the following: 509(a)(3) and is controlled by an organization ‘‘(II) the aggregate amount of such costs ‘‘(9) NO CARRYBACK OF SECTION 40A CREDIT described in section 509(a)(2). taken into account under subsection (a)(1)(B) BEFORE EFFECTIVE DATE.—No portion of the ‘‘(c) STOCK IN HOLDING CORPORATIONS.—For by the taxpayer (or any related person or unused business credit for any taxable year purposes of this section, the term ‘land or an predecessor) with respect to property placed which is attributable to the clean burning interest in land or water’ shall include stock in service at such location for all preceding fuel retail sales credit determined under sec- in any corporation, if the fair market value taxable years, plus tion 40A(a) may be carried back to a taxable of the corporation’s land or interests in land ‘‘(ii) the lesser of— year ending before January 1, 1999.’’. or water equals or exceeds 90 percent of the ‘‘(I) the cost of the installation of such (d) CLERICAL AMENDMENT.—The table of fair market value of all of such corporation’s property, or sections for subpart D of part IV of sub- assets at all times during the 3-year period ‘‘(II) $30,000.’’. chapter A of chapter 1 is amended by insert- ending on the date of the sale.’’ (b) EFFECTIVE DATE.—The amendment ing after the item relating to section 40 the (b) CLERICAL AMENDMENT.—The table of made by this section shall apply to property following: sections for part I of subchapter P of chapter placed in service in taxable years beginning ‘‘Sec. 40A. Credit for retail sale of clean 1 of the Internal Revenue Code of 1986 is after December 31, 2000. amended by adding at the end the following burning fuels as motor vehicle SEC. 723. CREDIT FOR RETAIL SALE OF CLEAN fuel.’’. new item: BURNING FUELS AS MOTOR VEHI- ‘‘Sec. 1203. 50-percent exclusion of gain on CLE FUEL. (e) EFFECTIVE DATE.—The amendments sales of land or interests in land (a) IN GENERAL.—Subpart D of part IV of made by this section shall apply to fuel sold or water to eligible entities for subchapter A of chapter 1 (relating to busi- at retail in taxable years beginning after De- conservation purposes.’’ ness related credits) is amended by inserting cember 31, 2000. (c) EFFECTIVE DATE.—The amendments after section 40 the following: Subtitle C—Other Provisions made by this section shall apply to sales oc- ‘‘SEC. 40A. CREDIT FOR RETAIL SALE OF CLEAN SEC. 731. EXPANSION OF SECTION 29 TAX CREDIT. curring in taxable years beginning after De- BURNING FUELS AS MOTOR VEHI- cember 31, 2000. CLE FUEL. (a) PLACED-IN-SERVICE DATE.—Section Subtitle C—Alternative Fuels Incentives ‘‘(a) GENERAL RULE.—For purposes of sec- 29(g)(1)(A) is amended by striking ‘‘July 1, tion 38, the clean burning fuel retail sales 1998’’ and inserting ‘‘the date which is 8 SEC. 721. EXTENSION AND EXPANSION OF CREDIT months after the date of the enactment of FOR PURCHASE OF ELECTRIC VEHI- credit of any taxpayer for any taxable year CLES. is 15 cents for each gasoline gallon equiva- the Tax and Public Debt Reduction Act of (a) MODIFIED CREDIT FOR VEHICLES WHICH lent of clean burning fuel sold at retail by 1999’’. MEET CERTAIN RANGE REQUIREMENTS.—Sec- the taxpayer during such year as a fuel to (b) EFFECTIVE DATE.—The amendment tion 30(a) (relating to allowance of credit) is propel any qualified motor vehicle. made by this section shall apply to produc- amended to read as follows: ‘‘(b) DEFINITIONS.—For purposes of this tion after the date of the enactment of this ‘‘(a) ALLOWANCE OF CREDIT.— section— Act. ‘‘(1) IN GENERAL.—There shall be allowed as ‘‘(1) CLEAN BURNING FUEL.—The term ‘clean SEC. 732. UNIFORM DOLLAR LIMITATION FOR a credit against the tax imposed by this burning fuel’ means natural gas, compressed ALL TYPES OF TRANSPORTATION chapter for the taxable year an amount natural gas, liquefied natural gas, liquefied FRINGE BENEFITS. equal to the sum of— petroleum gas, hydrogen, and any liquid at (a) IN GENERAL.—Paragraph (2) of section ‘‘(A) 10 percent of the cost of any qualified least 85 percent of which consists of meth- 132(f) (relating to qualified transportation electric vehicle placed in service by the tax- anol. fringe) is amended to read as follows: payer during the taxable year, plus ‘‘(2) GASOLINE GALLON EQUIVALENT.—The ‘‘(2) LIMITATION ON EXCLUSION.—The aggre- ‘‘(B) in the case of any such vehicle also term ‘gasoline gallon equivalent’ means, gate amount of the fringe benefits which are meeting the requirement described in para- with respect to any clean burning fuel, the provided by an employer to any employee graph (2), $5,000. amount (determined by the Secretary) of and which may be excluded from gross in- ‘‘(2) RANGE REQUIREMENT.—The require- such fuel having a Btu content of 114,000. come under subsection (a)(5) shall not exceed ment described in this paragraph is a driving ‘‘(3) QUALIFIED MOTOR VEHICLE.—The term $175 per month.’’ range of at least 100 miles— ‘qualified motor vehicle’ means any motor (b) CONFORMING AMENDMENT TO INFLATION ‘‘(A) on a single charge of the vehicle’s re- vehicle (as defined in section 179A(e)) which ADJUSTMENT.—Section 132(f)(6)(A) (relating chargeable batteries, fuel cells, or other meets any applicable Federal or State emis- to inflation adjustment) is amended by strik- portable source of electrical current, and sions standards with respect to each fuel by ing ‘‘the dollar amounts contained in sub- ‘‘(B) measured pursuant to the urban dyna- which such vehicle is designed to be pro- paragraphs (A) and (B) of paragraph (2)’’ and mometer schedules under appendix I to part pelled. inserting ‘‘the dollar amount contained in 86 of title 40, Code of Federal Regulations.’’ ‘‘(4) SOLD AT RETAIL.— paragraph (2)’’. (b) CREDIT EXTENDED THROUGH 2010.— ‘‘(A) IN GENERAL.—The term ‘sold at retail’ (1) IN GENERAL.—Section 30(e) (relating to means the sale, for a purpose other than re- (c) ADDITIONAL CONFORMING AMENDMENT.— termination) is amended to read as follows: sale, after manufacture, production, or im- Section 9010 of the Transportation Equity ‘‘(e) TERMINATION.—This section shall not portation. Act for the 21st Century is amended by strik- apply to any property placed in service after ‘‘(B) USE TREATED AS SALE.—If any person ing subsection (c). December 31, 2010.’’ uses clean burning fuel as a fuel to propel (d) EFFECTIVE DATE.—The amendments (2) CONFORMING AMENDMENTS.—Section any qualified motor vehicle (including any made by this section shall apply to taxable 30(b)(2) (relating to phaseout) is amended— use after importation) before such fuel is years beginning after December 31, 1999. S9578 CONGRESSIONAL RECORD — SENATE July 28, 1999

TITLE VIII—SAVINGS AND PENSION (B) CHANGE OF AMOUNTS.—An employee es- ‘‘(iii) EXCEPTION FOR FROZEN PLAN.—For PROVISIONS tablishing and maintaining an individual re- purposes of determining an employee’s years Subtitle A—Expanding Coverage for Small tirement plan under subparagraph (A) may of service with the employer, any service Business change the amount of an employer payroll with the employer shall be disregarded to SEC. 801. PLAN LOANS FOR SUBCHAPTER S OWN- deduction in the same manner as under sub- the extent that such service occurs during a ERS, PARTNERS, AND SOLE PROPRI- paragraph (A). plan year when the plan benefits (within the ETORS. (C) SIMPLIFIED FORMS.— meaning of section 410(b)) no employee or (a) AMENDMENT TO 1986 CODE.—Subpara- (i) CONTRIBUTION CERTIFICATE.—The Sec- former employee.’’ graph (B) of section 4975(f)(6) (relating to ex- retary shall develop a model contribution (2) CONFORMING AMENDMENT.—Subpara- emptions not to apply to certain trans- certificate for purposes of this paragraph— graph (A) of section 415(b)(5) is amended by actions) is amended by adding at the end the (I) which is written in a clear and easily adding at the end the following: ‘‘An em- following new clause: understandable manner, and ployee shall not be credited with a year of ‘‘(iii) LOAN EXCEPTION.—For purposes of (II) the completion of which by an em- participation in a defined benefit plan for subparagraph (A)(i), the term ‘owner-em- ployee will constitute the establishment of any year in which the plan does not benefit ployee’ shall only include a person described an individual retirement plan and the re- (within the meaning of section 410(b)) such in subclause (II) or (III) of clause (i).’’ quest for employer payroll deductions or employee.’’ (b) AMENDMENT TO ERISA.—Section changes in such deductions. SEC. 804. CREDIT FOR SMALL EMPLOYER PEN- 408(d)(2) of the Employee Retirement Income (ii) AVAILABILITY.—The Secretary shall SION PLAN CONTRIBUTIONS AND Security Act of 1974 (29 U.S.C. 1108(d)(2)) is make available to all employees and employ- START-UP COSTS. amended by adding at the end the following ers the forms developed under this subpara- (a) IN GENERAL.—Subpart D of part IV of new subparagraph: graph, and shall include with such forms subchapter A of chapter 1 (relating to busi- ‘‘(C) For purposes of paragraph (1)(A), the easy to understand explanatory materials. ness related credits) is amended by adding at term ‘owner-employee’ shall only include a (D) USE OF CERTIFICATE.—Each employer the end the following new section: person described in clause (ii) or (iii) of sub- electing to adopt a system under subsection paragraph (A).’’ ‘‘SEC. 45D. SMALL EMPLOYER PENSION PLAN (b) shall, upon receipt of a contribution cer- CREDIT. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to loans tificate from an employee, deduct the appro- ‘‘(a) GENERAL RULE.—For purposes of sec- made after December 31, 2000. priate contribution as determined by such tion 38, in the case of an eligible employer, certificate from the employee’s wages in SEC. 802. CONTRIBUTIONS TO IRAS THROUGH the small employer pension plan credit de- PAYROLL DEDUCTIONS. equal amounts during the remaining payroll termined under this section for any taxable (a) DEFINITIONS.—For purposes of this periods for the taxable year and shall remit year is an amount equal to the sum of— section— such amounts for investment in the employ- ‘‘(1) 25 percent of the qualified employer (1) CONTRIBUTION CERTIFICATE.—The term ee’s individual retirement plan not later contributions of the taxpayer for the taxable ‘‘contribution certificate’’ means a certifi- than the close of the 30-day period following year, and cate submitted by an employee to the em- the last day of the month in which such pay- ‘‘(2) 50 percent of the qualified start-up ployee’s employer which— roll period occurs. costs paid or incurred by the taxpayer during (A) identifies the employee by name, ad- (E) FAILURE TO REMIT PAYROLL DEDUC- the taxable year. dress, and social security number, TIONS.—For purposes of the Internal Revenue ‘‘(b) LIMITATIONS.— (B) identifies the individual retirement Code of 1986, any amount which an employer ‘‘(1) LIMITS ON CONTRIBUTIONS.—For pur- plan to which the employee wishes to make fails to remit on behalf of an employee pur- poses of subsection (a)(1)— contributions through payroll deductions, suant to a contribution certificate of such ‘‘(A) qualified employer contributions may and employee shall not be allowed as a deduction only be taken into account for each of the (C) identifies the amount of such contribu- to the employer under such Code. first 3 taxable years ending after the date tions, not to exceed the amount allowed (d) ADDITIONAL INFORMATION.— the employer establishes the qualified em- under section 408 of the Internal Revenue (1) IN GENERAL.—The system established ployer plan to which the contribution is Code of 1986 to an individual retirement plan under subsection (b) shall provide for the fur- made, and for such year. nishing of information to employees of the ‘‘(B) the amount of the qualified employer (2) EMPLOYEE.—The term ‘‘employee’’ does opportunity of establishing individual retire- contributions taken into account with re- not include an employee as defined in sec- ment plans and of transferring amounts to spect to any qualified employee for any such tion 401(c)(1) of such Code. such plans. taxable year shall not exceed 3 percent of the (3) INDIVIDUAL RETIREMENT PLANS.—The (2) INVESTMENT INFORMATION.—The em- compensation (as defined in section 414(s)) of term ‘‘individual retirement plan’’ has the ployer shall also make available to employ- the qualified employee for such taxable year. meaning given the term by section 7701(a)(37) ees information on how to make informed in- ‘‘(2) LIMITS ON START-UP COSTS.—The of the Internal Revenue Code of 1986. vestment decisions and how to achieve re- amount of the credit determined under sub- (4) SECRETARY.—The term ‘‘Secretary’’ tirement objectives. section (a)(2) for any taxable year shall not means the Secretary of the Treasury. (3) INFORMATION NOT INVESTMENT ADVICE.— exceed— (b) ESTABLISHMENT OF PAYROLL DEDUCTION Information provided under this subsection ‘‘(A) $2,000 for the first taxable year ending SYSTEM.—An employer may establish a sys- shall not be treated as investment advice for after the date the employer established the tem under which employees, through em- purposes of any Federal or State law. qualified employer plan to which such costs ployer payroll deductions, may make con- SEC. 803. MODIFICATION OF TOP-HEAVY RULES. relate, tributions to individual retirement plans. An (a) DISTRIBUTIONS DURING LAST YEAR BE- ‘‘(B) $1,000 for each of the second and third employer shall not incur any liability under FORE DETERMINATION DATE TAKEN INTO AC- such taxable years, and title I of the Employee Retirement Income COUNT.—Section 416(g) is amended— ‘‘(C) zero for each taxable year thereafter. Security Act of 1974 in providing for such a (1) in paragraph (3)— ‘‘(c) DEFINITIONS.—For purposes of this system. (A) by striking ‘‘LAST 5 YEARS’’ in the head- section— (c) CONTRIBUTIONS TO INDIVIDUAL RETIRE- ing and inserting ‘‘LAST YEAR BEFORE DETER- ‘‘(1) ELIGIBLE EMPLOYER.— MENT PLANS.— MINATION DATE’’, and ‘‘(A) IN GENERAL.—The term ‘eligible em- (1) IN GENERAL.—The system established ployer’ means, with respect to any year, an under subsection (b) shall provide that con- (B) in the matter following subparagraph employer which has no more than— tributions made to an individual retirement (B), by striking ‘‘5-year period’’ and insert- ‘‘(i) for purposes of subsection (a)(1), 25 em- plan for any taxable year are— ing ‘‘1-year period’’, and ployees, and (A) contributions through employer pay- (2) in paragraph (4)(E)— roll deductions, and (b) REQUIREMENTS FOR QUALIFICATION.— ‘‘(ii) for purposes of subsection (a)(2), 100 (B) if the employer so elects, additional Clause (ii) of section 401(a)(10)(B) (relating to employees, contributions by the employee which, when requirements for qualifications for top-heavy who received at least $5,000 of compensation added to contributions under subparagraph plans) is amended by adding at the end the from the employer for the preceding year. (A), do not exceed the amount allowed under following new flush sentence: ‘‘(B) 2-YEAR GRACE PERIOD.—An eligible em- section 408 of the Internal Revenue Code of ‘‘The preceding sentence shall not apply to a ployer who establishes and maintains a 1986 for the taxable year. plan if the plan is not top-heavy and if it is qualified employer plan for 1 or more years (2) EMPLOYER PAYROLL DEDUCTIONS.— not reasonable to expect that the plan will and who fails to be an eligible employer for (A) IN GENERAL.—The system established become a top-heavy plan.’’ any subsequent year shall be treated as an under subsection (b) shall provide that an (c) FROZEN PLAN EXEMPT FROM MINIMUM eligible employer for the 2 years following employee may establish and maintain an in- BENEFIT REQUIREMENT.— the last year the employer was an eligible dividual retirement plan simply by— (1) IN GENERAL.—Subparagraph (C) of sec- employer. (i) completing a contribution certificate, tion 416(c)(1) (relating to defined benefit ‘‘(C) REQUIREMENT FOR NEW QUALIFIED EM- and plans) is amended— PLOYER PLANS.—Such term shall not include (ii) submitting such certificate to the em- (A) in clause (i), by striking ‘‘clause (ii)’’ an employer if, during the 3-taxable year pe- ployee’s employer in the manner provided and inserting ‘‘clause (ii) or (iii)’’, and riod immediately preceding the 1st taxable under subparagraph (D). (B) by adding at the end the following: year for which the credit under this section July 28, 1999 CONGRESSIONAL RECORD — SENATE S9579 is otherwise allowable for a qualified em- ‘‘(ii) the amount by which the aggregate inserting ‘‘the applicable limit under section ployer plan of the employer, the employer amount of credits allowed by this section 415’’, and and each member of any controlled group in- (without regard to this paragraph) would in- (B) by striking paragraph (2). cluding the employer (or any predecessor of crease if the limitation under paragraph (1) (3) NONDISCRIMINATION TESTING.— either) established or maintained a qualified were increased by the taxpayer’s applicable (A) Section 401(k)(3)(A) is amended by add- employer plan with respect to which con- payroll taxes for the taxable year. ing at the end the following: ‘‘The actual de- tributions were made, or benefits were ac- ‘‘(B) TREATMENT OF CREDIT.—The amount ferral percentage of eligible employees other crued, for substantially the same employees of the credit allowed under this paragraph than highly compensated employees shall be as are in the qualified employer plan. shall not be treated as a credit allowed under computed without regard to contributions in ‘‘(2) QUALIFIED EMPLOYER CONTRIBUTIONS.— this subpart and shall reduce the amount of excess of 25 percent of compensation.’’ ‘‘(A) IN GENERAL.—The term ‘qualified em- the credit allowed under this section for the (B) Section 401(m)(3) is amended by adding ployer contributions’ means, with respect to taxable year. at the end the following: ‘‘The contribution any taxable year, any employer contribu- ‘‘(C) APPLICABLE PAYROLL TAXES.—For pur- percentage of eligible employees other than tions made on behalf of a qualified employee poses of this paragraph— highly compensated employees shall be com- to a qualified employer plan for a plan year ‘‘(i) IN GENERAL.—The term ‘applicable puted without regard to contributions in ex- ending with or within the taxable year. payroll taxes’ means, with respect to any cess of 25 percent of compensation.’’ ‘‘(B) EMPLOYER CONTRIBUTIONS.—The term taxpayer for any taxable year— (4) CONFORMING AMENDMENTS.— ‘employer contributions’ shall not include ‘‘(I) the amount of the taxes imposed by (A) Subsection (f) of section 72 is amended any elective deferral (within the meaning of sections 3111 and 3221(a) on compensation by striking ‘‘section 403(b)(2)(D)(iii))’’ and in- section 402(g)(3)). paid by the taxpayer during the taxable serting ‘‘section 403(b)(2)(D)(iii), as in effect ‘‘(3) QUALIFIED EMPLOYEE.—The term year, on December 31, 2000)’’. ‘qualified employee’ means an individual ‘‘(II) 50 percent of the taxes imposed by (B) Section 403(b)(3) is amended by insert- who— section 1401 on the self-employment income ing ‘‘or any amount received by a former em- ‘‘(A) is eligible to participate in the quali- of the taxpayer during the taxable year, and ployee after the 5th taxable year following fied employer plan to which the employer ‘‘(III) 50 percent of the taxes imposed by the taxable year in which such employee was contributions are made, and section 3211(a)(1) on amounts received by the terminated’’ before the period at the end of ‘‘(B) is not a highly compensated employee taxpayer during the calendar year in which the second sentence. (within the meaning of section 414(q)) for the the taxable year begins. (C) Section 404(a)(10)(B) is amended by year for which the contribution is made. ‘‘(ii) AGREEMENTS REGARDING FOREIGN AF- striking ‘‘, the exclusion allowance under ‘‘(4) QUALIFIED START-UP COSTS.—The term FILIATES.—Section 24(d)(5)(C) shall apply for section 403(b)(2),’’. ‘qualified start-up costs’ means any ordinary purposes of clause (i).’’ (D) Section 415(a)(2) is amended by striking and necessary expenses of an eligible em- (d) CONFORMING AMENDMENT.—The table of ‘‘, and the amount of the contribution for ployer which are paid or incurred in connec- sections for subpart D of part IV of sub- such portion shall reduce the exclusion al- tion with— chapter A of chapter 1 is amended by adding lowance as provided in section 403(b)(2)’’. ‘‘(A) the establishment or maintenance of at the end the following new item: (E) Section 415(c)(3) is amended by adding a qualified employer plan in which qualified ‘‘Sec. 45D. Small employer pension plan at the end the following new subparagraph: employees are eligible to participate, and credit.’’ ‘‘(E) ANNUITY CONTRACTS.—In the case of ‘‘(B) providing educational information to (e) EFFECTIVE DATE.—The amendments an annuity contract described in section employees regarding participation in such made by this section shall apply to costs 403(b), the term ‘participant’s compensation’ plan and the benefits of establishing an in- paid or incurred or contributions made in means the participant’s includible com- vestment plan. connection with qualified employer plans es- pensation determined under section UALIFIED EMPLOYER PLAN.—The term ‘‘(5) Q tablished after December 31, 2000. 403(b)(3).’’ ‘qualified employer plan’ has the meaning (F) Section 415(c) is amended by striking given such term in section 4972(d). SEC. 805. INCREASING LIMITS FOR DEFERRALS TO SIMPLE PLANS. paragraph (4) and by redesignating para- ‘‘(d) SPECIAL RULES.— (a) SIMPLE RETIREMENT ACCOUNTS.—Para- graph (6) as paragraph (4). ‘‘(1) AGGREGATION RULES.—All persons graph (2)(A)(ii) of section 408(p) (relating to (G) Section 415(c) is amended by striking treated as a single employer under sub- simple retirement accounts) is amended by paragraph (7) and inserting the following section (a) or (b) of section 52, or subsection striking ‘‘$6,000’’ and inserting ‘‘$8,000’’. new paragraph: (n) or (o) of section 414, shall be treated as (b) NONDISCRIMINATION TESTS.—Section ‘‘(5) CERTAIN CONTRIBUTIONS BY CHURCH one person. All qualified employer plans of 401(k)(11)(B)(i)(I) is amended by striking PLANS NOT TREATED AS EXCEEDING LIMIT.— an employer shall be treated as a single ‘‘$6,000’’ and inserting ‘‘$8,000’’. ‘‘(A) IN GENERAL.—Notwithstanding any qualified employer plan. (c) EFFECTIVE DATE.—The amendments other provision of this subsection, at the ‘‘(2) DISALLOWANCE OF DEDUCTION.—No de- made by this section shall apply to years be- election of a participant who is an employee duction shall be allowable under this chapter ginning after December 31, 2000. of a church, a convention or association of for any qualified start-up costs or qualified SEC. 806. ELECTIVE DEFERRALS NOT TAKEN churches, including an organization de- contributions for which a credit is deter- INTO ACCOUNT FOR PURPOSES OF scribed in section 414(e)(3)(B)(ii), contribu- mined under subsection (a). LIMITS. tions and other additions for an annuity con- ‘‘(3) ELECTION NOT TO CLAIM CREDIT.—This (a) IN GENERAL.—Section 404, as amended tract or retirement income account de- section shall not apply to a taxpayer for any by section 803, is amended by adding at the scribed in section 403(b) with respect to such taxable year if such taxpayer elects to have end the following new subsection: participant, when expressed as an annual ad- this section not apply for such taxable ‘‘(o) ELECTIVE DEFERRALS NOT TAKEN INTO dition to such participant’s account, shall be year.’’ ACCOUNT FOR PURPOSES OF LIMITS.—Elective treated as not exceeding the limitation of (b) CREDIT ALLOWED AS PART OF GENERAL deferrals (as defined in section 402(g)(3)) shall paragraph (1) if such annual addition is not BUSINESS CREDIT.—Section 38(b) (defining not be subject to any limitations described in excess of $10,000. current year business credit) is amended by in this section (other than subsection (a)), ‘‘(B) $40,000 AGGREGATE LIMITATION.—The striking ‘‘plus’’ at the end of paragraph (11), and such elective deferrals shall not be taken total amount of additions with respect to by striking the period at the end of para- into account in applying such limitations to any participant which may be taken into ac- graph (12) and inserting ‘‘, plus’’, and by add- any other contributions.’’ count for purposes of this subparagraph for ing at the end the following new paragraph: (c) EFFECTIVE DATE.—The amendment all years may not exceed $40,000. ‘‘(13) in the case of an eligible employer (as made by this section shall apply to years be- ‘‘(C) ANNUAL ADDITION.—For purposes of defined in section 45D(c)), the small em- ginning after December 31, 2000. this paragraph, the term ‘annual addition’ ployer pension plan credit determined under Subtitle B—Increasing Pension Access and has the meaning given such term by para- section 45D(a).’’ Fairness for Women graph (2).’’ (c) PORTION OF CREDIT REFUNDABLE.—Sec- SEC. 811. EQUITABLE TREATMENT FOR CON- (H) Section 415(e)(3)(B) is amended— tion 38(c) (relating to limitation based on TRIBUTIONS OF EMPLOYEES TO DE- (i) by striking ‘‘subsection (c)(6)’’ in clause amount of tax) is amended by adding at the FINED CONTRIBUTION PLANS. (i) and inserting ‘‘subsection (c)(4)’’, and end the following new paragraph: (a) EQUITABLE TREATMENT.— (ii) by striking ‘‘subsection (c)(7)’’ in ‘‘(4) PORTION OF SMALL EMPLOYER PENSION (1) IN GENERAL.—Subparagraph (B) of sec- clause (ii)(II) and inserting ‘‘subsection PLAN CREDIT REFUNDABLE.— tion 415(c)(1) (relating to limitation for de- (c)(5)’’. ‘‘(A) IN GENERAL.—In the case of the small fined contribution plans) is amended to read (I) Section 415(e)(5) is amended— employer pension plan credit under sub- as follows: (i) by striking ‘‘(except in the case of a par- section (b)(13), the aggregate credits allowed ‘‘(B) the greater of 50 percent of the par- ticipant who has elected under subsection under subpart C shall be increased by the ticipant’s compensation or $10,000.’’ (c)(4)(D) to have the provisions of subsection lesser of— (2) APPLICATION TO SECTION 403(b).—Section (c)(4)(C) apply)’’, and ‘‘(i) the credit which would be allowed 403(b) is amended— (ii) by striking the last sentence. without regard to this paragraph and the (A) by striking ‘‘the exclusion allowance (J) Section 415(n)(2)(B) is amended by limitation under paragraph (1), or for such taxable year’’ in paragraph (1) and striking ‘‘percentage’’. S9580 CONGRESSIONAL RECORD — SENATE July 28, 1999 (K) Subparagraph (B) of section 402(g)(7) is section shall apply to contributions for plan SEC. 814. CLARIFICATION OF TAX TREATMENT OF amended by inserting before the period at years beginning after December 31, 2000. DIVISION OF SECTION 457 PLAN BEN- the end the following: ‘‘(as in effect on the (2) COLLECTIVE BARGAINING AGREEMENTS.— EFITS UPON DIVORCE. date of the enactment of the Pension Cov- In the case of a plan maintained pursuant to (a) IN GENERAL.—Section 414(p)(11) (relat- erage and Portability Act)’’. 1 or more collective bargaining agreements ing to application of rules to governmental (b) SPECIAL RULES FOR SECTIONS 403(b) AND between employee representatives and 1 or and church plans) is amended— 408.—Subsection (k) of section 415 is amended more employers ratified by the date of en- (1) by inserting ‘‘or an eligible deferred by adding at the end the following new para- actment of this Act, the amendments made compensation plan (within the meaning of graph: by this section shall not apply to contribu- section 457(b))’’ after ‘‘subsection (e))’’, and ‘‘(4) SPECIAL RULES FOR ANNUITY CONTRACTS tions on behalf of employees covered by any (2) in the heading, by striking ‘‘GOVERN- AND SIMPLIFIED PENSIONS.—For purposes of such agreement for plan years beginning be- MENTAL AND CHURCH PLANS’’ and inserting this section— fore the earlier of— ‘‘CERTAIN OTHER PLANS’’. ‘‘(A) ANNUITY CONTRACTS.—Any annuity (A) the later of— (b) WAIVER OF CERTAIN DISTRIBUTION RE- contract described in section 403(b) for the (i) the date on which the last of such col- QUIREMENTS.—Paragraph (10) of section 414(p) benefit of a participant shall be treated as a lective bargaining agreements terminates is amended by striking ‘‘and section 409(d)’’ defined contribution plan maintained by (determined without regard to any extension and inserting ‘‘section 409(d), and section each employer with respect to which the par- thereof on or after such date of enactment), 457(d)’’. ticipant has the control required under sub- or (c) TAX TREATMENT OF PAYMENTS FROM A section (b) or (c) of section 414 (as modified (ii) January 1, 2001, or SECTION 457 PLAN.—Subsection (p) of section by subsection (h)). (B) January 1, 2005. 414 is amended by redesignating paragraph ‘‘(B) SIMPLIFIED PLANS.—Any contribution (3) SERVICE REQUIRED.—With respect to any (12) as paragraph (13) and inserting after by an employer to a simplified employee plan, the amendments made by this section paragraph (11) the following new paragraph: pension plan for an individual for a taxable shall not apply to any employee before the ‘‘(12) TAX TREATMENT OF PAYMENTS FROM A year shall be treated as an employer con- date that such employee has 1 hour of serv- SECTION 457 PLAN.—If a distribution or pay- tribution to a defined contribution plan for ice under such plan in any plan year to ment from an eligible deferred compensation such individual for such year.’’ which the amendments made by this section plan described in section 457(b) is made pur- (c) DEFERRED COMPENSATION PLANS OF apply. suant to a qualified domestic relations order, STATE AND LOCAL GOVERNMENTS AND TAX-EX- SEC. 813. DEFERRED ANNUITIES FOR SURVIVING rules similar to the rules of section EMPT ORGANIZATIONS.—Subparagraph (B) of SPOUSES OF FEDERAL EMPLOYEES. 402(e)(1)(A) shall apply to such distribution section 457(b)(2) (relating to salary limita- (a) IN GENERAL.—Section 8341 of title 5, or payment.’’ tion on eligible deferred compensation plans) United States Code, is amended— (d) EFFECTIVE DATE.—The amendments is amended by striking ‘‘331⁄3 percent’’ and (1) in subsection (h)(1), by striking ‘‘sec- made by this section shall apply to transfers, inserting ‘‘100 percent’’. tion 8338(b) of this title’’ and inserting ‘‘sec- distributions, and payments made after De- (d) EFFECTIVE DATE.—The amendments tion 8338(b), and a former spouse of a de- cember 31, 2000. made by this section shall apply to years be- ceased former employee who separated from SEC. 815. SPOUSES’ RIGHT TO KNOW PROPOSAL. ginning after December 31, 2000. the service with title to a deferred annuity (a) SPOUSE’S RIGHT TO KNOW DISTRIBUTION SEC. 812. FASTER VESTING OF CERTAIN EM- under section 8338 (if they were married to INFORMATION.— PLOYER MATCHING CONTRIBU- one another prior to the date of separa- (1) AMENDMENT OF INTERNAL REVENUE TIONS. tion),’’; and CODE.—Section 417(a)(3) (relating to plan to (a) AMENDMENTS TO 1986 CODE.—Section (2) by adding at the end the following: provide written explanations) is amended by 411(a) (relating to minimum vesting stand- ‘‘(j)(1) If a former employee dies after hav- adding at the end the following new subpara- ards) is amended— ing separated from the service with title to graph: (1) in paragraph (2), by striking ‘‘A plan’’ a deferred annuity under section 8338 but be- ‘‘(C) EXPLANATION TO SPOUSE.—At the time and inserting ‘‘Except as provided in para- fore having established a valid claim for an- a plan provides a participant with a written graph (12), a plan’’, and nuity, and is survived by a spouse to whom explanation under subparagraph (A) or (B), (2) by adding at the end the following: married on the date of separation, the sur- such plan shall provide a copy of such expla- ‘‘(12) FASTER VESTING FOR MATCHING CON- viving spouse may elect to receive— nation to such participant’s spouse. If the TRIBUTIONS.—In the case of matching con- ‘‘(A) an annuity, commencing on what last known address of the spouse is the same tributions (as defined in section would have been the former employee’s 62d as the last known address of the participant, 401(m)(4)(A)), paragraph (2) shall be applied— birthday, equal to 55 percent of the former the requirement of the preceding sentence ‘‘(A) by substituting ‘3 years’ for ‘5 years’ employee’s deferred annuity; shall be treated as met if the copy referred in subparagraph (A), and ‘‘(B) an annuity, commencing on the day to in the preceding sentence is included in a ‘‘(B) by substituting the following table for after the date of death of the former em- single mailing made to such address and ad- the table contained in subparagraph (B): ployee, such that, to the extent practicable, dressed to both such participant and The nonforfeitable the present value of the future payments of spouse.’’ ‘‘Years of service: percentage is: the annuity would be actuarially equivalent (2) AMENDMENT OF ERISA.—Paragraph (3) of 2 ...... 20 to the present value of the future payments section 205(c) of Employee Retirement In- 3 ...... 40 under subparagraph (A) as of the day after come Security Act of 1974 is amended by add- 4 ...... 60 the former employee’s death; or ing at the end the following new subpara- 5 ...... 80 ‘‘(C) the lump-sum credit, if the surviving graph: 6 ...... 100.’’ spouse is the individual who would be enti- ‘‘(C) EXPLANATION TO SPOUSE.—At the time (b) AMENDMENTS TO ERISA.—Section 203(a) tled to the lump-sum credit and if such sur- a plan provides a participant with a written of the Employee Retirement Income Secu- viving spouse files application therefor. explanation under subparagraph (A) or (B), rity Act of 1974 (29 U.S.C. 1053(a)) is ‘‘(2) An annuity under this subsection and such plan shall provide a copy of such expla- amended— the right thereto terminate on the last day nation to such participant’s spouse. If the (1) in paragraph (2), by striking ‘‘A plan’’ of the month before the surviving spouse re- last known address of the spouse is the same and inserting ‘‘Except as provided in para- marries before becoming 55 years of age, or as the last known address of the participant, graph (4), a plan’’, and dies.’’ the requirement of the preceding sentence (2) by adding at the end the following: (b) CORRESPONDING AMENDMENT FOR shall be treated as met if the copy referred ‘‘(4) FASTER VESTING FOR MATCHING CON- FERS.—Section 8445(a) of title 5, United to in the preceding sentence is included in a TRIBUTIONS.—In the case of matching con- States Code, is amended— single mailing made to such address and ad- tributions (as defined in section 401(m)(4)(A) (1) by striking ‘‘(or of a former employee dressed to both such participant and of the Internal Revenue Code of 1986), para- or’’ and inserting ‘‘(or of a former’’; and spouse.’’ graph (2) shall be applied— (2) by striking ‘‘annuity)’’ and inserting (b) EFFECTIVE DATE.—The amendments ‘‘(A) by substituting ‘3 years’ for ‘5 years’ ‘‘annuity, or of a former employee who dies made by this section shall apply to years be- in subparagraph (A), and after having separated from the service with ginning after December 31, 2000. ‘‘(B) by substituting the following table for title to a deferred annuity under section 8413 the table contained in subparagraph (B): but before having established a valid claim Subtitle C—Increasing Portability of Pension Plans The nonforfeitable for annuity (if such former spouse was mar- ‘‘Years of service: percentage is: ried to such former employee prior to the SEC. 821. ROLLOVERS ALLOWED AMONG VAR- 2 ...... 20 date of separation))’’. IOUS TYPES OF PLANS. 3 ...... 40 (c) EFFECTIVE DATE.—The amendments (a) ROLLOVERS FROM AND TO SECTION 457 4 ...... 60 made by this section shall apply with respect PLANS.— 5 ...... 80 to surviving spouses and former spouses (1) ROLLOVERS FROM SECTION 457 PLANS.— 6 ...... 100.’’ (whose marriage, in the case of the amend- (A) IN GENERAL.—Section 457(e) (relating to (c) EFFECTIVE DATES.— ments made by subsection (a), terminated other definitions and special rules) is amend- (1) IN GENERAL.—Except as provided in after May 6, 1985) of former employees who ed by adding at the end the following: paragraph (2), the amendments made by this die after December 31, 2000. ‘‘(16) ROLLOVER AMOUNTS.— July 28, 1999 CONGRESSIONAL RECORD — SENATE S9581

‘‘(A) GENERAL RULE.—In the case of an eli- ment plans not described in such clause, the ‘‘(B) CERTAIN RULES MADE APPLICABLE.— gible deferred compensation plan established plan described in such clause may not accept The rules of paragraphs (2) through (7) and and maintained by an employer described in transfers or rollovers from such retirement (9) of section 402(c) and section 402(f) shall subsection (e)(1)(A), if— plans.’’ apply for purposes of subparagraph (A), ex- ‘‘(i) any portion of the balance to the cred- (C) 10 PERCENT ADDITIONAL TAX.—Sub- cept that section 402(f) shall be applied to it of an employee in such plan is paid to such section (t) of section 72 (relating to 10-per- the payor in lieu of the plan administrator.’’ employee in an eligible rollover distribution cent additional tax on early distributions (8) Section 408(a)(1) is amended by striking (within the meaning of section 402(c)(4) with- from qualified retirement plans) is amended ‘‘or 403(b)(8)’’ and inserting ‘‘, 403(b)(8), or out regard to subparagraph (C) thereof), by adding at the end the following new para- 457(e)(16)’’. ‘‘(ii) the employee transfers any portion of graph: (9) Subparagraphs (A) and (B) of section the property such employee receives in such ‘‘(9) SPECIAL RULE FOR ROLLOVERS TO SEC- 415(b)(2) are each amended by striking ‘‘and distribution to an eligible retirement plan TION 457 PLANS.—For purposes of this sub- 408(d)(3)’’ and inserting ‘‘403(b)(8), 408(d)(3), described in section 402(c)(8)(B), and section, a distribution from an eligible de- and 457(e)(16)’’. ‘‘(iii) in the case of a distribution of prop- ferred compensation plan (as defined in sec- (10) Section 415(c)(2) is amended by strik- erty other than money, the amount so trans- tion 457(b)) of an employer described in sec- ing ‘‘and 408(d)(3)’’ and inserting ‘‘408(d)(3), ferred consists of the property distributed, tion 457(e)(1)(A) shall be treated as a dis- and 457(e)(16)’’. then such distribution (to the extent so tribution from a qualified retirement plan (11) Section 4973(b)(1)(A) is amended by transferred) shall not be includible in gross described in 4974(c)(1) to the extent that such striking ‘‘or 408(d)(3)’’ and inserting income for the taxable year in which paid. distribution is attributable to an amount ‘‘408(d)(3), or 457(e)(16)’’. ‘‘(B) CERTAIN RULES MADE APPLICABLE.— transferred to an eligible deferred compensa- (f) EFFECTIVE DATE; SPECIAL RULE.— The rules of paragraphs (2) through (7) (other tion plan from a qualified retirement plan (1) EFFECTIVE DATE.—The amendments than paragraph (4)(C)) and (9) of section (as defined in section 4974(c)).’’ made by this section shall apply to distribu- 402(c) and section 402(f) shall apply for pur- (b) ALLOWANCE OF ROLLOVERS FROM AND TO tions after December 31, 2000. poses of subparagraph (A). 403(b) PLANS.— (2) SPECIAL RULE.—Notwithstanding any ‘‘(C) REPORTING.—Rollovers under this (1) ROLLOVERS FROM SECTION 403(b) PLANS.— other provision of law, subsections (h)(3) and paragraph shall be reported to the Secretary Section 403(b)(8)(A)(ii) (relating to rollover (h)(5) of section 1122 of the Tax Reform Act in the same manner as rollovers from quali- amounts) is amended by striking ‘‘such dis- of 1986 shall not apply to any distribution fied retirement plans (as defined in section tribution’’ and all that follows and inserting from an eligible retirement plan (as defined 4974(c)).’’ ‘‘such distribution to an eligible retirement in clause (iii) or (iv) of section 402(c)(8)(B) of (B) DEFERRAL LIMIT DETERMINED WITHOUT plan described in section 402(c)(8)(B), and’’. the Internal Revenue Code of 1986) on behalf REGARD TO ROLLOVER AMOUNTS.—Section (2) ROLLOVERS TO SECTION 403(b) PLANS.— of an individual if there was a rollover to 457(b)(2) (defining eligible deferred com- Section 402(c)(8)(B) (defining eligible retire- such plan on behalf of such individual which pensation plan) is amended by inserting ment plan), as amended by subsection (a), is is permitted solely by reason of any amend- ‘‘(other than rollover amounts)’’ after ‘‘tax- amended by striking ‘‘and’’ at the end of ment made by this section. able year’’. clause (iv), by striking the period at the end SEC. 822. ROLLOVERS OF IRAS INTO WORKPLACE (C) DIRECT ROLLOVER.—Paragraph (1) of of clause (v) and inserting RETIREMENT PLANS. section 457(d) is amended by striking ‘‘and’’ ‘‘, and’’, and by inserting after clause (v) the (a) IN GENERAL.—Subparagraph (A) of sec- at the end of subparagraph (A), by striking following new clause: tion 408(d)(3) (relating to rollover amounts) the period at the end of subparagraph (B) and ‘‘(vi) an annuity contract described in sec- is amended by adding ‘‘or’’ at the end of inserting ‘‘, and’’, and by inserting after sub- tion 403(b).’’ clause (i), by striking clauses (ii) and (iii), paragraph (B) the following: (c) EXPANDED EXPLANATION TO RECIPIENTS and by adding at the end the following: ‘‘(C) in the case of a plan maintained by an OF ROLLOVER DISTRIBUTIONS.—Paragraph (1) ‘‘(ii) the entire amount received (including employer described in subsection (e)(1)(A), of section 402(f) (relating to written expla- money and any other property) is paid into the plan meets requirements similar to the nation to recipients of distributions eligible an eligible retirement plan for the benefit of requirements of section 401(a)(31). for rollover treatment) is amended by strik- such individual not later than the 60th day Any amount transferred in a direct trustee- ing ‘‘and’’ at the end of subparagraph (C), by after the date on which the payment or dis- to-trustee transfer in accordance with sec- striking the period at the end of subpara- tribution is received, except that the max- tion 401(a)(31) shall not be includible in gross graph (D) and inserting ‘‘, and’’, and by add- imum amount which may be paid into such income for the taxable year of transfer.’’ ing at the end the following new subpara- plan may not exceed the portion of the (D) WITHHOLDING.— graph: amount received which is includible in gross (i) Paragraph (12) of section 3401(a) is ‘‘(E) of the provisions under which dis- income (determined without regard to this amended by adding at the end the following: tributions from the eligible retirement plan paragraph). ‘‘(E) under or to an eligible deferred com- receiving the distribution may be subject to For purposes of clause (ii), the term ‘eligible pensation plan which, at the time of such restrictions and tax consequences which are retirement plan’ means an eligible retire- payment, is a plan described in section 457(b) different from those applicable to distribu- ment plan described in clause (iii), (iv), (v), maintained by an employer described in sec- tions from the plan making such distribu- or (vi) of section 402(c)(8)(B) the trustee of tion 457(e)(1)(A); or’’. tion.’’ which is a person which may be a trustee of (ii) Paragraph (3) of section 3405(c) is (d) SPOUSAL ROLLOVERS.—Section 402(c)(9) an individual retirement plan under section amended to read as follows: (relating to rollover where spouse receives 408.’’ ‘‘(3) ELIGIBLE ROLLOVER DISTRIBUTION.—For distribution after death of employee) is (b) CONFORMING AMENDMENTS.— purposes of this subsection, the term ‘eligi- amended by striking ‘‘; except that’’ and all (1) Paragraph (1) of section 403(b) is amend- ble rollover distribution’ has the meaning that follows up to the end period. ed by striking ‘‘section 408(d)(3)(A)(iii)’’ and given such term by section 402(f)(2)(A).’’ (e) CONFORMING AMENDMENTS.— inserting ‘‘section 408(d)(3)(A)(ii)’’. (iii) LIABILITY FOR WITHHOLDING.—Subpara- (1) Section 72(o)(4) is amended by striking (2) Clause (i) of section 408(d)(3)(D) is graph (B) of section 3405(d)(2) is amended by ‘‘and 408(d)(3)’’ and inserting ‘‘403(b)(8), amended by striking ‘‘(i), (ii), or (iii)’’ and striking ‘‘or’’ at the end of clause (ii), by 408(d)(3), and 457(e)(16)’’. inserting ‘‘(i) or (ii)’’. striking the period at the end of clause (iii) (2) Section 219(d)(2) is amended by striking (3) Subparagraph (G) of section 408(d)(3) is and inserting ‘‘, or’’, and by adding at the ‘‘or 408(d)(3)’’ and inserting ‘‘408(d)(3), or amended to read as follows: end the following: 457(e)(16)’’. ‘‘(G) SIMPLE RETIREMENT ACCOUNTS.—In the ‘‘(iv) section 457(b).’’ (3) Section 401(a)(31)(B) is amended by case of any payment or distribution out of a (2) ROLLOVERS TO SECTION 457 PLANS.— striking ‘‘and 403(a)(4)’’ and inserting ‘‘, simple retirement account (as defined in sub- (A) IN GENERAL.—Section 402(c)(8)(B) (de- 403(a)(4), 403(b)(8), and 457(e)(16)’’. section (p)) to which section 72(t)(6) applies, fining eligible retirement plan) is amended (4) Subparagraph (A) of section 402(f)(2) is this paragraph shall not apply unless such by striking ‘‘and’’ at the end of clause (iii), amended by striking ‘‘or paragraph (4) of sec- payment or distribution is paid into another by striking the period at the end of clause tion 403(a)’’ and inserting ‘‘, paragraph (4) of simple retirement account.’’ (iv) and inserting ‘‘, and’’, and by inserting section 403(a), subparagraph (A) of section (c) EFFECTIVE DATE; SPECIAL RULE.— after clause (iv) the following new clause: 403(b)(8), or subparagraph (A) of section (1) EFFECTIVE DATE.—The amendments ‘‘(v) an eligible deferred compensation plan 457(e)(16)’’. made by this section shall apply to distribu- described in section 457(b) of an employer de- (5) Paragraph (1) of section 402(f) is amend- tions after December 31, 2000. scribed in section 457(e)(1)(A).’’ ed by striking ‘‘from an eligible retirement (2) SPECIAL RULE.—Notwithstanding any (B) SEPARATE ACCOUNTING.—Section 402(c) plan’’. other provision of law, subsections (h)(3) and is amended by adding at the end the fol- (6) Subparagraphs (A) and (B) of section (h)(5) of section 1122 of the Tax Reform Act lowing new paragraph: 402(f)(1) are amended by striking ‘‘another of 1986 shall not apply to any distribution ‘‘(11) SEPARATE ACCOUNTING.—Unless a plan eligible retirement plan’’ and inserting ‘‘an from an eligible retirement plan (as defined described in clause (v) of paragraph (8)(B) eligible retirement plan’’. in clause (iii) or (iv) of section 402(c)(8)(B) of agrees to separately account for amounts (7) Subparagraph (B) of section 403(b)(8) is the Internal Revenue Code of 1986) on behalf rolled into such plan from eligible retire- amended to read as follows: of an individual if there was a rollover to S9582 CONGRESSIONAL RECORD — SENATE July 28, 1999

such plan on behalf of such individual which the distributee received the property distrib- ‘‘(E) ELIMINATION OF FORM OF DISTRIBU- is permitted solely by reason of the amend- uted. TION.—Except to the extent provided in regu- ments made by this section. ‘‘(B) HARDSHIP EXCEPTION.—The Secretary lations, a defined contribution plan shall not SEC. 823. ROLLOVERS OF AFTER-TAX CONTRIBU- may waive the 60-day requirement under be treated as failing to meet the require- TIONS. subparagraph (A) where the failure to waive ments of this section merely because of the (a) ROLLOVERS FROM EXEMPT TRUSTS.— such requirement would be against equity or elimination of a form of distribution pre- Paragraph (2) of section 402(c) (relating to good conscience, including casualty, dis- viously available thereunder. This subpara- maximum amount which may be rolled over) aster, or other events beyond the reasonable graph shall not apply to the elimination of a is amended by adding at the end the fol- control of the individual subject to such re- form of distribution with respect to any par- lowing: ‘‘The preceding sentence shall not quirement.’’ ticipant unless— apply to such distribution to the extent— (b) IRAS.—Paragraph (3) of section 408(d) ‘‘(i) a single sum payment is available to ‘‘(A) such portion is transferred in a direct (relating to rollover contributions), as such participant at the same time or times trustee-to-trustee transfer to a qualified amended by section 333, is amended by add- as the form of distribution being eliminated, trust which is part of a plan which is a de- ing after subparagraph (H) the following new and fined contribution plan and which agrees to subparagraph: ‘‘(ii) such single sum payment is based on separately account for amounts so trans- ‘‘(I) WAIVER OF 60-DAY REQUIREMENT.—The the same or greater portion of the partici- ferred, including separately accounting for Secretary may waive the 60-day requirement pant’s account as the form of distribution the portion of such distribution which is in- under subparagraphs (A) and (D) where the being eliminated.’’ cludible in gross income and the portion of failure to waive such requirement would be (2) AMENDMENT TO ERISA.—Section 204(g) of such distribution which is not so includible, against equity or good conscience, including the Employee Retirement Income Security or casualty, disaster, or other events beyond Act of 1974 (29 U.S.C. 1054(g)) is amended by ‘‘(B) such portion is transferred to an eligi- the reasonable control of the individual sub- adding at the end the following: ble retirement plan described in clause (i) or ject to such requirement.’’ ‘‘(4)(A) A defined contribution plan (in this (ii) of paragraph (8)(B).’’ (c) EFFECTIVE DATE.—The amendments subparagraph referred to as the ‘transferee (b) OPTIONAL DIRECT TRANSFER OF ELIGIBLE made by this section shall apply to distribu- plan’) shall not be treated as failing to meet ROLLOVER DISTRIBUTIONS.—Subparagraph (B) tions after December 31, 2000. the requirements of this subsection merely of section 401(a)(31) (relating to limitation) SEC. 825. TREATMENT OF FORMS OF DISTRIBU- is amended by adding at the end the fol- because the transferee plan does not provide TION. some or all of the forms of distribution pre- lowing: ‘‘The preceding sentence shall not (a) PLAN TRANSFERS.— apply to such distribution if the plan to viously available under another defined con- (1) AMENDMENT TO INTERNAL REVENUE CODE tribution plan (in this paragraph referred to which such distribution is transferred— OF 1986.—Paragraph (6) of section 411(d) (re- as the ‘transferor plan’) to the extent that— ‘‘(i) agrees to separately account for lating to accrued benefit not to be decreased ‘‘(i) the forms of distribution previously amounts so transferred, including separately by amendment) is amended by adding at the available under the transferor plan applied accounting for the portion of such distribu- end the following: to the account of a participant or beneficiary tion which is includible in gross income and ‘‘(D) PLAN TRANSFERS.— under the transferor plan that was trans- the portion of such distribution which is not ‘‘(i) A defined contribution plan (in this ferred from the transferor plan to the trans- so includible, or subparagraph referred to as the ‘transferee feree plan pursuant to a direct transfer rath- ‘‘(ii) is an eligible retirement plan de- plan’) shall not be treated as failing to meet er than pursuant to a distribution from the scribed in clause (i) or (ii) of section the requirements of this subsection merely transferor plan; 402(c)(8)(B).’’ because the transferee plan does not provide ‘‘(ii) the terms of both the transferor plan (c) RULES FOR APPLYING SECTION 72 TO some or all of the forms of distribution pre- and the transferee plan authorize the trans- IRAS.—Paragraph (3) of section 408(d) (relat- viously available under another defined con- fer described in clause (i); ing to special rules for applying section 72) is tribution plan (in this subparagraph referred ‘‘(iii) the transfer described in clause (i) amended by inserting at the end the fol- to as the ‘transferor plan’) to the extent was made pursuant to a voluntary election lowing: that— by the participant or beneficiary whose ac- ‘‘(H) APPLICATION OF SECTION 72.— ‘‘(I) the forms of distribution previously count was transferred to the transferee plan; ‘‘(i) IN GENERAL.—If— available under the transferor plan applied ‘‘(iv) the election described in clause (iii) ‘‘(I) a distribution is made from an indi- to the account of a participant or beneficiary was made after the participant or bene- vidual retirement plan, and under the transferor plan that was trans- ficiary received a notice describing the con- ‘‘(II) a rollover contribution is made to an ferred from the transferor plan to the trans- sequences of making the election; eligible retirement plan described in section feree plan pursuant to a direct transfer rath- ‘‘(v) if the transferor plan provides for an 402(c)(8)(B)(iii), (iv), (v), or (vi) with respect er than pursuant to a distribution from the annuity as the normal form of distribution to all or part of such distribution, transferor plan, under the plan in accordance with section then, notwithstanding paragraph (2), the ‘‘(II) the terms of both the transferor plan 417, the transfer is made with the consent of rules of clause (ii) shall apply for purposes of and the transferee plan authorize the trans- the participant’s spouse (if any), and such applying section 72. fer described in subclause (I), consent meets requirements similar to the ‘‘(ii) APPLICABLE RULES.—In the case of a ‘‘(III) the transfer described in subclause requirements imposed by section 417(a)(2); distribution described in clause (i)— (I) was made pursuant to a voluntary elec- and ‘‘(I) section 72 shall be applied separately tion by the participant or beneficiary whose ‘‘(vi) the transferee plan allows the partici- to such distribution, account was transferred to the transferee pant or beneficiary described in subclause ‘‘(II) notwithstanding the pro rata alloca- plan, (III) to receive any distribution to which the tion of income on, and investment in the ‘‘(IV) the election described in subclause participant or beneficiary is entitled under contract, to distributions under section 72, (III) was made after the participant or bene- the transferee plan in the form of a single the portion of such distribution rolled over ficiary received a notice describing the con- sum distribution. to an eligible retirement plan described in sequences of making the election, clause (i) shall be treated as from income on ‘‘(V) if the transferor plan provides for an ‘‘(B) Subparagraph (A) shall apply to plan the contract (to the extent of the aggregate annuity as the normal form of distribution mergers and other transactions having the income on the contract from all individual under the plan in accordance with section effect of a direct transfer, including consoli- retirement plans of the distributee), and 417, the transfer is made with the consent of dations of benefits attributable to different ‘‘(III) appropriate adjustments shall be the participant’s spouse (if any), and such employers within a multiple employer plan. made in applying section 72 to other dis- consent meets requirements similar to the ‘‘(C) Subparagraph (A) shall not apply to a tributions in such taxable year and subse- requirements imposed by section 417(a)(2), transfer unless it is in connection with a quent taxable years.’’ and bona fide transaction or change in employer. (d) EFFECTIVE DATE.—The amendments ‘‘(VI) the transferee plan allows the partic- made by this section shall apply to distribu- ipant or beneficiary described in subclause ‘‘(5) Except to the extent provided in regu- tions made after December 31, 2000. (III) to receive any distribution to which the lations, a defined contribution plan shall not SEC. 824. HARDSHIP EXCEPTION TO 60-DAY RULE. participant or beneficiary is entitled under be treated as failing to meet the require- (a) EXEMPT TRUSTS.—Paragraph (3) of sec- the transferee plan in the form of a single ments of this section merely because of the tion 402(c) (relating to transfer must be made sum distribution. elimination of a form of distribution pre- within 60 days of receipt) is amended to read ‘‘(ii) Clause (i) shall apply to plan mergers viously available thereunder. This paragraph as follows: and other transactions having the effect of a shall not apply to the elimination of a form ‘‘(3) TRANSFER MUST BE MADE WITHIN 60 direct transfer, including consolidations of of distribution with respect to any partici- DAYS OF RECEIPT.— benefits attributable to different employers pant unless— ‘‘(A) IN GENERAL.—Except as provided in within a multiple employer plan. ‘‘(A) a single sum payment is available to subparagraph (B), paragraph (1) shall not ‘‘(iii) Clause (i) shall not apply to a trans- such participant at the same time or times apply to any transfer of a distribution made fer unless it is in connection with a bona fide as the form of distribution being eliminated; after the 60th day following the day on which transaction or change in employer. and July 28, 1999 CONGRESSIONAL RECORD — SENATE S9583

‘‘(B) such single sum payment is based on ‘‘(13) TRUSTEE-TO-TRUSTEE TRANSFERS TO Subtitle D—Strengthening Pension Security the same or greater portion of the partici- PURCHASE PERMISSIVE SERVICE CREDIT.—No and Enforcement pant’s account as the form of distribution amount shall be includible in gross income SEC. 831. TREATMENT OF MULTIEMPLOYER being eliminated.’’ by reason of a direct trustee-to-trustee PLANS UNDER SECTION 415. (3) EFFECTIVE DATE.—The amendments transfer to a defined benefit governmental (a) COMPENSATION LIMIT.—Paragraph (11) of made by this subsection shall apply to years plan (as defined in section 414(d)) if such section 415(b) (relating to limitation for de- beginning after December 31, 2000. transfer is— fined benefit plans) is amended to read as (b) REGULATIONS.— ‘‘(A) for the purchase of permissive service follows: (1) AMENDMENT TO INTERNAL REVENUE CODE credit (as defined in section 415(n)(3)(A)) ‘‘(11) SPECIAL LIMITATION RULE FOR GOVERN- OF 1986.—The last sentence of paragraph (6)(B) under such plan, or MENTAL AND MULTIEMPLOYER PLANS.—In the of section 411(d) (relating to accrued benefit ‘‘(B) a repayment to which section 415 does case of a governmental plan (as defined in not to be decreased by amendment) is not apply by reason of subsection (k)(3) section 414(d)) or a multiemployer plan (as amended to read as follows: ‘‘The Secretary thereof.’’ defined in section 414(f)), subparagraph (B) of may by regulations provide that this sub- paragraph (1) shall not apply.’’ paragraph shall not apply to any plan (b) 457 PLANS.— (b) COMBINING AND AGGREGATION OF amendment that does not adversely affect (1) Subsection (e) of section 457 is amended PLANS.— the rights of participants in a material man- by adding after paragraph (17) the following (1) COMBINING OF PLANS.—Subsection (f) of ner.’’ new paragraph: section 415 (relating to combining of plans) is (2) AMENDMENT TO ERISA.—The last sen- ‘‘(18) TRUSTEE-TO-TRUSTEE TRANSFERS TO amended by adding at the end the following: tence of section 204(g)(2) of the Employee Re- PURCHASE PERMISSIVE SERVICE CREDIT.—No ‘‘(3) EXCEPTION FOR MULTIEMPLOYER tirement Income Security Act of 1974 (29 amount shall be includible in gross income PLANS.—Notwithstanding paragraph (1) and U.S.C. 1054(g)(2)) is amended to read as fol- by reason of a direct trustee-to-trustee subsection (g), a multiemployer plan (as de- lows: ‘‘The Secretary of the Treasury may by transfer to a defined benefit governmental fined in section 414(f)) shall not be combined regulations provide that this paragraph shall plan (as defined in section 414(d)) if such or aggregated with any other plan main- not apply to any plan amendment that does transfer is— tained by an employer for purposes of apply- not adversely affect the rights of partici- ‘‘(A) for the purchase of permissive service ing the limitations established in this sec- pants in a material manner.’’ credit (as defined in section 415(n)(3)(A)) tion. The preceding sentence shall not apply (3) SECRETARY DIRECTED.—Not later than under such plan, or for purposes of applying subsection (b)(1)(A) December 31, 2001, the Secretary of the ‘‘(B) a repayment to which section 415 does to a plan which is not a multiemployer Treasury is directed to issue final regula- not apply by reason of subsection (k)(3) plan.’’ tions under section 411(d)(6) of the Internal thereof.’’ (2) CONFORMING AMENDMENT FOR AGGREGA- Revenue Code of 1986 and section 204(g)(2) of (2) Section 457(b)(2) is amended by striking TION OF PLANS.—Subsection (g) of section 415 the Employee Retirement Income Security ‘‘(other than rollover amounts)’’ and insert- (relating to aggregation of plans) is amended Act of 1974. Such regulations shall apply to ing ‘‘(other than rollover amounts and by striking ‘‘The Secretary’’ and inserting plan years beginning after December 31, 2001, amounts received in a transfer referred to in ‘‘Except as provided in subsection (f)(3), the or such earlier date as is specified by the subsection (e)(16))’’. Secretary’’. Secretary of the Treasury. (c) EFFECTIVE DATE.—The amendments (c) EFFECTIVE DATE.—The amendments SEC. 826. RATIONALIZATION OF RESTRICTIONS made by this section shall apply to trustee- made by this section shall apply to years be- ON DISTRIBUTIONS. to-trustee transfers after December 31, 2000. ginning after December 31, 2000. (a) MODIFICATION OF SAME DESK EXCEP- TION.— SEC. 828. EMPLOYERS MAY DISREGARD ROLL- SEC. 832. EXTENSION OF MISSING PARTICIPANTS OVERS FOR PURPOSES OF CASH-OUT PROGRAM TO MULTIEMPLOYER (1) SECTION 401(k).— AMOUNTS. PLANS. (A) Section 401(k)(2)(B)(i)(I) (relating to (a) IN GENERAL.—Section 4050 of the Em- qualified cash or deferred arrangements) is (a) QUALIFIED PLANS.— ployee Retirement Income Security Act of amended by striking ‘‘separation from serv- (1) AMENDMENT TO INTERNAL REVENUE CODE 1974 (29 U.S.C. 1350) is amended by redesig- ice’’ and inserting ‘‘severance from employ- OF 1986.—Section 411(a)(11) (relating to re- nating subsection (c) as subsection (d) and by ment’’. strictions on certain mandatory distribu- inserting after subsection (b) the following: (B) Subparagraph (A) of section 401(k)(10) tions) is amended by adding at the end the ‘‘(c) MULTIEMPLOYER PLANS.—The corpora- (relating to distributions upon termination following: tion shall prescribe rules similar to the rules of plan or disposition of assets or subsidiary) ‘‘(D) SPECIAL RULE FOR ROLLOVER CONTRIBU- in subsection (a) for multiemployer plans is amended to read as follows: TIONS.—A plan shall not fail to meet the re- covered by this title that terminate under ‘‘(A) IN GENERAL.—An event described in quirements of this paragraph if, under the section 4041A.’’ this subparagraph is the termination of the terms of the plan, the present value of the (b) CONFORMING AMENDMENT.—Section plan without establishment or maintenance nonforfeitable accrued benefit is determined 206(f) of the Employee Retirement Income of another defined contribution plan (other without regard to that portion of such ben- Security Act of 1974 (29 U.S.C. 1056(f)) is than an employee stock ownership plan as efit which is attributable to rollover con- amended by striking ‘‘the plan shall provide defined in section 4975(e)(7)).’’ tributions (and earnings allocable thereto). that,’’. (C) Section 401(k)(10) is amended— For purposes of this subparagraph, the term (c) EFFECTIVE DATE.—The amendments (i) in subparagraph (B)— ‘rollover contributions’ means any rollover made by this section shall apply to distribu- (I) by striking ‘‘An event’’ in clause (i) and contribution under sections 402(c), 403(a)(4), tions made after final regulations imple- inserting ‘‘A termination’’, and 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).’’ menting subsection (c) of section 4050 of the (II) by striking ‘‘the event’’ in clause (i) (2) AMENDMENT TO ERISA.—Section 203(e) of Employee Retirement Income Security Act and inserting ‘‘the termination’’, the Employee Retirement Income Security of 1974 (as added by subsection (a)) are pre- (ii) by striking subparagraph (C), and Act of 1974 (29 U.S.C. 1053(c)) is amended by scribed. (iii) by striking ‘‘OR DISPOSITION OF ASSETS adding at the end the following: SEC. 833. CIVIL PENALTIES FOR BREACH OF FI- OR SUBSIDIARY’’ in the heading. ‘‘(4) A plan shall not fail to meet the re- DUCIARY RESPONSIBILITY. (2) SECTION 403(b).— quirements of this subsection if, under the (A) Paragraphs (7)(A)(ii) and (11)(A) of sec- (a) IMPOSITION AND AMOUNT OF PENALTY terms of the plan, the present value of the tion 403(b) are each amended by striking MADE DISCRETIONARY.—Section 502(l)(1) of nonforfeitable accrued benefit is determined ‘‘separates from service’’ and inserting ‘‘has the Employee Retirement Income Security without regard to that portion of such ben- a severance from employment’’. Act of 1974 (29 U.S.C. 1132(l)(1)) is amended— efit which is attributable to rollover con- (B) The heading for paragraph (11) of sec- (1) by striking ‘‘shall’’ and inserting tributions (and earnings allocable thereto). ‘‘may’’, and tion 403(b) is amended by striking ‘‘SEPARA- For purposes of this subparagraph, the term (2) by striking ‘‘equal to’’ and inserting TION FROM SERVICE’’ and inserting ‘‘SEVER- ‘rollover contributions’ means any rollover ‘‘not greater than’’. ANCE FROM EMPLOYMENT’’. contribution under sections 402(c), 403(a)(4), (b) APPLICABLE RECOVERY AMOUNT.—Sec- (3) SECTION 457.—Clause (ii) of section 457(d)(1)(A) is amended by striking ‘‘is sepa- 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the tion 502(l)(2) of the Employee Retirement In- rated from service’’ and inserting ‘‘has a sev- Internal Revenue Code of 1986.’’ come Security Act of 1974 (29 U.S.C. 1132(l)(2)) is amended to read as follows: erance from employment’’. (b) ELIGIBLE DEFERRED COMPENSATION ‘‘(2) For purposes of paragraph (1), the (b) EFFECTIVE DATE.—The amendments PLANS.—Clause (i) of section 457(e)(9)(A) is term ‘applicable recovery amount’ means made by this section shall apply to distribu- amended by striking ‘‘such amount’’ and in- any amount which is recovered from (or on tions after December 31, 2000. serting ‘‘the portion of such amount which is behalf of) any fiduciary or other person with SEC. 827. PURCHASE OF SERVICE CREDIT IN GOV- not attributable to rollover contributions (as respect to a breach or violation described in ERNMENTAL DEFINED BENEFIT defined in section 411(a)(11)(D))’’. PLANS. paragraph (1) on or after the 90th day fol- (a) 403(b) PLANS.—Subsection (b) of section (c) EFFECTIVE DATE.—The amendments lowing receipt by such fiduciary or other 403 is amended by adding at the end the fol- made by this section shall apply to distribu- person of written notice from the Secretary lowing new paragraph: tions after December 31, 2000. of the violation, whether paid voluntarily or S9584 CONGRESSIONAL RECORD — SENATE July 28, 1999 by order of a court in a judicial proceeding of the Secretary that none of the persons re- scribed in this paragraph includes the fol- instituted by the Secretary under subsection ferred to in subsection (d) knew, or exer- lowing: (a)(2) or (a)(5). The Secretary may, in the cising reasonable diligence would have ‘‘(A) Notice setting forth the plan amend- Secretary’s sole discretion, extend the 90-day known, that the failure existed. ment and its effective date. period described in the preceding sentence.’’ ‘‘(2) TAX NOT TO APPLY TO FAILURES COR- ‘‘(B) A comparison of the following (c) OTHER RULES.—Section 502(l) of the Em- RECTED WITHIN 30 DAYS.—No tax shall be im- amounts under the plan with respect to an ployee Retirement Income Security Act of posed by subsection (a) on any failure if— applicable individual, determined both with 1974 (29 U.S.C. 1132(l)) is amended by adding ‘‘(A) such failure was due to reasonable and without regard to the plan amendment: at the end the following: cause and not to willful neglect, and ‘‘(i) The accrued benefit and the present ‘‘(5) A person shall be jointly and severally ‘‘(B) such failure is corrected during the 30- value of the accrued benefit as of the effec- liable for the penalty described in paragraph day period beginning on the first date any of tive date. (1) to the same extent that such person is the persons referred to in subsection (d) ‘‘(ii) The projected accrued benefit and the jointly and severally liable for the applicable knew, or exercising reasonable diligence projected present value of the accrued ben- recovery amount on which the penalty is would have known, that such failure existed. efit as of the date which is 3 years, 5 years, based. ‘‘(3) OVERALL LIMITATION FOR UNINTEN- and 10 years from the effective date and as of ‘‘(6) No penalty shall be assessed under this TIONAL FAILURES.— the normal retirement age. subsection unless the person against whom ‘‘(A) IN GENERAL.—In the case of failures Such comparison may include a statement the penalty is assessed is given notice and that are due to reasonable cause and not to that ‘The projected benefits were computed opportunity for a hearing with respect to the willful neglect, the tax imposed by sub- using assumptions required under Federal violation and applicable recovery amount.’’ section (a) for failures during the taxable law and may not prove accurate over time.’ (d) EFFECTIVE DATE.—The amendments year of the employer (or, in the case of a ‘‘(C) A table of all annuity factors used to made by this section shall apply to any ac- multiemployer plan, the taxable year of the calculate benefits under the plan, presented tion or claim, including any action or claim trust forming part of the plan) shall not ex- in the form provided in section 72 and the commenced by the Secretary of Labor, pend- ceed $500,000. For purposes of the preceding regulations thereunder. sentence, all multiemployer plans of which ing on or after the date of enactment of this Benefits described in subparagraph (B) shall the same trust forms a part shall be treated Act. be stated separately and shall be calculated as 1 plan. SEC. 834. FAILURE TO PROVIDE NOTICE BY DE- by using the applicable mortality table and ‘‘(B) TAXABLE YEARS IN THE CASE OF CER- FINED BENEFIT PLANS SIGNIFI- the applicable interest rate under section CANTLY REDUCING FUTURE BEN- TAIN CONTROLLED GROUPS.—For purposes of 417(e)(3)(A). The Secretary may prescribe EFIT ACCRUALS. this paragraph, if all persons who are treated regulations under which information other (a) EXCISE TAX.— as a single employer for purposes of this sec- than that described in this paragraph may be (1) IN GENERAL.—Chapter 43 of subtitle D tion do not have the same taxable year, the provided in cases where the comparative (relating to qualified pension, etc., plans) is taxable years taken into account shall be de- benefits are not needed. amended by adding at the end the following termined under principles similar to the ‘‘(4) EMPLOYERS HELD HARMLESS.—A plan new section: principles of section 1561. (and any employer maintaining the plan) ‘‘(4) WAIVER BY SECRETARY.—In the case of ‘‘SEC. 4980F. FAILURE OF DEFINED BENEFIT shall not be treated as failing to meet the re- PLANS REDUCING BENEFIT ACCRU- a failure which is due to reasonable cause quirements of this subsection (or as being ALS TO SATISFY NOTICE REQUIRE- and not to willful neglect, the Secretary may liable to any applicable individual) by reason MENTS. waive part or all of the tax imposed by sub- of any projected amounts under paragraph ‘‘(a) IMPOSITION OF TAX.—There is hereby section (a) to the extent that the payment of (3) being wrong if such amounts were com- imposed a tax on the failure of a large de- such tax would be excessive relative to the puted in accordance with such paragraph. fined benefit plan to meet the requirements failure involved. ‘‘(5) LARGE DEFINED BENEFIT PLAN; APPLICA- of subsection (e) with respect to any applica- ‘‘(d) LIABILITY FOR TAX.—The following ble individual. shall be liable for the tax imposed by sub- BLE INDIVIDUAL.—For purposes of this ‘‘(b) AMOUNT OF TAX.— section (a): subsection— ‘‘(1) IN GENERAL.—The amount of the tax ‘‘(1) In the case of a plan other than a mul- ‘‘(A) LARGE DEFINED BENEFIT PLAN.—The imposed by subsection (a) on any failure tiemployer plan, the employer. term ‘large defined benefit plan’ means any with respect to any applicable individual ‘‘(2) In the case of a multiemployer plan, defined benefit plan which had 1,000 or more shall be $100 for each day in the noncompli- the plan. participants who had accrued a benefit under ance period with respect to such failure. ‘‘(e) NOTICE REQUIREMENTS FOR PLANS SIG- the plan (whether or not nonforfeitable) as of ‘‘(2) NONCOMPLIANCE PERIOD.—For purposes NIFICANTLY REDUCING BENEFIT ACCRUALS.— the last day of the plan year preceding the of this section, the term ‘noncompliance pe- ‘‘(1) IN GENERAL.—If a large defined benefit plan year in which the plan amendment be- riod’ means, with respect to any failure, the plan adopts an amendment which has the ef- comes effective. Such term shall not include period beginning on the date the failure first fect of significantly reducing the rate of fu- a governmental plan (within the meaning of occurs and ending on the date the failure is ture benefit accrual of 1 or more partici- section 414(d)) or a church plan (within the corrected. pants, a trust which is part of such plan shall meaning of section 414(e)). ‘‘(3) MINIMUM TAX FOR NONCOMPLIANCE PE- not constitute a qualified trust under this ‘‘(B) APPLICABLE INDIVIDUAL.—The term RIOD WHERE FAILURE DISCOVERED AFTER NO- section unless, after adoption of such amend- ‘applicable individual’ means— TICE OF EXAMINATION.—Notwithstanding ment and not less than 15 days before its ef- ‘‘(i) each participant in the plan, and paragraphs (1) and (2) of subsection (c)— fective date, the plan administrator ‘‘(ii) each beneficiary who is an alternate ‘‘(A) IN GENERAL.—In the case of 1 or more provides— payee (within the meaning of section failures with respect to an applicable ‘‘(A) a written statement of benefit change 414(p)(8)) under an applicable qualified do- individual— described in paragraph (2) to each applicable mestic relations order (within the meaning ‘‘(i) which are not corrected before the date individual, and of section 414(p)(1)(A)), a notice of examination of income tax liabil- ‘‘(B) a written notice setting forth the plan who has a nonforfeitable benefit under the ity is sent to the employer, and amendment and its effective date to each plan as of the effective date of the plan ‘‘(ii) which occurred or continued during employee organization representing partici- amendment and who may reasonably be ex- the period under examination, pants in the plan. pected to be affected by the plan amend- the amount of tax imposed by subsection (a) Any such notice may be provided to a person ment. by reason of such failures with respect to designated, in writing, by the person to ‘‘(6) ACCRUED BENEFIT; PROJECTED RETIRE- such beneficiary shall not be less than the which it would otherwise be provided. The MENT BENEFIT.—For purposes of this lesser of $2,500 or the amount of tax which plan administrator shall not be treated as subsection— would be imposed by subsection (a) without failing to meet the requirements of this ‘‘(A) PRESENT VALUE OF ACCRUED BENEFIT.— regard to such paragraphs. paragraph merely because the statement or The present value of an accrued benefit of ‘‘(B) HIGHER MINIMUM TAX WHERE VIOLA- notice is provided before the adoption of the any applicable individual shall be calculated TIONS ARE MORE THAN DE MINIMIS.—To the ex- plan amendment if no material modification as if the accrued benefit were in the form of tent violations by the employer (or the plan of the amendment occurs before the amend- a single life annuity commencing at the par- in the case of a multiemployer plan) for any ment is adopted. ticipant’s normal retirement age (and by year are more than de minimis, subpara- ‘‘(2) STATEMENT OF BENEFIT CHANGE.—A taking into account any early retirement graph (A) shall be applied by substituting statement of benefit change described in this subsidy). ‘$15,000’ for ‘$2,500’ with respect to the em- subparagraph shall— ‘‘(B) PROJECTED ACCRUED BENEFIT.— ployer (or such plan). ‘‘(A) be written in a manner calculated to ‘‘(i) IN GENERAL.—The projected accrued ‘‘(c) LIMITATIONS ON AMOUNT OF TAX.— be understood by the average plan partici- benefit of any applicable individual shall be ‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT pant, and calculated as if the benefit were payable in DISCOVERED EXERCISING REASONABLE DILI- ‘‘(B) include the information described in the form of a single life annuity commencing GENCE.—No tax shall be imposed by sub- paragraph (3). at the participant’s normal retirement age section (a) on any failure during any period ‘‘(3) INFORMATION CONTAINED IN STATEMENT (and by taking into account any early retire- for which it is established to the satisfaction OF BENEFIT CHANGE.—The information de- ment subsidy). July 28, 1999 CONGRESSIONAL RECORD — SENATE S9585

‘‘(ii) COMPENSATION AND OTHER ASSUMP- applicable interest rate under section (1) IN GENERAL.—The amendments made by TIONS.—Such benefit shall be calculated by 417(e)(3)(A) of such Code. The Secretary may this section shall apply to plan amendments assuming that compensation and all other prescribe regulations under which informa- taking effect in plan years beginning on or benefit factors would increase for each plan tion other than that described in this sub- after the earlier of— year beginning after the effective date of the paragraph may be provided in cases where (A) the later of— plan amendment at a rate equal to the me- the comparative benefits are not needed. (i) January 1, 1999, or dian average of the CPI increase percentage ‘‘(D) A plan (and any employer maintain- (ii) the date on which the last of the collec- (as defined in section 215(i) of the Social Se- ing the plan) shall not be treated as failing tive bargaining agreements pursuant to curity Act) for the 5 calendar years imme- to meet the requirements of this paragraph which the plan is maintained terminates (de- diately preceding the calendar year before (or as being liable to any applicable indi- termined without regard to any extension the calendar year in which such effective vidual) by reason of any projected amounts thereof after the date of the enactment of date occurs. under subparagraph (C) being wrong if such this Act), or ‘‘(iii) BENEFIT FACTORS.—For purposes of amounts were computed in accordance with (B) January 1, 2001. clause (ii), the term ‘benefit factors’ means such subparagraph. (2) EXCEPTION WHERE NOTICE GIVEN.—The social security benefits and all other rel- ‘‘(E) For purposes of this paragraph— amendments made by this section shall not evant factors under section 411(b)(1)(A) used ‘‘(i) The term ‘large defined benefit plan’ apply to any plan amendment for which to compute benefits under the plan which means any defined benefit plan which had written notice was given to participants or had increased from the 2d plan year pre- 1,000 or more participants who had accrued a their representatives before March 17, 1999, ceding the plan year in which the effective benefit under the plan (whether or not non- without regard to whether the amendment date of the plan amendment occurs to the 1st forfeitable) as of the last day of the plan was adopted before such date. such preceding plan year. year preceding the plan year in which the (3) SPECIAL RULE.—The period for providing ‘‘(C) NORMAL RETIREMENT AGE.—The term plan amendment becomes effective. Such any notice required by, or any notice the ‘normal retirement age’ means the later of— term shall not include a governmental plan contents of which are changed by, the ‘‘(i) the date determined under section (within the meaning of section 3(32)) or a amendments made by this Act shall not end 411(a)(8), or church plan (within the meaning of section before the date which is 6 months after the ‘‘(ii) the date a plan participant attains 3(33)). date of the enactment of this Act. age 62.’’ ‘‘(ii) The term ‘applicable individual’ Subtitle E—Encouraging Retirement (2) CONFORMING AMENDMENT.—The table of means an individual described in subpara- Education sections for chapter 43 of subtitle D is graph (A) or (B) of paragraph (1) who has a amended by adding at the end the following SEC. 841. PERIODIC PENSION BENEFITS STATE- nonforfeitable benefit under the plan as of MENTS. new item: the effective date of the plan amendment (a) IN GENERAL.—Section 105(a) of the Em- ‘‘Sec. 4980F. Failure of defined benefit plans and who may reasonably be expected to be ployee Retirement Income Security Act of reducing benefit accruals to affected by the plan amendment. 1974 (29 U.S.C. 1025(a)) is amended by striking satisfy notice requirements.’’ ‘‘(F) For purposes of this paragraph— ‘‘shall furnish to any plan participant or (b) AMENDMENTS TO ERISA.— ‘‘(i) The present value of an accrued benefit beneficiary who so requests in writing, a (1) BENEFIT STATEMENT REQUIREMENT.—Sec- of any applicable individual shall be cal- statement’’ and inserting ‘‘shall furnish to tion 204(h) of the Employee Retirement In- culated as if the accrued benefit were in the each plan participant at least once each year come Security Act of 1974 (29 U.S.C. 1054(h)) form of a single life annuity commencing at (3 years in the case of a defined benefit plan) is amended by adding at the end the fol- the participant’s normal retirement age (and or upon written request of a plan participant lowing new paragraphs: by taking into account any early retirement or beneficiary, a statement in written or ‘‘(3)(A) If paragraph (1) applies to the adop- subsidy). electronic form’’. tion of a plan amendment by a large defined ‘‘(ii)(I) The projected accrued benefit of (b) RULE FOR MULTIEMPLOYER PLANS.—Sec- benefit plan, the plan administrator shall, any applicable individual shall be calculated tion 105(d) of the Employee Retirement In- after adoption of such amendment and not as if the benefit were payable in the form of come Security Act of 1974 (29 U.S.C. 1025(d)) less than 15 days before its effective date, a single life annuity commencing at the par- is amended to read as follows: provide with the notice under paragraph (1) a ticipant’s normal retirement age (and by ‘‘(d) Upon written request of a plan partici- written statement of benefit change de- taking into account any early retirement pant or beneficiary, each administrator of a scribed in subparagraph (B) to each applica- subsidy). plan to which more than 1 unaffiliated em- ble individual. The Secretary may provide ‘‘(II) Such benefit shall be calculated by ployer is required to contribute shall furnish that paragraph (1) shall not apply to an assuming that compensation and all other a statement described in subsection (a) in amendment by reason of a failure under this benefit factors would increase for each plan written or electronic form.’’ paragraph if such application would be an ex- year beginning after the effective date of the (c) EFFECTIVE DATE.—The amendments cessive penalty relative to the failure in- plan amendment at a rate equal to the me- made by this section shall apply to plan volved. dian average of the CPI increase percentage years beginning after the earlier of— ‘‘(B) A statement of benefit change de- (as defined in section 215(i) of the Social Se- (1) the date of issuance by the Secretary of scribed in this subparagraph shall— curity Act) for the 5 calendar years imme- Labor of regulations providing guidance for ‘‘(i) be written in a manner calculated to diately preceding the calendar year before simplifying defined benefit plan calculations be understood by the average plan partici- the calendar year in which such effective with respect to the information required pant, and date occurs. under section 105 of the Employee Retire- ‘‘(ii) include the information described in ‘‘(III) For purposes of subclause (II), the ment Income Security Act of 1974 (29 U.S.C. subparagraph (C). term ‘benefit factors’ means social security 1025), or ‘‘(C) The information described in this sub- benefits and all other relevant factors under (2) December 31, 1998. paragraph includes the following: section 204(b)(1)(A) used to compute benefits SEC. 842. CLARIFICATION OF TREATMENT OF EM- ‘‘(i) A comparison of the following amounts under the plan which had increased from the PLOYER-PROVIDED RETIREMENT ADVICE. under the plan with respect to an applicable 2d plan year preceding the plan year in (a) IN GENERAL.—Subsection (a) of section individual, determined both with and with- which the effective date of the plan amend- 132 (relating to exclusion from gross income) out regard to the plan amendment: ment occurs to the 1st such preceding plan is amended by striking ‘‘or’’ at the end of ‘‘(I) The accrued benefit and the present year. paragraph (5), by striking the period at the value of the accrued benefit as of the effec- ‘‘(iii) The term ‘normal retirement age’ end of paragraph (6) and inserting ‘‘, or’’, and tive date. means the later of— by adding at the end the following new para- ‘‘(II) The projected accrued benefit and the ‘‘(I) the date determined under section graph: projected present value of the accrued ben- 3(24), or efit as of the date which is 3 years, 5 years, ‘‘(7) qualified retirement planning advice.’’ ‘‘(II) the date a plan participant attains (b) QUALIFIED RETIREMENT PLANNING AD- and 10 years from the effective date and as of age 62. the normal retirement age. VICE DEFINED.—Section 132 is amended by re- ‘‘(4) A plan administrator shall not be designating subsection (m) as subsection (n) Such comparison shall include a statement treated as failing to meet the requirements and by inserting after subsection (l) the fol- that ‘The projected benefits were computed of this subsection merely because the notice lowing: using assumptions required under Federal or statement is provided before the adoption ‘‘(m) QUALIFIED RETIREMENT PLANNING AD- law and may not prove accurate over time.’ of the plan amendment if no material modi- VICE.— ‘‘(ii) A table of all annuity factors used to fication of the amendment occurs before the ‘‘(1) IN GENERAL.—For purposes of this sec- calculate benefits under the plan, presented amendment is adopted.’’ tion, the term ‘qualified retirement planning in the form provided in section 72 of the In- (2) CONFORMING AMENDMENT.—Section advice’ means any retirement planning ad- ternal Revenue Code of 1986 and the regula- 204(h)(1) of such Act (29 U.S.C. 1054(h)(1)) is vice provided to an employee and his spouse tions thereunder. amended by inserting ‘‘(including any writ- by an employer maintaining a qualified em- Benefits described in clause (i) shall be stat- ten statement of benefit change if required ployer plan. Such term shall not include the ed separately and shall be calculated by by paragraph (3))’’ after ‘‘written notice’’. providing of tax preparation, accounting, using the applicable mortality table and the (c) EFFECTIVE DATES.— legal, brokerage, or other similar services. S9586 CONGRESSIONAL RECORD — SENATE July 28, 1999

‘‘(2) NONDISCRIMINATION RULE.—Subsection (c) EFFECTIVE DATE.—The amendments nary results of such analysis within 60 days (a)(7) shall apply in the case of highly com- made by this section shall apply to plans es- of the date of the enactment of this Act. pensated employees only if such advice is tablished after December 31, 2000. Subtitle G—Other Provisions available on substantially the same terms to SEC. 853. REDUCTION OF ADDITIONAL PBGC PRE- SEC. 303. TAX CREDIT FOR MATCHING CONTRIBU- each member of the group of employees nor- MIUM FOR NEW PLANS. TIONS TO INDIVIDUAL DEVELOP- mally provided education and information (a) IN GENERAL.—Subparagraph (E) of sec- MENT ACCOUNTS. regarding the employer’s qualified employer tion 4006(a)(3) of the Employee Retirement (a) IN GENERAL.—Subchapter F of chapter 1 plan. Income Security Act of 1974 (29 U.S.C. (relating to exempt organizations) is amend- ‘‘(3) QUALIFIED EMPLOYER PLAN.—For pur- 1306(a)(3)(E)) is amended by adding at the end ed by adding at the end the following new poses of this subsection, the term ‘qualified the following new clause: part: employer plan’ means a plan, contract, pen- ‘‘(v) In the case of a new defined benefit ‘‘PART IX—INDIVIDUAL DEVELOPMENT sion, or account described in section plan, the amount determined under clause ACCOUNTS 219(g)(5).’’ (ii) for any plan year shall be an amount ‘‘Sec. 530A. Individual development ac- (c) EFFECTIVE DATE.—The amendments equal to the product of the amount deter- counts. made by this section shall apply to years be- mined under clause (ii) and the applicable ‘‘SEC. 530A. INDIVIDUAL DEVELOPMENT AC- ginning after December 31, 2000. percentage. For purposes of this clause, the COUNTS. Subtitle F—Reducing Red Tape term ‘applicable percentage’ means— ‘‘(a) INDIVIDUAL DEVELOPMENT ACCOUNT.— ‘‘(I) 0 percent, for the first plan year. SEC. 851. ESOP DIVIDENDS MAY BE REINVESTED For purposes of this section, the term ‘Indi- WITHOUT LOSS OF DIVIDEND DE- ‘‘(II) 20 percent, for the second plan year. vidual Development Account’ means a custo- DUCTION. ‘‘(III) 40 percent, for the third plan year. dial account established for the exclusive (a) IN GENERAL.—Section 404(k)(2)(A) (de- ‘‘(IV) 60 percent, for the fourth plan year. benefit of an eligible individual or such indi- fining applicable dividends) is amended by ‘‘(V) 80 percent, for the fifth plan year. vidual’s beneficiaries, but only if the written striking ‘‘or’’ at the end of clause (ii), by re- For purposes of this clause, a defined benefit governing instrument creating the account designating clause (iii) as clause (iv), and by plan (as defined in section 3(35)) maintained meets the following requirements: inserting after clause (ii) the following: by a contributing sponsor shall be treated as ‘‘(1) Except in the case of a qualified roll- ‘‘(iii) is, at the election of such partici- a new defined benefit plan for its first 5 plan over (as defined in subsection (c)(2)(E))— pants or their beneficiaries— years if, during the 36-month period ending ‘‘(A) no contribution will be accepted un- ‘‘(I) payable as provided in clause (i) or (ii), on the date of the adoption of the plan, the less it is in cash, and or sponsor and each member of any controlled ‘‘(B) contributions will not be accepted for ‘‘(II) paid to the plan and reinvested in group including the sponsor (or any prede- the taxable year in excess of the lesser of— qualifying employer securities, or’’. cessor of either) did not establish or main- ‘‘(i) $350, or (b) EFFECTIVE DATE.—The amendments tain a plan to which this title applies with ‘‘(ii) an amount equal to the compensation made by this section shall apply to taxable respect to which benefits were accrued for includible in the eligible individual’s gross years beginning after December 31, 2000. substantially the same employees as are in income for such taxable year. SEC. 852. REDUCED PBGC PREMIUM FOR NEW the new plan.’’ ‘‘(2) The custodian of the account is a PLANS OF SMALL EMPLOYERS. (b) EFFECTIVE DATE.—The amendments qualified financial institution. (a) IN GENERAL.—Subparagraph (A) of sec- made by this section shall apply to plans es- ‘‘(3) The interest of an eligible individual tion 4006(a)(3) of the Employee Retirement tablished after December 31, 2000. in the balance of the account (determined Income Security Act of 1974 (29 U.S.C. SEC. 854. ELIMINATION OF USER FEE FOR RE- without regard to any such matching con- 1306(a)(3)(A)) is amended— QUESTS TO IRS REGARDING NEW tribution or earnings thereon) is nonforfeit- (1) in clause (i), by inserting ‘‘other than a PENSION PLANS. able. new single-employer plan (as defined in sub- (a) ELIMINATION OF CERTAIN USER FEES.— ‘‘(4) The assets of the account will not be paragraph (F)) maintained by a small em- The Secretary of the Treasury or the Sec- commingled with other property except in a ployer (as so defined),’’ after ‘‘single-em- retary’s delegate shall not require payment common trust fund or common investment ployer plan,’’, of user fees under the program established fund. (2) in clause (iii), by striking the period at under section 7527 of the Internal Revenue ‘‘(5) Except as provided in subsection (c), the end and inserting ‘‘, and’’, and Code of 1986 for requests to the Internal Rev- any amount in the account may be paid out (3) by adding at the end the following new enue Service for ruling letters, opinion let- only for qualified expense distributions. clause: ters, and determination letters or similar re- ‘‘(b) MATCHING CONTRIBUTIONS WITH RE- ‘‘(iv) in the case of a new single-employer quests with respect to the qualified status of SPECT TO INDIVIDUAL DEVELOPMENT AC- plan (as defined in subparagraph (F)) main- a new pension benefit plan or any trust COUNTS.— tained by a small employer (as so defined) which is part of the plan. ‘‘(1) IN GENERAL.—If an eligible individual for the plan year, $5 for each individual who (b) NEW PENSION BENEFIT PLAN.—For pur- establishes an Individual Development Ac- is a participant in such plan during the plan poses of this section— count with a qualified financial institution, year.’’ (1) IN GENERAL.—The term ‘‘new pension the qualified financial institution may de- (b) DEFINITION OF NEW SINGLE-EMPLOYER benefit plan’’ means a pension, profit-shar- posit into a separate, parallel, individual or PLAN.—Section 4006(a)(3) of the Employee ing, stock bonus, annuity, or employee stock pooled matching account an eligible match- Retirement Income Security Act of 1974 (29 ownership plan which is maintained by one ing contribution for the taxable year. The U.S.C. 1306(a)(3)) is amended by adding at the or more eligible employers if such employer qualified financial institution shall maintain end the following new subparagraph: (or any predecessor employer) has not made a separate accounting of matching contribu- ‘‘(F)(i) For purposes of this paragraph, a a prior request described in subsection (a) for tions and earnings thereon. single-employer plan maintained by a con- such plan (or any predecessor plan). ‘‘(2) ELIGIBLE MATCHING CONTRIBUTION.—For tributing sponsor shall be treated as a new (2) ELIGIBLE EMPLOYER.—The term ‘‘eligi- purposes of this section, the term ‘eligible single-employer plan for each of its first 5 ble employer’’ means an employer (or any matching contribution’ means a dollar-for- plan years if, during the 36-month period predecessor employer) which has not estab- dollar match of the contributions made by ending on the date of the adoption of such lished or maintained a qualified employer the eligible individual into the Individual plan, the sponsor or any member of such plan with respect to which contributions Development Account described in para- sponsor’s controlled group (or any prede- were made, or benefits were accrued for serv- graph (1) with respect to any taxable year. cessor of either) had not established or main- ice, in the 3 most recent taxable years end- ‘‘(3) ALLOWANCE OF CREDIT FOR ELIGIBLE tained a plan to which this title applies with ing prior to the first taxable year in which MATCHING CONTRIBUTIONS.— respect to which benefits were accrued for the request is made. ‘‘(A) IN GENERAL.—In the case of a qualified substantially the same employees as are in (c) EFFECTIVE DATE.—The provisions of financial institution, there shall be allowed the new single-employer plan. this section shall apply with respect to re- as a credit against the tax imposed by this ‘‘(ii)(I) For purposes of this paragraph, the quests made after December 31, 2000. chapter for the taxable year an amount term ‘small employer’ means an employer SEC. 855. DISTRIBUTIONAL ANALYSIS OF PEN- equal to 85 percent of the eligible matching which on the first day of any plan year has, SION TAX BENEFITS. contributions made by such institution with in aggregation with all members of the con- (a) ANALYSIS.—The Secretary of the Treas- respect to an eligible individual under this trolled group of such employer, 100 or fewer ury shall, not later than June 30, 2000 con- subsection for such taxable year (determined employees. duct a distributional analysis of the tax ben- without regard to any amount described in ‘‘(II) In the case of a plan maintained by 2 efits of major pension and retirement sav- paragraph (4)(B)). If any amount determined or more contributing sponsors that are not ings arrangements by income group. under the preceding sentence is not a mul- part of the same controlled group, the em- (b) REPORT.—The Secretary shall report to tiple of $10, such amount shall be rounded to ployees of all contributing sponsors and con- the Committee on Finance of the Senate and the next highest multiple of $10. trolled groups of such sponsors shall be ag- the Committee on Ways and Means of the ‘‘(B) LIMITATION BASED ON AMOUNT OF gregated for purposes of determining wheth- House of Representatives the results of the TAX.—The credit allowed under subparagraph er any contributing sponsor is a small em- analysis under subsection (a). To the extent (A) for any taxable year shall not exceed the ployer.’’ feasible, the Secretary shall report prelimi- excess of— July 28, 1999 CONGRESSIONAL RECORD — SENATE S9587 ‘‘(i) the sum of the regular tax liability (as 521(33) of such Act), as such sections are in unit and 1 motor vehicle owned by the house- defined in section 26(b)) plus the tax imposed effect on the date of the enactment of this hold. by section 55, over section. ‘‘(D) PROOF OF COMPENSATION AND STATUS ‘‘(ii) the sum of the credits allowable under ‘‘(iii) COORDINATION WITH OTHER BENEFITS.— AS AN ELIGIBLE INDIVIDUAL.—Statements part IV of subchapter A of this chapter. The amount of qualified higher education ex- under section 6051 and other forms specified ‘‘(C) CREDIT TREATED AS ALLOWED UNDER penses for any taxable year shall be reduced by the Secretary proving the eligible individ- PART IV OF SUBCHAPTER A.—For purposes of as provided in section 25A(g)(2) and by the ual’s wages and other compensation and the subtitle F, the credit allowed under subpara- amount of such expenses for which a credit status of the individual as an eligible indi- graph (A) shall be treated as a credit allow- or exclusion is allowed under this chapter for vidual shall be presented to the custodian at able under part IV of subchapter A of this such taxable year. the time of the establishment of the Indi- chapter. ‘‘(C) QUALIFIED FIRST-TIME HOMEBUYER vidual Development Account and at least ‘‘(4) FORFEITURE OF MATCHING FUNDS.— COSTS.—The term ‘qualified first-time home- once annually thereafter. ‘‘(A) IN GENERAL.—Amounts in the match- buyer costs’ means qualified acquisition ‘‘(2) QUALIFIED FINANCIAL INSTITUTION.— ing account established under this sub- costs (as defined in section 72(t)(8) without The term ‘qualified financial institution’ section for an eligible individual shall be re- regard to subparagraph (B) thereof) with re- means any person authorized to be a trustee duced by the amount of any distribution spect to a principal residence (within the of any individual retirement account under from an Individual Development Account of meaning of section 121) for a qualified first- section 408(a)(2). such individual which is not a qualified ex- time homebuyer (as defined in section ‘‘(3) TREATMENT OF MORE THAN ONE AC- pense distribution and which is not re- 72(t)(8)). COUNT.—All Individual Development Ac- contributed as part of a qualified rollover (as ‘‘(D) QUALIFIED BUSINESS CAPITALIZATION counts of an individual shall be treated as defined in subsection (c)(2)(E)). COSTS.— one account. ‘‘(B) USE OF FORFEITED FUNDS.—Eligible ‘‘(i) IN GENERAL.—The term ‘qualified busi- ‘‘(4) OTHER RULES TO APPLY.—Rules similar matching contributions which are forfeited ness capitalization costs’ means qualified ex- to the rules of paragraphs (1), (2), and (3) of by an eligible individual under subparagraph penditures for the capitalization of a quali- section 219(f), section 220(f)(8), paragraphs (4) (A) shall be used by the qualified financial fied business pursuant to a qualified business and (6) of section 408(d), and section 408(m) institution to make eligible matching con- plan. shall apply for purposes of this section. tributions for other Individual Development ‘‘(ii) QUALIFIED EXPENDITURES.—The term ‘‘(5) REPORTS.—The custodian of an Indi- Account contributions by eligible individ- ‘qualified expenditures’ means expenditures vidual Development Account shall make uals. included in a qualified business plan, includ- such reports regarding such account to the ‘‘(5) EXCLUSION FROM INCOME.—Gross in- ing capital, plant, equipment, working cap- Secretary and to the individual for whom the come of an eligible individual shall not in- ital and inventory expenses. account is maintained with respect to con- clude any eligible matching contribution and ‘‘(iii) QUALIFIED BUSINESS.—The term tributions (and the years to which they re- the earnings thereon deposited into a match- ‘qualified business’ means any business that late), distributions, and such other matters ing account under paragraph (1) on behalf of does not contravene any law. as the Secretary may require under regula- such individual. ‘‘(iv) QUALIFIED BUSINESS PLAN.—The term tions. The reports required by this ‘‘(6) REGULAR REPORTING OF MATCHING CON- ‘qualified business plan’ means a business paragraph— TRIBUTIONS.—Any qualified financial institu- plan which meets such requirements as the ‘‘(A) shall be filed at such time and in such tion shall report eligible matching contribu- Secretary of Housing and Urban Develop- manner as the Secretary prescribes in such tions to eligible individuals with Individual ment may specify. regulations, and Development Accounts on not less than a ‘‘(E) QUALIFIED ROLLOVERS.—The term ‘‘(B) shall be furnished to individuals— quarterly basis. ‘qualified rollover’ means, with respect to ‘‘(i) not later than January 31 of the cal- ‘‘(7) TERMINATION.—No eligible matching any distribution from an Individual Develop- endar year following the calendar year to contribution may be made for any taxable ment Account, the payment, within 120 days which such reports relate, and year beginning after December 31, 2005. of such distribution, of all or a portion of ‘‘(ii) in such manner as the Secretary pre- ‘‘(c) QUALIFIED EXPENSE DISTRIBUTION.— such distribution to such account or to an- For purposes of this section— other Individual Development Account es- scribes in such regulations. ‘‘(e) APPLICATION OF SECTION.—This section ‘‘(1) IN GENERAL.—The term ‘qualified ex- tablished in another qualified financial insti- pense distribution’ means any amount paid tution for the benefit of the eligible indi- shall apply to amounts paid to an Individual or distributed out of an Individual Develop- vidual. Rules similar to the rules of section Development Account for any taxable year ment Account and the matching account es- 408(d)(3) (other than subparagraph (C) there- beginning after December 31, 2000, and before tablished under subsection (b) for an eligible of) shall apply for purposes of this subpara- January 1, 2006.’’ individual if such amount— graph. (b) TAX ON EXCESS CONTRIBUTIONS.— ‘‘(A) is used exclusively to pay the quali- ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For (1) TAX IMPOSED.—Subsection (a) of section fied expenses of such individual or such indi- purposes of this section— 4973 is amended by striking ‘‘or’’ at the end vidual’s spouse or dependents, ‘‘(1) ELIGIBLE INDIVIDUAL.— of paragraph (3), adding ‘‘or’’ at the end of ‘‘(B) is paid by the qualified financial insti- ‘‘(A) IN GENERAL.—The term ‘eligible indi- paragraph (4), and inserting after paragraph tution directly to the person to whom the vidual’ means an individual who— (4) the following new paragraph: amount is due or to another Individual De- ‘‘(i) has attained the age of 18 years, ‘‘(5) an Individual Development Account velopment Account, and ‘‘(ii) is a citizen or legal resident of the (within the meaning of section 530A(a)),’’. ‘‘(C) is paid after the holder of the Indi- United States, and (2) EXCESS CONTRIBUTIONS.—Section 4973 is vidual Development Account has completed ‘‘(iii) is a member of a household— amended by adding at the end the following an economic literacy course offered by the ‘‘(I) which is eligible for the earned income new subsection: qualified financial institution, a nonprofit tax credit under section 32, ‘‘(g) INDIVIDUAL DEVELOPMENT ACCOUNTS.— organization, or a government entity. ‘‘(II) which is eligible for assistance under For purposes of this section, in the case of ‘‘(2) QUALIFIED EXPENSES.— a State program funded under part A of title Individual Development Accounts, the term ‘‘(A) IN GENERAL.—The term ‘qualified ex- IV of the Social Security Act, or ‘excess contributions’ means the excess (if penses’ means any of the following: ‘‘(III) the gross income of which does not any) of— ‘‘(i) Qualified higher education expenses. exceed 60 percent of the area median income ‘‘(1) the amount contributed for the tax- ‘‘(ii) Qualified first-time homebuyer costs. (as determined by the Department of Hous- able year to the accounts (other than a ‘‘(iii) Qualified business capitalization ing and Urban Affairs) and the net worth of qualified rollover, as defined in section costs. which does not exceed $10,000. 530A(c)(2)(E)), over ‘‘(iv) Qualified rollovers. ‘‘(B) HOUSEHOLD.—The term ‘household’ ‘‘(2) the amount allowable as a contribu- ‘‘(B) QUALIFIED HIGHER EDUCATION EX- means all individuals who share use of a tion under section 530A. PENSES.— dwelling unit as primary quarters for living For purposes of this subsection, any con- ‘‘(i) IN GENERAL.—The term ‘qualified high- and eating separate from other individuals. tribution which is distributed from the Indi- er education expenses’ has the meaning ‘‘(C) DETERMINATION OF NET WORTH.— vidual Development Account in a distribu- given such term by section 72(t)(7), deter- ‘‘(i) IN GENERAL.—For purposes of subpara- tion to which rules similar to the rules of mined by treating postsecondary vocational graph (A)(iii)(III), the net worth of a house- section 408(d)(4) apply by reason of section educational schools as eligible educational hold is the amount equal to— 530A(d)(4) shall be treated as an amount not institutions. ‘‘(I) the aggregate fair market value of all contributed.’’ ‘‘(ii) POSTSECONDARY VOCATIONAL EDU- assets that are owned in whole or in part by (c) INFORMATION RELATING TO CERTAIN CATION SCHOOL.—The term ‘postsecondary vo- any member of a household, minus TRUSTS AND ANNUITY PLANS.—Subsection (c) cational educational school’ means an area ‘‘(II) the obligations or debts of any mem- of section 6047 is amended— vocational education school (as defined in ber of the household. (1) by inserting ‘‘or section 530A’’ after subparagraph (C) or (D) of section 521(4) of ‘‘(ii) CERTAIN ASSETS DISREGARDED.—For ‘‘section 219’’; and the Carl D. Perkins Vocational and Applied purposes of determining the net worth of a (2) by inserting ‘‘, of any Individual Devel- Technology Education Act (20 U.S.C. 2471(4))) household, a household’s assets shall not be opment Account described in section which is in any State (as defined in section considered to include the primary dwelling 530A(a),’’, after ‘‘section 408(a)’’. S9588 CONGRESSIONAL RECORD — SENATE July 28, 1999 (d) FAILURE TO PROVIDE REPORTS ON INDI- (F) in the matter relating to a judge of the 7.75 January 1, 1999, VIDUAL DEVELOPMENT ACCOUNTS.—Paragraph United States Court of Appeals for the to December 31, (2) of section 6693(a) is amended by striking Armed Forces for service as a judge of that 1999. ‘‘and’’ at the end of subparagraph (C), by court by striking: 7.5 After December striking the period and inserting ‘‘, and’’ at ‘‘8.4 January 1, 2000, to December 31, 2000. 31, 1999. the end of subparagraph (D), and by adding Nuclear materials 7 January 1, 1987, 8.5 January 1, 2001, to December 31, 2002. at the end the following new subparagraph: courier to the day be- 8 After December 31, 2002.’’; ‘‘(E) section 530(d)(5) (relating to Indi- fore the date of vidual Development Accounts).’’ and inserting the following: enactment of (e) CLERICAL AMENDMENT.—The table of the strom Thur- ‘‘8 After December 31, 1999.’’; parts for subchapter F of chapter 1 is amend- mond National ed by adding at the end the following new (G) in the matter relating to a United Defense Au- item: States magistrate by striking: thorization Act ‘‘Part IX. Individual development ac- for Fiscal Year ‘‘8.4 January 1, 2000, to December 31, 2000. counts.’’ 1999. 8.5 January 1, 2001, to December 31, 2002. (f) FUNDS IN ACCOUNTS DISREGARDED FOR 7.75 The date of en- 8 After December 31, 2002.’’; PURPOSES OF CERTAIN MEANS-TESTED FED- actment of the ERAL PROGRAMS.—Notwithstanding any and inserting the following: Strom Thur- other provision of the Internal Revenue Code mond National of 1986 or the Social Security Act that re- ‘‘8 After December 31, 1999.’’; Defense Au- quires consideration of 1 or more financial (H) in the matter relating to a Court of thorization Act circumstances of an individual, for the pur- Federal Claims judge by striking: for Fiscal Year pose of determining eligibility to receive, or 1999 to Decem- the amount of, any assistance or benefit au- ‘‘8.4 January 1, 2000, to December 31, 2000. ber 31, 1998. thorized by such provision to be provided to 8.5 January 1, 2001, to December 31, 2002. 7.75 January 1, 1999, or for the benefit of such individual, con- 8 After December 31, 2002.’’; to December 31, tributions (including earnings thereon) in and inserting the following: 1999. any Individual Development Account and ap- 7.5 After December plicable matching account under section ‘‘8 After December 31, 1999.’’; 31, 1999.’’. 530A of such Code shall be disregarded for (I) in the matter relating to the Capitol (b) CONFORMING AMENDMENTS RELATING TO such purpose. Police by striking: MILITARY AND VOLUNTEER SERVICE UNDER (g) EFFECTIVE DATE.—The amendments FERS.— ‘‘7.9 January 1, 2000, to December 31, 2000. made by this section shall apply to taxable (1) MILITARY SERVICE.—Section 8422(e)(6) of 8 January 1, 2001, to December 31, 2002. years beginning after December 31, 2000. title 5, United States Code, is amended to 7.5 After December 31, 2002.’’. SEC. 862. FEDERAL EMPLOYEE RETIREMENT read as follows: CONTRIBUTIONS. and inserting the following: ‘‘(6) The percentage of basic pay under sec- (a) DEDUCTIONS, CONTRIBUTIONS, AND DE- tion 204 of title 37 payable under paragraph POSITS.— ‘‘7.5 After December 31, 1999.’’; (1), with respect to any period of military (1) CIVIL SERVICE RETIREMENT SYSTEM.—The and service performed during January 1, 1999, table under section 8334(c) of title 5, United through December 31, 1999, shall be 3.25 per- (J) in the matter relating to a nuclear ma- States Code, is amended— cent.’’. terial courier by striking: (A) in the matter relating to an employee (2) VOLUNTEER SERVICE.—Section 8422(f)(4) by striking: ‘‘7.9 January 1, 2000, to December 31, 2000. of title 5, United States Code, is amended to ‘‘7.4 January 1, 2000, to December 31, 2000. 8 January 1, 2001, to December 31, 2002. read as follows: ‘‘(4) The percentage of the readjustment al- 7.5 January 1, 2001, to December 31, 2002. 7.5 After December 31, 2002.’’. lowance or stipend (as the case may be) pay- 7 After December 31, 2002.’’; and inserting the following: able under paragraph (1), with respect to any and inserting the following: ‘‘7.5 After December 31, 1999.’’. period of volunteer service performed during January 1, 1999, through December 31, 1999, ‘‘7 After December 31, 1999.’’; (2) FEDERAL EMPLOYEES’ RETIREMENT SYS- shall be 3.25 percent.’’. (B) in the matter relating to a Member or TEM.—Section 8422(a) of title 5, United States (c) OTHER FEDERAL RETIREMENT SYS- employee for Congressional employee service Code, is amended by striking paragraph (3) TEMS.— by striking: and inserting the following: (1) CENTRAL INTELLIGENCE AGENCY RETIRE- ‘‘(3) The applicable percentage under this MENT AND DISABILITY SYSTEM.— ‘‘7.9 January 1, 2000, to December 31, 2000. paragraph for civilian service shall be as fol- (A) DEDUCTIONS, WITHHOLDINGS, AND DEPOS- 8 January 1, 2001, to December 31, 2002. lows: ITS.—Section 7001(c)(2) of the Balanced Budg- 7.5 After December 31, 2002.’’; et Act of 1997 (Public Law 105–33; 111 Stat. ‘‘Employee 7 January 1, 1987, 659) is amended to read as follows: and inserting the following: to December 31, ‘‘(2) INDIVIDUAL DEDUCTIONS, WITHHOLDINGS, 1998. ‘‘7 After December 31, 1999.’’; AND DEPOSITS.—Notwithstanding section 7.25 January 1, 1999, 211(a)(1) of the Central Intelligence Agency (C) in the matter relating to a Member for to December 31, Retirement Act (50 U.S.C. 2021(a)(1)) begin- Member service by striking: 1999. ning on January 1, 1999, through December 7 After December ‘‘8.4 January 1, 2000, to December 31, 2000. 31, 1999, the percentage deducted and with- 31, 1999. 8.5 January 1, 2001, to December 31, 2002. held from the basic pay of an employee par- Congressional em- 7.5 January 1, 1987, 8 After December 31, 2002.’’; ticipating in the Central Intelligence Agency ployee to December 31, Retirement and Disability System shall be and inserting the following: 1998. 7.25 percent.’’. ‘‘8 After December 31, 1999.’’; 7.75 January 1, 1999, (B) MILITARY SERVICE.—Section 252(h)(1)(A) to December 31, of the Central Intelligence Agency Retire- (D) in the matter relating to a law enforce- 1999. ment Act (50 U.S.C. 2082(h)(1)(A)), is amended ment officer for law enforcement service and 7.5 After December firefighter for firefighter service by striking: to read as follows: 31, 1999. ‘‘(h)(1)(A) Each participant who has per- ‘‘7.9 January 1, 2000, to December 31, 2000. Member 7.5 January 1, 1987, formed military service before the date of 8 January 1, 2001, to December 31, 2002. to December 31, separation on which entitlement to an annu- 7.5 After December 31, 2002.’’; 1998. ity under this title is based may pay to the 7.75 January 1, 1999, and inserting the following: Agency an amount equal to 7 percent of the to December 31, amount of basic pay paid under section 204 of ‘‘7.5 After December 31, 1999.’’; 1999. title 37, United States Code, to the partici- 7.5 After December (E) in the matter relating to a bankruptcy pant for each period of military service after 31, 1999. judge by striking: December 1956; except, the amount to be paid Law enforcement 7.5 January 1, 1987, for military service performed beginning on ‘‘8.4 January 1, 2000, to December 31, 2000. officer, fire- to December 31, January 1, 1999, through December 31, 1999, 8.5 January 1, 2001, to December 31, 2002. fighter, member 1998. shall be 7.25 percent of basic pay.’’. 8 After December 31, 2002.’’; of the Capitol (2) FOREIGN SERVICE RETIREMENT AND DIS- Police, or air and inserting the following: ABILITY SYSTEM.— traffic con- (A) IN GENERAL.—Section 7001(d)(2) of the ‘‘8 After December 31, 1999.’’; troller Balanced Budget Act of 1997 (Public Law 105– July 28, 1999 CONGRESSIONAL RECORD — SENATE S9589

33; 111 Stat. 660) is amended by striking sub- ‘‘(1) IN GENERAL.—The term ‘qualified sev- able year for which deductions taken) is paragraphs (A) and (B) and inserting the fol- erance payment’ means any payment re- amended by inserting after section 468B the lowing: ceived by an individual if— following: ‘‘(A) IN GENERAL.—Notwithstanding section ‘‘(A) such payment was paid by such indi- ‘‘SEC. 468C. FARM AND RANCH RISK MANAGE- 805(a)(1) of the Foreign Service Act of 1980 (22 vidual’s employer on account of such individ- MENT ACCOUNTS. U.S.C. 4045(a)(1)), beginning on January 1, ual’s separation from employment, ‘‘(a) DEDUCTION ALLOWED.—In the case of 1999, through December 31, 1999, the amount ‘‘(B) such separation was in connection an individual engaged in an eligible farming withheld and deducted from the basic pay of with a reduction in the work force of the em- business, there shall be allowed as a deduc- a participant in the Foreign Service Retire- ployer, and tion for any taxable year the amount paid in ment and Disability System shall be 7.25 per- ‘‘(C) such individual does not attain em- cash by the taxpayer during the taxable year cent. ployment within 6 months of the date of to a Farm and Ranch Risk Management Ac- ‘‘(B) FOREIGN SERVICE CRIMINAL INVESTIGA- such separation in which the amount of com- count (hereinafter referred to as the TORS/INSPECTORS OF THE OFFICE OF THE IN- pensation is equal to or greater than 95 per- ‘FARRM Account’). SPECTOR GENERAL, AGENCY FOR INTER- cent of the amount of compensation for the ‘‘(b) LIMITATION.—The amount which a tax- NATIONAL DEVELOPMENT.—Notwithstanding employment that is related to such payment. payer may pay into the FARRM Account for section 805(a)(2) of the Foreign Service Act ‘‘(2) LIMITATION.—Such term shall not in- any taxable year shall not exceed 20 percent of 1980 (22 U.S.C. 4045(a)(2)), beginning on clude any payment received by an individual of so much of the taxable income of the tax- January 1, 1999, through December 31, 1999, if the aggregate payments received with re- payer (determined without regard to this the amount withheld and deducted from the spect to the separation from employment ex- section) which is attributable (determined in basic pay of an eligible Foreign Service ceed $75,000.’’ the manner applicable under section 1301) to criminal investigator/inspector of the Office (b) CLERICAL AMENDMENT.—The table of any eligible farming business. of the Inspector General, Agency for Inter- sections for part III of subchapter B of chap- ‘‘(c) ELIGIBLE FARMING BUSINESS.—For pur- national Development participating in the ter 1 is amended by striking the item relat- poses of this section, the term ‘eligible farm- Foreign Service Retirement and Disability ing to section 139 and inserting the following ing business’ means any farming business (as System shall be 7.75 percent.’’. new items: defined in section 263A(e)(4)) which is not a (B) CONFORMING AMENDMENT.—Section ‘‘Sec. 139. Severance payments. passive activity (within the meaning of sec- 805(d)(1) of the Foreign Service Act of 1980 (22 ‘‘Sec. 140. Cross references to other Acts.’’ tion 469(c)) of the taxpayer. U.S.C. 4045(d)(1)) is amended in the table in (c) EFFECTIVE DATES.—The amendments ‘‘(d) FARRM ACCOUNT.—For purposes of the matter following subparagraph (B) by made by subsections (a) and (c) shall apply this section— striking: to taxable years beginning after December ‘‘(1) IN GENERAL.—The term ‘FARRM Ac- 31, 2000, and before January 1, 2003. ‘‘January 1, 1970, through December count’ means a trust created or organized in 31, 1998, inclusive 7 Subtitle H—Plan Amendments the United States for the exclusive benefit of January 1, 1999, through December SEC. 871. PROVISIONS RELATING TO PLAN the taxpayer, but only if the written gov- 31, 1999, inclusive 7.25 AMENDMENTS. erning instrument creating the trust meets January 1, 2000, through December (a) IN GENERAL.—If this section applies to the following requirements: 31, 2000, inclusive 7.4 any plan or contract amendment— ‘‘(A) No contribution will be accepted for January 1, 2001, through December (1) such plan or contract shall be treated as any taxable year in excess of the amount al- 31, 2002, inclusive 7.5 being operated in accordance with the terms lowed as a deduction under subsection (a) for After December 31, 2002 7’’. of the plan during the period described in such year. subsection (b)(2)(A), and ‘‘(B) The trustee is a bank (as defined in and inserting the following: (2) such plan shall not fail to meet the re- section 408(n)) or another person who dem- ‘‘January 1, 1970, through December quirements of section 411(d)(6) of the Inter- onstrates to the satisfaction of the Secretary 31, 1998, inclusive 7 nal Revenue Code of 1986 or section 204(g) of that the manner in which such person will January 1, 1999, through December the Employee Retirement Income Security administer the trust will be consistent with 31, 1999, inclusive 7.25 Act of 1974 (29 U.S.C. 1054(g)) by reason of the requirements of this section. After December 31, 1999 7.’’. such amendment. ‘‘(C) The assets of the trust consist en- (b) AMENDMENTS TO WHICH SECTION AP- tirely of cash or of obligations which have (3) FOREIGN SERVICE PENSION SYSTEM.— PLIES.— adequate stated interest (as defined in sec- (A) IN GENERAL.—Section 856(a)(2) of the (1) IN GENERAL.—This section shall apply to tion 1274(c)(2)) and which pay such interest Foreign Service Act of 1980 (22 U.S.C. any amendment to any plan or annuity con- not less often than annually. 4071e(a)(2)) is amended to read as follows: tract which is made— ‘‘(D) All income of the trust is distributed ‘‘(2) The applicable percentage under this (A) pursuant to any amendment made by currently to the grantor. subsection shall be as follows: this title, or pursuant to any regulation ‘‘(E) The assets of the trust will not be ‘‘7.5 Before January 1, 1999. issued under this title, and commingled with other property except in a 7.75 January 1, 1999, to December 31, 1999. (B) on or before the last day of the first common trust fund or common investment 7.5 After December 31, 1999.’’. plan year beginning on or after January 1, fund. 2004. ‘‘(2) ACCOUNT TAXED AS GRANTOR TRUST.— (B) VOLUNTEER SERVICE.—Section 854(c)(1) In the case of a government plan (as defined The grantor of a FARRM Account shall be of the Foreign Service Act of 1980 (22 U.S.C. in section 414(d) of the Internal Revenue treated for purposes of this title as the 4071c(c)(1)) is amended by striking all after Code of 1986 and section 3(32) of the Em- owner of such Account and shall be subject ‘‘volunteer service;’’ and inserting ‘‘except, ployee Retirement Income Security Act of to tax thereon in accordance with subpart E the amount to be paid for volunteer service 1974), this paragraph shall be applied by sub- of part I of subchapter J of this chapter (re- beginning on January 1, 1999, through De- stituting ‘‘2005’’ for ‘‘2004’’. lating to grantors and others treated as sub- cember 31, 1999, shall be 3.25 percent.’’. stantial owners). (2) CONDITIONS.—This section shall not (e) EFFECTIVE DATE.—This section and the apply to any amendment unless— ‘‘(e) INCLUSION OF AMOUNTS DISTRIBUTED.— amendments made by this section shall take (A) during the period— ‘‘(1) IN GENERAL.—Except as provided in effect on December 31, 1999. (i) beginning on the date the legislative or paragraph (2), there shall be includible in the SEC. 863. EXCLUSION FROM INCOME OF SEVER- regulatory amendment described in para- gross income of the taxpayer for any taxable ANCE PAYMENT AMOUNTS graph (1)(A) takes effect (or in the case of a year— (a) EXCLUSION FROM INCOME OF SEVERANCE plan or contract amendment not required by ‘‘(A) any amount distributed from a PAYMENT AMOUNTS.—Part III of subchapter B such legislative or regulatory amendment, FARRM Account of the taxpayer during such of chapter 1 (relating to items specifically the effective date specified by the plan), and taxable year, and excluded from gross income) is amended by (ii) ending on the date described in para- ‘‘(B) any deemed distribution under— redesignating section 139 as section 140 and graph (1)(B) (or, if earlier, the date the plan ‘‘(i) subsection (f)(1) (relating to deposits by inserting after section 138 the following or contract amendment is adopted), not distributed within 5 years), new section: ‘‘(ii) subsection (f)(2) (relating to cessation the plan or contract is operated as if such in eligible farming business), and ‘‘SEC. 139. SEVERANCE PAYMENTS. plan or contract amendment were in effect, ‘‘(iii) subparagraph (A) or (B) of subsection ‘‘(a) IN GENERAL.—In the case of an indi- and (f)(3) (relating to prohibited transactions and vidual, gross income shall not include any (B) such plan or contract amendment ap- pledging account as security). plies retroactively for such period. qualified severance payment. ‘‘(2) EXCEPTIONS.—Paragraph (1)(A) shall ‘‘(b) LIMITATION.—The amount to which the TITLE IX—FARM RELIEF AND ECONOMIC not apply to— exclusion under subsection (a) applies shall DEVELOPMENT ‘‘(A) any distribution to the extent attrib- not exceed $2,000 with respect to any separa- SEC. 901. FARM AND RANCH RISK MANAGEMENT utable to income of the Account, and tion from employment. ACCOUNTS. ‘‘(B) the distribution of any contribution ‘‘(c) QUALIFIED SEVERANCE PAYMENT.—For (a) IN GENERAL.—Subpart C of part II of paid during a taxable year to a FARRM Ac- purposes of this section— subchapter E of chapter 1 (relating to tax- count to the extent that such contribution S9590 CONGRESSIONAL RECORD — SENATE July 28, 1999

exceeds the limitation applicable under sub- such Account to the Secretary and to the (f) EFFECTIVE DATE.—The amendments section (b) if requirements similar to the re- person for whose benefit the Account is made by this section shall apply to taxable quirements of section 408(d)(4) are met. maintained with respect to contributions, years beginning after December 31, 2000. For purposes of subparagraph (A), distribu- distributions, and such other matters as the SEC. 902. LEASE AGREEMENT RELATING TO EX- tions shall be treated as first attributable to Secretary may require under regulations. CLUSION OF CERTAIN FARM RENTAL income and then to other amounts. The reports required by this subsection shall INCOME FROM NET EARNINGS FROM SELF-EMPLOYMENT. ‘‘(f) SPECIAL RULES.— be filed at such time and in such manner and (a) INTERNAL REVENUE CODE.—Section ‘‘(1) TAX ON DEPOSITS IN ACCOUNT WHICH ARE furnished to such persons at such time and in 1402(a)(1)(A) (relating to net earnings from NOT DISTRIBUTED WITHIN 5 YEARS.— such manner as may be required by such reg- self-employment) is amended by striking ‘‘an ‘‘(A) IN GENERAL.—If, at the close of any ulations.’’ arrangement’’ and inserting ‘‘a lease agree- taxable year, there is a nonqualified balance (b) TAX ON EXCESS CONTRIBUTIONS.— (1) Subsection (a) of section 4973 (relating ment’’. in any FARRM Account— (b) SOCIAL SECURITY ACT.—Section ‘‘(i) there shall be deemed distributed from to tax on excess contributions to certain tax- favored accounts and annuities), as amended 211(a)(1)(A) of the Social Security Act is such Account during such taxable year an amended by striking ‘‘an arrangement’’ and by section 303(b)(1), is amended by striking amount equal to such balance, and inserting ‘‘a lease agreement’’. ‘‘or’’ at the end of paragraph (4), by redesig- ‘‘(ii) the taxpayer’s tax imposed by this (c) EFFECTIVE DATE.—The amendments chapter for such taxable year shall be in- nating paragraphs (4) and (5) as paragraphs made by this section shall apply to taxable creased by 10 percent of such deemed dis- (5) and (6), respectively, and by inserting years beginning after December 31, 2000. after paragraph (3) the following: tribution. SEC. 903. EXCLUSION OF GAIN FROM SALE OF The preceding sentence shall not apply if an ‘‘(4) a FARRM Account (within the mean- CERTAIN FARMLAND. amount equal to such nonqualified balance is ing of section 468C(d)), or’’. (a) IN GENERAL.—Part III of subchapter B distributed from such Account to the tax- (2) Section 4973, as amended by section of chapter 1 (relating to items specifically payer before the due date (including exten- 303(b)(2), is amended by adding at the end the excluded from gross income) is amended by sions) for filing the return of tax imposed by following: adding after section 121 the following new this chapter for such year (or, if earlier, the ‘‘(h) EXCESS CONTRIBUTIONS TO FARRM AC- section: COUNTS.—For purposes of this section, in the date the taxpayer files such return for such ‘‘SEC. 121A. EXCLUSION OF GAIN FROM SALE OF year). case of a FARRM Account (within the mean- QUALIFIED FARM PROPERTY. ing of section 468C(d)), the term ‘excess con- ‘‘(B) NONQUALIFIED BALANCE.—For purposes ‘‘(a) EXCLUSION.—In the case of a natural of subparagraph (A), the term ‘nonqualified tributions’ means the amount by which the person, gross income shall not include gain balance’ means any balance in the Account amount contributed for the taxable year to from the sale or exchange of qualified farm on the last day of the taxable year which is the Account exceeds the amount which may property, to the extent such property does attributable to amounts deposited in such be contributed to the Account under section not exceed 160 acres. Account before the 4th preceding taxable 468C(b) for such taxable year. For purposes of ‘‘(b) LIMITATION ON AMOUNT OF EXCLU- year. this subsection, any contribution which is SION.— distributed out of the FARRM Account in a ‘‘(C) ORDERING RULE.—For purposes of this ‘‘(1) IN GENERAL.—The amount of gain ex- paragraph, distributions from a FARRM Ac- distribution to which section 468C(e)(2)(B) cluded from gross income under subsection count (other than distributions of current in- applies shall be treated as an amount not (a) with respect to any taxable year shall not come) shall be treated as made from deposits contributed.’’ exceed $500,000 ($250,000 in the case of a mar- in the order in which such deposits were (3) The section heading for section 4973 is ried individual filing a separate return), re- made, beginning with the earliest deposits. amended to read as follows: duced by the aggregate amount of gain ex- ‘‘(2) CESSATION IN ELIGIBLE FARMING BUSI- ‘‘SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN cluded under subsection (a) for all preceding ACCOUNTS, ANNUITIES, ETC.’’ NESS.—At the close of the first disqualifica- taxable years. tion period after a period for which the tax- (4) The table of sections for chapter 43 is ‘‘(2) SPECIAL RULE FOR JOINT RETURNS.—The payer was engaged in an eligible farming amended by striking the item relating to amount of the exclusion under subsection (a) business, there shall be deemed distributed section 4973 and inserting the following: on a joint return for any taxable year shall be allocated equally between the spouses for from the FARRM Account of the taxpayer an ‘‘Sec. 4973. Excess contributions to certain purposes of applying the limitation under amount equal to the balance in such Account accounts, annuities, etc.’’ paragraph (1) for any succeeding taxable (if any) at the close of such disqualification (c) TAX ON PROHIBITED TRANSACTIONS.— year. period. For purposes of the preceding sen- (1) Subsection (c) of section 4975 (relating ‘‘(c) QUALIFIED FARM PROPERTY.— tence, the term ‘disqualification period’ to tax on prohibited transactions) is amend- means any period of 2 consecutive taxable ‘‘(1) QUALIFIED FARM PROPERTY.—For pur- ed by adding at the end the following: poses of this section, the term ‘qualified years for which the taxpayer is not engaged ‘‘(6) SPECIAL RULE FOR FARRM ACCOUNTS.—A in an eligible farming business. farm property’ means real property located person for whose benefit a FARRM Account in the United States if— ‘‘(3) CERTAIN RULES TO APPLY.—Rules simi- (within the meaning of section 468C(d)) is es- lar to the following rules shall apply for pur- ‘‘(A) during periods aggregating 3 years or tablished shall be exempt from the tax im- more of the 5-year period ending on the date poses of this section: posed by this section with respect to any ‘‘(A) Section 220(f)(8) (relating to treat- of the sale or exchange of such real transaction concerning such account (which property— ment on death). would otherwise be taxable under this sec- ‘‘(B) Section 408(e)(2) (relating to loss of ‘‘(i) such real property was used as a farm tion) if, with respect to such transaction, the for farming purposes by the taxpayer or a exemption of account where individual en- account ceases to be a FARRM Account by gages in prohibited transaction). member of the family of the taxpayer, and reason of the application of section ‘‘(ii) there was material participation by ‘‘(C) Section 408(e)(4) (relating to effect of 468C(f)(3)(A) to such account.’’ pledging account as security). the taxpayer (or such a member) in the oper- (2) Paragraph (1) of section 4975(e) is ation of the farm, and ‘‘(D) Section 408(g) (relating to community amended by redesignating subparagraphs (E) property laws). ‘‘(B) such real property is located contig- and (F) as subparagraphs (F) and (G), respec- ‘‘(E) Section 408(h) (relating to custodial uous to the principal residence of the tax- tively, and by inserting after subparagraph accounts). payer which is sold or exchanged in the same (D) the following: ‘‘(4) TIME WHEN PAYMENTS DEEMED MADE.— taxable year as such real property. ‘‘(E) a FARRM Account described in sec- For purposes of this section, a taxpayer shall ‘‘(2) DEFINITIONS.—For purposes of this sub- tion 468C(d),’’. be deemed to have made a payment to a section, the terms ‘member of the family’, (d) FAILURE TO PROVIDE REPORTS ON FARRM Account on the last day of a taxable ‘farm’, and ‘farming purposes’ have the re- FARRM ACCOUNTS.—Paragraph (2) of section spective meanings given such terms by para- year if such payment is made on account of 6693(a) (relating to failure to provide reports such taxable year and is made on or before graphs (2), (4), and (5) of section 2032A(e). on certain tax-favored accounts or annu- the due date (without regard to extensions) ‘‘(3) SPECIAL RULES.—For purposes of this ities), as amended by section 303(d), is for filing the return of tax for such taxable section, rules similar to the rules of para- amended by redesignating subparagraphs (C), year. graphs (4) and (5) of section 2032A(b) and (D), and (E) as subparagraphs (D), (E), and ‘‘(5) INDIVIDUAL.—For purposes of this sec- paragraphs (3) and (6) of section 2032A(e) (F), respectively, and by inserting after sub- tion, the term ‘individual’ shall not include shall apply. paragraph (B) the following: an estate or trust. ‘‘(d) OTHER RULES.—For purposes of this ‘‘(C) section 468C(g) (relating to FARRM ‘‘(6) DEDUCTION NOT ALLOWED FOR SELF-EM- section, rules similar to the rules of sub- Accounts),’’. PLOYMENT TAX.—The deduction allowable by section (e) and subsection (f) of section 121 (e) CLERICAL AMENDMENT.—The table of reason of subsection (a) shall not be taken shall apply.’’ sections for subpart C of part II of sub- into account in determining an individual’s (b) CONFORMING AMENDMENT.—The table of chapter E of chapter 1 is amended by insert- net earnings from self-employment (within sections for part III of subchapter B of chap- ing after the item relating to section 468B the meaning of section 1402(a)) for purposes ter 1 is amended by adding after the item re- the following: of chapter 2. lating to section 121 the following new item: ‘‘(g) REPORTS.—The trustee of a FARRM ‘‘Sec. 468C. Farm and Ranch Risk Manage- ‘‘Sec. 121A. Exclusion of gain from sale of Account shall make such reports regarding ment Accounts.’’ qualified farm property.’’ July 28, 1999 CONGRESSIONAL RECORD — SENATE S9591

(c) EFFECTIVE DATE.—The amendment ‘‘(B) equity in all property held by the tax- indebtedness of a taxpayer shall be treated made by this section shall apply to any sale payer after such transfer is less than the as qualified farm indebtedness if such indebt- or exchange after December 31, 2000, in tax- greater of — edness was incurred directly in connection able years ending after such date. ‘‘(i) $25,000, or with the operation by the taxpayer of the SEC. 904. EXEMPTION OF SMALL ISSUE AGRI- ‘‘(ii) 150 percent of the excess (if any) of— trade or business of farming and when such CULTURE BONDS FROM STATE VOL- ‘‘(I) the tax imposed by this chapter deter- taxpayer materially participated in such UME CAP. mined as if this section and section 108 did trade or business (within the meaning of sec- (a) IN GENERAL.—Section 146(g) (relating to not apply to the transfer, over tion 2032A(e)(6)).’ exception for certain bonds) is amended by ‘‘(II) the tax imposed by this chapter deter- ‘‘(B) PRIOR DISCHARGES OF INDEBTEDNESS striking ‘‘and’’ at the end of paragraph (3), mined with regard to this section and sec- AND GAINS TAKEN INTO ACCOUNT.—If for any by striking the period at the end of para- tion 108 (if applicable). prior year— graph (4) and inserting ‘‘, and’’, and by in- ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— ‘‘(i) a discharge of qualified farm indebted- serting after paragraph (4) the following: For purposes of this subsection, the term ness, or ‘‘(5) any small issue bond described in sec- ‘modified adjusted gross income’ means ad- ‘‘(ii) gain from the transfer of farm prop- tion 144(a)(12)(B)(ii).’’ justed gross income— erty in complete or partial satisfaction of (b) EFFECTIVE DATE.—The amendments ‘‘(A) determined with regard to this sec- such indebtedness, made by this section shall apply to bonds tion and section 108, and is excluded from the taxpayer’s gross income issued after December 31, 2000. ‘‘(B) increased by the amount of interest under this subsection or section 139, respec- SEC. 905. CAPITAL GAIN REALIZED FROM TRANS- received or accrued by the taxpayer during tively, subparagraph (A) shall be applied for FER OF FARM PROPERTY IN COM- the taxable year which is exempt from tax. the taxable year with respect to such dis- PLETE OR PARTIAL SATISFACTION ‘‘(3) EQUITY.—For purposes of this sub- charge by reducing the dollar amount con- OF QUALIFIED FARM INDEBTED- section, the term ‘equity’ means, with re- tained in such subparagraph by the such ex- NESS EXCLUDED FROM GROSS IN- cluded prior year discharges and gains. COME. spect to all property held by the taxpayer, an amount equal to— ‘‘(C) TAXPAYER DESCRIBED IN THIS SUBPARA- (a) IN GENERAL.—Part III of subchapter B ‘‘(A) the fair market value of such prop- GRAPH.—A taxpayer is described in this sub- of chapter 1 (relating to items specifically paragraph if— excluded from gross income) is amended by erty, minus ‘‘(B) any indebtedness relating to such ‘‘(i) more than 50 percent of the gross re- redesignating section 139 as section 140 and ceipts of the taxpayer for 6 of the 10 taxable by inserting after section 138 the following property. ‘‘(e) FARM PROPERTY.—For purposes of this years preceding such taxable year are attrib- new section: section, the term ‘farm property’ means real utable to— ‘‘SEC. 139. CAPITAL GAIN REALIZED FROM TRANS- and personal property used by the taxpayer ‘‘(I) the trade or business of farming (with- FER OF FARM PROPERTY IN COM- in the trade or business of farming (within in the meaning of section 2032A(e)(5)), or PLETE OR PARTIAL SATISFACTION ‘‘(II) the sale or lease of assets used in such OF QUALIFIED FARM INDEBTED- the meaning of section 2032A(e)(5)). NESS. ‘‘(f) QUALIFIED FARM INDEBTEDNESS.—For trade or business, or ‘‘(III) both, ‘‘(a) IN GENERAL.—Gross income of any purposes of this section, indebtedness of a taxpayer described in subsection (d) does not taxpayer shall be treated as qualified farm ‘‘(ii) the indebtedness of the taxpayer both include so much of the gain from the trans- indebtedness if such indebtedness was in- before and after such discharge is equal to 70 fer of farm property in complete or partial curred directly in connection with the oper- percent or more of the fair market value in satisfaction of qualified farm indebtedness as ation by the taxpayer of the trade or busi- all property held by such taxpayer, and does not exceed $300,000. ness of farming (within the meaning of sec- ‘‘(iii) equity in all property held by the taxpayer after such discharge is less than ‘‘(b) PRIOR GAINS AND DISCHARGES OF IN- tion 2032A(e)(5)) and when such taxpayer ma- the greater of— DEBTEDNESS TAKEN INTO ACCOUNT.— terially participated in such trade or busi- ‘‘(I) $25,000, or ‘‘(1) IN GENERAL.—If for any prior year— ness (within the meaning of section ‘‘(A) gain from the transfer of farm prop- 2032A(e)(6)). ‘‘(II) 150 percent of the excess (if any) of erty in complete or partial satisfaction of ‘‘(g) APPLICATION WITH RECAPTURE PROVI- the tax imposed by this chapter determined qualified farm indebtedness, or SIONS.—In the case of any gain from the as if this section and section 139 did not ‘‘(B) a discharge of such indebtedness, transfer of farm property in complete or par- apply to the transfer, over the tax imposed tial satisfaction of qualified farm indebted- by this chapter determined with regard to is excluded from the taxpayer’s gross income ness which is treated as ordinary income this section and section 139 (if applicable). under subsection (a) of this section or sec- under section 1245, 1250, 1252, or 1255, sub- ‘‘(D) DEFINITIONS.—For purposes of this tion 108(g), respectively, subsection (a) of section (a) shall be applied for the taxable paragraph— this section shall be applied for the taxable year by first reducing the dollar amount con- ‘‘(i) FARM PROPERTY.—The term ‘farm year with respect to such gain by reducing tained in such subsection by such gain.’’. property’ means real and personal property the dollar amount contained in such sub- (b) CLERICAL AMENDMENT.—The table of used by the taxpayer in the trade or business section by the such excluded prior year gains sections for part III of subchapter B of chap- of farming (within the meaning of section and discharges. ter 1 is amended by striking out the item re- 2032A(e)(5)). ‘‘(2) CURRENT YEAR COORDINATION WITH SEC- lating to section 139 and inserting in lieu ‘‘(ii) MODIFIED ADJUSTED GROSS INCOME.— TION 108.—Subsection (a) of this section shall thereof the following new items: The term ‘modified adjusted gross income’ be applied for the taxable year with respect means adjusted gross income— ‘‘Sec. 139. Capital gain realized from transfer to any gain by reducing the dollar amount ‘‘(I) determined with regard to this section of farm property in complete or contained in such subsection (after any re- and section 139, and partial satisfaction of qualified duction under paragraph (1)) by any amount ‘‘(II) increased by the amount of interest farm indebtedness. excluded from gross income under section 108 received or accrued by the taxpayer during for such year. ‘‘Sec. 140. Cross references to other Acts.’’. the taxable year which is exempt from tax. ‘‘(c) REDUCTION OF TAX ATTRIBUTES.— (c) EFFECTIVE DATE.—The amendments ‘‘(iii) EQUITY.—The term ‘equity’ means, ‘‘(1) IN GENERAL.—The amount excluded made by this section shall apply to transfers with respect to any property, an amount from gross income under subsection (a) shall occurring after December 31, 2000, in taxable equal to— be applied to reduce the tax attributes de- years ending after such date. ‘‘(I) the fair market value of such property, scribed under section 108(b)(2). SEC. 906. EXCLUSION OF DISCHARGE OF QUALI- minus ‘‘(2) COORDINATION WITH SECTION 108.—For FIED FARM INDEBTEDNESS FROM ‘‘(II) any indebtedness relating to such purposes of this subsection, the amount of GROSS INCOME INCREASED FOR property.’’. CERTAIN SOLVENT FARMERS. tax attributes shall be determined after any (b) CONFORMING AMENDMENT.—Subpara- reduction under section 108(b) by reason of (a) IN GENERAL.—Section 108(g) (relating to graph (A) of section 108(g)(3) is amended by amounts excluded from gross income under special rules for discharge of qualified farm striking out ‘‘The amount’’ and inserting in section 108(a)(1). indebtedness) is amended by adding at the lieu thereof ‘‘Except as provided in para- ‘‘(d) TAXPAYER DESCRIBED IN THIS SUB- end thereof the following new paragraph: graph (4), the amount’’. SECTION.— ‘‘(4) SPECIAL LIMITATIONS FOR CERTAIN (c) EFFECTIVE DATE.—The amendments ‘‘(1) IN GENERAL.—A taxpayer is described FARMERS.— made by this section shall apply to any sale in this subsection if— ‘‘(A) IN GENERAL.—With respect to a tax- or exchange occurring after December 31, ‘‘(A) more than 50 percent of the gross re- payer who is described in subparagraph (C) of 2000, in taxable years ending after such date. ceipts of the taxpayer for 6 of the 10 taxable this paragraph and who elects the applica- SEC. 907. NET OPERATING LOSS OF FARMERS. years preceding such taxable year are attrib- tion of this paragraph— (a) INCREASE IN CARRYBACK YEARS.—Para- utable to— ‘‘(i) the amount excluded under subpara- graph (1) of section 172(b) (relating to net op- ‘‘(i) the trade or business of farming (with- graph (C) of subsection (a)(1) shall not exceed erating loss carrybacks and carryforwards) is in the meaning of section 2032A(e)(5)), or $300,000, and amended by adding at the end the following ‘‘(ii) the sale or lease of assets used in such ‘‘(ii) paragraph (2) of this subsection shall new subparagraph: trade or business, or be applied by amending such paragraph to ‘‘(G) FARMING LOSSES.—Subparagraph (A) ‘‘(iii) both, and read as follows: ‘For purposes of this section, shall be applied— S9592 CONGRESSIONAL RECORD — SENATE July 28, 1999 ‘‘(i) in the matter preceding clause (i), by treated as a separate net operating loss for (C) by striking ‘‘2.75 percent’’ and inserting substituting ‘any taxable year beginning such taxable year to be taken into account ‘‘3.75 percent’’. with the 3rd taxable year after the taxable for the remaining portion of the net oper- (2) EFFECTIVE DATE.—The amendments year of such loss’ for ‘any taxable year’, and ating loss for such taxable year. made by this subsection shall apply to tax- ‘‘(ii) in clause (i), by substituting ‘10 years’ ‘‘(5) ELECTION.—Any taxpayer entitled to a able years beginning after June 30, 1999. for ‘2 years’, 10-year carryback under subsection (b)(1)(G) (c) EXTENSION OF RESEARCH CREDIT TO RE- with respect to the portion of the net oper- from any loss year may elect to have the SEARCH IN PUERTO RICO AND THE POSSESSIONS ating loss of an eligible taxpayer (as defined carryback period with respect to such loss OF THE UNITED STATES.— in subsection (i)) for any taxable year begin- year, and any portion of the farming loss for (1) IN GENERAL.—Section 41(d)(4)(F) (relat- ning after December 31, 1997, and ending be- such year, determined without regard to sub- ing to foreign research) is amended by in- fore January 1, 2000, which is a farming loss section (b)(1)(G). Such election shall be made serting ‘‘, the Commonwealth of Puerto (as so defined) with respect to the taxpayer.’’ in such manner as may be prescribed by the Rico, or any possession of the United States’’ (b) DEFINITIONS AND RULES RELATING TO Secretary and shall be made by the due date after ‘‘United States’’. FARMING LOSSES.—Section 172 is amended by (including extensions of time) for filing the (2) EFFECTIVE DATE.—The amendment redesignating subsection (i) as subsection (j) taxpayer’s return for the taxable year of the made by this section shall apply to taxable and inserting after subsection (h) the fol- net operating loss. Such election, once made years beginning after June 30, 1999. lowing new subsection: for any taxable year, shall be irrevocable for SEC. 1002. NEW MARKETS TAX CREDIT. ‘‘(i) DEFINITIONS AND RULES RELATING TO the taxable year.’’ (a) IN GENERAL.—Subpart D of part IV of FARMING LOSSES.—For purposes of this SEC. 908. CERTAIN CASH RENTALS OF FARMLAND subchapter A of chapter 1 (relating to busi- section— NOT TO CAUSE RECAPTURE OF SPE- ness-related credits), as amended by section ‘‘(1) FARMING LOSS.— CIAL ESTATE TAX VALUATION. 608(a), is amended by adding at the end the ‘‘(A) IN GENERAL.—The term ‘farming loss’ (a) IN GENERAL.—Subsection (c) of section following new section: means the lesser of— 2032A (relating to tax treatment of disposi- ‘‘SEC. 45E. NEW MARKETS TAX CREDIT. ‘‘(i) the net operating loss of the taxpayer tions and failures to use for qualified use) is ‘‘(a) ALLOWANCE OF CREDIT.— for the taxable year, or amended by adding at the end the following ‘‘(1) IN GENERAL.—For purposes of section ‘‘(ii) the net operating loss of the taxpayer new paragraph: 38, in the case of a taxpayer who holds a for the taxable year determined by only tak- ‘‘(8) CERTAIN CASH RENTAL NOT TO CAUSE RE- qualified equity investment on a credit al- ing into account items of income and deduc- CAPTURE.—For purposes of this subsection, a lowance date of such investment which oc- tion attributable to 1 or more qualified farm- qualified heir shall not be treated as failing curs during the taxable year, the new mar- ing business of the taxpayer. to use property in a qualified use solely be- kets tax credit determined under this section ‘‘(B) DOLLAR LIMITATION.— cause such heir rents such property on a net for such taxable year is an amount equal to ‘‘(i) IN GENERAL.—The farming loss of tax- cash basis to a member of the decedent’s 6 percent of the amount paid to the qualified payer for any taxable year shall not exceed family, but only if, during the period of the community development entity for such in- $200,000. lease, such member of the decedent’s family vestment at its original issue. ‘‘(ii) AGGREGATION RULES.— uses such property in a qualified use.’’ ‘‘(2) CREDIT ALLOWANCE DATE.—The term ‘‘(I) IN GENERAL.—All persons treated as 1 (b) CONFORMING AMENDMENT.—Section ‘credit allowance date’ means, with respect employer under subsections (a) or (b) of sec- 2032A (b)(5)(A) is amended by striking the to any qualified equity investment— tion 52 shall be treated as 1 person. last sentence. ‘‘(A) the date on which such investment is (c) EFFECTIVE DATE.—The amendment ‘‘(II) PASS-THRU ENTITY.—In the case of a initially made, and made by subsection (a) shall apply with re- partnership, trust, or other pass-thru entity, ‘‘(B) each of the 4 anniversary dates of spect to rentals occurring after December 31, the limitation shall be applied at both the such date thereafter. 1976. entity and the owner level. ‘‘(b) QUALIFIED EQUITY INVESTMENT.—For SEC. 909. DECLARATORY JUDGMENT REMEDY RE- ‘‘(III) OWNER.—The limitation shall be re- purposes of this section— LATING TO STATUS AND CLASSI- N GENERAL duced by the amount of farming loss deter- FICATION OF FARMERS’ COOPERA- ‘‘(1) I .—The term ‘qualified eq- mined for a corporation for which the tax- TIVES. uity investment’ means any equity invest- payer is a 50 percent owner in the taxable (a) IN GENERAL.—Paragraph (1) of section ment in a qualified community development year of the corporation ending in the taxable 7428(a) (relating to creation of remedy) is entity if— year of the taxpayer owner. amended by striking ‘‘or’’ at the end of sub- ‘‘(A) such investment is acquired by the ‘‘(2) ELIGIBLE TAXPAYER.— paragraph (B), and by inserting after sub- taxpayer at its original issue (directly or ‘‘(A) IN GENERAL.—The term ‘eligible tax- paragraph (C) the following new subpara- through an underwriter) solely in exchange payer’ means a taxpayer which derives more graph: for cash, than 50 percent of its gross income for the 3- ‘‘(D) with respect to the initial qualifica- ‘‘(B) substantially all of such cash is used year period beginning 2 years prior to the tion or continuing qualification of an organi- by the qualified community development en- current taxable year from qualified farming zation as a cooperative described in section tity to make qualified low-income commu- businesses. 521(b) which is exempt from tax under sec- nity investments, and ‘‘(B) QUALIFIED FARMING BUSINESS.—The tion 521(a), or’’. ‘‘(C) such investment is designated for pur- term ‘qualified farming business’ means a (b) EFFECTIVE DATE.—The amendment poses of this section by the qualified commu- trade or business of farming (within the made by this section shall apply with respect nity development entity. meaning of section 2032A)— to pleadings filed with the United States Tax Such term shall not include any equity in- ‘‘(i) with respect to which— Court, the district court of the United States vestment issued by a qualified community ‘‘(I) the taxpayer or a member of the fam- for the District of Columbia, or the United development entity more than 5 years after ily of the taxpayer materially participates States Court of Federal Claims after the date the date that such entity receives an alloca- (within the meaning of section 2032A(e)(6)), of enactment of this Act but only with re- tion under subsection (f). Any allocation not or spect to determinations (or requests for de- used within such 5-year period may be reallo- ‘‘(II) in the case of a taxpayer other than terminations) made after January 1, 1998. cated by the Secretary under subsection (f). an individual, a 20 percent owner of the tax- TITLE X—TECHNOLOGY AND ECONOMIC ‘‘(2) LIMITATION.—The maximum amount of payer or a member of the owner’s family ma- DEVELOPMENT equity investments issued by a qualified terially participates (as so defined), and SEC. 1001. PERMANENT EXTENSION AND MODI- community development entity which may ‘‘(ii) which does not receive in excess of FICATION OF RESEARCH CREDIT. be designated under paragraph (1)(C) by such $7,000,000 for sales in a taxable year. (a) PERMANENT EXTENSION.— entity shall not exceed the portion of the For purposes of clause (i)(II), owners which (1) IN GENERAL.—Section 41 (relating to limitation amount allocated under sub- are members of a single family shall be credit for increasing research activities) is section (f) to such entity. treated as a single owner. amended by striking subsection (h). ‘‘(3) SAFE HARBOR FOR DETERMINING USE OF ‘‘(3) OWNER.— (2) CONFORMING AMENDMENT.—Paragraph CASH.—The requirement of paragraph (1)(B) ‘‘(A) 20 PERCENT OWNER.—The term ‘20 per- (1) of section 45C(b) is amended by striking shall be treated as met if at least 85 percent cent owner’ means any person who would be subparagraph (D). of the aggregate gross assets of the qualified described in section 416(i)(1)(B)(i) if ‘20 per- (3) EFFECTIVE DATE.—The amendments community development entity are invested cent’ were substituted for ‘5 percent’ each made by this subsection shall apply to in qualified low-income community invest- place it appears in such section. amounts paid or incurred after June 30, 1999. ments. ‘‘(B) 50 PERCENT OWNER.—The term ‘50 per- (b) INCREASE IN PERCENTAGES UNDER AL- ‘‘(4) TREATMENT OF SUBSEQUENT PUR- cent owner’ means any person who would be TERNATIVE INCREMENTAL CREDIT.— CHASERS.—The term ‘qualified equity invest- described in section 416(i)(1)(B)(i) if ‘50 per- (1) IN GENERAL.—Subparagraph (A) of sec- ment’ includes any equity investment which cent’ were substituted for ‘5 percent’ each tion 41(c)(4) is amended— would (but for paragraph (1)(A)) be a quali- place it appears in such section. (A) by striking ‘‘1.65 percent’’ and insert- fied equity investment in the hands of the ‘‘(4) COORDINATION WITH SUBSECTION (b)(2).— ing ‘‘2.65 percent’’, taxpayer if such investment was a qualified For purposes of applying subsection (b)(2), a (B) by striking ‘‘2.2 percent’’ and inserting equity investment in the hands of a prior farming loss for any taxable year shall be ‘‘3.2 percent’’, and holder. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9593

‘‘(5) REDEMPTIONS.—A rule similar to the sale to customers in the ordinary course of ‘‘(g) RECAPTURE OF CREDIT IN CERTAIN rule of section 1202(c)(3) shall apply for pur- such business, and CASES.— poses of this subsection. ‘‘(v) less than 5 percent of the average of ‘‘(1) IN GENERAL.—If, at any time during ‘‘(6) EQUITY INVESTMENT.—The term ‘equity the aggregate unadjusted bases of the prop- the 5-year period beginning on the date of investment’ means— erty of such entity is attributable to non- the original issue of a qualified equity in- ‘‘(A) any stock in a qualified community qualified financial property (as defined in vestment in a qualified community develop- development entity which is a corporation, section 1397B(e)). ment entity, there is a recapture event with and ‘‘(B) PROPRIETORSHIP.—Such term shall in- respect to such investment, then the tax im- ‘‘(B) any capital interest in a qualified clude any business carried on by an indi- posed by this chapter for the taxable year in community development entity which is a vidual as a proprietor if such business would which such event occurs shall be increased partnership. meet the requirements of subparagraph (A) by the credit recapture amount. ‘‘(c) QUALIFIED COMMUNITY DEVELOPMENT were it incorporated. ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur- ENTITY.—For purposes of this section— ‘‘(C) PORTIONS OF BUSINESS MAY BE QUALI- poses of paragraph (1), the credit recapture ‘‘(1) IN GENERAL.—The term ‘qualified com- FIED ACTIVE LOW-INCOME COMMUNITY BUSI- amount is an amount equal to the sum of— munity development entity’ means any do- NESS.—The term ‘qualified active low-income ‘‘(A) the aggregate decrease in the credits mestic corporation or partnership if— community business’ includes any trades or allowed to the taxpayer under section 38 for ‘‘(A) the primary mission of the entity is businesses which would qualify as a qualified all prior taxable years which would have re- serving, or providing investment capital for, active low-income community business if sulted if no credit had been determined low-income communities or low-income per- such trades or businesses were separately in- under this section with respect to such in- sons, corporated. vestment, plus ‘‘(B) the entity maintains accountability ‘‘(3) QUALIFIED BUSINESS.—For purposes of ‘‘(B) interest at the overpayment rate es- to residents of low-income communities this subsection, the term ‘qualified business’ tablished under section 6621 on the amount through representation on governing or advi- has the meaning given to such term by sec- determined under subparagraph (A) for each sory boards or otherwise, and tion 1397B(d); except that— prior taxable year for the period beginning ‘‘(C) the entity is certified by the Sec- ‘‘(A) in lieu of applying paragraph (2)(B) on the due date for filing the return for the retary for purposes of this section as being a thereof, the rental to others of real property prior taxable year involved. qualified community development entity. located in any low-income community shall No deduction shall be allowed under this ‘‘(2) SPECIAL RULES FOR CERTAIN ORGANIZA- be treated as a qualified business if there are chapter for interest described in subpara- TIONS.—The requirements of paragraph (1) substantial improvements located on such graph (B). shall be treated as met by— property, ‘‘(3) RECAPTURE EVENT.—For purposes of ‘‘(A) any specialized small business invest- ‘‘(B) paragraph (3) thereof shall not apply, paragraph (1), there is a recapture event with ment company (as defined in section and respect to an equity investment in a quali- 1044(c)(3)), and ‘‘(C) such term shall not include any busi- fied community development entity if— ‘‘(B) any community development finan- ness if a significant portion of the equity in- ‘‘(A) such entity ceases to be a qualified cial institution (as defined in section 103 of terests in such business are held by any per- community development entity, the Community Development Banking and son who holds a significant portion of the eq- ‘‘(B) the proceeds of the investment cease Financial Institutions Act of 1994 (12 U.S.C. uity investments in the community develop- to be used as required of subsection (b)(1)(B), 4702)). ment entity. or ‘‘(d) QUALIFIED LOW-INCOME COMMUNITY IN- ‘‘(e) LOW-INCOME COMMUNITY.—For pur- ‘‘(C) such investment is redeemed by such VESTMENTS.—For purposes of this section— poses of this section— entity. ‘‘(1) IN GENERAL.—The term ‘qualified low- ‘‘(1) IN GENERAL.—The term ‘low-income ‘‘(4) SPECIAL RULES.— income community investment’ means— community’ means any population census ‘‘(A) TAX BENEFIT RULE.—The tax for the ‘‘(A) any equity investment in, or loan to, tract if— taxable year shall be increased under para- any qualified active low-income community ‘‘(A) the poverty rate for such tract is at graph (1) only with respect to credits allowed business, least 20 percent, or by reason of this section which were used to ‘‘(B) the purchase from another commu- ‘‘(B)(i) in the case of a tract not located reduce tax liability. In the case of credits nity development entity of any loan made by within a metropolitan area, the median fam- not so used to reduce tax liability, the such entity which is a qualified low-income ily income for such tract does not exceed 80 carryforwards and carrybacks under section community investment if the amount re- percent of statewide median family income, 39 shall be appropriately adjusted. ceived by such other entity from such pur- or ‘‘(B) NO CREDITS AGAINST TAX.—Any in- chase is used by such other entity to make ‘‘(ii) in the case of a tract located within a crease in tax under this subsection shall not qualified low-income community invest- metropolitan area, the median family in- be treated as a tax imposed by this chapter ments, come for such tract does not exceed 80 per- for purposes of determining the amount of ‘‘(C) financial counseling and other serv- cent of the greater of statewide median fam- any credit under this chapter or for purposes ices specified in regulations prescribed by ily income or the metropolitan area median of section 55. the Secretary to businesses located in, and family income. ‘‘(h) BASIS REDUCTION.—The basis of any residents of, low-income communities, and ‘‘(2) AREAS NOT WITHIN CENSUS TRACTS.—In qualified equity investment shall be reduced ‘‘(D) any equity investment in, or loan to, the case of an area which is not tracted for by the amount of any credit determined any qualified community development enti- population census tracts, the equivalent under this section with respect to such in- ty if substantially all of the investment or county divisions (as defined by the Bureau of vestment. loan is used by such entity to make qualified the Census for purposes of defining poverty ‘‘(i) REGULATIONS.—The Secretary shall low-income community investments de- areas) shall be used for purposes of deter- prescribe such regulations as may be appro- scribed in subparagraphs (A), (B), and (C). mining poverty rates and median family in- priate to carry out this section, including ‘‘(2) QUALIFIED ACTIVE LOW-INCOME COMMU- come. regulations— NITY BUSINESS.— ‘‘(f) NATIONAL LIMITATION ON AMOUNT OF ‘‘(1) which limit the credit for investments ‘‘(A) IN GENERAL.—For purposes of para- INVESTMENTS DESIGNATED.— which are directly or indirectly subsidized by graph (1), the term ‘qualified active low-in- ‘‘(1) IN GENERAL.—There is a new markets other Federal benefits (including the credit come community business’ means, with re- tax credit limitation of $750,000,000 for each under section 42 and the exclusion from gross spect to any taxable year, any corporation or of calendar years 2000 through 2004 and zero income under section 103), partnership if for such year— for any succeeding calendar year. ‘‘(2) which prevent the abuse of the provi- ‘‘(i) at least 50 percent of the total gross ‘‘(2) ALLOCATION OF LIMITATION.—The limi- sions of this section through the use of re- income of such entity is derived from the ac- tation under paragraph (1) shall be allocated lated parties, tive conduct of a qualified business within by the Secretary among qualified commu- ‘‘(3) which impose appropriate reporting re- any low-income community, nity development entities selected by the quirements ‘‘(ii) a substantial portion of the use of the Secretary. In making allocations under the ‘‘(4) which apply the provisions of this sec- tangible property of such entity (whether preceding sentence, the Secretary shall give tion to newly formed entities.’’ owned or leased) is within any low-income priority to entities with records of having (b) CREDIT MADE PART OF GENERAL BUSI- community, successfully provided capital or technical as- NESS CREDIT.— ‘‘(iii) a substantial portion of the services sistance to disadvantaged businesses or com- (1) IN GENERAL.—Subsection (b) of section performed for such entity by its employees munities. 38, as amended by section 608(b), is amended are performed in any low-income commu- ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If by striking ‘‘plus’’ at the end of paragraph nity, the new markets tax credit limitation for (13), by striking the period at the end of ‘‘(iv) less than 5 percent of the average of any calendar year exceeds the aggregate paragraph (14) and inserting ‘‘, plus’’, and by the aggregate unadjusted bases of the prop- amount allocated under paragraph (2) for adding at the end the following new para- erty of such entity is attributable to collect- such year, such limitation for the succeeding graph: ibles (as defined in section 408(m)(2)) other calendar year shall be increased by the ‘‘(15) the new markets tax credit deter- than collectibles that are held primarily for amount of such excess. mined under section 45E(a).’’ S9594 CONGRESSIONAL RECORD — SENATE July 28, 1999

(2) LIMITATION ON CARRYBACK.—Subsection (c) BOND MAY BE FEDERALLY GUARAN- (c) SUSPENSION OF GROSS INCOME LIMIT FOR (d) of section 39, as amended by section 608(c) TEED.—Paragraph (3) of section 149(b) (relat- PERCENTAGE DEPLETION.—Section 613A(d)(1) is amended by adding at the end the fol- ing to exceptions) is amended by adding at (relating to limitation based on taxable in- lowing new paragraph: the end the following new subparagraph: come) is amended by adding at the end the ‘‘(11) NO CARRYBACK OF NEW MARKETS TAX ‘‘(E) EXCEPTION FOR SPACEPORTS.—Para- following: ‘‘This paragraph shall not apply to CREDIT BEFORE JANUARY 1, 2000.—No portion of graph (1) shall not apply to any exempt facil- any taxpayer in taxable years beginning the unused business credit for any taxable ity bond issued as part of an issue described after December 31, 2000, and ending before year which is attributable to the credit in paragraph (1) of section 142(a) to provide a under section 45E may be carried back to a spaceport in situations where— January 1, 2006.’’ taxable year ending before January 1, 2000.’’ ‘‘(i) the guarantee of the United States (or SEC. 1102. TREATMENT OF CERTAIN REVENUES (c) DEDUCTION FOR UNUSED CREDIT.—Sub- an agency or instrumentality thereof) is the OF ELECTRIC COOPERATIVES. section (c) of section 196, as amended by sec- result of payment of rent, user fees, or other (a) IN GENERAL.—Section 501(c)(12)(C) is tion 205(d), is amended by striking ‘‘and’’ at charges by the United States (or any agency amended by striking ‘‘or’’ at the end of the end of paragraph (8), by striking the pe- or instrumentality thereof), and riod at the end of paragraph (9) and inserting ‘‘(ii) the payment of the rent, user fees, or clause (i), by striking the period at the end ‘‘, and’’, and by adding at the end the fol- other charges is for, and conditioned upon, of clause (ii) and inserting ‘‘, or’’, and by lowing new paragraph: the use of the spaceport by the United States adding at the end the following new clause: ‘‘(10) the new markets tax credit deter- (or any agency or instrumentality thereof).’’. ‘‘(iii) from revenues received from non- mined under section 45E(a).’’ (d) EFFECTIVE DATE.—The amendments members solely as a result of conforming op- (d) CLERICAL AMENDMENT.—The table of made by this section shall apply to obliga- erations to meet provisions of an applicable sections for subpart D of part IV of sub- tions issued after December 31, 2000. Federal or State plan designed to provide chapter A of chapter 1, as amended by sec- SEC. 1006. INCREASE IN EXPENSE TREATMENT customer choice in electric power supply, in- tion 608(d), is amended by adding at the end FOR SMALL BUSINESSES. cluding wheeling revenue, revenue from re- the following new item: (a) IN GENERAL.—Paragraph (1) of section placement of lost member sales with non- 179(b) (relating to dollar limitation) is member sales, revenue from unbundled elec- ‘‘Sec. 45E. New markets tax credit.’’ amended to read as follows: (e) EFFECTIVE DATE.—The amendments tric activities (including metering, billing, ‘‘(1) DOLLAR LIMITATION.—The aggregate and service charges), revenue from member made by this section shall apply to invest- cost which may be taken into account under ments made after December 31, 1999. sales at below cost in order to meet market subsection (a) for any taxable year shall not rates, revenue from asset sales, and revenue SEC. 1003. INCREASE IN STATE CEILING ON LOW- exceed $25,000.’’ from diversified businesses if such a business INCOME HOUSING CREDIT. (b) EFFECTIVE DATE.—The amendment (a) IN GENERAL.—Clause (i) of section made by this section shall apply to taxable is conducted on a cooperative basis.’’ 42(h)(3)(C) (relating to State housing credit years beginning after December 31, 2000. (b) EFFECTIVE DATE.—The amendments ceiling) is amended to read as follows: TITLE XI—MISCELLANEOUS INCENTIVES made by this section shall apply to amounts ‘‘(i) the applicable amount under subpara- Subtitle A—Miscellaneous Provisions received after December 31, 1999. graph (H) multiplied by the State popu- SEC. 1101. OIL AND GAS INCENTIVES. lation,’’. SEC. 1103. TAX-EXEMPT BOND FINANCING OF (a) ELECTION TO EXPENSE GEOLOGICAL AND CERTAIN ELECTRIC FACILITIES. (b) APPLICABLE AMOUNT.—Paragraph (3) of GEOPHYSICAL EXPENDITURES.— section 42(h) (relating to housing credit dol- (1) IN GENERAL.—Section 263 (relating to (a) PERMITTED OPEN ACCESS TRANSACTIONS lar amount for agencies) is amended by add- capital expenditures) is amended by adding NOT A PRIVATE BUSINESS USE.—Section ing at the end the following new subpara- at the end the following new paragraph: 141(b)(6) of the Internal Revenue Code of 1986 graph: ‘‘(j) GEOLOGICAL AND GEOPHYSICAL EXPEND- (defining private business use) is amended by ‘‘(H) APPLICABLE AMOUNT OF STATE CEIL- ITURES FOR DOMESTIC OIL AND GAS WELLS.— adding at the end the following: ING.—For purposes of subparagraph (C)(i), Notwithstanding subsection (a), a taxpayer ‘‘(C) PERMITTED OPEN ACCESS TRANSACTIONS the applicable amount shall be determined may elect to treat geological and geo- NOT A PRIVATE BUSINESS USE.— under the following table: physical expenses incurred in connection ‘‘(i) IN GENERAL.—For purposes of this sub- ‘‘For calendar year— The applicable with the exploration for, or development of, section, the term ‘private business use’ shall oil or gas within the United States (as de- amount is— not include a permitted open access trans- fined in section 638) as expenses which are 2001, 2002, and 2003 ...... $1.30 action. 2004 and 2005 ...... 1.40 not chargeable to capital account. Any ex- ‘‘(ii) PERMITTED OPEN ACCESS TRANSACTION 2006 and thereafter ...... 1.50.’’ penses so treated shall be allowed as a deduc- DEFINED.—For purposes of clause (i), the (c) EFFECTIVE DATE.—The amendments tion in the taxable year in which paid or in- curred.’’ term ‘permitted open access transaction’ made by this section shall apply to calendar means any of the following transactions or (2) CONFORMING AMENDMENT.—Section years after 2000. activities with respect to an electric output SEC. 1004. INCREASE IN VOLUME CAP ON PRI- 263A(c)(3) is amended by inserting ‘‘263(j),’’ after ‘‘263(i),’’. facility (as defined in subsection (f)(4)(A)) VATE ACTIVITY BONDS. owned by a governmental unit: (a) IN GENERAL.—The table contained in (3) EFFECTIVE DATE.—The amendments ‘‘(I) Providing open access transmission section 146(d)(2) (relating to per capita limit; made by this subsection shall apply to ex- services and ancillary services which meet aggregate limit) is amended by striking penses paid or incurred in taxable years be- the reciprocity requirements of Federal En- ‘‘2002’’, ‘‘2003’’, ‘‘2004’’, ‘‘2005’’, ‘‘2006’’, and ginning after December 31, 2000. ergy Regulatory Commission Order No. 888, ‘‘2007’’ and inserting ‘‘2000’’, ‘‘2001’’, ‘‘2002’’, (b) ELECTION TO EXPENSE DELAY RENTAL which are ordered by the Federal Energy ‘‘2003’’, ‘‘2004’’, and ‘‘2005’’, respectively. PAYMENTS.— (b) EFFECTIVE DATE.—The amendments (1) IN GENERAL.—Section 263 (relating to Regulatory Commission, which are provided made by this section shall apply to calendar capital expenditures), as amended by sub- in accordance with a transmission tariff of years after 2000. section (a)(1), is amended by adding at the an independent system operator approved by such Commission, or which are consistent SEC. 1005. SPACEPORTS TREATED LIKE AIR- end the following new paragraph: PORTS UNDER EXEMPT FACILITY ‘‘(k) DELAY RENTAL PAYMENTS FOR DOMES- with State administered laws, rules, or or- BOND RULES. TIC OIL AND GAS WELLS.— ders providing for open transmission access. (a) IN GENERAL.—Paragraph (1) of section ‘‘(1) IN GENERAL.—Notwithstanding sub- ‘‘(II) Participation in an independent sys- 142(a) (relating to exempt facility bond) is section (a), a taxpayer may elect to treat tem operator agreement (including the relin- amended to read as follows: delay rental payments incurred in connec- quishment of control of transmission facili- ‘‘(1) airports and spaceports,’’. tion with the development of oil or gas with- ties to an independent system operator), in a (b) TREATMENT OF GROUND LEASES.—Para- in the United States (as defined in section regional transmission group, or in a power graph (1) of section 142(b) (relating to certain 638) as payments which are not chargeable to exchange agreement approved by such Com- facilities must be governmentally owned) is capital account. Any payments so treated mission. amended by adding at the end the following shall be allowed as a deduction in the tax- ‘‘(III) Delivery on an open access basis of new subparagraph: able year in which paid or incurred. electric energy sold by other entities to end- ‘‘(C) SPECIAL RULE FOR SPACEPORT GROUND ‘‘(2) DELAY RENTAL PAYMENTS.—For pur- users served by such governmental unit’s LEASES.—For purposes of subparagraph (A), poses of paragraph (1), the term ‘delay rental distribution facilities. spaceport property which is located on land payment’ means an amount paid for the ‘‘(IV) If open access service is provided owned by the United States and which is privilege of deferring development of an oil under subclauses (I) and (III), the sale of used by a governmental unit pursuant to a or gas well.’’ electric output of electric output facilities lease (as defined in section 168(h)(7)) from (2) CONFORMING AMENDMENT.—Section on terms other than those available to the the United States shall be treated as owned 263A(c)(3), as amended by subsection (a)(2), is general public if such sale is to an on-system by such unit if— amended by inserting ‘‘263(k),’’ after purchaser or is an existing off-system sale. ‘‘(i) the lease term (within the meaning of ‘‘263(j),’’. ‘‘(V) Such other transactions or activities section 168(i)(3)) is at least 15 years, and (3) EFFECTIVE DATE.—The amendments as may be provided in regulations prescribed ‘‘(ii) such unit would be treated as owning made by this subsection shall apply to pay- by the Secretary. such property if such lease term were equal ments made or incurred in taxable years be- ‘‘(iii) DEFINITIONS; SPECIAL RULES.—For to the useful life of such property.’’. ginning after December 31, 2000. purposes of this subparagraph— July 28, 1999 CONGRESSIONAL RECORD — SENATE S9595

‘‘(I) ON-SYSTEM PURCHASER.—The term ‘on- ‘‘(A) ELECTRIC OUTPUT FACILITY.—The term ‘‘(f) TRANSFERS OF BALANCES IN NON- system purchaser’ means a person who pur- ‘electric output facility’ means an output fa- QUALIFIED FUNDS INTO QUALIFIED FUNDS.— chases electric energy from a governmental cility that is an electric generation, trans- ‘‘(1) IN GENERAL.—Notwithstanding sub- unit and whose electric facilities or equip- mission, or distribution facility. section (b), any taxpayer maintaining a ment are directly connected with trans- ‘‘(B) ELIGIBLE REFUNDING BOND.—The term Fund to which this section applies with re- mission or distribution facilities that are ‘eligible refunding bond’ means any bond (or spect to a nuclear powerplant may transfer owned by such governmental unit. series of bonds) issued after an election de- into such Fund amounts held in any non- ‘‘(II) OFF-SYSTEM PURCHASER.—The term scribed in paragraph (1) to directly or indi- qualified fund of such taxpayer with respect ‘off-system purchaser’ means a purchaser of rectly refund a bond issued before such elec- to such powerplant. electric energy from a governmental unit tion, if— ‘‘(2) MAXIMUM AMOUNT PERMITTED TO BE other than an on-system purchaser. ‘‘(i) the average maturity date of the issue TRANSFERRED.—The amount permitted to be ‘‘(III) EXISTING OFF-SYSTEM SALE.—The of which the refunding bond is a part is not transferred under paragraph (1) shall not ex- term ‘existing off-system sale’ means a sale later than the average maturity date of the ceed the balance in the nonqualified fund as of electric energy to a person that was an bonds to be refunded by such issue, and of December 31, 1998. off-system purchaser of electric energy in ‘‘(ii) the amount of the refunding bond does ‘‘(3) DEDUCTION FOR AMOUNTS TRANS- the base year, but not in excess of the kilo- not exceed the outstanding amount of the re- FERRED.— watt hours purchased by such person in such funded bond. ‘‘(A) IN GENERAL.—The deduction allowed year. by subsection (a) for any transfer permitted For purposes of clause (i), average maturity ‘‘(IV) BASE YEAR.—The term ‘base year’ by this subsection shall be allowed ratably shall be determined in accordance with sec- means 1998 (or, at the election of such unit, over the remaining estimated useful life tion 147(b)(2)(A). in 1996 or 1997). (within the meaning of subsection (d)(2)(A)) ‘‘(C) QUALIFYING T&D FACILITY.—The term ‘‘(V) JOINT ACTION AGENCIES.—A member of of the nuclear powerplant, beginning with ‘qualifying T&D facility’ means— a joint action agency that is entitled to the later of the taxable year during which ‘‘(i) transmission facilities over which make a sale described in clause (ii)(IV) in a the transfer is made or the taxpayer’s first services described in subsection year may transfer that entitlement to the taxable year beginning after December 31, (b)(6)(C)(ii)(I) are provided, or joint action agency in accordance with rules 2001. ‘‘(ii) distribution facilities over which serv- of the Secretary. ‘‘(B) DENIAL OF DEDUCTION FOR PREVIOUSLY ices described in subsection (b)(6)(C)(ii)(III) ‘‘(VI) GOVERNMENT-OWNED FACILITY.—An DEDUCTED AMOUNTS.—No deduction shall be are provided.’’ electric output facility (as defined in sub- allowed for any transfer under this sub- (c) EFFECTIVE DATE AND TRANSITION section (f)(4)(A)) which is leased by a govern- section of an amount for which a deduction RULES.— mental unit or in which a governmental unit was allowed when such amount was paid into (1) EFFECTIVE DATE.—The amendments has capacity rights acquired with the pro- made by this section take effect on the date the nonqualified fund. For purposes of the ceeds of tax-exempt bonds issued before the of enactment of this Act, except that a gov- preceding sentence, a ratable portion of each date of the enactment of this subparagraph ernmental unit may elect to apply section transfer shall be treated as being from pre- shall be treated as owned by such govern- 141(b)(6)(C) of the Internal Revenue Code of viously deducted amounts to the extent mental unit.’’. 1986, as added by subsection (a), with respect thereof. (b) ELECTION TO TERMINATE TAX EXEMPT ‘‘(C) TRANSFERS OF QUALIFIED FUNDS.—If— FINANCING.—Section 141 of the Internal Rev- to permitted open access transactions on or after July 9, 1996. ‘‘(i) any transfer permitted by this sub- enue Code of 1986 (relating to private activ- section is made to any Fund to which this (3) TRANSITION RULES.— ity bond; qualified bond) is amended by add- section applies, and (A) PRIVATE BUSINESS USE.—Any activity ing at the end the following: ‘‘(ii) such Fund is transferred thereafter, ‘‘(f) ELECTION TO TERMINATE TAX-EXEMPT that was not a private business use prior to BOND FINANCING FOR CERTAIN ELECTRIC OUT- the effective date of the amendment made by any deduction under this subsection for tax- PUT FACILITIES.— subsection (a) shall not be deemed to be a able years ending after the date that such ‘‘(1) IN GENERAL.—An issuer may make an private business use by reason of the enact- Fund is transferred shall be allowed to the irrevocable election under this paragraph to ment of such amendment. transferee and not to the transferor. The pre- terminate certain tax-exempt financing for (B) ELECTION.—An issuer making the elec- ceding sentence shall not apply if the trans- electric output facilities. If the issuer makes tion under section 141(f) of the Internal Rev- feror is an organization exempt from tax im- such election, then— enue Code of 1986, as added by subsection (b), posed by this chapter. ‘‘(A) except as provided in paragraph (2), no shall not be liable under any contract in ef- ‘‘(4) NEW RULING AMOUNT REQUIRED.—Para- bond the interest on which is exempt from fect on the date of enactment of this Act for graph (1) shall not apply to any transfer un- tax under section 103 may be issued on or any claim arising from having made the less the taxpayer requests from the Sec- after the date of such election with respect election. retary a new schedule of ruling amounts in to an electric output facility; and SEC. 1104. MODIFICATIONS TO SPECIAL RULES connection with such transfer. ‘‘(B) notwithstanding paragraph (1) or (2) FOR NUCLEAR DECOMMISSIONING ‘‘(5) NONQUALIFIED FUND.—For purposes of of subsection (a) or paragraph (5) of sub- COSTS. this subsection, the term ‘nonqualified fund’ section (b), with respect to an electric out- (a) REPEAL OF LIMITATION ON DEPOSITS INTO means, with respect to any nuclear power- put facility no bond that was issued before FUND BASED ON COST OF SERVICE.—Sub- plant, any fund in which amounts are irrev- the date of the enactment of this subsection, section (b) of section 468A is amended to read ocably set aside pursuant to the require- the interest on which was exempt from tax as follows: ments of any State or Federal agency exclu- ‘‘(b) LIMITATION ON AMOUNTS PAID INTO on such date, shall be treated as a private ac- sively for the purpose of funding the decom- FUND.—The amount which a taxpayer may tivity bond, for so long as such facility con- missioning of such powerplant. pay into the Fund for any taxable year shall tinues to be owned by a governmental unit. ‘‘(6) NO BASIS IN QUALIFIED FUNDS.—Not- not exceed the ruling amount applicable to withstanding any other provision of law, the ‘‘(2) EXCEPTIONS.—An election under para- such taxable year.’’ graph (1) does not apply to— basis of any Fund to which this section ap- (b) CLARIFICATION OF TREATMENT OF FUND plies shall not be increased by reason of any ‘‘(A) any qualified bond (as defined in sub- TRANSFERS.—Subsection (e) of section 468A section (e)), transfer permitted by this subsection.’’ is amended by adding at the end the fol- (d) EFFECTIVE DATE.—The amendments ‘‘(B) any eligible refunding bond, lowing new paragraph: ‘‘(C) any bond issued to finance a quali- made by this section shall apply to taxable ‘‘(8) TREATMENT OF FUND TRANSFERS.—If, in years beginning after December 31, 1999. fying T&D facility, or connection with the transfer of the tax- ‘‘(D) any bond issued to finance— SEC. 1105. MODIFICATION OF DEPENDENT CARE payer’s interest in a nuclear powerplant, the CREDIT. ‘‘(i) equipment necessary to meet Federal taxpayer transfers the Fund with respect to (b) INCREASE IN LIMIT ON EMPLOYMENT-RE- or State environmental requirements appli- such powerplant to the transferee of such in- LATED EXPENSES.—Section 21(c) (relating to cable to electric output facilities, or terest and the transferee elects to continue dollar limit on amount creditable) is ‘‘(ii) repair of electric output facilities in the application of this section to such amended— service on the date of the enactment of this Fund— (1) by striking ‘‘$2,400’’ in paragraph (1) and subsection. ‘‘(A) the transfer of such Fund shall not inserting ‘‘$2,700’’, and Any repair under subparagraph (D)(ii) may cause such Fund to be disqualified from the (2) by striking ‘‘$4,800’’ in paragraph (2) and not increase by more than a de minimis de- application of this section, and inserting ‘‘$5,400’’. gree the capacity of the facility beyond its ‘‘(B) no amount shall be treated as distrib- (b) EFFECTIVE DATE.—The amendments original design. uted from such Fund, or be includible in made by this section shall apply to taxable ‘‘(3) FORM AND EFFECT OF ELECTIONS.—An gross income, by reason of such transfer.’’ years beginning after December 31, 2000. election under paragraph (1) shall be made in (c) TRANSFERS OF BALANCES IN NON- SEC. 1106. ALLOWANCE OF CREDIT FOR EM- such a manner as the Secretary prescribes QUALIFIED FUNDS.—Section 468A is amended PLOYER EXPENSES FOR CHILD CARE and shall be binding on any successor in in- by redesignating subsections (f) and (g) as ASSISTANCE. terest to the electing issuer. subsections (g) and (h), respectively, and by (a) IN GENERAL.—Subpart D of part IV of ‘‘(4) DEFINITIONS.—For purposes of this inserting after subsection (e) the following subchapter A of chapter 1 (relating to busi- subsection— new subsection: ness related credits), as amended by section S9596 CONGRESSIONAL RECORD — SENATE July 28, 1999

1002(a), is amended by adding at the end the ‘‘(d) RECAPTURE OF ACQUISITION AND CON- ‘‘(1) AGGREGATION RULES.—All persons following: STRUCTION CREDIT.— which are treated as a single employer under ‘‘SEC. 45F. EMPLOYER-PROVIDED CHILD CARE ‘‘(1) IN GENERAL.—If, as of the close of any subsections (a) and (b) of section 52 shall be CREDIT. taxable year, there is a recapture event with treated as a single taxpayer. ‘‘(a) IN GENERAL.—For purposes of section respect to any qualified child care facility of ‘‘(2) PASS-THRU IN THE CASE OF ESTATES AND 38, the employer-provided child care credit the taxpayer, then the tax of the taxpayer TRUSTS.—Under regulations prescribed by determined under this section for the taxable under this chapter for such taxable year the Secretary, rules similar to the rules of year is an amount equal to 25 percent of the shall be increased by an amount equal to the subsection (d) of section 52 shall apply. qualified child care expenditures of the eligi- product of— ‘‘(3) ALLOCATION IN THE CASE OF PARTNER- ble taxpayer for such taxable year. ‘‘(A) the applicable recapture percentage, SHIPS.—In the case of partnerships, the cred- ‘‘(b) DOLLAR LIMITATION.—The credit al- and it shall be allocated among partners under lowable under subsection (a) for any taxable ‘‘(B) the aggregate decrease in the credits regulations prescribed by the Secretary. year shall not exceed $90,000. allowed under section 38 for all prior taxable ‘‘(f) NO DOUBLE BENEFIT.— ‘‘(c) DEFINITIONS.—For purposes of this years which would have resulted if the quali- ‘‘(1) REDUCTION IN BASIS.—For purposes of section— fied child care expenditures of the taxpayer this subtitle— ‘‘(1) QUALIFIED CHILD CARE EXPENDITURE.— described in subsection (c)(1)(A) with respect ‘‘(A) IN GENERAL.—If a credit is determined ‘‘(A) IN GENERAL.—The term ‘qualified to such facility had been zero. under this section with respect to any prop- child care expenditure’ means any amount PPLICABLE RECAPTURE PERCENTAGE.— erty by reason of expenditures described in paid or incurred— ‘‘(2) A ‘‘(A) IN GENERAL.—For purposes of this sub- subsection (c)(1)(A), the basis of such prop- ‘‘(i) to acquire, construct, rehabilitate, or erty shall be reduced by the amount of the expand property— section, the applicable recapture percentage shall be determined from the following table: credit so determined. ‘‘(I) which is to be used as part of a quali- ‘‘(B) CERTAIN DISPOSITIONS.—If, during any fied child care facility of the taxpayer, The applicable taxable year, there is a recapture amount de- ‘‘(II) with respect to which a deduction for recapture termined with respect to any property the depreciation (or amortization in lieu of de- ‘‘If the recapture event percentage is: basis of which was reduced under subpara- preciation) is allowable, and occurs in: graph (A), the basis of such property (imme- ‘‘(III) which does not constitute part of the Years 1–3 ...... 100 diately before the event resulting in such re- principal residence (within the meaning of Year 4 ...... 85 capture) shall be increased by an amount section 121) of the taxpayer or any employee Year 5 ...... 70 equal to such recapture amount. For pur- of the taxpayer, Year 6 ...... 55 poses of the preceding sentence, the term ‘re- ‘‘(ii) for the operating costs of a qualified Year 7 ...... 40 capture amount’ means any increase in tax child care facility of the taxpayer, including Year 8 ...... 25 (or adjustment in carrybacks or carryovers) costs related to the training of employees, to Years 9 and 10 ...... 10 determined under subsection (d). scholarship programs, and to the providing Years 11 and thereafter 0. ‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No of increased compensation to employees with ‘‘(B) YEARS.—For purposes of subparagraph deduction or credit shall be allowed under higher levels of child care training, (A), year 1 shall begin on the first day of the any other provision of this chapter with re- ‘‘(iii) under a contract with a qualified taxable year in which the qualified child spect to the amount of the credit determined child care facility to provide child care serv- care facility is placed in service by the tax- under this section.’’ ices to employees of the taxpayer, or payer. (b) CONFORMING AMENDMENTS.— ‘‘(iv) to reimburse an employee for ex- ‘‘(3) RECAPTURE EVENT DEFINED.—For pur- (1) Section 38(b), as amended by section penses for child care which enables the em- poses of this subsection, the term ‘recapture 1002(b)(1), is amended by striking ‘‘plus’’ at ployee to be gainfully employed including event’ means— the end of paragraph (12), by striking the pe- expenses related to— ‘‘(A) CESSATION OF OPERATION.—The ces- riod at the end of paragraph (13) and insert- ‘‘(I) day care and before and after school sation of the operation of the facility as a ing ‘‘, plus’’, and by adding at the end the care, qualified child care facility. following new paragraph: ‘‘(II) transportation associated with such ‘‘(B) CHANGE IN OWNERSHIP.— ‘‘(14) the employer-provided child care care, and ‘‘(i) IN GENERAL.—Except as provided in credit determined under section 45F.’’ ‘‘(III) before and after school and holiday clause (ii), the disposition of a taxpayer’s in- (2) The table of sections for subpart D of programs including educational and rec- terest in a qualified child care facility with part IV of subchapter A of chapter 1, as reational programs and camp programs. respect to which the credit described in sub- amended by section 1002(d), is amended by ‘‘(B) FAIR MARKET VALUE.—The term ‘quali- section (a) was allowable. adding at the end the following: fied child care expenditures’ shall not in- ‘‘(ii) AGREEMENT TO ASSUME RECAPTURE LI- ‘‘Sec. 45F. Employer-provided child care clude expenses in excess of the fair market ABILITY.—Clause (i) shall not apply if the credit.’’ value of such care. person acquiring such interest in the facility (c) EFFECTIVE DATE.—The amendments ‘‘(2) QUALIFIED CHILD CARE FACILITY.— agrees in writing to assume the recapture li- made by this section shall apply to taxable ‘‘(A) IN GENERAL.—The term ‘qualified ability of the person disposing of such inter- child care facility’ means a facility— est in effect immediately before such disposi- years beginning after December 31, 2000. ‘‘(i) the principal use of which is to provide tion. In the event of such an assumption, the SEC. 1107. RECOVERY PERIOD FOR DEPRECIA- TION OF CERTAIN LEASEHOLD IM- child care assistance, and person acquiring the interest in the facility PROVEMENTS. ‘‘(ii) which meets the requirements of all shall be treated as the taxpayer for purposes (a) 15-YEAR RECOVERY PERIOD.—Subpara- applicable laws and regulations of the State of assessing any recapture liability (com- graph (E) of section 168(e)(3) (relating to 15- or local government in which it is located, puted as if there had been no change in own- year property) is amended by striking ‘‘and’’ including, but not limited to, the licensing of ership). at the end of clause (ii), by striking the pe- the facility as a child care facility. ‘‘(4) SPECIAL RULES.— riod at the end of clause (iii) and inserting ‘‘, Clause (i) shall not apply to a facility which ‘‘(A) TAX BENEFIT RULE.—The tax for the and’’, and by adding at the end the following is the principal residence (within the mean- taxable year shall be increased under para- new clause: ing of section 121) of the operator of the fa- graph (1) only with respect to credits allowed ‘‘(iv) any qualified leasehold improvement cility. by reason of this section which were used to property.’’ ‘‘(B) SPECIAL RULES WITH RESPECT TO A TAX- reduce tax liability. In the case of credits (b) QUALIFIED LEASEHOLD IMPROVEMENT PAYER.—A facility shall not be treated as a not so used to reduce tax liability, the PROPERTY.—Subsection (e) of section 168 is qualified child care facility with respect to a carryforwards and carrybacks under section amended by adding at the end the following taxpayer unless— 39 shall be appropriately adjusted. new paragraph: ‘‘(i) enrollment in the facility is open to ‘‘(B) NO CREDITS AGAINST TAX.—Any in- ‘‘(6) QUALIFIED LEASEHOLD IMPROVEMENT employees of the taxpayer during the taxable crease in tax under this subsection shall not PROPERTY.— year, be treated as a tax imposed by this chapter ‘‘(A) IN GENERAL.—The term ‘qualified ‘‘(ii) if the facility is the principal trade or for purposes of determining the amount of leasehold improvement property’ means any business of the taxpayer, at least 30 percent any credit under subpart A, B, or D of this improvement to an interior portion of a of the enrollees of such facility are depend- part. building which is nonresidential real prop- ents of employees of the taxpayer, and ‘‘(C) NO RECAPTURE BY REASON OF CASUALTY erty if— ‘‘(iii) the use of such facility (or the eligi- LOSS.—The increase in tax under this sub- ‘‘(i) such improvement is made under or bility to use such facility) does not discrimi- section shall not apply to a cessation of op- pursuant to a lease (as defined in subsection nate in favor of employees of the taxpayer eration of the facility as a qualified child (h)(7))— who are highly compensated employees care facility by reason of a casualty loss to ‘‘(I) by the lessee (or any sublessee) of such (within the meaning of section 414(q)). the extent such loss is restored by recon- portion, or ‘‘(3) ELIGIBLE TAXPAYER.—The term ‘eligi- struction or replacement within a reasonable ‘‘(II) by the lessor of such portion, ble taxpayer’ means for any taxable year a period established by the Secretary. ‘‘(ii) the original use of such improvement taxpayer with gross receipts of less than ‘‘(e) SPECIAL RULES.—For purposes of this begins with the lessee and after December 31, $50,000,000 for such year. section— 2000, July 28, 1999 CONGRESSIONAL RECORD — SENATE S9597 ‘‘(iii) such portion is to be occupied exclu- covering losses under such policies, or to spect to disclosures or inspections made pur- sively by the lessee (or any sublessee) of such support governmental programs to prepare suant to this paragraph.’’ portion, and for or mitigate the effects of natural cata- SEC. 1110. INCREASE IN LIMIT ON CERTAIN ‘‘(iv) such improvement is placed in service strophic events, CHARITABLE CONTRIBUTIONS AS more than 3 years after the date the building ‘‘(iii) the State law governing the associa- PERCENTAGE OF AGI. was first placed in service. tion permits the association to levy assess- (a) IN GENERAL.—Section 170(b)(1) (relating ‘‘(B) CERTAIN IMPROVEMENTS NOT IN- ments on insurance companies authorized to to percentage limitations) is amended by CLUDED.—Such term shall not include any sell property and casualty insurance in the striking ‘‘30 percent’’ each place it appears improvement for which the expenditure is State, or on property and casualty insurance in subparagraphs (B) and (C) and inserting attributable to— policyholders with insurable interests in ‘‘50 percent’’. ‘‘(i) the enlargement of the building, property located in the State to fund deficits (b) EFFECTIVE DATE.—The amendments ‘‘(ii) any elevator or escalator, of the association, including the creation of made by this section shall apply to taxable ‘‘(iii) any structural component benefiting reserves, years beginning after December 31, 2000. a common area, and ‘‘(iv) the plan of operation of the associa- SEC. 1111. LOW-INCOME SECOND MORTGAGE TAX ‘‘(iv) the internal structural framework of tion is subject to approval by the chief exec- CREDIT. the building. utive officer or other executive branch offi- (a) IN GENERAL.—Subpart D of part IV of ‘‘(C) DEFINITIONS AND SPECIAL RULES.—For cial of the State, by the State legislature, or subchapter A of chapter 1 (relating to busi- purposes of this paragraph— both, and ness related credits), as amended by section ‘‘(i) COMMITMENT TO LEASE TREATED AS ‘‘(v) the assets of the association revert 1002(a), is amended by adding at the end the LEASE.—A commitment to enter into a lease upon dissolution to the State, the State’s following: shall be treated as a lease, and the parties to designee, or an entity designated by the ‘‘SEC. 45F. LOW-INCOME SECOND MORTGAGE TAX such commitment shall be treated as lessor State law governing the association, or CREDIT. and lessee, respectively, if the lease is in ef- State law does not permit the dissolution of ‘‘(a) ALLOWANCE OF CREDIT.— fect at the time the property is placed in the association. ‘‘(1) IN GENERAL.—For purposes of section service. ‘‘(B)(i) An entity described in clause (ii) 38, the amount of the low-income second ‘‘(ii) RELATED PERSONS.—A lease between shall be disregarded as a separate entity and mortgage tax credit determined under this related persons shall not be considered a treated as part of the association described section for any taxable year in the credit pe- lease. For purposes of the preceding sen- in subparagraph (A) from which it receives riod shall be an amount equal to the applica- tence, the term ‘related persons’ means— remittances described in clause (ii) if an ble percentage of the low-income second ‘‘(I) members of an affiliated group (as de- election is made within 30 days after the mortgage tax credit amount allocated such fined in section 1504), and date that such association is determined to taxpayer by a State housing finance agency ‘‘(II) persons having a relationship de- be exempt from tax. in the credit allocation year under sub- scribed in subsection (b) of section 267(b) or ‘‘(ii) An entity is described in this clause if section (b). 707(b)(1); except that, for purposes of this it is an entity or fund created before Janu- ‘‘(2) APPLICABLE PERCENTAGE.—For pur- clause, the phrase ‘80 percent or more’ shall ary 1, 1999, pursuant to State law and orga- poses of this section, the Secretary shall pre- be substituted for the phrase ‘more than 50 nized and operated exclusively to receive, scribe the applicable percentage for any year percent’ each place it appears in such sub- hold, and invest remittances from an asso- in which the taxpayer is a qualified lender. sections.’’ ciation described in subparagraph (A) and ex- Such percentage with respect to any month (c) REQUIREMENT TO USE STRAIGHT LINE empt from tax under subsection (a) and to in the credit period with respect to such tax- METHOD.—Paragraph (3) of section 168(b) is make disbursements to pay claims on insur- payer shall be percentages which will yield amended by adding at the end the following ance contracts issued by such association, over such period amounts of credit under new subparagraph: and to make disbursements to support gov- paragraph (1) which have a present value ‘‘(G) Qualified leasehold improvement ernmental programs to prepare for or miti- equal to 100 percent of the low-income sec- property described in subsection (e)(6).’’ gate the effects of natural catastrophic ond mortgage tax credit amount allocated (d) EFFECTIVE DATE.—The amendments events.’’ such taxpayer under subsection (b). made by this section shall apply to qualified (b) UNRELATED BUSINESS TAXABLE IN- ‘‘(3) METHOD OF DISCOUNTING.—The present leasehold improvement property placed in COME.—Subsection (a) of section 512 (relating value under paragraph (2) shall be deter- service after December 31, 2000. to unrelated business taxable income) is mined in the same manner as the low-income SEC. 1108. EXEMPTION FROM INCOME TAX FOR amended by adding at the end the following housing credit under section 42(b)(2)(C). STATE-CREATED ORGANIZATIONS new paragraph: PROVIDING PROPERTY AND CAS- ‘‘(b) ALLOCATION OF LOW-INCOME SECOND ‘‘(6) SPECIAL RULE APPLICABLE TO ORGANIZA- UALTY INSURANCE FOR PROPERTY MORTGAGE TAX CREDIT AMOUNTS.— FOR WHICH SUCH COVERAGE IS TIONS DESCRIBED IN SECTION 501(C)(28).—In the ‘‘(1) AMOUNT OF CREDIT.—Each qualified OTHERWISE UNAVAILABLE. case of an organization described in section State shall receive a low-income second (a) IN GENERAL.—Subsection (c) of section 501(c)(28), the term ‘unrelated business tax- mortgage tax credit dollar amount for each 501 (relating to exemption from tax on cor- able income’ means taxable income for a tax- calendar year in an amount equal to the sum porations, certain trusts, etc.) is amended by able year computed without the application of— adding at the end the following new para- of section 501(c)(28) if, at the end of the im- ‘‘(A) an amount equal to— graph: mediately preceding taxable year, the orga- ‘‘(i) 10 cents multiplied by the State popu- ‘‘(28)(A) Any association created before nization’s net equity exceeded 15 percent of lation, multiplied by January 1, 1999, by State law and organized the total coverage in force under insurance ‘‘(ii) 10, plus and operated exclusively to provide property contracts issued by the organization and ‘‘(B) the unused low-income second mort- and casualty insurance coverage for property outstanding at the end of such preceding gage tax credit dollar amount (if any) of located within the State for which the State year.’’ such State for the preceding year. has determined that coverage in the author- (c) TRANSITIONAL RULE.—No income or ‘‘(2) QUALIFIED STATE.—For purposes of this ized insurance market is limited or unavail- gain shall be recognized by an association as section— able at reasonable rates, if— a result of a change in status to that of an ‘‘(A) IN GENERAL.—The term ‘qualified ‘‘(i) no part of the net earnings of which in- association described by section 501(c)(28) of State’ means a State with an approved allo- ures to the benefit of any private share- the Internal Revenue Code of 1986, as amend- cation plan to allocate low-income second holder or individual, ed by subsection (a). mortgage tax credits to qualified lenders ‘‘(ii) except as provided in clause (v), no (d) EFFECTIVE DATE.—The amendment through the State housing finance agency. part of the assets of which may be used for, made by subsection (a) shall apply to taxable ‘‘(B) APPROVED ALLOCATION PLAN.—For pur- or diverted to, any purpose other than— years beginning after December 31, 2000. poses of this paragraph, the term ‘approved ‘‘(I) to satisfy, in whole or in part, the li- SEC. 1109. DISCLOSURE OF TAX INFORMATION TO allocation plan’ means a written plan, cer- ability of the association for, or with respect FACILITATE COMBINED EMPLOY- tified by the Secretary, which includes— to, claims made on policies written by the MENT TAX REPORTING. ‘‘(i) selection criteria for the allocation of association, Section 6103(d)(5) is amended to read as fol- credits to qualified lenders— ‘‘(II) to invest in investments authorized lows: ‘‘(I) based on a process in which lenders by applicable law, ‘‘(5) DISCLOSURE FOR COMBINED EMPLOYMENT submit bids for the value of the credit, and ‘‘(III) to pay reasonable and necessary ad- TAX REPORTING.—The Secretary may disclose ‘‘(II) which gives priority to qualified lend- ministration expenses in connection with the taxpayer identity information and signa- ers with qualified low-income second mort- establishment and operation of the associa- tures to any agency, body, or commission of gage tax credit loans which are prepaid dur- tion and the processing of claims against the any State for the purpose of carrying out ing a calendar year, for credit allocations in association, or with such agency, body, or commission a the succeeding calendar year, ‘‘(IV) to make remittances pursuant to combined Federal and State employment tax ‘‘(ii) an assurance that the State will not State law to be used by the State to provide reporting program approved by the Sec- allocate in excess of 10 percent of the low-in- for the payment of claims on policies written retary. Subsections (a)(2) and (p)(4) and sec- come second mortgage tax credit amount for by the association, purchase reinsurance tions 7213 and 7213A shall not apply with re- the calendar year for qualified low-income S9598 CONGRESSIONAL RECORD — SENATE July 28, 1999 second mortgage tax credit loans which are determined by the lender or the State hous- ‘‘(A) whose family income for the year in neighborhood revitalization project loans, ing finance agency (as applicable)), or which the mortgagor applies for the loan is ‘‘(iii) a procedure that the agency (or an ‘‘(ii) described in paragraph (2), 80 percent or less of the area median gross agent or other private contractor of such ‘‘(F) the proceeds of such loan are not used income for the area in which the residence agency) will follow in monitoring for non- for settlement or other closing costs of the which secures the mortgage is located, compliance with the provisions of this sec- transaction in an amount in excess of 4 per- ‘‘(B) for whom the loan would not result in tion and in notifying the Internal Revenue cent of the purchase price of the residence a housing debt-to-income ratio, with respect Service of such noncompliance with respect securing the loan, to the residence securing the loan, or total to which such agency becomes aware, and ‘‘(G) the rate of interest of the loan does debt-to-income ratio which is greater than ‘‘(iv) such other assurances as the Sec- not exceed the greater of— the guidelines set by the Federal Housing retary may require. ‘‘(i) the excess of— Administration (or any other ratio as deter- ‘‘(3) QUALIFIED LENDER.—For purposes of ‘‘(I) the prime lending rate in effect as of mined by the State housing finance agency this section, the term ‘qualified lender’ the date on which the loan is originated, or lender if such ratio is less than such means a lender which— over guidelines), and ‘‘(A) is an insured depository institution ‘‘(II) 5.5 percent, or ‘‘(C) who attends pre-purchase homeowner- (as defined in section 3 of the Federal De- ‘‘(ii) 3 percent, ship counseling provided by the qualified posit Insurance Act), insured credit union (as ‘‘(H) the origination fee paid with respect lender or the lender’s designee. defined in section 101 of the Federal Credit to the loan does not cause the aggregate ‘‘(2) DETERMINATION OF FAMILY INCOME.— Union Act), community development finan- amount of origination fees paid with respect For purposes of this subsection and sub- cial institution (as defined in section 103 of to any loans secured by the residence— section (h), the family income of a mort- the Community Development Banking and ‘‘(i) in the case of a neighborhood revital- gagor and area median gross income shall be Financial Institutions Act of 1994 (12 U.S.C. ization project loan, to exceed 1 percent of determined in accordance with section 4702)), or nonprofit community development the appraised value of the residence which 143(f)(2). corporation (as defined in section 613 of the secures the loan, and ‘‘(e) RESIDENCE REQUIREMENTS.—A loan Community Economic Development Act of ‘‘(ii) in the case of any other loan, to ex- meets the requirements of this subsection if 1981 (42 U.S.C. 9802)), ceed 2 percent of the appraised value of such it is secured by a residence that is— ‘‘(B) makes available, through such lender residence, and ‘‘(1) a single-family residence (including a or the lender’s designee, pre-purchase home- ‘‘(I) the servicing fees of such loan— manufactured home (within the meaning of ownership counseling for mortgagors, and ‘‘(i) are allocated from interest payments section 25(e)(10))) which is the principal resi- ‘‘(C) during the 1-year period beginning on made with respect to the loan, and dence (within the meaning of section 121) of the date of the credit allocation, originates ‘‘(ii) may not— the mortgagor, or can reasonably be ex- not less than 100 qualified low-income second ‘‘(I) in the case of a neighborhood revital- pected to become the principal residence of mortgage tax credit loans in an aggregate ization project loan, exceed a total of 38 the mortgagor within a reasonable time amount not less than the amount of the bid basis points, and after the financing is provided, of such lender for such credit allocation. ‘‘(II) in the case of any other loan, when ‘‘(2) purchased by the mortgagor with a ‘‘(4) CARRYOVER OF CREDIT.—A low-income added to such fees of any other loan secured down payment in an amount not less than second mortgage tax credit amount received by the residence, exceed a total of 63 basis the lesser of— by a State for any calendar year and not al- points. ‘‘(A) 2 percent of the purchase price, or located in such year shall remain available ‘‘(2) BALLOON PAYMENT LOAN.— ‘‘(B) $1,000, and to be allocated in the succeeding calendar ‘‘(A) IN GENERAL.—A loan is described in ‘‘(3) in the case of a mortgagor with a fam- year. this paragraph if such loan— ily income greater than 50 percent of the ‘‘(5) POPULATION.—For purposes of this sec- ‘‘(i) meets the requirements of subpara- area median gross income, as determined tion, population shall be determined in ac- graphs (B) and (C), under subsection (d)(1)(A), not financed in cordance with section 146(j). ‘‘(ii) is for a period of 25 years and, except connection with a qualified mortgage issued ‘‘(6) COST-OF-LIVING ADJUSTMENT.—In the as provided in clause (iv), no payment is due under section 143. case of a calendar year after 2001, the 10 cent on such loan until the sooner of— ‘‘(f) DEFINITION AND SPECIAL RULES RELAT- amount contained in paragraph (1)(A)(i) ‘‘(I) the end of such period, or ING TO CREDIT PERIOD.— shall be increased by an amount equal to— ‘‘(II) the date on which the residence which ‘‘(1) CREDIT PERIOD DEFINED.—For purposes ‘‘(A) such amount, multiplied by secures the loan is disposed of, of this section, the term ‘credit period’ ‘‘(B) the cost-of-living adjustment deter- ‘‘(iii) does not prohibit early repayment of means the period of 10 taxable years begin- mined under section 1(f)(3) for such calendar such loan, and ning with the taxable year in which a low-in- year by substituting ‘calendar year 1999’ for ‘‘(iv) requires payment on such loan if the come second mortgage tax credit amount is ‘calendar year 1992’ in subparagraph (B) mortgagor receives any portion of the equity allocated to the taxpayer. thereof. of such residence as part of a refinancing of ‘‘(2) SPECIAL RULE FOR 1ST YEAR OF CREDIT ‘‘(c) QUALIFIED LOW-INCOME SECOND MORT- any loan secured by such residence. PERIOD.— GAGE TAX CREDIT LOAN DEFINED.—For pur- ‘‘(B) INTEREST.—Notwithstanding para- ‘‘(A) IN GENERAL.—The credit allowable poses of this section— graph (1)(G), the rate of interest of the loan under subsection (a) with respect to any tax- ‘‘(1) IN GENERAL.—The term ‘qualified low- is zero percent. payer for the 1st taxable year of the credit income second mortgage tax credit loan’ ‘‘(C) SERVICING FEES.—Notwithstanding period shall be determined by substituting means a loan originated and funded by a paragraph (1)(I), there shall be no servicing for the applicable percentage under sub- qualified lender which is secured by a second fees in connection with the loan. section (a)(2) the fraction— lien on a residence, but only if— ‘‘(3) INDEX OF AMOUNT.— ‘‘(i) the numerator of which is the sum of ‘‘(A) the requirements of subsections (d), ‘‘(A) IN GENERAL.—In the case of a calendar the applicable percentages determined under (e), and (f) are met, year after 2001, the amounts under subpara- subsection (a)(2) as of the close of each full ‘‘(B) subject to subparagraphs (F), (H), and graphs (C) and (D) of paragraph (1) shall be month of such year, during which the tax- (I), the proceeds from such loan are applied increased by an amount equal to— payer was a qualified lender, and exclusively— ‘‘(i) such amount, multiplied by ‘‘(ii) the denominator of which is 12. ‘‘(i) to acquire such residence, or ‘‘(ii) the housing price adjustment for such ‘‘(B) DISALLOWED 1ST YEAR CREDIT ALLOWED ‘‘(ii) to substantially improve such resi- calendar year. IN 11TH YEAR.—Any reduction by reason of dence in connection with a neighborhood re- ‘‘(B) HOUSING PRICE ADJUSTMENT.—For pur- subparagraph (A) in the credit allowable vitalization project, poses of subparagraph (A), the housing price (without regard to subparagraph (A)) for the ‘‘(C) the principal amount of the loan is adjustment for any calendar year is the per- 1st taxable year of the credit period shall be equal to an amount which is— centage (if any) by which— allowable under subsection (a) for the 1st ‘‘(i) not less than 18 percent of the pur- ‘‘(i) the housing price index for the pre- taxable year following the credit period. chase price of the residence securing the ceding calendar year, exceeds ‘‘(3) DISPOSITION OF LOW-INCOME SECOND loan, and ‘‘(ii) the housing price index for calendar MORTGAGE TAX CREDIT LOANS.—If a qualified ‘‘(ii) not more than the lesser of— year 2001. low-income second mortgage tax credit loan ‘‘(I) 22 percent of such purchase price, or ‘‘(C) HOUSING PRICE INDEX.—For purposes of is disposed of during any year for which a ‘‘(II) $25,000, subparagraph (B), the housing price index credit is allowable under subsection (a), such ‘‘(D) in the case of a neighborhood revital- means the housing price index published by credit shall be allocated between the parties ization project loan, subparagraph (C) is ap- the Federal Housing Finance Board (as es- on the basis of the number of days during plied by substituting— tablished in section 2A of the Federal Home such year the mortgage was held by each and ‘‘(i) ‘purchase price or appraised value’ for Loan Bank Act (12 U.S.C. 1422a)) for the cal- the portion of the total credit allocated to ‘purchase price’, and endar year. the qualified lender which is attributable to ‘‘(ii) ‘$40,000’ for ‘$25,000’, ‘‘(d) MORTGAGOR.— such mortgage. ‘‘(E) the loan is— ‘‘(1) IN GENERAL.—A loan meets the re- ‘‘(g) LOSS OF CREDIT.—If, during the tax- ‘‘(i) amortized over a period of not more quirements of this subsection if it is made to able year, a qualified low-income second than 30 years (or any lesser period of time as a mortgagor— mortgage tax credit loan is repaid prior to July 28, 1999 CONGRESSIONAL RECORD — SENATE S9599

the expiration of the credit period with re- ‘‘(j) CERTIFICATION AND OTHER REPORTS TO ‘‘(g) COORDINATION WITH CERTAIN MEANS- spect to such loan, the amount of the low-in- THE SECRETARY.— TESTED PROGRAMS.—Any refund or credit come second mortgage tax credit attrib- ‘‘(1) CERTIFICATION WITH RESPECT TO STATE made to an individual by reason of this sec- utable to such loan is no longer available ALLOCATION OF LOW-INCOME SECOND MORTGAGE tion shall not be treated as income or re- under subsection (a). For purposes of the pre- TAX CREDITS.—The Secretary may, upon a ceipts (or taken into account in determining ceding sentence, the tax credit is allowable finding of noncompliance, revoke the certifi- resources) for purposes of determining— for the portion of the year in which such re- cation of a qualified State and revoke any ‘‘(1) the eligibility of the individual or any payment occurs for which the loan is out- qualified low-income second mortgage tax other individual for any month for benefits standing, determined in the same manner as credit amounts allocated to such State or al- or assistance under any Federal program or provided in subsection (f)(2)(A). located by such State to a qualified lender. any State or local program financed in whole ‘‘(h) RECAPTURE OF PORTION OF FEDERAL ‘‘(2) ANNUAL REPORT FROM HOUSING FINANCE or in part with Federal funds, or SUBSIDY FROM HOME-OWNER.— AGENCIES.—Each State housing finance agen- ‘‘(2) the amount or extent of such benefits ‘‘(1) IN GENERAL.—If, during the taxable cy which allocates any low-income second or assistance.’’ year, any taxpayer described in paragraph (3) mortgage tax credit amount to any qualified (b) EARNED INCOME CREDIT.—Subsection (l) disposes of an interest in a residence with re- lender for any calendar year shall submit to of section 32 (relating to coordination with spect to which a low-income second mort- the Secretary (at such time and in such man- certain means-tested programs) is amended gage tax credit amount applies, then the tax- ner as the Secretary shall prescribe) an an- to read as follows: payer’s tax imposed by this chapter for such nual report specifying— ‘‘(l) COORDINATION WITH CERTAIN MEANS- taxable year shall be increased by 50 percent ‘‘(A) the low-income second mortgage tax TESTED PROGRAMS.—Any refund or credit of the gain (if any) on the disposition of such credit amount allocated to each qualified made to an individual by reason of this sec- interest. lender for such year, and tion, and any payment made to such indi- ‘‘(B) with respect to each qualified lender— ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not vidual by an employer under section 3507, apply to any disposition— ‘‘(i) the principal amount of the aggregate shall not be treated as income or receipts (or ‘‘(A) by reason of death, qualified low-income second mortgage tax taken into account in determining resources) ‘‘(B) which is made on a date that is more credit loans made by such lender in such for purposes of determining— year and the outstanding amount of such than 10 years after the date on which the ‘‘(1) the eligibility of the individual or any loans in such year, and qualified low-income second mortgage tax other individual for any month for benefits ‘‘(ii) the number of qualified low-income credit loan secured by such residence was or assistance under any Federal program or second mortgage tax credit loans made by made, or any State or local program financed in whole such lender in such year. ‘‘(C) in which the purchaser of the resi- or in part with Federal funds, or dence assumes the qualified low-income sec- The penalty under section 6652(j) shall apply ‘‘(2) the amount or extent of such benefits ond mortgage tax credit loan secured by the to any failure to submit the report required or assistance.’’ residence. by this paragraph on the date prescribed (c) EFFECTIVE DATE.—The amendments ‘‘(3) INCOME LIMITATION.—A taxpayer is de- therefore. made by this section shall apply to taxable scribed in this paragraph if, on the date of ‘‘(k) REGULATIONS.—The Secretary shall years beginning after December 31, 2000. prescribe such regulations as may be nec- the disposition, the family income of the SEC. 1113. NO FEDERAL INCOME TAX ON essary or appropriate to carry out the pur- mortgagor is 115 percent or more of the area AMOUNTS RECEIVED BY HOLO- poses of this section.’’ median gross income as determined under CAUST VICTIMS OR THEIR HEIRS. (b) LIMITATION ON CARRYBACK OF UNUSED subsection (d)(1)(A) for the year in which the (a) IN GENERAL.—For purposes of the Inter- CREDIT.—Subsection (d) of section 39 (relat- nal Revenue Code of 1986, gross income shall disposition occurs. ing to carryback and carryforward of unused not include any amount received by an indi- ‘‘(4) SPECIAL RULES RELATING TO LIMITATION credits), as amended by section 1002(b)(2), is vidual (or any heir of the individual)— ON RECAPTURE AMOUNT BASED ON GAIN REAL- amended by adding at the end the following: (1) from the Swiss Humanitarian Fund es- IZED.—For purposes of this subsection, rules ‘‘(12) NO CARRYBACK OF LOW-INCOME SECOND tablished by the Government of Switzerland similar to the rules of section 143(m)(6) shall MORTGAGE TAX CREDITS BEFORE EFFECTIVE or from any similar fund established by any apply. DATE.—No portion of the unused business ‘‘(5) LENDER TO INFORM MORTGAGOR OF PO- credit for any taxable year which is attrib- foreign country, or TENTIAL RECAPTURE.—The qualified lender utable to the low-income second mortgage (2) as a result of the settlement of the ac- which makes a qualified low-income second tax credit determined under section 45F may tion entitled ‘‘In re Holocaust Victims’ Asset mortgage tax credit loan to a mortgagor be carried back to a taxable year ending be- Litigation’’, (E.D. NY), C.A. No. 96–4849, or as shall, at the time of settlement, provide a fore the date of the enactment of section a result of any similar action. written statement informing the mortgagor 45F.’’ (b) EFFECTIVE DATE.—This section shall of the potential recapture under this sub- (c) CONFORMING AMENDMENTS.— apply to any amount received before, on, or section. (1) Section 38(b), as amended by section after the date of the enactment of this Act. ‘‘(6) SPECIAL RULES.—For purposes of this 1002(b)(1), is amended— SEC. 1114. TAX TREATMENT OF SPECIAL PAY FOR subsection, rules similar to the rules of sec- (A) by striking ‘‘plus’’ at the end of para- MEMBERS OF THE ARMED FORCES. tion 143(m)(8) shall apply. graph (14), (a) IN GENERAL.—Subchapter C of chapter ‘‘(i) OTHER DEFINITIONS.— (B) by striking the period at the end of 80 (relating to provisions affecting more than ‘‘(1) NEIGHBORHOOD REVITALIZATION PROJECT paragraph (15), and inserting ‘‘, plus’’, and one subtitle) is amended by adding at the LOAN.— (C) by adding at the end the following: end the following: ‘‘(A) IN GENERAL.—The term ‘neighborhood ‘‘(16) the low-income second mortgage tax ‘‘SEC. 7874. TREATMENT OF SPECIAL PAY FOR revitalization project loan’ means a loan se- credit determined under section 45F.’’ MEMBERS OF THE ARMED FORCES. cured by a second lien on a residence, the (2) The table of sections for subpart D of ‘‘(a) GENERAL RULE.—For purposes of the proceeds of which are used to substantially part IV of subchapter A of chapter 1, as following provisions, a special pay area shall improve such residence in connection with a amended by section 1002(d), is amended by be treated in the same manner as if it were neighborhood revitalization project. adding at the end the following: a combat zone (as determined under section ‘‘(B) NEIGHBORHOOD REVITALIZATION 112): ‘‘Sec. 45F. Low-income second mortgage tax PROJECT.—The term ‘neighborhood revital- ‘‘(1) Section 2(a)(3) (relating to special rule credit.’’ ization project’ means a project of sufficient where deceased spouse was in missing sta- size and scope to alleviate physical deterio- (d) REGULATIONS.—The Secretary of the tus). ration and stimulate investment in— Treasury shall, by regulation, make any nec- ‘‘(2) Section 112 (relating to the exclusion ‘‘(i) a geographic location within the juris- essary adjustments to the amount of credit of certain combat pay of members of the diction of a unit of local government (but allocated under section 45F(b)(1) of the Inter- Armed Forces). not the entire jurisdiction) designated in nal Revenue Code of 1986, as added by sub- ‘‘(3) Section 692 (relating to income taxes comprehensive plans, ordinances, or other section (a), to ensure that the decrease in of members of Armed Forces on death). documents as a neighborhood, village, or revenues in the Treasury, resulting from the ‘‘(4) Section 2201 (relating to members of similar geographic designation, or amendments made by this section, in cal- the Armed Forces dying in combat zone or endar years before 2011 does not exceed ‘‘(ii) the entire jurisdiction of a unit of by reason of combat-zone-incurred wounds, $1,000,000,000. local government if the population of such etc.). (e) EFFECTIVE DATE.—The amendments jurisdiction is not in excess of 25,000. made by this section apply to calendar years ‘‘(5) Section 3401(a)(1) (defining wages re- ‘‘(2) STATE.—The term ‘State’ includes a after 2000. lating to combat pay for members of the possession of the United States. Armed Forces). SEC. 1112. COORDINATION OF CHILD TAX CREDIT ‘‘(3) STATE HOUSING FINANCE AGENCY.—The AND EARNED INCOME CREDIT WITH ‘‘(6) Section 4253(d) (relating to the tax- term ‘State housing finance agency’ means CERTAIN MEANS-TESTED PRO- ation of phone service originating from a the public agency, authority, corporation, or GRAMS. combat zone from members of the Armed other instrumentality of a State that has (a) CHILD TAX CREDIT.—Section 24 (relating Forces). the authority to provide residential mort- to child tax credit) is amended by adding at ‘‘(7) Section 6013(f)(1) (relating to joint re- gage loan financing throughout the State. the end the following new subsection: turn where individual is in missing status). S9600 CONGRESSIONAL RECORD — SENATE July 28, 1999

‘‘(8) Section 7508 (relating to time for per- the requirements of subparagraph (A) or (B) ‘‘(i) IN GENERAL.—The term ‘qualified lodg- forming certain acts postponed by reason of are met. ing facility’ means any lodging facility un- service in combat zone). ‘‘(A) LIMITED RENTAL EXCEPTION.—The re- less wagering activities are conducted at or ‘‘(b) SPECIAL PAY AREA.—For purposes of quirements of this subparagraph are met in connection with such facility by any per- this section, the term ‘special pay area’ with respect to any property if at least 90 son who is engaged in the business of accept- means any area in which an individual re- percent of the leased space of the property is ing wagers and who is legally authorized to ceives special pay under section 310 of title rented to persons other than taxable REIT engage in such business at or in connection 37, United States Code, for services per- subsidiaries of such trust and other than per- with such facility. formed in such area.’’ sons described in section 856(d)(2)(B). The ‘‘(ii) LODGING FACILITY.—The term ‘lodging (b) CONFORMING AMENDMENT.—The table of preceding sentence shall apply only to the facility’ means a hotel, motel, or other es- sections for subchapter C of chapter 80 is extent that the amounts paid to the trust as tablishment more than one-half of the dwell- amended by adding at the end the following: rents from real property (as defined in para- ing units in which are used on a transient ‘‘Sec. 7874. Treatment of special pay.’’ graph (1) without regard to paragraph (2)(B)) basis. from such property are substantially com- (c) EFFECTIVE DATE.—The amendments ‘‘(iii) CUSTOMARY AMENITIES AND FACILI- made by this section shall apply to remu- parable to such rents made by the other ten- TIES.—The term ‘lodging facility’ includes neration paid in taxable years ending after ants of the trust’s property for comparable customary amenities and facilities operated the date of the enactment of this Act. space. as part of, or associated with, the lodging fa- ‘‘(B) EXCEPTION FOR CERTAIN LODGING FA- cility so long as such amenities and facilities Subtitle B—Provisions Relating to Real CILITIES.—The requirements of this subpara- Estate Investment Trusts are customary for other properties of a com- graph are met with respect to an interest in parable size and class owned by other owners PART I—TREATMENT OF INCOME AND real property which is a qualified lodging fa- unrelated to such real estate investment SERVICES PROVIDED BY TAXABLE REIT cility leased by the trust to a taxable REIT trust. SUBSIDIARIES subsidiary of the trust if the property is op- ‘‘(E) OPERATE INCLUDES MANAGE.—Ref- SEC. 1121. MODIFICATIONS TO ASSET DIVER- erated on behalf of such subsidiary by a per- erences in this paragraph to operating a SIFICATION TEST. son who is an eligible independent con- property shall be treated as including a ref- (a) IN GENERAL.—Subparagraph (B) of sec- tractor. erence to managing the property. tion 856(c)(4) is amended to read as follows: ‘‘(9) ELIGIBLE INDEPENDENT CONTRACTOR.— ‘‘(F) RELATED PERSON.—Persons shall be ‘‘(B)(i) not more than 25 percent of the For purposes of paragraph (8)(B)— treated as related to each other if such per- value of its total assets is represented by se- ‘‘(A) IN GENERAL.—The term ‘eligible inde- sons are treated as a single employer under curities (other than those includible under pendent contractor’ means, with respect to subsection (a) or (b) of section 52.’’ subparagraph (A)), and any qualified lodging facility, any inde- ‘‘(ii) except with respect to a taxable REIT pendent contractor if, at the time such con- (2) CONFORMING AMENDMENT.—Subpara- subsidiary and securities includible under tractor enters into a management agreement graph (B) of section 856(d)(2) is amended by subparagraph (A)— or other similar service contract with the inserting ‘‘except as provided in paragraph ‘‘(I) not more than 5 percent of the value of taxable REIT subsidiary to operate the facil- (8),’’ after ‘‘(B)’’. its total assets is represented by securities of ity, such contractor (or any related person) SEC. 1123. TAXABLE REIT SUBSIDIARY. any 1 issuer, is actively engaged in the trade or business ‘‘(II) the trust does not hold securities pos- of operating qualified lodging facilities for (a) IN GENERAL.—Section 856 is amended by sessing more than 10 percent of the total vot- any person who is not a related person with adding at the end the following new sub- ing power of the outstanding securities of respect to the real estate investment trust section: any 1 issuer, and or the taxable REIT subsidiary. ‘‘(l) TAXABLE REIT SUBSIDIARY.—For pur- ‘‘(III) the trust does not hold securities ‘‘(B) SPECIAL RULES.—Solely for purposes poses of this part— having a value of more than 10 percent of the of this paragraph and paragraph (8)(B), a per- ‘‘(1) IN GENERAL.—The term ‘taxable REIT total value of the outstanding securities of son shall not fail to be treated as an inde- subsidiary’ means, with respect to a real es- any 1 issuer.’’ pendent contractor with respect to any tate investment trust, a corporation (other (b) EXCEPTION FOR STRAIGHT DEBT SECURI- qualified lodging facility by reason of any of than a real estate investment trust) if— TIES.—Subsection (c) of section 856 is amend- the following: ‘‘(A) such trust directly or indirectly owns ed by adding at the end the following new ‘‘(i) The taxable REIT subsidiary bears the stock in such corporation, and paragraph: expenses for the operation of the facility ‘‘(B) such trust and such corporation joint- ‘‘(7) STRAIGHT DEBT SAFE HARBOR IN APPLY- pursuant to the management agreement or ly elect that such corporation shall be treat- ING PARAGRAPH (4).—Securities of an issuer other similar service contract. which are straight debt (as defined in section ‘‘(ii) The taxable REIT subsidiary receives ed as a taxable REIT subsidiary of such trust 1361(c)(5) without regard to subparagraph the revenues from the operation of such fa- for purposes of this part. (B)(iii) thereof) shall not be taken into ac- cility, net of expenses for such operation and Such an election, once made, shall be irrev- count in applying paragraph (4)(B)(ii)(III) fees payable to the operator pursuant to ocable unless both such trust and corpora- if— such agreement or contract. tion consent to its revocation. Such election, ‘‘(A) the issuer is an individual, or ‘‘(iii) The real estate investment trust re- and any revocation thereof, may be made ‘‘(B) the only securities of such issuer ceives income from such person with respect without the consent of the Secretary. which are held by the trust or a taxable to another property that is attributable to a ‘‘(2) 35 PERCENT OWNERSHIP IN ANOTHER TAX- REIT subsidiary of the trust are straight lease of such other property to such person ABLE REIT SUBSIDIARY.—The term ‘taxable debt (as so defined), or that was in effect as on the later of— REIT subsidiary’ includes, with respect to ‘‘(C) the issuer is a partnership and the ‘‘(I) January 1, 1999, or any real estate investment trust, any cor- trust holds at least a 20 percent profits inter- ‘‘(II) the earliest date that any taxable poration (other than a real estate invest- est in the partnership.’’ REIT subsidiary of such trust entered into a ment trust) with respect to which a taxable SEC. 1122. TREATMENT OF INCOME AND SERV- management agreement or other similar REIT subsidiary of such trust owns directly ICES PROVIDED BY TAXABLE REIT service contract with such person with re- or indirectly— SUBSIDIARIES. spect to such qualified lodging facility. ‘‘(A) securities possessing more than 35 (a) INCOME FROM TAXABLE REIT SUBSIDI- ‘‘(C) RENEWALS, ETC., OF EXISTING LEASES.— percent of the total voting power of the out- ARIES NOT TREATED AS IMPERMISSIBLE TEN- For purposes of subparagraph (B)(iii)— standing securities of such corporation, or ANT SERVICE INCOME.—Clause (i) of section ‘‘(i) a lease shall be treated as in effect on ‘‘(B) securities having a value of more than 856(d)(7)(C) (relating to exceptions to imper- January 1, 1999, without regard to its re- 35 percent of the total value of the out- missible tenant service income) is amended newal after such date, so long as such re- standing securities of such corporation. by inserting ‘‘or through a taxable REIT sub- newal is pursuant to the terms of such lease sidiary of such trust’’ after ‘‘income’’. as in effect on whichever of the dates under The preceding sentence shall not apply to a (b) CERTAIN INCOME FROM TAXABLE REIT subparagraph (B)(iii) is the latest, and qualified REIT subsidiary (as defined in sub- SUBSIDIARIES NOT EXCLUDED FROM RENTS ‘‘(ii) a lease of a property entered into section (i)(2)). The rule of section 856(c)(7) FROM REAL PROPERTY.— after whichever of the dates under subpara- shall apply for purposes of subparagraph (B). (1) IN GENERAL.—Subsection (d) of section graph (B)(iii) is the latest shall be treated as ‘‘(3) EXCEPTIONS.—The term ‘taxable REIT 856 (relating to rents from real property de- in effect on such date if— subsidiary’ shall not include— fined) is amended by adding at the end the ‘‘(I) on such date, a lease of such property ‘‘(A) any corporation which directly or in- following new paragraphs: from the trust was in effect, and directly operates or manages a lodging facil- ‘‘(8) SPECIAL RULE FOR TAXABLE REIT SUB- ‘‘(II) under the terms of the new lease, such ity or a health care facility, and SIDIARIES.—For purposes of this subsection, trust receives a substantially similar or less- ‘‘(B) any corporation which directly or in- amounts paid to a real estate investment er benefit in comparison to the lease referred directly provides to any other person (under trust by a taxable REIT subsidiary of such to in subclause (I). a franchise, license, or otherwise) rights to trust shall not be excluded from rents from ‘‘(D) QUALIFIED LODGING FACILITY.—For any brand name under which any lodging fa- real property by reason of paragraph (2)(B) if purposes of this paragraph— cility or health care facility is operated. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9601 Subparagraph (B) shall not apply to rights ‘‘(II) only to the extent the charge for such binding contract in effect on such date and provided to an eligible independent con- service so rendered is substantially com- at all times thereafter before such acquisi- tractor to operate or manage a lodging facil- parable to the charge for the similar services tion, ity if such rights are held by such corpora- rendered to persons referred to in subclause (iii) securities received by such trust (or a tion as a franchisee, licensee, or in a similar (I). successor) in exchange for, or with respect capacity and such lodging facility is either ‘‘(v) EXCEPTION FOR CERTAIN SEPARATELY to, securities described in clause (i) or (ii) in owned by such corporation or is leased to CHARGED SERVICES.—Clause (i) shall not a transaction in which gain or loss is not such corporation from the real estate invest- apply to any service rendered by a taxable recognized, and ment trust. REIT subsidiary of a real estate investment (iv) securities acquired directly or indi- ‘‘(4) DEFINITIONS.—For purposes of para- trust to a tenant of such trust if— rectly by such trust as part of a reorganiza- graph (3)— ‘‘(I) the rents paid to the trust by tenants tion (as defined in section 368(a)(1) of the In- ‘‘(A) LODGING FACILITY.—The term ‘lodging (leasing at least 25 percent of the net ternal Revenue Code of 1986) with respect to facility’ has the meaning given to such term leasable space in the trust’s property) who such trust if such securities are described in by paragraph (9)(D)(ii). are not receiving such service from such sub- clause (i), (ii), or (iii) with respect to any ‘‘(B) HEALTH CARE FACILITY.—The term sidiary are substantially comparable to the other real estate investment trust. ‘health care facility’ has the meaning given rents paid by tenants leasing comparable (B) NEW TRADE OR BUSINESS OR SUBSTAN- to such term by subsection (e)(6)(D)(ii).’’ space who are receiving such service from TIAL NEW ASSETS.—Subparagraph (A) shall (b) CONFORMING AMENDMENT.—Paragraph such subsidiary, and cease to apply to securities of a corporation (2) of section 856(i) is amended by adding at ‘‘(II) the charge for such service from such as of the first day after July 12, 1999, on the end the following new sentence: ‘‘Such subsidiary is separately stated. which such corporation engages in a substan- term shall not include a taxable REIT sub- ‘‘(vi) EXCEPTION FOR CERTAIN SERVICES tial new line of business, or acquires any sidiary.’’ BASED ON SUBSIDIARY’S INCOME FROM THE substantial asset, other than— SEC. 1124. LIMITATION ON EARNINGS STRIPPING. SERVICES.—Clause (i) shall not apply to any (i) pursuant to a binding contract in effect on such date and at all times thereafter be- Paragraph (3) of section 163(j) (relating to service rendered by a taxable REIT sub- fore the acquisition of such asset, limitation on deduction for interest on cer- sidiary of a real estate investment trust to a (ii) in a transaction in which gain or loss is tain indebtedness) is amended by striking tenant of such trust if the gross income of not recognized by reason of section 1031 or ‘‘and’’ at the end of subparagraph (A), by such subsidiary from such service is not less 1033 of the Internal Revenue Code of 1986, or striking the period at the end of subpara- than 150 percent of such subsidiary’s direct (iii) in a reorganization (as so defined) with graph (B) and inserting ‘‘, and’’, and by add- cost in furnishing or rendering the service. another corporation the securities of which ing at the end the following new subpara- ‘‘(vii) EXCEPTIONS GRANTED BY SEC- are described in paragraph (1)(A) of this sub- graph: RETARY.—The Secretary may waive the tax section. ‘‘(C) any interest paid or accrued (directly otherwise imposed by subparagraph (A) if the trust establishes to the satisfaction of the (2) TAX-FREE CONVERSION.—If— or indirectly) by a taxable REIT subsidiary (A) at the time of an election for a corpora- (as defined in section 856(l)) of a real estate Secretary that rents charged to tenants were established on an arms’ length basis even tion to become a taxable REIT subsidiary, investment trust to such trust.’’ the amendment made by section 1121 does though a taxable REIT subsidiary of the SEC. 1125. 100 PERCENT TAX ON IMPROPERLY AL- not apply to such corporation by reason of trust provided services to such tenants. LOCATED AMOUNTS. paragraph (1), and ‘‘(C) REDETERMINED DEDUCTIONS.—The term (a) IN GENERAL.—Subsection (b) of section (B) such election first takes effect before ‘redetermined deductions’ means deductions 857 (relating to method of taxation of real es- January 1, 2004, tate investment trusts and holders of shares (other than redetermined rents) of a taxable such election shall be treated as a reorga- or certificates of beneficial interest) is REIT subsidiary of a real estate investment nization qualifying under section 368(a)(1)(A) amended by redesignating paragraphs (7) and trust if the amount of such deductions would of such Code. (8) as paragraphs (8) and (9), respectively, (but for subparagraph (E)) be increased on and by inserting after paragraph (6) the fol- distribution, apportionment, or allocation PART II—HEALTH CARE REITS lowing new paragraph: under section 482 to clearly reflect income as SEC. 1131. HEALTH CARE REITS. ‘‘(7) INCOME FROM REDETERMINED RENTS, RE- between such subsidiary and such trust. (a) SPECIAL FORECLOSURE RULE FOR DETERMINED DEDUCTIONS, AND EXCESS INTER- ‘‘(D) EXCESS INTEREST.—The term ‘excess HEALTH CARE PROPERTIES.—Subsection (e) of EST.— interest’ means any deductions for interest section 856 (relating to special rules for fore- ‘‘(A) IMPOSITION OF TAX.—There is hereby payments by a taxable REIT subsidiary of a closure property) is amended by adding at imposed for each taxable year of the real es- real estate investment trust to such trust to the end the following new paragraph: tate investment trust a tax equal to 100 per- the extent that the interest payments are in ‘‘(6) SPECIAL RULE FOR QUALIFIED HEALTH cent of redetermined rents, redetermined de- excess of a rate that is commercially reason- CARE PROPERTIES.—For purposes of this ductions, and excess interest. able. subsection— ‘‘(B) REDETERMINED RENTS.— ‘‘(E) COORDINATION WITH SECTION 482.—The ‘‘(A) ACQUISITION AT EXPIRATION OF ‘‘(i) IN GENERAL.—The term ‘redetermined imposition of tax under subparagraph (A) LEASE.—The term ‘foreclosure property’ rents’ means rents from real property (as de- shall be in lieu of any distribution, appor- shall include any qualified health care prop- fined in subsection 856(d)) the amount of tionment, or allocation under section 482. erty acquired by a real estate investment which would (but for subparagraph (E)) be re- ‘‘(F) REGULATORY AUTHORITY.—The Sec- trust as the result of the termination of a duced on distribution, apportionment, or al- retary shall prescribe such regulations as lease of such property (other than a termi- location under section 482 to clearly reflect may be necessary or appropriate to carry out nation by reason of a default, or the immi- income as a result of services furnished or the purposes of this paragraph. Until the nence of a default, on the lease). rendered by a taxable REIT subsidiary of the Secretary prescribes such regulations, real ‘‘(B) GRACE PERIOD.—In the case of a quali- real estate investment trust to a tenant of estate investment trusts and their taxable fied health care property which is fore- such trust. REIT subsidiaries may base their allocations closure property solely by reason of subpara- ‘‘(ii) EXCEPTION FOR CERTAIN SERVICES.— on any reasonable method.’’ graph (A), in lieu of applying paragraphs (2) Clause (i) shall not apply to amounts re- (b) AMOUNT SUBJECT TO TAX NOT REQUIRED and (3)— ceived directly or indirectly by a real estate TO BE DISTRIBUTED.—Subparagraph (E) of ‘‘(i) the qualified health care property shall investment trust for services described in section 857(b)(2) (relating to real estate in- cease to be foreclosure property as of the paragraph (1)(B) or (7)(C)(i) of section 856(d). vestment trust taxable income) is amended close of the second taxable year after the ‘‘(iii) EXCEPTION FOR DE MINIMIS AMOUNTS.— by striking ‘‘paragraph (5)’’ and inserting taxable year in which such trust acquired Clause (i) shall not apply to amounts de- ‘‘paragraphs (5) and (7)’’. such property, and scribed in section 856(d)(7)(A) with respect to SEC. 1126. EFFECTIVE DATE. ‘‘(ii) if the real estate investment trust es- a property to the extent such amounts do (a) IN GENERAL.—The amendments made by tablishes to the satisfaction of the Secretary not exceed the one percent threshold de- this part shall apply to taxable years begin- that an extension of the grace period in scribed in section 856(d)(7)(B) with respect to ning after December 31, 2000. clause (i) is necessary to the orderly leasing such property. (b) TRANSITIONAL RULES RELATED TO SEC- or liquidation of the trust’s interest in such ‘‘(iv) EXCEPTION FOR COMPARABLY PRICED TION 1121.— qualified health care property, the Secretary SERVICES.—Clause (i) shall not apply to any (1) EXISTING ARRANGEMENTS.— may grant 1 or more extensions of the grace service rendered by a taxable REIT sub- (A) IN GENERAL.—Except as otherwise pro- period for such qualified health care prop- sidiary of a real estate investment trust to a vided in this paragraph, the amendment erty. tenant of such trust if— made by section 1121 shall not apply to a real Any such extension shall not extend the ‘‘(I) such subsidiary renders a significant estate investment trust with respect to— grace period beyond the close of the 6th year amount of similar services to persons other (i) securities of a corporation held directly after the taxable year in which such trust than such trust and tenants of such trust or indirectly by such trust on July 12, 1999, acquired such qualified health care property. who are unrelated (within the meaning of (ii) securities of a corporation held by an ‘‘(C) INCOME FROM INDEPENDENT CONTRAC- section 856(d)(8)(F)) to such subsidiary, trust, entity on July 12, 1999, if such trust acquires TORS.—For purposes of applying paragraph and tenants, but control of such entity pursuant to a written (4)(C) with respect to qualified health care S9602 CONGRESSIONAL RECORD — SENATE July 28, 1999

property which is foreclosure property by limitation set forth in subparagraph (B) (but (d) EFFECTIVE DATE.—The amendments reason of subparagraph (A) or paragraph (1), all of the outstanding stock of such class made by this section shall apply to distribu- income derived or received by the trust from shall be considered outstanding in order to tions after December 31, 2000. an independent contractor shall be dis- compute the denominator for purpose of de- (c) EFFECTIVE DATE.—This section shall regarded to the extent such income is attrib- termining the applicable percentage of own- apply to taxable years beginning after De- utable to— ership).’’ cember 31, 2000. ‘‘(i) any lease of property in effect on the (b) EFFECTIVE DATE.—The amendment PART IV—CLARIFICATION OF EXCEPTION date the real estate investment trust ac- made by this section shall apply to taxable FROM IMPERMISSIBLE TENANT SERV- quired the qualified health care property years beginning after December 31, 2000. ICE INCOME (without regard to its renewal after such PART V—MODIFICATION OF EARNINGS SEC. 1151. CLARIFICATION OF EXCEPTION FOR date so long as such renewal is pursuant to AND PROFITS RULES INDEPENDENT OPERATORS. the terms of such lease as in effect on such SEC. 1161. MODIFICATION OF EARNINGS AND (a) IN GENERAL.—Paragraph (3) of section date), or PROFITS RULES. 856(d) (relating to independent contractor de- ‘‘(ii) any lease of property entered into (a) RULES FOR DETERMINING WHETHER REG- fined) is amended by adding at the end the after such date if— ULATED INVESTMENT COMPANY HAS EARNINGS following flush sentence: ‘‘(I) on such date, a lease of such property AND PROFITS FROM NON-RIC YEAR.—Sub- ‘‘In the event that any class of stock of ei- from the trust was in effect, and section (c) of section 852 is amended by add- ther the real estate investment trust or such ‘‘(II) under the terms of the new lease, such ing at the end the following new paragraph: person is regularly traded on an established trust receives a substantially similar or less- ‘‘(3) DISTRIBUTIONS TO MEET REQUIREMENTS securities market, only persons who own, di- er benefit in comparison to the lease referred OF SUBSECTION (a)(2)(B).—Any distribution rectly or indirectly, more than 5 percent of to in subclause (I). which is made in order to comply with the such class of stock shall be taken into ac- ‘‘(D) QUALIFIED HEALTH CARE PROPERTY.— requirements of subsection (a)(2)(B)— count as owning any of the stock of such ‘‘(i) IN GENERAL.—The term ‘qualified ‘‘(A) shall be treated for purposes of this class for purposes of applying the 35 percent health care property’ means any real prop- subsection and subsection (a)(2)(B) as made limitation set forth in subparagraph (B) (but erty (including interests therein), and any from the earliest earnings and profits accu- all of the outstanding stock of such class personal property incident to such real prop- mulated in any taxable year to which the shall be considered outstanding in order to erty, which— provisions of this part did not apply rather compute the denominator for purpose of de- ‘‘(I) is a health care facility, or than the most recently accumulated earn- termining the applicable percentage of own- ‘‘(II) is necessary or incidental to the use ings and profits, and ership).’’ of a health care facility. ‘‘(B) to the extent treated under subpara- (b) EFFECTIVE DATE.—The amendment ‘‘(ii) HEALTH CARE FACILITY.—For purposes graph (A) as made from accumulated earn- made by this section shall apply to taxable of clause (i), the term ‘health care facility’ ings and profits, shall not be treated as a dis- years beginning after December 31, 2000. means a hospital, nursing facility, assisted tribution for purposes of subsection (b)(2)(D) living facility, congregate care facility, and section 855.’’ PART V—MODIFICATION OF EARNINGS qualified continuing care facility (as defined (b) CLARIFICATION OF APPLICATION OF REIT AND PROFITS RULES in section 7872(g)(4)), or other licensed facil- SPILLOVER DIVIDEND RULES TO DISTRIBUTIONS SEC. 1161. MODIFICATION OF EARNINGS AND ity which extends medical or nursing or an- TO MEET QUALIFICATION REQUIREMENT.—Sub- PROFITS RULES. cillary services to patients and which, imme- paragraph (B) of section 857(d)(3) is amended (a) RULES FOR DETERMINING WHETHER REG- diately before the termination, expiration, by inserting before the period ‘‘and section ULATED INVESTMENT COMPANY HAS EARNINGS default, or breach of the lease of or mortgage 858’’. AND PROFITS FROM NON-RIC YEAR.—Sub- secured by such facility, was operated by a (c) APPLICATION OF DEFICIENCY DIVIDEND section (c) of section 852 is amended by add- provider of such services which was eligible PROCEDURES.—Paragraph (1) of section 852(e) ing at the end the following new paragraph: for participation in the medicare program is amended by adding at the end the fol- ‘‘(3) DISTRIBUTIONS TO MEET REQUIREMENTS under title XVIII of the Social Security Act lowing new sentence: ‘‘If the determination OF SUBSECTION (a)(2)(B).—Any distribution with respect to such facility.’’ under subparagraph (A) is solely as a result which is made in order to comply with the (b) EFFECTIVE DATE.—The amendment of the failure to meet the requirements of requirements of subsection (a)(2)(B)— made by this section shall apply to taxable subsection (a)(2), the preceding sentence ‘‘(A) shall be treated for purposes of this years beginning after December 31, 2000. shall also apply for purposes of applying sub- subsection and subsection (a)(2)(B) as made section (a)(2) to the non-RIC year.’’ from the earliest earnings and profits accu- PART III—CONFORMITY WITH REGU- (d) EFFECTIVE DATE.—The amendments mulated in any taxable year to which the LATED INVESTMENT COMPANY RULES made by this section shall apply to distribu- provisions of this part did not apply rather SEC. 1141. CONFORMITY WITH REGULATED IN- tions after December 31, 2000. than the most recently accumulated earn- VESTMENT COMPANY RULES. TITLE XII—REVENUE OFFSETS ings and profits, and (a) DISTRIBUTION REQUIREMENT.—Clauses (i) Subtitle A—General Provisions ‘‘(B) to the extent treated under subpara- and (ii) of section 857(a)(1)(A) (relating to re- graph (A) as made from accumulated earn- quirements applicable to real estate invest- SEC. 1201. MODIFICATION TO FOREIGN TAX CREDIT CARRYBACK AND CARRY- ings and profits, shall not be treated as a dis- ment trusts) are each amended by striking OVER PERIODS. tribution for purposes of subsection (b)(2)(D) ‘‘95 percent (90 percent for taxable years be- (a) IN GENERAL.—Section 904(c) (relating to and section 855.’’ ginning before January 1, 1980)’’ and insert- limitation on credit) is amended— (b) CLARIFICATION OF APPLICATION OF REIT ing ‘‘90 percent’’. (1) by striking ‘‘in the second preceding SPILLOVER DIVIDEND RULES TO DISTRIBUTIONS (b) IMPOSITION OF TAX.—Clause (i) of sec- taxable year,’’, and TO MEET QUALIFICATION REQUIREMENT.—Sub- tion 857(b)(5)(A) (relating to imposition of (2) by striking ‘‘or fifth’’ and inserting paragraph (B) of section 857(d)(3) is amended tax in case of failure to meet certain require- ‘‘fifth, sixth, or seventh’’. by inserting before the period ‘‘and section ments) is amended by striking ‘‘95 percent (b) EFFECTIVE DATE.—The amendment 858’’. (90 percent in the case of taxable years be- made by subsection (a) shall apply to credits (c) APPLICATION OF DEFICIENCY DIVIDEND ginning before January 1, 1980)’’ and insert- arising in taxable years beginning after De- PROCEDURES.—Paragraph (1) of section 852(e) ing ‘‘90 percent’’. cember 31, 1999. is amended by adding at the end the fol- (c) EFFECTIVE DATE.—The amendments SEC. 1202. LIMITATION ON USE OF NON-ACCRUAL lowing new sentence: ‘‘If the determination made by this section shall apply to taxable EXPERIENCE METHOD OF ACCOUNT- under subparagraph (A) is solely as a result years beginning after December 31, 2000. ING. of the failure to meet the requirements of PART IV—CLARIFICATION OF EXCEPTION (a) IN GENERAL.—Section 448(d)(5) (relating subsection (a)(2), the preceding sentence FROM IMPERMISSIBLE TENANT SERV- to special rule for services) is amended— shall also apply for purposes of applying sub- ICE INCOME (1) by inserting ‘‘in fields described in para- section (a)(2) to the non-RIC year.’’ graph (2)(A)’’ after ‘‘services by such per- (d) EFFECTIVE DATE.—The amendments SEC. 1151. CLARIFICATION OF EXCEPTION FOR son’’, and INDEPENDENT OPERATORS. made by this section shall apply to distribu- (2) by inserting ‘‘CERTAIN PERSONAL’’ before (a) IN GENERAL.—Paragraph (3) of section tions after December 31, 2000. ‘‘SERVICES’’ in the heading. 856(d) (relating to independent contractor de- (b) EFFECTIVE DATE.—g before the period TITLE XII—REVENUE OFFSETS fined) is amended by adding at the end the ‘‘and section 858’’. Subtitle A—General Provisions following flush sentence: (c) APPLICATION OF DEFICIENCY DIVIDEND SEC. 1201. MODIFICATION TO FOREIGN TAX ‘‘In the event that any class of stock of ei- PROCEDURES.—Paragraph (1) of section 852(e) CREDIT CARRYBACK AND CARRY- ther the real estate investment trust or such is amended by adding at the end the fol- OVER PERIODS. person is regularly traded on an established lowing new sentence: ‘‘If the determination (a) IN GENERAL.—Section 904(c) (relating to securities market, only persons who own, di- under subparagraph (A) is solely as a result limitation on credit) is amended— rectly or indirectly, more than 5 percent of of the failure to meet the requirement of (1) by striking ‘‘in the second preceding such class of stock shall be taken into ac- subsection (a)(2), the preceding sentence taxable year,’’, and count as owning any of the stock of such shall also apply for purposes of applying sub- (2) by striking ‘‘or fifth’’ and inserting class for purposes of applying the 35 percent section (a)(2) to the non-RIC year.’’ ‘‘fifth, sixth, or seventh’’. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9603

(b) EFFECTIVE DATE.—The amendment ing after the date of the enactment of this (2) Section 10511 of the Revenue Act of 1987 made by subsection (a) shall apply to credits Act. is repealed. arising in taxable years beginning after De- (2) CHANGE IN METHOD OF ACCOUNTING.—In (c) EFFECTIVE DATE.—The amendments cember 31, 1999. the case of any taxpayer required by the made by this section shall apply to requests SEC. 1202. LIMITATION ON USE OF NON-ACCRUAL amendments made by this section to change made after the date of the enactment of this EXPERIENCE METHOD OF ACCOUNT- its method of accounting for its first taxable Act. ING. year ending after the date of the enactment SEC. 1205. CHARITABLE SPLIT-DOLLAR LIFE IN- (a) IN GENERAL.—Section 448(d)(5) (relating of this Act— SURANCE, ANNUITY, AND ENDOW- to special rule for services) is amended— (A) such change shall be treated as initi- MENT CONTRACTS. (1) by inserting ‘‘in fields described in para- ated by the taxpayer, (a) IN GENERAL.—Subsection (f) of section graph (2)(A)’’ after ‘‘services by such per- (B) such change shall be treated as made 170 (relating to disallowance of deduction in son’’, and with the consent of the Secretary of the certain cases and special rules), as amended (2) by inserting ‘‘CERTAIN PERSONAL’’ before Treasury, and by section 807, is amended by adding at the ‘‘SERVICES’’ in the heading. (C) the net amount of the adjustments re- end the following new paragraph: (b) EFFECTIVE DATE.—To reduce the basis quired to be taken into account by the tax- ‘‘(11) SPLIT-DOLLAR LIFE INSURANCE, ANNU- of the property of such controlled corpora- payer under section 481 of the Internal Rev- ITY, AND ENDOWMENT CONTRACTS.— tion. This subsection shall be reapplied to enue Code of 1986 shall be taken into account ‘‘(A) IN GENERAL.—Nothing in this section any property of any controlled corporation over a period (not greater than 4 taxable or in section 545(b)(2), 556(b)(2), 642(c), 2055, which is stock in a corporation which it con- years) beginning with such first taxable 2106(a)(2), or 2522 shall be construed to allow trols. year. a deduction, and no deduction shall be al- ‘‘(8) REGULATIONS.—The Secretary shall SEC. 1203. RETURNS RELATING TO CANCELLA- lowed, for any transfer to or for the use of an prescribe such regulations as may be nec- TIONS OF INDEBTEDNESS BY ORGA- organization described in subsection (c) if in essary to carry out the purposes of this sub- NIZATIONS LENDING MONEY. connection with such transfer— section, including regulations to avoid dou- (a) IN GENERAL.—Paragraph (2) of section ‘‘(i) the organization directly or indirectly ble counting and to prevent the abuse of 6050P(c) (relating to definitions and special pays, or has previously paid, any premium such purposes.’’ rules) is amended by striking ‘‘and’’ at the on any personal benefit contract with re- (b) EFFECTIVE DATE.—The amendment end of subparagraph (B), by striking the pe- spect to the transferor, or made by this section shall apply to distribu- riod at the end of subparagraph (C) and in- ‘‘(ii) there is an understanding or expecta- tions made after July 14, 1999. serting ‘‘, and’’, and by inserting after sub- tion that any person will directly or indi- (C) Section 404(a)(10)(B) is amended by paragraph (C) the following new subpara- rectly pay any premium on any personal striking ‘‘, the exclusion allowance under graph: benefit contract with respect to the trans- section 403(b)(2),’’. ‘‘(D) any organization a significant trade feror. (D) Section 415(a)(2) is amended by striking or business of which is the lending of ‘‘(B) PERSONAL BENEFIT CONTRACT.—For ‘‘, and the amount of the contribution for money.’’ purposes of subparagraph (A), the term ‘per- such portion shall reduce the exclusion al- (b) EFFECTIVE DATE.—The amendment sonal benefit contract’ means, with respect lowance as provided in section 403(b)(2)’’. made by subsection (a) shall apply to dis- to the transferor, any life insurance, annu- (E) Section 415(c)(3) is amended by adding charges of indebtedness after December 31, ity, or endowment contract if any direct or at the end the following new subparagraph: 1999. indirect beneficiary under such contract is ‘‘(E) ANNUITY CONTRACTS.—In the case of an annuity contract described in section SEC. 1204. EXTENSION OF INTERNAL REVENUE the transferor, any member of the trans- SERVICE USER FEES. 403(b), the term ‘participant’s compensation’ feror’s family, or any other person (other (a) IN GENERAL.—Chapter 77 (relating to means the participant’s includible com- than an organization described in subsection miscellaneous provisions) is amended by add- pensation determined under section (c)) designated by the transferor. ing at the end the following new section: ‘‘(C) APPLICATION TO CHARITABLE REMAIN- 403(b)(3).’’ (F) Section 415(c) is amended by striking ‘‘SEC. 7527. INTERNAL REVENUE SERVICE USER DER TRUSTS.—In the case of a transfer to a paragraph (4) and by redesignating para- FEES. trust referred to in subparagraph (E), ref- ‘‘(a) GENERAL RULE.—The Secretary shall graph (6) as paragraph (4). erences in subparagraphs (A) and (B) to an (G) Section 415(c) is amended by striking establish a program requiring the payment organization described in subsection (c) shall paragraph (7) and inserting the following of user fees for— be treated as a reference to such trust. new paragraph: ‘‘(1) requests to the Internal Revenue Serv- ‘‘(D) EXCEPTION FOR CERTAIN ANNUITY CON- ‘‘(5) CERTAIN CONTRIBUTIONS BY CHURCH ice for ruling letters, opinion letters, and de- TRACTS.—If, in connection with a transfer to PLANS NOT TREATED AS EXCEEDING LIMIT.— termination letters, and or for the use of an organization described in ‘‘(A) IN GENERAL.—Notwithstanding any ‘‘(2) other similar requests. subsection (c), such organization incurs an other provision of this subsection, at the ‘‘(b) PROGRAM CRITERIA.— obligation to pay a charitable gift annuity ‘‘(1) IN GENERAL.—The fees charged under election of a participant who is an employee (as defined in section 501(m)) and such orga- the program required by subsection (a)— of a church, a convention or association of nization purchases any annuity contract to ‘‘(A) shall vary according to categories (or churches, including an organization de- fund such obligation, persons receiving pay- subcategories) established by the Secretary, scribed in section 414(e)(3)(B)(ii), contribu- ments under the charitable gift annuity ‘‘(B) shall be determined after taking into tions and other additions for an annuity con- shall not be treated for purposes of subpara- account the average time for (and difficulty tract or retirement income account de- graph (B) as in direct beneficiaries under of) complying with requests in each category scribed in section 403(b) with respect to such such contract if— (and subcategory), and participant, when expressed as an annual ad- ‘‘(i) such organization possesses all of the ‘‘(C) shall be payable in advance. incidents of ownership under such contract, dition to such al of deduction for previously ‘‘(2) EXEMPTIONS, ETC.—The Secretary shall deducted amounts.—No deduction shall be ‘‘(ii) such organization is entitled to all the provide for such exemptions (and reduced payments under such contract, and allowed for any transfer under this sub- fees) under such program as the Secretary section of an amount for which a deduction ‘‘(iii) the timing and amount of payments determines to be appropriate. under such contract are substantially the was allowed when such amount was paid into ‘‘(3) AVERAGE FEE REQUIREMENT.—The aver- same as the timing and amount of payments the nonqualified fund. For purposes of the age fee charged under the program required to each such person under such obligation preceding sentence, a ratable portion of each by subsection (a) shall not be less than the (as such obligation is in effect at the time of transfer shall be treated as being from pre- amount determined under the following such transfer.) viously deducted amounts to the extent table: thereof. ‘‘(E) EXCEPTION FOR CERTAIN CONTRACTS ‘‘(C) TRANSFERS OF QUALIFIED FUNDS.—If— ‘‘Category Average Fee HELD BY CHARITABLE REMAINDER TRUSTS.—A ‘‘(i) any transfer permitted by this sub- Employee plan ruling and person shall not be treated for purposes of section is made to any Fund to which this opinion ...... $250 subparagraph (B) as an indirect beneficiary section applies, and Exempt organization ruling .. 350 under any life insurance, annuity, or endow- ‘‘(ii) such Fund is transferred thereafter, Employee plan determination 300 ment contract held by a charitable remain- any deduction under this subsection for tax- Exempt organization deter- der annuity trust or a charitable remainder able years ending after the date that such mination ...... 275 unitrust (as defined in section 664(d)) solely Chief counsel ruling ...... 200. Fund is transferred shall be allowed to the by reason of being entitled to any payment transferee and not to the transferor. The pre- ‘‘(c) TERMINATION.—No fee shall be imposed referred to in paragraph (1)(A) or (2)(A) of ceding sentence shall not apply if the trans- under this section with respect to requests section 664(d) if— feror is an organization exempt from tax im- made after September 30, 2009.’’ ‘‘(i) such trust possesses all of the inci- posed by this chapter. (b) CONFORMING AMENDMENTS.— dents of ownership under such contract, and (4) NEW RULING AMOUNT REQUIRED.—Para- (1) The table of sections for chapter 77 is (ii) such trust is entitled to all the pay- graph (1) shall not apply to d not to the amended by adding at the end the following ments under such contract. transferor. The preceding se new item: ‘‘(F) EXCISE TAX ON PREMIUMS PAID.— (1) IN GENERAL.—The amendments made by ‘‘Sec. 7527. Internal Revenue Service user ‘‘(i) IN GENERAL.—There is hereby imposed this section shall apply to taxable years end- fees.’’ on any organization described in subsection S9604 CONGRESSIONAL RECORD — SENATE July 28, 1999

(c) an excise tax equal to the premiums paid SEC. 1206. TRANSFER OF EXCESS DEFINED BEN- ‘‘(2) ACCURUAL METHOD TAXPAYER.—The in- by such organization on any life insurance, EFIT PLAN ASSETS FOR RETIREE stallment method shall not apply to income annuity; or endowment contract if the pay- HEALTH BENEFITS. from an installment sale if such income ment of premiums on such contract is in (a) EXTENSION.— would be reported under an accrual method connection with a transfer for which a de- (1) IN GENERAL.—Paragraph (5) of section of accounting without regard to this section. duction is not allowable under subparagraph 420(b) (relating to expiration) is amended by The preceding sentence shall not apply to a (A), determined with out regard to when striking ‘‘in any taxable year beginning after disposition described in subparagraph (A) or such transfer is made. December 31, 2000’’ and inserting ‘‘made after (B) of subsection (1)(2).’’ ‘‘(ii) PAYMENTS BY OTHER PERSONS.—For September 30, 2009’’. (2) CONFORMING AMENDMENTS.—Sections purposes of clause (i), payments made by any (2) CONFORMING AMENDMENTS.— 453(d)(1), 453(i)(1), and 453(k) are each amend- other person pursuant to an understanding (A) Section 101(e)(3) of the Employee Re- ed by striking ‘‘(a)’’ each place it appears or expectation referred to in subparagraph tirement Income Security Act of 1974 (29 and inserting (((a)(1)’’. (A) shall be treated as made by the organiza- U.S.C. 1021(e)(3)) is amended by striking (b) MODIFICATION OF PLEDGE RULES.—Para- tion. ‘‘1995’’ and inserting ‘‘2001’’. graph (4) of section 453A(d) (relating to ‘‘(iii) REPORTING.—Any organization on (B) Section 403(c)(1) of such Act (29 U.S.C. pledges, etc., of installment obligations) is which tax is imposed by clause (i) with to 1103(c)(1)) is amended by striking ‘‘1995’’ and amended by adding at the end the following: any premium shall file an annual return inserting ‘‘2001’’. ‘‘A payment shall be treated as directly se- (C) Paragraph (13) of section 408(b) of such which includes— cured by an interest in an installment obli- Act (29 U.S.C. 1108(b)(13)) is amended— ‘‘(I) the amount of such premium paid dur- gation to the extent an arrangement allows (i) by striking ‘‘in a taxable year beginning ing the year and the name and TIN of each the taxpayer to satisfy all or a portion of the before January 1, 2001’’ and inserting ‘‘made beneficiary under the contract to which the indebtedness with the installment obliga- premium relates, and before October 1, 2009’’, and (ii) by striking ‘‘1995’’ and inserting ‘‘2001’’. tion.’’ ‘‘(II) such other information as Secretary (c) EFFECTIVE DATE.—The amendments (b) EFFECTIVE DATE.—The amendments may require. made by this section shall apply to sales or made by this section shall apply to qualified The penalties applicable to returns re- other dispositions occurring on or after the transfers occurring after December 31, 2000. quired under section 6033 shall apply to re- date of the enactment of this Act. turns required under this clause. Returns re- SEC. 1207. LIMITATIONS ON WELFARE BENEFIT SEC. 1209. INCLUSION OF CERTAIN VACCINES quired under this clause shall be furnished at FUNDS OF 10 OR MORE EMPLOYER PLANS. AGAINST STREPTOCOCCUS such time and in such manner as the Sec- PENUMONLAE TO LIST OF TAXABLE retary shall by forms or regulations require. (a) BENEFITS TO WHICH EXCEPTION AP- VACCINES. PLIES.—Section 419A(f)(6)(A) (relating to ex- ‘‘(iv) CERTAIN RULES TO APPLY.—The tax (a) IN GENERAL.—Section 4132(a)(1) (defin- imposed by this subparagraph shall be treat- ception for 10 or more employer plans) is ing taxable vaccine) is amended by adding at ed as imposed by chapter 42 for purposes of amended to read as follows: the end the following new subparagraph: this title other than subchapter B of chapter ‘‘(A) IN GENERAL.—This subpart shall not ‘‘(L) Any conjugate vaccine against strep- 42. apply to a welfare benefit fund which is part tococcus pneunmoniae.’’ ‘‘(G) SPECIAL RULE WHERE STATE REQUIRES of a 10 or more employer plan if the only (b) EFFECTIVE DATE.— SPECIFICATION OF CHARITABLE GIFT ANNUITANT benefits provided through the fund are 1 or (1) SALES.—The amendment made by this IN CONTRACT.—In the case of an obligation to more of the following: section shall apply to vaccine sales begin- pay a charitable gift annuity referred to in ‘‘(i) Medical benefits. ning on the day after the date on which the subparagraph (D) which is entered into under ‘‘(ii) Disability benefits. Centers for Disease Control makes a final the laws of the State which requires, in order ‘‘(iii) Group term life insurance benefits recommendation for routine administration for the charitable gift annuity to be exempt which do not provide directly or indirectly to children of any conjugate vaccine against from insurance regulation by such State, for any cash surrender value of other money streptococcus pneumoniae. that each beneficiary under the charitable that can be paid, assigned, borrowed, or (2) DELIVERIES.—For purposes of paragraph gift annuity be named as a beneficiary under pledged for collateral for a loan. (1), in the case of sales on or before the date an annuity contract issued by an insurance The preceding sentence shall not apply to described in such paragraph for which deliv- company authorized to transact business in any plan which maintains experience-rating ery is made after such date, the delivery date such State, the requirements of clauses (i) arrangements with respect to individual em- shall be considered the sale date. ployers.’’. and (ii) of subparagraph (D) shall be treated SEC. 1210. RESTORATION OF PHASE-OUT OF UNI- (b) LIMITATION ON USE OF AMOUNTS FOR as met if— FIED CREDIT. ‘‘(i) such State law requirement was in ef- OTHER PURPOSES.—Section 4976(b) (defining (a) IN GENERAL.—Paragraph (2) of section fect on February 8, 1999, disqualified benefit) is amended by adding at 2001(c) is amended by striking ‘‘$10,000,000’’ ‘‘(ii) each such beneficiary under the chari- the end the following new paragraph: and all that follows and inserting table gift annuity is a bona fide resident of ‘‘(5) SPECIAL RULE FOR 10 OR MORE EM- ‘‘$10,000,000. The amount of the increase such State at the time the obligation to pay PLOYER PLANS EXEMPTED FROM PREFUNDING under the preceding sentence shall not ex- a charitable gift annuity is entered into, and LIMITS.—For purposes of paragraph (1)(C), ceed the sum of the applicable credit amount ‘‘(iii) the only persons entitled to pay- if— under section 2010(c) (determined without re- ‘‘(A) subpart D of part I of subchapter D of ments under such contract are persons enti- gard to section 2057(a)(3)) and $359,200.’’ chapter 1 does not apply by reason of section tled to payments as beneficiaries under such (b) EFFECTIVE DATE.—The amendment obligation on the date such obligation is en- 419A(f)(6) to contributions to provide 1 or made by this section shall apply to estates of tered into. more welfare benefits through a welfare ben- decedents dying after the date of enactment ‘‘(H) MEMBER OF FAMILY.—For purposes of efit fund under a 10 or more employer plan, of this Act. this paragraph, an individual’s family con- and ‘‘(B) any portion of the welfare benefit SEC. 1211. REPEAL OF LOWER-OF-COST-OR-MAR- sists of the individual’s grandparents, the KET METHOD OF ACCOUNTING FOR grandparents of such individual’s spouse, the fund attributable to such conditions is used INVENTORIES. lineal descendants of such grandparents, and for a purpose other than that for which the (a) IN GENERAL.—Section 471 (relating to any spouse of such a lineal descendant. contributions were made, general rule for inventories) is amended by ‘‘(I) REGULATIONS.—The Secretary shall then such portion shall be treated as revert- redesignating subsection (b) as subsection (c) prescribe such regulations as may be nec- ing to the benefit of the employers maintain- and by inserting after subsection (a) the fol- essary or appropriate to carry out the pur- ing the fund.’’ lowing new subsection: poses of this paragraph, including regula- ‘‘(c) EFFECTIVE DATE.—The amendments (b) CERTAIN WRITE-DOWNS NOT PERMITTED; tions to prevent the avoidance of such pur- made by this section shall apply to contribu- USE OR MARK-DOWNS REQUIRED UNDER RE- poses.’’. tions paid or accrued after June 9, 1999, in TAIL METHOD.— (b) EFFECTIVE DATE.— taxable years ending after such date. (1) IN GENERAL.—A taxpayer— (1) IN GENERAL.—Except as otherwise pro- SEC. 1208. MODIFICATION OF INSTALLMENT (A) may not use the lower-of-cost-or-mar- vided in this section, the amendment made METHOD AND REPEAL OF INSTALL- ket method of accounting for inventories, by this section shall apply to transfer made MENT METHOD FOR ACCRUAL and after February 8, 1999. METHOD TAXPAYERS. ‘‘(B) may not write-down items by reason (2) EXCISE TAX.—Except as provided in (a) REPEAL OF INSTALLMENT METHOD FOR of being unsalable at normal prices or unus- paragraph (3) of this subsection, section ACCRUAL BASIS TAXPAYERS.— able in the normal way because of damage, 170(f)(11)(F) of the Internal Revenue Code of (1) IN GENERAL.—Subsection (a) of section imperfections, shop wear, chances of style, 1986 (as added by this section) shall apply to 453 (relating to installment method) is odd or broken lots, or other similar causes. premiums paid after the date of the enact- amended to read as follows: Subparagraph (B) shall not apply to a tax- ment of this Act. ‘‘(a) USE OF INSTALLMENT METHOD.— payer using a mark-to-market method of ac- (3) REPORTING.—Clause (iii) of such section ‘‘(1) IN GENERAL.—Except as otherwise pro- counting for both gains and losses in inven- 170(f)(11)(F) shall apply to premiums paid vided in this section, income from an install- tory values. after February 8, 1999 (determined as if the ment sale shall be taken into account for ‘‘(2) MARK-DOWNS REQUIRED TO BE TAKEN tax imposed by such section applies to pre- purposes of this title under the installment INTO ACCOUNT UNDER RETAIL METHOD.—The re- miums paid after such date). method. tail method of accounting for inventories July 28, 1999 CONGRESSIONAL RECORD — SENATE S9605 shall be applied by taking into account retary) with respect to any organizational vestment trust) is amended by striking mark-downs in determining the approximate expenditures— ‘‘and’’ at the end of paragraph (6), by redesig- cost of the inventories. ‘‘(A) the corporation shall be allowed a de- nating paragraph (7) as paragraph (8), and by ‘‘(3) EXCEPTION FOR CERTAIN SMALL BUSI- duction for the taxable year in which the inserting after paragraph (6) the following NESSES.—Paragraph (1) shall not apply to corporation begins business in an amount new paragraph: any taxpayer for any taxable year if, for all equal to the lesser of— ‘‘(7) which is not a controlled entity (as de- prior taxable years ending on or after the ‘‘(i) the amount of organizational expendi- fined in subsection (1)); and’’. date of the enactment of this subsection, the tures with respect to the taxpayer, or (b) CONTROLLED ENTITY.—Section 856 is taxpayer (or any predecessor) met the ‘‘(ii) $5,000, reduced (but not below zero) by $5,000,000 gross receipts test of section 448(c). amended by adding at the end the following the amount by which such organizational ex- new subsection: ‘‘(4) REGULATIONS.—The Secretary shall penditures exceed $50,000, and ‘‘(l) CONTROLLED ENTITY.— prescribe such regulations as may be appro- ‘‘(B) the remainder of such organizational priate to carry out the purposes of this sub- expenditures shall be allowed as a deduction ‘‘(1) IN GENERAL.—For purposes of sub- section, including regulations relating to ratably over the 180-month period beginning section (a)(7), an entity is a controlled entity wash-sale-type transaction.’’ with the month in which the corporation be- if, at any time during the taxable year, one (b) CONFORMING AMENDMENTS.— gins business. person (other than a qualified entity)— (1) Clause (iii) of section 312(n)(4)(C) is ‘‘(2) AGGEGATION RULE.—For purposes of ‘‘(A) in the case of a corporation, owns amended to read as follows: paragraph (1), all persons which are treated stock— ‘‘(iii) INVENTORY AMOUNT.—The inventory as a single employer under subsection (a) or ‘‘(i) possessing at least 50 percent of the among of assets under the first-in, first-out (b) of section 52 shall be treated as a single total voting power of the stock of such cor- method authorized by section 471 shall be de- person.’’ poration, or termined using the method authorized to be (c) TREATMENT OF ORGANIZATIONAL AND ‘‘(ii) having a value equal to at least 50 per- used by the taxpayer under such section.’’ SYNDICATION FEES OR PARTNERSHIPS.—Sec- cent of the total value of the stock of such (2) Subparagraph (C) of section 1363(d)(4) is tion 709(b) (relating to amortization of orga- corporation, or amended to read as follows: nization fees) is amended by redesignating ‘‘(B) in the case of a trust, owns beneficial ‘‘(C) INVENTORY AMOUNT.—The inventory paragraph (2) as paragraph (4) and by amend- interests in the trust which would meet the amount of assets under a method authorized ing paragraph (1) to read as follows: requirements of subparagraph (A) if such in- by section 471 shall be determined using the ‘‘(1) ALLOWANCE OF DEDUCTION.—If a tax- terests were stock. method authorized to be used by the corpora- payer elects the application of this sub- tion under such section.’’ section (in accordance with regulations pre- ‘‘(2) QUALIFIED ENTITY.—For purposes of scribed by the Secretary) with respect to any paragraph (1), the term ‘qualified entity’ (c) EFFECTIVE DATE.— means— (1) IN GENERAL.—The amendments made by organizational expenses— this section shall apply to taxable years be- ‘‘(A) the taxpayer shall be allowed a deduc- ‘‘(A) any real estate investment trust, and ginning after the date of the enactment of tion for the taxable year in which the part- ‘‘(B) any partnership in which one real es- this subsection. nership begins business in an amount equal tate investment trust owns at least 50 per- (2) CHANGES IN METHOD OF ACCOUNTING.—In to the lesser of— cent of the capital and profits interests in the case of any taxpayer required by this ‘‘(i) the amount of organizational expenses the partnership. section to change its method of accounting with respect to the partnership, or ‘‘(3) ATTRIBUTION RULES.—For purposes of for its first taxable year beginning after the ‘‘(ii) $5,000, reduced (but not below zero) by this paragraphs (1) and (2)— date of the enactment of this subsection— the amount by which such organizational ex- ‘‘(A) IN GENERAL.—Rules similar to the (A) such change shall be treated as initi- penses exceed $50,000, and rules of subsections (d)(5) and (h)(3) shall ated by the taxpayer, ‘‘(B) the remainder of such organizational apply. (B) such change shall be treated as made expenses shall be allowed as a deduction rat- ‘‘(B) STAPLED ENTITIES.—A group of enti- with the consent of the Secretary of the ably over the 180-month period beginning ties which are stapled entities (as defined in Treasury, and with the month in which the partnership be- section 269(c)(2)) shall be treated as 1 per- (C) the net amount of the adjustments re- gins business. son.’’ quired to be taken into account by the tax- ‘‘(2) DISPOSITIONS BEFORE CLOSE OF AMORTI- (c) CONFORMING AMENDMENT.—Paragraph payer under section 481 of the Internal Rev- ZATION PERIOD.—In any case in which a part- (2) of section 856(h) is amended by striking enue Code of 1986 shall be taken into account nership is liquidated before the end of the pe- ‘‘and (6)’’ each place it appears and inserting ratably over the 4-taxable year period begin- riod to which paragraph (1)(B) applies, any deferred expenses attributable to the part- ‘‘, (6), and (7)’’. ning with the first taxable year beginning (d) EFFECTIVE DATE.— after such date. nership which were not allowed as a deduc- tion by reasons of this section may be de- (1) IN GENERAL.—The amendments made by SEC. 1212. CONSISTENT AMORTIZATION PERIODS FOR INTANGIBLES. ducted to the extent allowable under section this section shall apply to taxable years end- 165. ing after July 14, 1999. (a) START-UP EXPENDITURES.— ‘‘(3) AGGREGATION RULE.—For purposes of XCEPTIONS FOR EXISTING CONTROLLED (1) ALLOWANCE OF DEDUCTION.—Subsection (2) E (b) of section 195 (relating to start-up ex- paragraph (1), all persons which are treated ENTITIES.—The amendments made by this penditures) is amended by striking para- as a single employer under subsection (a) or section shall not apply to any entity which (b) of section 52 shall be treated as a single is a controlled entity (as defined in section graph (1), by redesignating paragraph (2) as person.’’ paragraph (3), and by inserting before para- 856(l) of the Internal Revenue Code of 1986, as graph (3), as so redesignated, the following (d) CONFORMING AMENDMENT.—Subsection added by this section) as of July 14, 1999, new paragraphs: (b) of section 709 is amended by striking which is a real estate investment trust for ‘‘AMORTIZATION’’ and inserting ‘‘DEDUCTION’’ the taxable year which includes such date, ‘‘(1) ALLOWANCE OF DEDUCTION.—If a tax- in the heading. payer elects the application of this sub- and which has significant business assets or section with respect to any start-up (e) EFFECTIVE DATE.—The amendments activities as of such date. made by this section shall apply to amounts expenditures— SEC. 1215. INCREASE IN ELECTIVE WITHHOLDING paid or incurred after the date of the enact- RATE FOR NONPERIODIC DISTRIBU- ‘‘(A) the taxpayer shall be allowed a deduc- ment of this Act. tion for the taxable year in which the active TIONS FROM DEFERRED COMPENSA- SEC. 1213. EXTENSION OF HAZARDOUS SUB- TION PLANS. trade or business begins in an amount equal STANCE SUPERFUND TAXES. to the lesser of— (a) IN GENERAL.—Section 3405(b)(1) (relat- (a) EXTENSION OF TAXES.— ‘‘(i) the amount of start-up expenditures ing to withholding) is amended by striking (1) ENVIRONMENTAL TAX.—Section 59A(e) is ‘‘10 percent’’ and inserting ‘‘15 percent’’. with respect to the active trade or business, amended to read as follows: or (b) EFFECTIVE DATE.—The amendment ‘‘(e) APPLICATION OF TAX.—The tax imposed ‘‘(ii) $5,000, reduced (but not below zero) by made by subsection (a) shall apply to dis- by this section shall apply to taxable years tributions after December 31, 2000. the amount by which such start-up expendi- beginning after December 31, 1986, and before tures exceed $50,000, and January 1, 1996, and to taxable years begin- SEC. 1216. TREATMENT OF GAIN FROM CON- ‘‘(B) the remainder of such start-up ex- STRUCTIVE OWNERSHIP TRANS- ning after December 31, 1999, and before Jan- ACTIONS. penditures shall be allowed as a deduction uary 1, 2010.’’ (a) IN GENERAL.—Part IV of subchapter P ratably over the 180-month period beginning (2) EXCISE TAXES.—Section 4611(e) is with the month in which the active trade or of chapter 1 (relating to special rules for de- amended to read as follows: termining capital gains and losses) is amend- business begins. ‘‘(e) APPLICATION OF HAZARDOUS SUBSTANCE ‘‘(2) AGGREGATION RULE.—For purposes of ed by inserting after section 1259 the fol- SUPERFUND FINANCING RATE.—The Hazardous lowing section: paragraph (1), all persons which are treated Substance Superfund Financing rate under as a single employer under subsections (a) this section shall apply after December 31, ‘‘SEC. 1260. GAINS FROM CONSTRUCTIVE OWNER- and (b) of section 52 shall be treated as a sin- 1986 and before January 1, 1996, and after the SHIP TRANSACTIONS. gle person.’’ date of the enactment of the Taxpayer Re- ‘‘(a) IN GENERAL.—If the taxpayer has gain (2) CONFORMING AMENDMENT.—Subsection fund Act of 1999, and before October 1, 2009.’’ from a constructive ownership transaction (b) of section 195 is amended by striking (b) EFFECTIVE DATES.— with respect to any financial asset and such ‘‘AMORTIZE’’ and inserting ‘‘DEDUCT’’ in the (1) INCOME TAX.—The amendment made by gain would (without regard to this section) heading. subsection (a)(1) shall apply to taxable years be treated as a long-term capital gain— (b) ORGANIZATIONAL EXPENDITURES.—Sub- beginning after December 31, 1999. ‘‘(1) such gain shall be treated as ordinary section (a) of section 248 (relating to organi- (2) EXCISE TAX.—The amendment made by income to the extent that such gain exceeds zational expenditures) is amended to read as subsection (a)(2) shall take effect on the date the net underlying long-term capital gain, follows: of the enactment of this Act. and ‘‘(a) ELECTION TO DEDUCT.— SEC. 1214. CONTROLLED ENTITIES INELIGIBLE ‘‘(2) to the extent such gain is treated as a ‘‘(1) IN GENERAL.—If a corporation elects FOR REIT STATUS. long-term capital gain after the application the application of this subsection (in accord- (a) IN GENERAL.—Subsection (a) of section of paragraph (1), the determination of the ance with regulations prescribed by the Sec- 856 (relating to definition of real estate in- capital gain rate (or rates) applicable to such S9606 CONGRESSIONAL RECORD — SENATE July 28, 1999 gain under section 1(h) shall be determined ‘‘(B) enters into a forward or futures con- ter 1 is amended by adding at the end the fol- on the basis of the respective rate (or rates) tract to acquire the financial asset, lowing new item: that would have been applicable to the net ‘‘(C) is the holder of a call option, and is ‘‘Sec. 1260. Gains from constructive owner- underlying long-term capital gain. the grantor of a put option, with respect to ship transactions.’’ ‘‘(b) INTEREST CHARGE ON DEFERRAL OF the financial asset and such options have (c) EFFECTIVE DATE.–The amendments GAIN RECOGNITION.— substantially equal strike prices and sub- made by this section shall apply to trans- ‘‘(1) IN GENERAL.—If any gain is treated as stantially contemporaneous maturity dates, actions entered into after July 11, 1999. ordinary income for any taxable year by rea- or SEC. 1217. RESTRICTION ON USE OF REAL ES- son of subsection (a)(1), the tax imposed by ‘‘(D) to the extent provided in regulations TATE INVESTMENT TRUSTS TO this chapter for such taxable year shall be prescribed by the Secretary, enters into 1 or AVOID ESTIMATED TAX PAYMENT increased by the amount of interest deter- more other transactions (or acquires 1 or REQUIREMENTS. mined under paragraph (2) with respect to more positions) that have substantially the (a) IN GENERAL.—Subsection (c) of section each prior taxable year during any portion of same effect as a transaction described in any 6655 (relating to estimated tax by corpora- which the constructive ownership trans- of the preceding subparagraphs. tions) is amended by adding at the end the action was open. Any amount payable under ‘‘(2) EXCEPTION FOR POSITIONS WHICH ARE following new paragraph: this paragraph shall be taken into account in MARKED TO MARKET.—This section shall not ‘‘(5) TREATMENT OF CERTAIN REIT DIVI- computing the amount of any deduction al- apply to any constructive ownership trans- DENDS.— lowable to the taxpayer for interest paid or action if all of the positions which are part ‘‘(A) IN GENERAL.—Any dividend received accrued during such taxable year. of such transaction are marked to market from a closely held real estate investment ‘‘(2) AMOUNT OF INTEREST.—The amount of under any provision of this title or the regu- trust by any person which owns (after appli- interest determined under this paragraph lations thereunder. cation of subsections (d)(5) and (1)(3)(B) of with respect to a prior taxable year is the ‘‘(3) LONG POSITION UNDER NOTIONAL PRIN- section 856) 10 percent or more (by vote or amount of interest which would have been CIPAL CONTRACT.—A person shall be treated value) of the stock or beneficial interests in imposed under section 6601 on the under- as holding a long position under a notional the trust shall be taken into account in com- payment of tax for such year which would principal contract with respect to any finan- puting annualized income installments have resulted if the gain (which is treated as cial asset if such person— under paragraph (2) in a manner similar to ordinary income by reason of subsection ‘‘(A) has the right to be paid (or receive the manner under which partnership income (a)(1)) had been included in gross income in credit for) all or substantially all of the in- inclusions are taken into account. the taxable years in which it accrued (deter- vestment yield (including appreciation) on ‘‘(B) CLOSELY HELD REIT.—For purposes of mined by treating the income as accruing at such financial asset for a specified period, subparagraph (A), the term ‘closely held real a constant rate equal to the applicable Fed- and estate investment trust’ means a real estate eral rate as in effect on the day the trans- ‘‘(B) is obligated to reimburse (or provide investment trust with respect to which 5 or action closed). The period during which such credit for) all or substantially all of any de- fewer persons own (after application of sub- interest shall accrue shall end on the due cline in the value of such financial asset. sections (d)(5) and (1)(3)(B) of section 856) 50 date (without extensions) for the return of ‘‘(4) FORWARD CONTRACT.—The term ‘for- percent or more (by vote or value) of the tax imposed by this chapter for the taxable ward contract’ means any contract to ac- stock or beneficial interests in the trust.’’ (b) EFFECTIVE DATE.—The amendment year in which such transaction closed quire in the future (or provide or receive made by subsection (a) shall apply to esti- ‘‘(3) APPLICABLE FEDERAL RATE.—For pur- credit for the future value of) any financial mated tax payments due on or after Sep- poses of paragraph (2), the applicable Federal asset. tember 15, 1999. rate is the applicable Federal rate deter- ‘‘(e) NET UNDERLYING LONG-TERM CAPITAL mined under 1274(d) (compound semiannu- GAIN.—For purposes of this section, in the SEC. 1218. PROHIBITED ALLOCATIONS OF S COR- case of any constructive ownership trans- PORATION STOCK HELD BY AN ally) which would apply to a debt instrument ESOP. with a term equal to the period the trans- action with respect to any financial asset, the term ‘net underlying long-term capital (a) IN GENERAL.—Section 409 (relating to action was open. qualifications for tax credit employee stock ‘‘(4) NO CREDITS AGAINST INCREASE IN TAX.— gain’ means the aggregate net capital gain that the tax-payer would have had if— ownership plans) is amended by redesig- Any increase in tax under paragraph (1) shall nating subsection (p) as subsection (q) and not be treated as tax imposed by this chapter ‘‘(1) the financial asset had been acquired for fair market value on the date such trans- by inserting after subsection (o) the fol- of purposes of determining— lowing new subsection: ‘‘(A) the amount of any credit allowable action was opened and sold for fair market value on the date such transaction was ‘‘(p) PROHIBITED ALLOCATION OF SECURITIES under this chapter, or IN AN S CORPORATION.— ‘‘(B) the amount of the tax imposed by sec- closed, and ‘‘(2) only gains and losses that would have ‘‘(1) IN GENERAL.—An employee stock own- tion 55. ership plan holding employer securities con- ‘‘(c) Financial Asset.—For purposed of ra- resulted from the deemed ownership under paragraph (1) were taken into account. sisting of stock in an S corporation shall tion provide that no portion of the assets of the The amount of the net underlying long-term ‘‘(1) IN GENERAL.—The term ‘financial plan attributable to (or allocable in lieu of) capital gain with respect to any financial asset’ means— such employer securities may, during a non- asset shall be treated as zero unless the ‘‘(A) any equity interest in any pass-thou allocation year, accrue (or be allocated di- amount thereof is established by clear and entity, and rectly or indirectly under any plan of the convincing evidence. ‘‘(B) to the extent provided in employer meeting the requirements of sec- ‘‘(f) SPECIAL RULE WHERE TAXPAYER TAKES regulations— tion 401(a)) for the benefit of any disqualified DELIVERY.—Except as provided in regula- ‘‘(i) any debt instrument, and individual. tions prescribed by the Secretary, if a con- (ii) any stock in a corporation which in not ‘‘(2) FAILURE TO MEET REQUIREMENTS.—If a structive ownership transaction is closed by a pass-thru entity. plan fails to meet the requirements of para- reason of taking delivery, this section shall ‘‘(2) PASS-THRU ENTITY.—For purposes of graph (1)— paragraph (1), the term ‘pass-thru entity’ be applied as if the taxpayer had sold all the ‘‘(A) the plan shall be treated as having means— contracts, options, or other positions which distributed to any disqualified individual the ‘‘(A) a regulated investment company, are part of such transaction for fair market amount allocated to the account of such in- ‘‘(B) a real estate investment trust, value on the closing date. The amount of dividual in violation of paragraph (1) at the ‘‘(C) an S corporation, gain recognized under the preceding sentence time of such allocation, ‘‘(D) a partnership, shall not exceed the amount of gain treated ‘‘(B) the provisions of section 4979A shall ‘‘(E) a trust, as ordinary income under subsection (a). apply, and ‘‘(F) a common trust fund, Proper adjustments shall be made in the ‘‘(C) the statutory period for the assess- ‘‘(G) a passive foreign investment company amount of any gain or loss subsequently re- ment of any tax imposed by section 4979A (as defined in section 1297 without regard to alized for gain recognized and treated as or- shall not expire before the date which is 3 subsection (e) thereof). dinary income under this subsection. years from the later of— ‘‘(H) a foreign personal holding company, ‘‘(g) REGULATIONS.—The Secretary shall ‘‘(i) the allocation of employer securities ‘‘(I) a foreign investment company (as de- prescribe such regulations as may be nec- resulting in the failure under paragraph (1) fined in section 1246(b)), and essary or appropriate to carry out the pur- giving rise to such tax, or ‘‘(J) a REMIC. poses of this section, including regulations— ‘‘(ii) the date on which the Secretary is no- ‘‘(d) CONSTRUCTIVE OWNERSHIP TRANS- ‘‘(1) to permit taxpayers to mark to mar- tified of such failure. ACTION.—For purposes of this section— ket constructive ownership transactions in ‘‘(3) NONALLOCATION YEAR.—For purposes of ‘‘(1) IN GENERAL.—The taxpayer shall be lieu of applying this section, and this subsection— treated as having entered into a constructive ‘‘(2) to exclude certain forward contracts ‘‘(A) IN GENERAL.—The term ‘nonallocation ownership transaction with respect to any fi- which do not convey substantially all of the year’ means any plan year of an employee nancial asset if the taxpayer— economic return with respect to a financial stock ownership plan if, at any time during ‘‘(A) holds a long position under a notional asset.’’ such plan year— principal contract with respect to the finan- (b) CLERICAL AMENDMENT.—The table of ‘‘(i) such plan holds employer securities cial asset, sections for part IV of subchapter P of chap- consisting of stock in an S corporation, and July 28, 1999 CONGRESSIONAL RECORD — SENATE S9607

‘‘(ii) disqualified individuals own at least essary to carry out the purposes of this sub- (b) TRANSFERS TO PARTNERSHIPS.—Sub- 50 percent of the number of outstanding section, including regulations providing for section (d) of section 721 is amended to read shares of stock in such S corporation. the treatment of any stock option, restricted as follows: ‘‘(B) ATTRIBUTION RULES.—For purposes of stock, sock appreciation right, phantom ‘‘(d) TRANSFERS OF INTANGIBLE PROP- subparagraph (A)— stock unit, performance unit, or similar in- ERTY.— ‘‘(i) IN GENERAL.—The rules of section strumental granted by an S corporation as ‘‘(1) IN GENERAL.—Rules similar to the 318(a) shall apply for purposes of determining stock or not stock.’’ rules of section 351(h) shall apply for pur- ownership, except that— (b) EXCISE TAX.— poses of this section. ‘‘(I) in applying paragraph (1) thereof, the (1) IN GENERAL.—Section 4979A(b) (defining ‘‘(2) TRANSFERS TO FOREIGN PARTNER- members of an individual’s family shall in- prohibited allocation) is amended by strik- SHIPS.—For regulatory authority to treat in- clude members of the family described in ing ‘‘and’’ at the end of paragraph (1), by tangibles transferred to a partnership as paragraph (4)(D), and striking the period at the end of paragraph sold, see section 367(d)(3).’’ ‘‘(II) paragraph (4) thereof shall not apply. (2) and inserting ‘‘, and ’’, and by adding at (c) EFFECTIVE DATE.—The amendments ‘‘(ii) DEEMED-OWNED SHARES.—Notwith- the end the following new paragraph: made by this section shall apply to transfers standing the employee trust exception in ‘‘(3) any allocation of employer securities on or after the date of the enactment of this section 318(a)(2)(B)(i), disqualified individ- which violate the provisions of section Act. uals shall be treated as owning deemed- 409(p).’’ SEC. 1221. DISTRIBUTIONS TO A CORPORATE PARTNER OF STOCK IN ANOTHER owned shares. (2) LIABILITY.—Section 4979A(c) (defining CORPORATION. ‘‘(4) DISQUALIFIED INDIVIDUAL.—For pur- liability for tax) is amended by adding at the (c) IN GENERAL.—Section 732 (relating to poses of this subsection— end the following new sentence: ‘‘in the case ‘‘(A) IN GENERAL.—The term ‘disqualified basis of distributed property other than of a prohibited allocation described in sub- money) is amended by adding at the end the individual’ means any individual who is a section (b)(3), such tax shall be paid by the S participant or beneficiary under the em- following new subsection: corporation the stock in which was allocated ORRESPONDING ADJUSTMENT TO BASIS ployee stock ownership plan if— ‘‘(f) C in violation of section 409(p).’’ OF ASSETS OF A DISTRIBUTED CORPORATION ‘‘(i) the aggregate number of deemed- (c) EFFECTIVE DATES.— owned shares of such individual and the CONTROLLED BY A CORPORATE PARTNER.— (1) IN GENERAL.—The amendments made by ‘‘(1) IN GENERAL.—If— members of the individual’s family is at this section shall apply to plan years begin- ‘‘(A) a corporation (hereafter in this sub- least 20 percent of the number of outstanding ning after December 31, 2000. section referred to as the ‘corporate part- shares of stock in the S corporation consti- (2) EXCEPTION FOR CERTAIN PLANS.—In the ner’) receives a distribution from a partner- tuting employer securities of such plan, or ease of any— ship of stock in another corporation (here- ‘‘(ii) if such individual is not described in (A) employee stock ownership plan estab- after in this subsection referred to as the clause (i), the number of deemed-owned lished after July 14, 1999, or ‘distributed corporation’). shares of such individual is at least 10 per- (B) employee stock ownership plan estab- ‘‘(B) the corporate partner has control of cent of the number of outstanding shares of lished on or before such date if employer se- the distributed corporation immediately stock in such corporation. curities held by the plan consist of stock in after the distribution or at any time there- ‘‘(B) TREATMENT OF FAMILY MEMBERS.—In a corporation with respect to which an elec- after, and the case of a disqualified individual de- tion under section 1362(a) of the internal ‘‘(C) the partnership’s adjusted basis in scribed in subparagraph (A)(i), any member Revenue Code of 1986 is not in effect on such such stock immediately before the distribu- of the individual’s family with deemed- date. tion exceeded the corporate partner’s ad- owned shares shall be treated as a disquali- justed basis in such stock immediately after fied individual if not otherwise a disqualified the amendments made by this section shall apply to plan years ending after July 14, 1999. the distribution, individual under subparagraph (A). then an amount equal to such excess shall be ‘‘(C) DEEMED-OWNED SHARES.—For purposes SEC. 1219. MODIFICATION OF ANTI-ABUSE RULES applied to reduce (in accordance with sub- of this paragraph— RELATED TO ASSUMPTION OF LI- ABILITY. section (c) the basis of property held by the ‘‘(i) IN GENERAL.—The term ‘deemed-owned distributed corporation at such time (or, if shares’ means, with respect to ay participant (a) IN GENERAL.—Section 357(b)(1) (relating the corporate partner does not control the or beneficiary under the employee stock to tax avoidance purpose) is amended— distributed corporation at such time, at the ownership plan— (1) by striking ‘‘the principal purpose’’ and time the corporation partner first has such ‘‘(I) the stock in the S corporation consti- inserting ‘‘a principal purpose’’, and control). tuting employer securities of such plan (2) by striking ‘‘on the exchange’’ in sub- ‘‘(2) EXCEPTION FOR CERTAIN DISTRIBUTIONS which is allocated to such participant or paragraph (A). (b) EFFECTIVE DATE.—The amendments BEFORE CONTROL ACQUIRED.—Paragraph (1) beneficiary under the plan, and shall not apply to any distribution of stock ‘‘(II) such participants or beneficiary’s made by this section shall apply to assump- tions of liability after July 14, 1999. in the distributed corporation if— share of the stock in such corporation which ‘‘(A) the corporate partner does not have is held by such trust but which is not allo- SEC. 1220. ALLOCATION OF BASIS ON TRANSFERS control of such corporation immediately cated under the plan to employees. OF INTANGIBLES IN CERTAIN NON- RECOGNITION TRNSACTIONS after such distribution, and ‘‘(ii) INDIVIDIAUALS SHARE OF UNALLOCATED ‘‘(B) the corporate partner establishes to (a) TRANSFERS TO CORPORATIONS.—Section STOCK.—For purposes of clause (i)(II), an in- the satisfaction of the Secretary that such 351 (relating to transfer to corporation con- dividual’s share of unallocated S corporation distribution was not part of a plan or ar- trolled by transferor) is amended by redesig- stock held by the trust in the amount of the rangement to acquire control of the distrib- nating subsection (h) or subsection (i) and by unallocated stock which would be allocated uted corporation. inserting after subsection (g) the following to such individual if the unallocated stock ‘‘(3) LIMITATIONS ON BASIS REDUCTION.— were allocated to individuals in the same new subsection: ‘‘(A) IN GENERAL.—The amount of the re- proportions as the most recent stock alloca- ‘‘(h) TREATMENT OF TRANSFERS OF INTAN- duction under paragraph (1) shall not exceed tion under the plan. GIBLE PROPERTY.— the amount by which the sum of the aggre- ‘‘(D) MEMBERS OF FAMILY.—For purposes of ‘‘(1) TRANSFERS OF LESS THAN ALL SUBSTAN- gate adjusted bases of the property and the this paragraph, the term ‘member of the TIAL RIGHTS. amount of money of the distributed corpora- family’ means, with respect of any ‘‘(A) IN GENERAL.—A transfer of an interest tion exceeds the corporate partner’s adjusted individual— in intangible property (as defined in section basis in the stock of the distributed corpora- ‘‘(i) the spouse of the individual. 936(h)(3)(B)) shall be treated under this sec- tion. ‘‘(ii) an ancestor or lineal descendant of tion as a transfer of property even if the ‘‘(B) REDUCTION NOT TO EXCEED ADJUSTED the individual or the individual’s spouse, transfer is of less than all of the substantial BASIS OF PROPERTY.—No reduction under ‘‘(iii) a brother or sister of the individual rights of the transferor in the property. paragraph (1) in the basis of any property or the individual’s spouse and any lineal de- ‘‘(B) ALLOCATION OF BASIS.—In the case of a shall exceed the adjusted basis of such prop- scendant of the brother or sister, and transfer of less than all of the substantial erty (determined without regard to such re- ‘‘(iv) the spouse of any person described in rights of the transferor in the intangible duction). clause (ii) or (iii). property, the transferor’s basis immediately ‘‘(4) GAIN RECOGNITION WHERE REDUCTION ‘‘(5) DEFINTIONS.—For purposes of this before the transfer shall be allocated among LIMITED.—If the amount of any reduction subsection— the rights retained by the transferor and the under paragraph (1) (determined after the ap- ‘‘(A) EMPLOYEE STOCK OWNERSHIP PLAN.— rights transferred on the basis of their re- plication of paragraph (3)(A)) exceeds the ag- The term ‘employee stock ownership plan’ spective fair market values. gregate adjusted bases of the property of the has the meaning given such term by section ‘‘(2) NONRECOGNITION NOT TO APPLY TO IN- distributed corporation— 4975(e)(7). TANGIBLE PROPERTY DEVELOPED FOR TRANS- ‘‘(A) such excess shall be recognized by the ‘‘(B) EMPLOYER SECURITIES.—The term ‘em- FEREE.—This section shall not apply to a corporate partner as long-term capital gain, ployer security’ has the meaning given such transfer of intangible property developed by and term by section 409(l). the transferor or any related person if such ‘‘(B) the corporate partner’s adjusted basis ‘‘(6) REGULATIONS.—The Secretary shall development was pursuant to an arrange- in the stock of the distributed corporation prescribe such regulations as may be nec- ment with the transferee.’’ shall be increased by such excess. S9608 CONGRESSIONAL RECORD — SENATE July 28, 1999

‘‘(5) CONTROL.—For purposes of this sub- vidual by an employer under section 3507, sonal services rendered by the taxpayer to a section, the term ‘control’ means ownership shall not be treated as income or receipts (or corporation which represents a distribution of a stock meeting the requirements of sec- taken into account in determining resources) of earnings or profits rather than a reason- tion 1504(a)(2). for purposes of determining— able allowance as compensation for the per- ‘‘(6) INDIRECT DISTRIBUTIONS.—For purposes (1) the eligibility of the individual or any sonal services actually rendered. of paragraph (1), if a corporation acquires other individual for any month for benefits ‘‘(2) TAXPAYER ENGAGED IN TRADE OR BUSI- (other than in a distribution from a partner- or assistance under any Federal program or NESS.—In the case of a taxpayer engaged in a ship) stock the basis of which is determined any State or local program financed in whole trade or business in which both personal in whole or in part by reference to sub- or in part with Federal funds, or services and capital are material income- section (a)(2) or (b), the corporation shall be (2) the amount or extent of such benefits or producing factors, under regulations pre- treated as receiving a distribution of such assistance. scribed by the Secretary, a reasonable allow- stock from a partnership. ance as compensation for the personal serv- ‘‘(7) SPECIAL RULE FOR STOCK IN CON- SPECTER AMENDMENT NO. 1386 ices rendered by the taxpayer, not in excess TROLLED CORPORATION.—If the property held of 30 percent of the taxpayer’s share of the by a distributed corporation is stock in a (Ordered to lie on the table.) net profits of such trade or business, shall be corporation which the distributed corpora- Mr. SPECTER submitted an amend- considered as earned income. tion controls, this subsection shall be ap- ment intended to be proposed by him ‘‘SEC. 2. STANDARD DEDUCTION. plied to reduce the basis of the property of to the bill, S. 1429, supra; as follows: ‘‘(a) IN GENERAL.—For purposes of this sub- such controlled corporation. This subsection Strike all after the first word and insert: title, the term ‘standard deduction’ means shall be reapplied to any property of any the sum of— controlled corporation which is stock in a 1. SHORT TITLE; TABLE OF CONTENTS; ‘‘(1) the basic standard deduction, plus AMENDMENT OF 1986 CODE. corporation which it controls. ‘‘(2) the additional standard deduction. (a) SHORT TITLE.—This Act may be cited as ‘‘(8) REGULATIONS.—The Secretary shall ‘‘(b) BASIC STANDARD DEDUCTION.—For pur- the ‘‘Flat Tax Act of 1999’’. prescribe such regulations as may be nec- poses of subsection (a), the basic standard (b) TABLE OF CONTENTS.—The table of con- essary to carry out the purposes of this sub- deduction is— tents for this Act is as follows: section, including regulations to avoid dou- ‘‘(1) $17,500 in the case of— ble counting and to prevent the abuse of Sec. 1. Short title; table of contents; amend- ‘‘(A) a joint return, and such purposes.’’ ment of 1986 Code. ‘‘(B) a surviving spouse (as defined in sec- ‘‘(b) EFFECTIVE DATE.—the amendment Sec. 2. Flat tax on individual taxable earned tion 5(a)), made by this section shall apply to distribu- income and business taxable in- ‘‘(2) $15,000 in the case of a head of house- tions made after July 14, 1999. come. hold (as defined in section 5(b)), and Sec. 3. Repeal of estate and gift taxes. ‘‘(3) $10,000 in the case of an individual— TITLE XIII—COMPLIANCE WITH Sec. 4. Additional repeals. ‘‘(A) who is not married and who is not a CONGRESSIONAL BUDGET ACT Sec. 5. Effective dates. surviving spouse or head of household, or SEC. 1301. SUNSET OF PROVISIONS OF ACT. (c) AMENDMENT OF 1986 CODE.—Except as ‘‘(B) who is a married individual filing a All provisions of, and amendments made otherwise expressly provided, whenever in separate return. by, this Act which are in effect on September this Act an amendment or repeal is ex- ‘‘(c) ADDITIONAL STANDARD DEDUCTION.— 30, 2009, shall cease to apply as of the close of pressed in terms of an amendment to, or re- For purposes of subsection (a), the additional September 30, 2009. peal of, a section or other provision, the ref- standard deduction is $5,000 for each depend- erence shall be considered to be made to a ent (as defined in section 5(d))— LINCOLN AMENDMENT NO. 1385 section or other provision of the Internal ‘‘(1) whose earned income for the calendar Revenue Code of 1986. year in which the taxable year of the tax- (Ordered to lie on the table.) SEC. 2. FLAT TAX ON INDIVIDUAL TAXABLE payer begins is less than the basic standard Mrs. LINCOLN submitted an amend- EARNED INCOME AND BUSINESS deduction specified in subsection (b)(3), or ment intended to be proposed by her to TAXABLE INCOME. ‘‘(2) who is a child of the taxpayer and the bill, S. 1429, supra; as follows: (a) IN GENERAL.—Subchapter A of chapter 1 who— of subtitle A is amended to read as follows: ‘‘(A) has not attained the age of 19 at the At the appropriate place add the following: close of the calendar year in which the tax- To amend the Internal Revenue Code of ‘‘Subchapter A—Determination of Tax Liability able year of the taxpayer begins, or 1986 to clarify that any amount allowable as ‘‘(B) is a student who has not attained the a child tax credit under section 24 or an ‘‘Part I. Tax on individuals. age of 24 at the close of such calendar year. earned income credit under section 32 shall ‘‘Part II. Tax on business activities. ‘‘(d) INFLATION ADJUSTMENT.— not be treated as income for purposes of any ‘‘PART I—TAX ON INDIVIDUALS ‘‘(1) IN GENERAL.—In the case of any tax- means-tested Federal program. ‘‘Sec. 1. Tax imposed. able year beginning in a calendar year after Be it enacted by the Senate and House of Rep- 1999, each dollar amount contained in sub- resentatives of the United States of America in ‘‘Sec. 2. Standard deduction. sections (b) and (c) shall be increased by an Congress assembled, ‘‘Sec. 3. Deduction for cash charitable con- amount equal to— SECTION 1. COORDINATION OF CHILD TAX CRED- tributions. ‘‘(A) such dollar amount, multiplied by IT WITH CERTAIN MEANS-TESTED ‘‘Sec. 4. Deduction for home acquisition in- ‘‘(B) the cost-of-living adjustment under PROGRAMS. debtedness. section 1(f)(3) for the calendar year in which Section 24 of the Internal Revenue Code of ‘‘Sec. 5. Definitions and special rules. the taxable year begins, determined by sub- 1986 (relating to child tax credit) is amended stituting ‘calendar year 1998’ for ‘calendar by adding at the end the following new sub- ‘‘SECTION 1. TAX IMPOSED. year 1992’ in subparagraph (B) of such sec- section: ‘‘(a) IMPOSITION OF TAX.—There is hereby tion. (g) COORDINATION WITH CERTAIN MEANS- imposed on every individual a tax equal to 20 ‘‘(2) ROUNDING.—If any increase determined TESTED PROGRAMS.—Any refund or credit percent of the taxable earned income of such under paragraph (1) is not a multiple of $50, made to an individual by reason of this sec- individual. such amount shall be rounded to the next tion shall not be treated as income or re- ‘‘(b) TAXABLE EARNED INCOME.—For pur- lowest multiple of $50. ceipts (or taken into account in determining poses of this section, the term ‘taxable ‘‘SEC. 3. DEDUCTION FOR CASH CHARITABLE resources) for purposes of determining— earned income’ means the excess (if any) of— CONTRIBUTIONS. (1) the eligibility of the individual or any ‘‘(1) the earned income received or accrued ‘‘(a) GENERAL RULE.—For purposes of this other individual for any month for benefits during the taxable year, over part, there shall be allowed as a deduction or assistance under any Federal program or ‘‘(2) the sum of— any charitable contribution (as defined in any State or local program financed in whole ‘‘(A) the standard deduction, subsection (b)) not to exceed $2,500 ($1,250, in or in part with Federal funds, or ‘‘(B) the deduction for cash charitable con- the case of a married individual filing a sepa- (2) the amount or extent of such benefits or tributions, and rate return), payment of which is made with- assistance. ‘‘(C) the deduction for home acquisition in- in the taxable year. SEC. 2. COORDINATION OF EARNED INCOME debtedness, ‘‘(b) CHARITABLE CONTRIBUTION DEFINED.— CREDIT WITH CERTAIN MEANS-TEST- for such taxable year. For purposes of this section, the term ‘chari- ED PROGRAMS. ‘‘(c) EARNED INCOME.—For purposes of this table contribution’ means a contribution or Subsection (l) of section 32 of the Internal section— gift of cash or its equivalent to or for the use Revenue Code of 1986 (relating to coordina- ‘‘(1) IN GENERAL.—The term ‘earned in- of the following: tion with certain means-tested programs) is come’ means wages, salaries, or professional ‘‘(1) A State, a possession of the United amended to read as follows: fees, and other amounts received from States, or any political subdivision of any of (l) COORDINATION WITH CERTAIN MEANS- sources within the United States as com- the foregoing, or the United States or the TESTED PROGRAMS.—Any refund or credit pensation for personal services actually ren- District of Columbia, but only if the con- made to an individual by reason of this sec- dered, but does not include that part of com- tribution or gift is made for exclusively pub- tion, and any payment made to such indi- pensation derived by the taxpayer for per- lic purposes. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9609 ‘‘(2) A corporation, trust, or community ‘‘(iii) A description and good faith estimate fall within the period described in paragraph chest, fund, or foundation— of the value of any goods or services referred (1). For purposes of the preceding sentence, if ‘‘(A) created or organized in the United to in clause (ii) or, if such goods or services 15 or more days of a calendar month fall States or in any possession thereof, or under consist solely of intangible religious bene- within such period such month shall be con- the law of the United States, any State, the fits, a statement to that effect. sidered as a full calendar month. District of Columbia, or any possession of For purposes of this subparagraph, the term ‘‘(B) COMPENSATION OR REIMBURSEMENT.— the United States, ‘intangible religious benefit’ means any in- Paragraph (1) shall not apply to any amount ‘‘(B) organized and operated exclusively for tangible religious benefit which is provided paid by the taxpayer within the taxable year religious, charitable, scientific, literary, or by an organization organized exclusively for if the taxpayer receives any money or other educational purposes, or to foster national or religious purposes and which generally is not property as compensation or reimbursement international amateur sports competition sold in a commercial transaction outside the for maintaining the individual in the tax- (but only if no part of its activities involve donative context. payer’s household during the period de- the provision of athletic facilities or equip- ‘‘(C) CONTEMPORANEOUS.—For purposes of scribed in paragraph (1). ment), or for the prevention of cruelty to subparagraph (A), an acknowledgment shall ‘‘(3) RELATIVE DEFINED.—For purposes of children or animals, be considered to be contemporaneous if the paragraph (1), the term ‘relative of the tax- ‘‘(C) no part of the net earnings of which taxpayer obtains the acknowledgment on or payer’ means an individual who, with respect inures to the benefit of any private share- before the earlier of— to the taxpayer, bears any of the relation- holder or individual, and ‘‘(i) the date on which the taxpayer files a ships described in subparagraphs (A) through ‘‘(D) which is not disqualified for tax ex- return for the taxable year in which the con- (H) of section 5(d)(1). emption under section 501(c)(3) by reason of tribution was made, or ‘‘(4) NO OTHER AMOUNT ALLOWED AS DEDUC- attempting to influence legislation, and ‘‘(ii) the due date (including extensions) for TION.—No deduction shall be allowed under which does not participate in, or intervene in filing such return. subsection (a) for any amount paid by a tax- payer to maintain an individual as a member (including the publishing or distributing of ‘‘(D) SUBSTANTIATION NOT REQUIRED FOR of the taxpayer’s household under a program statements), any political campaign on be- CONTRIBUTIONS REPORTED BY THE DONEE ORGA- described in paragraph (1)(A) except as pro- half of (or in opposition to) any candidate for NIZATION.—Subparagraph (A) shall not apply public office. to a contribution if the donee organization vided in this subsection. ‘‘(e) DENIAL OF DEDUCTION FOR CERTAIN A contribution or gift by a corporation to a files a return, on such form and in accord- TRAVEL EXPENSES.—No deduction shall be al- ance with such regulations as the Secretary trust, chest, fund, or foundation shall be de- lowed under this section for traveling ex- may prescribe, which includes the informa- ductible by reason of this paragraph only if penses (including amounts expended for it is to be used within the United States or tion described in subparagraph (B) with re- meals and lodging) while away from home, any of its possessions exclusively for pur- spect to the contribution. whether paid directly or by reimbursement, poses specified in subparagraph (B). Rules ‘‘(E) REGULATIONS.—The Secretary shall unless there is no significant element of per- similar to the rules of section 501(j) shall prescribe such regulations as may be nec- sonal pleasure, recreation, or vacation in apply for purposes of this paragraph. essary or appropriate to carry out the pur- such travel. ‘‘(3) A post or organization of war veterans, poses of this paragraph, including regula- ‘‘(f) DISALLOWANCE OF DEDUCTIONS IN CER- or an auxiliary unit or society of, or trust or tions that may provide that some or all of TAIN CASES.—For disallowance of deductions foundation for, any such post or the requirements of this paragraph do not for contributions to or for the use of Com- organization— apply in appropriate cases. munist controlled organizations, see section ‘‘(A) organized in the United States or any ‘‘(2) DENIAL OF DEDUCTION WHERE CONTRIBU- 11(a) of the Internal Security Act of 1950 (50 of its possessions, and TION FOR LOBBYING ACTIVITIES.—No deduction U.S.C. 790). ‘‘(B) no part of the net earnings of which shall be allowed under this section for a con- ‘‘(g) TREATMENT OF CERTAIN AMOUNTS PAID inures to the benefit of any private share- tribution to an organization which conducts TO OR FOR THE BENEFIT OF INSTITUTIONS OF holder or individual. activities to which section 11(d)(2)(C)(i) ap- HIGHER EDUCATION.— ‘‘(4) In the case of a contribution or gift by plies on matters of direct financial interest ‘‘(1) IN GENERAL.—For purposes of this sec- an individual, a domestic fraternal society, to the donor’s trade or business, if a prin- tion, 80 percent of any amount described in order, or association, operating under the cipal purpose of the contribution was to paragraph (2) shall be treated as a charitable lodge system, but only if such contribution avoid Federal income tax by securing a de- contribution. or gift is to be used exclusively for religious, duction for such activities under this section ‘‘(2) AMOUNT DESCRIBED.—For purposes of charitable, scientific, literary, or edu- which would be disallowed by reason of sec- paragraph (1), an amount is described in this cational purposes, or for the prevention of tion 11(d)(2)(C) if the donor had conducted paragraph if— cruelty to children or animals. such activities directly. No deduction shall ‘‘(A) the amount is paid by the taxpayer to ‘‘(5) A cemetery company owned and oper- be allowed under section 11(d) for any or for the benefit of an educational ated exclusively for the benefit of its mem- amount for which a deduction is disallowed organization— bers, or any corporation chartered solely for under the preceding sentence. ‘‘(i) which is described in subsection burial purposes as a cemetery corporation ‘‘(d) AMOUNTS PAID TO MAINTAIN CERTAIN (d)(1)(B), and and not permitted by its charter to engage in STUDENTS AS MEMBERS OF TAXPAYER’S ‘‘(ii) which is an institution of higher edu- any business not necessarily incident to that HOUSEHOLD.— cation (as defined in section 3304(f)), and purpose, if such company or corporation is ‘‘(1) IN GENERAL.—Subject to the limita- ‘‘(B) such amount would be allowable as a not operated for profit and no part of the net tions provided by paragraph (2), amounts deduction under this section but for the fact earnings of such company or corporation in- paid by the taxpayer to maintain an indi- that the taxpayer receives (directly or indi- ures to the benefit of any private share- vidual (other than a dependent, as defined in rectly) as a result of paying such amount the holder or individual. section 5(d), or a relative of the taxpayer) as right to purchase tickets for seating at an For purposes of this section, the term ‘chari- a member of such taxpayer’s household dur- athletic event in an athletic stadium of such table contribution’ also means an amount ing the period that such individual is— institution. treated under subsection (d) as paid for the ‘‘(A) a member of the taxpayer’s household If any portion of a payment is for the pur- use of an organization described in para- under a written agreement between the tax- chase of such tickets, such portion and the graph (2), (3), or (4). payer and an organization described in para- remaining portion (if any) of such payment ‘‘(c) DISALLOWANCE OF DEDUCTION IN CER- graph (2), (3), or (4) of subsection (b) to im- shall be treated as separate amounts for pur- TAIN CASES AND SPECIAL RULES.— plement a program of the organization to poses of this subsection. ‘‘(1) SUBSTANTIATION REQUIREMENT FOR CER- provide educational opportunities for pupils ‘‘(h) OTHER CROSS REFERENCES.— TAIN CONTRIBUTIONS.— or students in private homes, and ‘‘(1) For treatment of certain organizations ‘‘(A) GENERAL RULE.—No deduction shall be ‘‘(B) a full-time pupil or student in the providing child care, see section 501(k). allowed under subsection (a) for any con- twelfth or any lower grade at an educational ‘‘(2) For charitable contributions of part- tribution of $250 or more unless the taxpayer organization located in the United States ners, see section 702. substantiates the contribution by a contem- which normally maintains a regular faculty ‘‘(3) For treatment of gifts for benefit of or poraneous written acknowledgment of the and curriculum and normally has a regularly use in connection with the Naval Academy contribution by the donee organization that enrolled body of pupils or students in attend- as gifts to or for the use of the United meets the requirements of subparagraph (B). ance at the place where its educational ac- States, see section 6973 of title 10, United ‘‘(B) CONTENT OF ACKNOWLEDGMENT.—An tivities are regularly carried on, States Code. acknowledgment meets the requirements of shall be treated as amounts paid for the use ‘‘(4) For treatment of gifts accepted by the this subparagraph if it includes the following of the organization. Secretary of State, the Director of the Inter- information: ‘‘(2) LIMITATIONS.— national Communication Agency, or the Di- ‘‘(i) The amount of cash contributed. ‘‘(A) AMOUNT.—Paragraph (1) shall apply to rector of the United States International De- ‘‘(ii) Whether the donee organization pro- amounts paid within the taxable year only velopment Cooperation Agency, as gifts to or vided any goods or services in consideration, to the extent that such amounts do not ex- for the use of the United States, see section in whole or in part, for any contribution de- ceed $50 multiplied by the number of full cal- 25 of the State Department Basic Authorities scribed in clause (i). endar months during the taxable year which Act of 1956. S9610 CONGRESSIONAL RECORD — SENATE July 28, 1999 ‘‘(5) For treatment of gifts of money ac- if earlier, the date which is 30 years after the ‘‘(B) unless, for the taxpayer’s taxable year cepted by the Attorney General for credit to date of such first refinancing). during which the taxpayer’s spouse died, a the ‘Commissary Funds, Federal Prisons’ as ‘‘(e) OTHER DEFINITIONS AND SPECIAL joint return could have been made under the gifts to or for the use of the United States, RULES.—For purposes of this section— provisions of section 6013 (without regard to see section 4043 of title 18, United States ‘‘(1) QUALIFIED RESIDENCE.—For purposes of subsection (a)(3) thereof). Code. this subsection— ‘‘(3) SPECIAL RULE WHERE DECEASED SPOUSE ‘‘(6) For charitable contributions to or for ‘‘(A) IN GENERAL.—Except as provided in WAS IN MISSING STATUS.—If an individual was the use of Indian tribal governments (or sub- subparagraph (C), the term ‘qualified resi- in a missing status (within the meaning of divisions of such governments), see section dence’ means the principal residence of the section 6013(f)(3)) as a result of service in a 7871. taxpayer. combat zone and if such individual remains ‘‘SEC. 4. DEDUCTION FOR HOME ACQUISITION IN- ‘‘(B) MARRIED INDIVIDUALS FILING SEPARATE in such status until the date referred to in DEBTEDNESS. RETURNS.—If a married couple does not file a subparagraph (A) or (B), then, for purposes of ‘‘(a) GENERAL RULE.—For purposes of this joint return for the taxable year— paragraph (1)(A), the date on which such in- part, there shall be allowed as a deduction ‘‘(i) such couple shall be treated as 1 tax- dividual dies shall be treated as the earlier of all qualified residence interest paid or ac- payer for purposes of subparagraph (A), and the date determined under subparagraph (A) crued within the taxable year. ‘‘(ii) each individual shall be entitled to or the date determined under subparagraph 1 (B): ‘‘(b) QUALIFIED RESIDENCE INTEREST DE- take into account ⁄2 of the principal resi- ‘‘(A) The date on which the determination FINED.—The term ‘qualified residence inter- dence unless both individuals consent in est’ means any interest which is paid or ac- writing to 1 individual taking into account is made under section 556 of title 37 of the crued during the taxable year on acquisition the principal residence. United States Code or under section 5566 of title 5 of such Code (whichever is applicable) indebtedness with respect to any qualified ‘‘(C) PRE-OCTOBER 13, 1987, INDEBTEDNESS.— that such individual died while in such miss- residence of the taxpayer. For purposes of In the case of any pre-October 13, 1987, in- ing status. the preceding sentence, the determination of debtedness, the term ‘qualified residence’ ‘‘(B) Except in the case of the combat zone whether any property is a qualified residence has the meaning given that term in section designated for purposes of the Vietnam con- of the taxpayer shall be made as of the time 163(h)(4), as in effect on the day before the flict, the date which is 2 years after the date the interest is accrued. date of enactment of this subparagraph. designated as the date of termination of ‘‘(c) ACQUISITION INDEBTEDNESS.— ‘‘(2) SPECIAL RULE FOR COOPERATIVE HOUS- combatant activities in that zone. ‘‘(1) IN GENERAL.—The term ‘acquisition in- ING CORPORATIONS.—Any indebtedness se- cured by stock held by the taxpayer as a ten- ‘‘(b) DEFINITION OF HEAD OF HOUSEHOLD.— debtedness’ means any indebtedness which— ‘‘(1) IN GENERAL.—For purposes of this ‘‘(A) is incurred in acquiring, constructing, ant-stockholder in a cooperative housing corporation shall be treated as secured by part, an individual shall be considered a head or substantially improving any qualified res- of a household if, and only if, such individual idence of the taxpayer, and the house or apartment which the taxpayer is entitled to occupy as such a tenant-stock- is not married at the close of such individ- ‘‘(B) is secured by such residence. ual’s taxable year, is not a surviving spouse Such term also includes any indebtedness se- holder. If stock described in the preceding sentence may not be used to secure indebted- (as defined in subsection (a)), and either— cured by such residence resulting from the ‘‘(A) maintains as such individual’s home a ness, indebtedness shall be treated as so se- refinancing of indebtedness meeting the re- household which constitutes for more than cured if the taxpayer establishes to the satis- quirements of the preceding sentence (or this one-half of such taxable year the principal faction of the Secretary that such indebted- sentence); but only to the extent the amount place of abode, as a member of such house- ness was incurred to acquire such stock. of the indebtedness resulting from such refi- hold, of— ‘‘(3) UNENFORCEABLE SECURITY INTERESTS.— nancing does not exceed the amount of the ‘‘(i) a son, stepson, daughter, or step- Indebtedness shall not fail to be treated as refinanced indebtedness. daughter of the taxpayer, or a descendant of secured by any property solely because, ‘‘(2) $100,000 LIMITATION.—The aggregate a son or daughter of the taxpayer, but if such under any applicable State or local home- amount treated as acquisition indebtedness son, stepson, daughter, stepdaughter, or de- stead or other debtor protection law in effect for any period shall not exceed $100,000 scendant is married at the close of the tax- on August 16, 1986, the security interest is in- ($50,000 in the case of a married individual payer’s taxable year, only if the taxpayer is filing a separate return). effective or the enforceability of the security entitled to a deduction for the taxable year interest is restricted. ‘‘(d) TREATMENT OF INDEBTEDNESS IN- for such person under section 2 (or would be ‘‘(4) SPECIAL RULES FOR ESTATES AND CURRED ON OR BEFORE OCTOBER 13, 1987.— so entitled but for subparagraph (B) or (D) of ‘‘(1) IN GENERAL.—In the case of any pre- TRUSTS.—For purposes of determining wheth- subsection (d)(5)), or October 13, 1987, indebtedness— er any interest paid or accrued by an estate ‘‘(ii) any other person who is a dependent ‘‘(A) such indebtedness shall be treated as or trust is qualified residence interest, any of the taxpayer, if the taxpayer is entitled to acquisition indebtedness, and residence held by such estate or trust shall a deduction for the taxable year for such per- ‘‘(B) the limitation of subsection (c)(2) be treated as a qualified residence of such es- son under section 2, or shall not apply. tate or trust if such estate or trust estab- ‘‘(B) maintains a household which con- ‘‘(2) REDUCTION IN $100,000 LIMITATION.—The lishes that such residence is a qualified resi- stitutes for such taxable year the principal limitation of subsection (c)(2) shall be re- dence of a beneficiary who has a present in- place of abode of the father or mother of the duced (but not below zero) by the aggregate terest in such estate or trust or an interest taxpayer, if the taxpayer is entitled to a de- amount of outstanding pre-October 13, 1987, in the residuary of such estate or trust. duction for the taxable year for such father indebtedness. ‘‘SEC. 5. DEFINITIONS AND SPECIAL RULES. or mother under section 2. ‘‘(3) PRE-OCTOBER 13, 1987, INDEBTEDNESS.— ‘‘(a) DEFINITION OF SURVIVING SPOUSE.— For purposes of this paragraph, an individual The term ‘pre-October 13, 1987, indebtedness’ ‘‘(1) IN GENERAL.—For purposes of this shall be considered as maintaining a house- means— part, the term ‘surviving spouse’ means a hold only if over one-half of the cost of main- ‘‘(A) any indebtedness which was incurred taxpayer— taining the household during the taxable on or before October 13, 1987, and which was ‘‘(A) whose spouse died during either of the year is furnished by such individual. secured by a qualified residence on October taxpayer’s 2 taxable years immediately pre- ‘‘(2) DETERMINATION OF STATUS.—For pur- 13, 1987, and at all times thereafter before ceding the taxable year, and poses of this subsection— the interest is paid or accrued, or ‘‘(B) who maintains as the taxpayer’s home ‘‘(A) a legally adopted child of a person ‘‘(B) any indebtedness which is secured by a household which constitutes for the tax- shall be considered a child of such person by the qualified residence and was incurred able year the principal place of abode (as a blood, after October 13, 1987, to refinance indebted- member of such household) of a dependent— ‘‘(B) an individual who is legally separated ness described in subparagraph (A) (or refi- ‘‘(i) who (within the meaning of subsection from such individual’s spouse under a decree nanced indebtedness meeting the require- (d)) is a son, stepson, daughter, or step- of divorce or of separate maintenance shall ments of this subparagraph) to the extent daughter of the taxpayer, and not be considered as married, (immediately after the refinancing) the prin- ‘‘(ii) with respect to whom the taxpayer is ‘‘(C) a taxpayer shall be considered as not cipal amount of the indebtedness resulting entitled to a deduction for the taxable year married at the close of such taxpayer’s tax- from the refinancing does not exceed the under section 2. able year if at any time during the taxable principal amount of the refinanced indebted- For purposes of this paragraph, an individual year such taxpayer’s spouse is a nonresident ness (immediately before the refinancing). shall be considered as maintaining a house- alien, and ‘‘(4) LIMITATION ON PERIOD OF REFI- hold only if over one-half of the cost of main- ‘‘(D) a taxpayer shall be considered as mar- NANCING.—Subparagraph (B) of paragraph (3) taining the household during the taxable ried at the close of such taxpayer’s taxable shall not apply to any indebtedness after— year is furnished by such individual. year if such taxpayer’s spouse (other than a ‘‘(A) the expiration of the term of the in- ‘‘(2) LIMITATIONS.—Notwithstanding para- spouse described in subparagraph (C)) died debtedness described in paragraph (3)(A), or graph (1), for purposes of this part a taxpayer during the taxable year. ‘‘(B) if the principal of the indebtedness de- shall not be considered to be a surviving ‘‘(3) LIMITATIONS.—Notwithstanding para- scribed in paragraph (3)(A) is not amortized spouse— graph (1), for purposes of this part, a tax- over its term, the expiration of the term of ‘‘(A) if the taxpayer has remarried at any payer shall not be considered to be a head of the first refinancing of such indebtedness (or time before the close of the taxable year, or a household— July 28, 1999 CONGRESSIONAL RECORD — SENATE S9611 ‘‘(A) if at any time during the taxable year tween such individual and the taxpayer is in port of the child is treated as having been re- the taxpayer is a nonresident alien, or violation of local law. ceived from a taxpayer under the provisions ‘‘(B) by reason of an individual who would ‘‘(3) MULTIPLE SUPPORT AGREEMENTS.—For of paragraph (3). not be a dependent for the taxable year but purposes of paragraph (1), over one-half of ‘‘(D) EXCEPTION FOR CERTAIN PRE-1985 IN- for— the support of an individual for a calendar STRUMENTS.— ‘‘(i) subparagraph (I) of subsection (d)(1), or year shall be treated as received from the ‘‘(i) IN GENERAL.—A child of parents de- ‘‘(ii) paragraph (3) of subsection (d). taxpayer if— scribed in subparagraph (A) shall be treated ‘‘(c) CERTAIN MARRIED INDIVIDUALS LIVING ‘‘(A) no one person contributed over one- as having received over one-half such child’s APART.—For purposes of this part, an indi- half of such support, support during a calendar year from the non- vidual shall be treated as not married at the ‘‘(B) over one-half of such support was re- custodial parent if— close of the taxable year if such individual is ceived from persons each of whom, but for ‘‘(I) a qualified pre-1985 instrument be- so treated under the provisions of section the fact that such person did not contribute tween the parents applicable to the taxable 7703(b). over one-half of such support, would have year beginning in such calendar year pro- ‘‘(d) DEPENDENT DEFINED.— been entitled to claim such individual as a vides that the noncustodial parent shall be ‘‘(1) GENERAL DEFINITION.—For purposes of dependent for a taxable year beginning in entitled to any deduction allowable under this part, the term ‘dependent’ means any of such calendar year, section 2 for such child, and the following individuals over one-half of ‘‘(C) the taxpayer contributed over 10 per- ‘‘(II) the noncustodial parent provides at whose support, for the calendar year in cent of such support, and least $600 for the support of such child during which the taxable year of the taxpayer be- ‘‘(D) each person described in subparagraph such calendar year. gins, was received from the taxpayer (or is (B) (other than the taxpayer) who contrib- For purposes of this clause, amounts ex- treated under paragraph (3) or (5) as received uted over 10 percent of such support files a pended for the support of a child or children from the taxpayer): written declaration (in such manner and shall be treated as received from the non- ‘‘(A) A son or daughter of the taxpayer, or form as the Secretary may by regulations custodial parent to the extent that such par- a descendant of either. prescribe) that such person will not claim ent provided amounts for such support. ‘‘(B) A stepson or stepdaughter of the tax- such individual as a dependent for any tax- UALIFIED PRE-1985 INSTRUMENT.—For payer. able year beginning in such calendar year. ‘‘(ii) Q purposes of this subparagraph, the term ‘‘(C) A brother, sister, stepbrother, or step- ‘‘(4) SPECIAL SUPPORT TEST IN CASE OF STU- ‘qualified pre-1985 instrument’ means any de- sister of the taxpayer. DENTS.—For purposes of paragraph (1), in the ‘‘(D) The father or mother of the taxpayer, case of any individual who is— cree of divorce or separate maintenance or or an ancestor of either. ‘‘(A) a son, stepson, daughter, or step- written agreement— ‘‘(E) A stepfather or stepmother of the tax- daughter of the taxpayer (within the mean- ‘‘(I) which is executed before January 1, payer. ing of this subsection), and 1985, ‘‘(F) A son or daughter of a brother or sis- ‘‘(B) a student, ‘‘(II) which on such date contains the pro- ter of the taxpayer. vision described in clause (i)(I), and amounts received as scholarships for study ‘‘(G) A brother or sister of the father or ‘‘(III) which is not modified on or after at an educational organization described in mother of the taxpayer. such date in a modification which expressly section 3(d)(1)(B) shall not be taken into ac- ‘‘(H) A son-in-law, daughter-in-law, father- provides that this subparagraph shall not count in determining whether such indi- in-law, mother-in-law, brother-in-law, or sis- apply to such decree or agreement. vidual received more than one-half of such ter-in-law of the taxpayer. ‘‘(E) SPECIAL RULE FOR SUPPORT RECEIVED individual’s support from the taxpayer. ‘‘(I) An individual (other than an indi- FROM NEW SPOUSE OF PARENT.—For purposes ‘‘(5) SUPPORT TEST IN CASE OF CHILD OF DI- vidual who at any time during the taxable of this paragraph, in the case of the remar- VORCED PARENTS, ETC.— year was the spouse, determined without re- riage of a parent, support of a child received ‘‘(A) CUSTODIAL PARENT GETS EXEMPTION.— gard to section 7703, of the taxpayer) who, for from the parent’s spouse shall be treated as Except as otherwise provided in this para- the taxable year of the taxpayer, has as such received from the parent. graph, if— individual’s principal place of abode the ‘‘(i) a child receives over one-half of such ‘‘PART II—TAX ON BUSINESS ACTIVITIES home of the taxpayer and is a member of the child’s support during the calendar year ‘‘Sec. 11. Tax imposed on business activities. taxpayer’s household. from such child’s parents— ‘‘SEC. 11. TAX IMPOSED ON BUSINESS ACTIVITIES. ‘‘(2) RULES RELATING TO GENERAL DEFINI- ‘‘(I) who are divorced or legally separated ‘‘(a) TAX IMPOSED.—There is hereby im- TION.—For purposes of this section— under a decree of divorce or separate mainte- posed on every person engaged in a business ‘‘(A) BROTHER; SISTER.—The terms ‘broth- nance, activity located in the United States a tax er’ and ‘sister’ include a brother or sister by ‘‘(II) who are separated under a written equal to 20 percent of the business taxable the halfblood. separation agreement, or income of such person. ‘‘(B) CHILD.—In determining whether any ‘‘(III) who live apart at all times during ‘‘(b) LIABILITY FOR TAX.—The tax imposed of the relationships specified in paragraph (1) the last 6 months of the calendar year, and by this section shall be paid by the person or subparagraph (A) of this paragraph exists, ‘‘(ii) such child is in the custody of 1 or engaged in the business activity, whether a legally adopted child of an individual (and both of such child’s parents for more than such person is an individual, partnership, a child who is a member of an individual’s one-half of the calendar year, corporation, or otherwise. household, if placed with such individual by ‘‘(c) BUSINESS TAXABLE INCOME.— an authorized placement agency for legal such child shall be treated, for purposes of ‘‘(1) IN GENERAL.—For purposes of this sec- adoption by such individual), or a foster paragraph (1), as receiving over one-half of tion, the term ‘business taxable income’ child of an individual (if such child satisfies such child’s support during the calendar year means gross active income reduced by the the requirements of paragraph (1)(I) with re- from the parent having custody for a greater deductions specified in subsection (d). spect to such individual), shall be treated as portion of the calendar year (hereafter in ‘‘(2) GROSS ACTIVE INCOME.—For purposes of a child of such individual by blood. this paragraph referred to as the ‘custodial paragraph (1), the term ‘gross active income’ ‘‘(C) CITIZENSHIP.—The term ‘dependent’ parent’). means gross income other than investment does not include any individual who is not a ‘‘(B) EXCEPTION WHERE CUSTODIAL PARENT income. citizen or national of the United States un- RELEASES CLAIM TO EXEMPTION FOR THE ‘‘(d) DEDUCTIONS.— less such individual is a resident of the YEAR.—A child of parents described in sub- ‘‘(1) IN GENERAL.—The deductions specified United States or of a country contiguous to paragraph (A) shall be treated as having re- in this subsection are— the United States. The preceding sentence ceived over one-half of such child’s support ‘‘(A) the cost of business inputs for the shall not exclude from the definition of ‘de- during a calendar year from the noncustodial business activity, pendent’ any child of the taxpayer legally parent if— ‘‘(B) the compensation (including contribu- adopted by such taxpayer, if, for the taxable ‘‘(i) the custodial parent signs a written tions to qualified retirement plans but not year of the taxpayer, the child has as such declaration (in such manner and form as the including other fringe benefits) paid for em- child’s principal place of abode the home of Secretary may by regulations prescribe) that ployees performing services in such activity, the taxpayer and is a member of the tax- such custodial parent will not claim such and payer’s household, and child as a dependent for any taxable year be- ‘‘(C) the cost of personal and real property if the taxpayer is a citizen or national of the ginning in such calendar year, and used in such activity. United States. ‘‘(ii) the noncustodial parent attaches such ‘‘(2) BUSINESS INPUTS.— ‘‘(D) ALIMONY, ETC.—A payment to a wife written declaration to the noncustodial par- ‘‘(A) IN GENERAL.—For purposes of para- which is alimony or separate maintenance ent’s return for the taxable year beginning graph (1)(A), the term ‘cost of business in- shall not be treated as a payment by the during such calendar year. puts’ means— wife’s husband for the support of any depend- For purposes of this paragraph, the term ‘‘(i) the actual cost of goods, services, and ent. ‘noncustodial parent’ means the parent who materials, whether or not resold during the ‘‘(E) UNLAWFUL ARRANGEMENTS.—An indi- is not the custodial parent. taxable year, and vidual is not a member of the taxpayer’s ‘‘(C) EXCEPTION FOR MULTIPLE-SUPPORT ‘‘(ii) the actual cost, if reasonable, of trav- household if at any time during the taxable AGREEMENT.—This paragraph shall not apply el and entertainment expenses for business year of the taxpayer the relationship be- in any case where over one-half of the sup- purposes. S9612 CONGRESSIONAL RECORD — SENATE July 28, 1999

‘‘(B) PURCHASES OF GOODS AND SERVICES EX- wise allocable to activities described in sub- (G) Subchapter J (relating to estates, CLUDED.—Such term shall not include pur- clauses (I) and (IV) of clause (i). trusts, beneficiaries, and decedents). chases of goods and services provided to em- ‘‘(bb) IN-HOUSE EXPENDITURES.—For pur- (H) Subchapter L (relating to insurance ployees or owners. poses of provision (aa), the term ‘in-house companies). ‘‘(C) CERTAIN LOBBYING AND POLITICAL EX- expenditures’ means expenditures described (I) Subchapter M (relating to regulated in- PENDITURES EXCLUDED.— in subclauses (I) and (IV) of clause (i) other vestment companies and real estate invest- ‘‘(i) IN GENERAL.—Such term shall not in- than payments by the taxpayer to a person ment trusts). clude any amount paid or incurred in con- engaged in the trade or business of con- (J) Subchapter N (relating to tax based on nection with— ducting activities described in clause (i) for income from sources within or without the ‘‘(I) influencing legislation, the conduct of such activities on behalf of United States). ‘‘(II) participation in, or intervention in, the taxpayer, or dues or other similar (K) Subchapter O (relating to gain or loss any political campaign on behalf of (or in op- amounts paid or incurred by the taxpayer on disposition of property). position to) any candidate for public office, which are allocable to activities described in (L) Subchapter P (relating to capital gains ‘‘(III) any attempt to influence the general clause (i). and losses). public, or segments thereof, with respect to ‘‘(III) EXPENSES INCURRED IN CONNECTION (M) Subchapter Q (relating to readjust- elections, legislative matters, or referen- WITH LOBBYING AND POLITICAL ACTIVITIES.— ment of tax between years and special limi- dums, or Any amount paid or incurred for research tations). ‘‘(IV) any direct communication with a for, or preparation, planning, or coordination (N) Subchapter S (relating to tax treat- covered executive branch official in an at- of, any activity described in clause (i) shall ment of S corporations and their share- tempt to influence the official actions or po- be treated as paid or incurred in connection holders). sitions of such official. with such activity. (O) Subchapter T (relating to cooperatives ‘‘(ii) EXCEPTION FOR LOCAL LEGISLATION.— ‘‘(vi) COVERED EXECUTIVE BRANCH OFFI- and their patrons). In the case of any legislation of any local CIAL.—For purposes of this subparagraph, the (P) Subchapter U (relating to designation council or similar governing body— term ‘covered executive branch official’ and treatment of empowerment zones, enter- ‘‘(I) clause (i)(I) shall not apply, and means— prise communities, and rural development ‘‘(II) such term shall include all ordinary ‘‘(I) the President, investment areas). and necessary expenses (including, but not ‘‘(II) the Vice President, (Q) Subchapter V (relating to title 11 limited to, traveling expenses described in ‘‘(III) any officer or employee of the White cases). subparagraph (A)(iii) and the cost of pre- House Office of the Executive Office of the (R) Subchapter W (relating to District of paring testimony) paid or incurred during President, and the 2 most senior level offi- Columbia Enterprise Zone). the taxable year in carrying on any trade or cers of each of the other agencies in such Ex- (2) REDESIGNATIONS.—The following sub- business— ecutive Office, and chapters of chapter 1 of subtitle A and the ‘‘(aa) in direct connection with appear- ‘‘(IV) any individual serving in a position items relating to such subchapters in the ances before, submission of statements to, or in level I of the Executive Schedule under table of subchapters for such chapter 1 are sending communications to the committees, section 5312 of title 5, United States Code, redesignated: or individual members, of such council or any other individual designated by the Presi- (A) Subchapter E (relating to accounting body with respect to legislation or proposed dent as having Cabinet level status, and any periods and methods of accounting) as sub- legislation of direct interest to the taxpayer, immediate deputy of such an individual. chapter B. or ‘‘(vii) SPECIAL RULE FOR INDIAN TRIBAL GOV- (B) Subchapter F (relating to exempt orga- ‘‘(bb) in direct connection with commu- ERNMENTS.—For purposes of this subpara- nizations) as subchapter C. nication of information between the tax- graph, an Indian tribal government shall be (C) Subchapter K (relating to partners and payer and an organization of which the tax- treated in the same manner as a local coun- partnerships) as subchapter D. payer is a member with respect to any such cil or similar governing body. SEC. 3. REPEAL OF ESTATE AND GIFT TAXES. legislation or proposed legislation which is ‘‘(viii) CROSS REFERENCE.— Subtitle B (relating to estate, gift, and of direct interest to the taxpayer and to such ‘‘For reporting requirements and alter- generation-skipping taxes) and the item re- organization, and that portion of the dues so native taxes related to this subsection, see lating to such subtitle in the table of sub- paid or incurred with respect to any organi- section 6033(e). titles is repealed. zation of which the taxpayer is a member ‘‘(e) CARRYOVER OF EXCESS DEDUCTIONS.— SEC. 4. ADDITIONAL REPEALS. which is attributable to the expenses of the ‘‘(1) IN GENERAL.—If the aggregate deduc- Subtitles H (relating to financing of presi- activities carried on by such organization. tions for any taxable year exceed the gross dential election campaigns) and J (relating ‘‘(iii) APPLICATION TO DUES OF TAX-EXEMPT active income for such taxable year, the to coal industry health benefits) and the ORGANIZATIONS.—Such term shall include the amount of the deductions specified in sub- items relating to such subtitles in the table portion of dues or other similar amounts section (d) for the succeeding taxable year of subtitles are repealed. paid by the taxpayer to an organization (determined without regard to this sub- SEC. 5. EFFECTIVE DATES. which is exempt from tax under this subtitle section) shall be increased by the sum of— (a) IN GENERAL.—Except as provided in which the organization notifies the taxpayer ‘‘(A) such excess, plus subsection (b), the amendments made by this under section 6033(e)(1)(A)(ii) is allocable to ‘‘(B) the product of such excess and the 3- Act apply to taxable years beginning after expenditures to which clause (i) applies. month Treasury rate for the last month of December 31, 1999. ‘‘(iv) INFLUENCING LEGISLATION.—For pur- such taxable year. (b) REPEAL OF ESTATE AND GIFT TAXES.— poses of this subparagraph— ‘‘(2) 3-MONTH TREASURY RATE.—For pur- The repeal made by section 3 applies to es- ‘‘(I) IN GENERAL.—The term ‘influencing poses of paragraph (1), the 3-month Treasury tates of decedents dying, and transfers made, legislation’ means any attempt to influence rate is the rate determined by the Secretary after December 31, 1999. any legislation through communication with based on the average market yield (during (c) TECHNICAL AND CONFORMING CHANGES.— any member or employee of a legislative any 1-month period selected by the Sec- The Secretary of the Treasury or the Sec- body, or with any government official or em- retary and ending in the calendar month in retary’s delegate shall, as soon as prac- ployee who may participate in the formula- which the determination is made) on out- ticable but in any event not later than 90 tion of legislation. standing marketable obligations of the days after the date of enactment of this Act, ‘‘(II) LEGISLATION.—The term ‘legislation’ United States with remaining periods to ma- submit to the Committee on Ways and has the meaning given that term in section turity of 3 months or less.’’ Means of the House of Representatives and 4911(e)(2). (b) CONFORMING REPEALS AND REDESIGNA- the Committee on Finance of the Senate a ‘‘(v) OTHER SPECIAL RULES.— TIONS.— draft of any technical and conforming ‘‘(I) EXCEPTION FOR CERTAIN TAXPAYERS.— (1) REPEALS.—The following subchapters of changes in the Internal Revenue Code of 1986 In the case of any taxpayer engaged in the chapter 1 of subtitle A and the items relating which are necessary to reflect throughout trade or business of conducting activities de- to such subchapters in the table of sub- such Code the changes in the substantive scribed in clause (i), clause (i) shall not chapters for such chapter 1 are repealed: provisions of law made by this Act. apply to expenditures of the taxpayer in con- (A) Subchapter B (relating to computation ducting such activities directly on behalf of of taxable income). GRASSLEY AMENDMENTS NOS. another person (but shall apply to payments (B) Subchapter C (relating to corporate by such other person to the taxpayer for con- distributions and adjustments). 1387–1388 ducting such activities). (C) Subchapter D (relating to deferred (Ordered to be lie on the table.) ‘‘(II) DE MINIMIS EXCEPTION.— compensation, etc.). Mr. GRASSLEY submitted two ‘‘(aa) IN GENERAL.—Clause (i) shall not (D) Subchapter G (relating to corporations amendments intended to be proposed apply to any in-house expenditures for any used to avoid income tax on shareholders). by him to the bill, S. 1429, supra; as fol- taxable year if such expenditures do not ex- (E) Subchapter H (relating to banking in- ceed $2,000. In determining whether a tax- stitutions). lows: payer exceeds the $2,000 limit, there shall not (F) Subchapter I (relating to natural re- AMENDMENT NO. 1387 be taken into account overhead costs other- sources). On page 38, after line 24, add the following: July 28, 1999 CONGRESSIONAL RECORD — SENATE S9613 SEC. ll. DEEMED IRAS UNDER EMPLOYER (1) in subsection (a), by striking ‘‘2001 and (6) in subsection (f)(1)(C), by inserting PLANS. 2005 on or after September 1 of each year in- ‘‘, no later than 90 days prior to the date of (a) IN GENERAL.—Section 408 (relating to volved’’ and inserting ‘‘2001, 2005, and 2009 in the commencement of the National Sum- individual retirement accounts) is amended the month of September of each year in- mit,’’ after ‘‘comment’’ in paragraph (1)(C); by redesignating subsection (q) as subsection volved’’; (7) in subsection (g), by inserting ‘‘, in con- (r) and by inserting after subsection (p) the (2) in subsection (b), by adding at the end sultation with the congressional leaders following new subsection: the following new sentence: ‘‘To effectuate specified in subsection (e)(2),’’ after ‘‘re- ‘‘(q) DEEMED IRAS UNDER QUALIFIED EM- the purposes of this paragraph, the Secretary port’’; PLOYER PLANS.— may enter into a cooperative agreement, (8) in subsection (i)— ‘‘(1) GENERAL RULE.—If— pursuant to the Federal Grant and Coopera- (A) by striking ‘‘beginning on or after Oc- ‘‘(A) a qualified employer plan elects to tive Agreement Act of 1977 (31 U.S.C. 6301 et tober 1, 1997’’ in paragraph (1) and inserting allow employees to make voluntary em- seq.), with the American Savings Education ‘‘2001, 2005, and 2009’’; and ployee contributions to a separate account Council.’’; (B) by adding at the end the following new or annuity established under the plan, and (3) in subsection (e)(2)— paragraph: ‘‘(B) under the terms of the qualified em- (A) by striking ‘‘Committee on Labor and ‘‘(3) RECEPTION AND REPRESENTATION AU- ployer plan, such account or annuity meets Human Resources’’ in subparagraph (B) and THORITY.—The Secretary is hereby granted the applicable requirements of this section inserting ‘‘Committee on Health, Education, reception and representation authority lim- or section 408A for an individual retirement Labor, and Pensions’’; ited specifically to the events at the Na- account or annuity, (B) by striking subparagraph (D) and in- tional Summit. The Secretary shall use any then such account or annuity shall be treat- serting the following: private contributions received in connection ed for purposes of this title in the same man- ‘‘(D) the Chairman and Ranking Member of with the National Summit prior to using ner as an individual retirement plan (and the Subcommittee on Labor, Health and funds appropriated for purposes of the Na- contributions to such account or annuity as Human Services, and Education of the Com- tional Summit pursuant to this paragraph.’’; contributions to an individual retirement mittee on Appropriations of the House of and plan). For purposes of subparagraph (B), the Representatives and the Chairman and (9) in subsection (k)— requirements of subsection (a)(5) shall not Ranking Member of the Subcommittee on (A) by striking ‘‘shall enter into a contract apply. Labor, Health and Human Services, and Edu- on a sole-source basis’’ and inserting ‘‘may ‘‘(2) SPECIAL RULES FOR QUALIFIED EM- cation of the Committee on Appropriations enter into a contract on a sole-source basis’’; PLOYER PLANS.—For purposes of this title— of the Senate;’’; and ‘‘(A) a qualified employer plan shall not (C) by redesignating subparagraph (G) as (B) by striking ‘‘fiscal year 1998’’ and in- fail to meet any requirement of this title subparagraph (J); and serting ‘‘fiscal years 2001, 2005, and 2009’’. solely by reason of establishing and main- (D) by inserting after subparagraph (F) the f taining a program described in paragraph (1), following new subparagraphs: and ‘‘(G) the Chairman and Ranking Member of the Committee on Finance of the Senate; DEPARTMENT OF THE INTERIOR ‘‘(B) any account or annuity described in AND RELATED AGENCIES APPRO- paragraph (1), and any contribution to the ‘‘(H) the Chairman and Ranking Member of account or annuity, shall not be subject to the Committee on Ways and Means of the PRIATIONS ACT, 2000 any requirement of this title applicable to a House of Representatives; qualified employer plan or taken into ac- ‘‘(I) the Chairman and Ranking Member of count in applying any such requirement to the Subcommittee on Employer-Employee THOMAS (AND ENZI) AMENDMENT any other contributions under the plan. Relations of the Committee on Education NO. 1389 and the Workforce of the House of Rep- ‘‘(3) DEFINITIONS.—For purposes of this Mr. THOMAS (for himself and Mr. subsection— resentatives; and’’; NZI ‘‘(A) QUALIFIED EMPLOYER PLAN.—The term (4) in subsection (e)(3)(A)— E ) submitted an amendment in- ‘qualified employer plan’ has the meaning (A) by striking ‘‘There shall be no more tended to be proposed by them to the given such term by section 72(p)(4). than 200 additional participants.’’ and insert- bill, H.R. 2466, supra; as follows: ing ‘‘The participants in the National Sum- ‘‘(B) VOLUNTARY EMPLOYEE CONTRIBUTION.— On page 5, line 13, strike the number mit shall also include additional partici- The term ‘voluntary employee contribution’ ‘‘130,000,000’’ and insert in lieu thereof the pants appointed under this subparagraph.’’; means any contribution (other than a man- number ‘‘140,000,000’’; (B) by striking ‘‘one-half shall be ap- datory contribution within the meaning of On page 5, line 22, strike the number pointed by the President,’’ in clause (i) and section 411(c)(2)(C))— ‘‘17,400,000’’ and insert in lieu thereof ‘‘(i) which is made by an individual as an inserting ‘‘not more than 100 participants shall be appointed under this clause by the ‘‘12,400,000’’; employee under a qualified employer plan President,’’, and by striking ‘‘and’’ at the On page 13, line 8, strike the number which allows employees to elect to make end of clause (i); ‘‘55,244,000’’ and insert in lieu thereof contributions described in paragraph (1), and (C) by striking ‘‘one-half shall be appointed ‘‘50,244,000’’. ‘‘(ii) with respect to which the individual by the elected leaders of Congress’’ in clause f has designated the contribution as a con- (ii) and inserting ‘‘not more than 100 partici- tribution to which this subsection applies.’’ pants shall be appointed under this clause by TAXPAYER REFUND ACT OF 1999 (b) AMENDMENT OF ERISA.— the elected leaders of Congress’’, and by (1) IN GENERAL.—Section 4 of the Employee striking the period at the end of clause (ii) Retirement Income Security Act of 1974 (29 and inserting ‘‘; and’’; and U.S.C. 1003) is amended by adding at the end ABRAHAM (AND OTHERS) (D) by adding at the end the following new the following new subsection: AMENDMENT NO. 1390 clause: ‘‘(c) If a pension plan allows an employee (Ordered to lie on the table.) to elect to make voluntary employee con- ‘‘(iii) The President, in consultation with tributions to accounts and annuities as pro- the elected leaders of Congress referred to in Mr. ABRAHAM (for himself and Mr. vided in section 408(q) of the Internal Rev- subsection (a), may appoint under this clause HATCH, Mr. SHELBY, Mr. DEWINE, Mr. enue Code of 1986, such accounts and annu- additional participants to the National Sum- ROBB, and Mr. SESSIONS) submitted an ities (and contributions thereto) shall not be mit. The number of such additional partici- amendment intended to be proposed by treated as part of such plan (or as a separate pants appointed under this clause may not them to the bill, S. 1429, supra; as fol- pension plan) for purposes of any provision of exceed the lesser of 3 percent of the total lows: this title other than section 403(c), 404, or 405 number of all additional participants ap- At the appropriate place in title XI, insert (relating to exclusive benefit, and fiduciary pointed under this paragraph, or 10. Such ad- the following: and co-fiduciary responsibilities).’’ ditional participants shall be appointed from (2) CONFORMING AMENDMENT.—Section 4(a) persons nominated by the organization re- SECTION 11. PLACED-IN-SERVICE DEFINITION. of such Act (29 U.S.C. 1003(a)) is amended by ferred to in subsection (b)(2) which is made (a) Section 1205 is amended by redesig- inserting ‘‘or (c)’’ after ‘‘subsection (b)’’. up of private sector businesses and associa- nating subsection (d) as subsection (e) and (c) EFFECTIVE DATE.—The amendments tions partnered with Government entities to inserting the following: made by this section shall apply to plan promote long term financial security in re- (d) Section 29(g) is amended by adding new years beginning after December 31, 1999. tirement through savings and with which the paragraph (3): Secretary is required thereunder to consult ‘‘(3) COAL BASED SYNTHETIC FUEL FACILI- AMENDMENT NO. 1388 and cooperate and shall not be Federal, TIES.—For purposes of subparagraph (A) of At the end of title XIV, insert: State, or local government employees.’’; paragraph (1) a facility producing a qualified SEC. ll. TECHNICAL CORRECTIONS TO SAVER (5) in subsection (e)(3)(B), by striking fuel described in subparagraph (C) of sub- ACT. ‘‘January 31, 1998’’ in subparagraph (B) and section (c)(1) shall be treated as placed in Section 517 of the Employee Retirement inserting ‘‘May 1, 2001, May 1, 2005, and May service before July 1, 1998, if such facility Income Security Act of 1974 (29 U.S.C. 1147) is 1, 2009, for each of the subsequent summits, produced such qualified fuel on or before amended— respectively’’; such date.’’ S9614 CONGRESSIONAL RECORD — SENATE July 28, 1999 BINGAMAN AMENDMENT NO. 1391 ‘‘(2) COMBINED HEAT AND POWER PROP- ergy capacity of more than 67 horsepower or ERTY.—The energy percentage is 8 percent in an equivalent combination of electrical and (Ordered to lie on the table.) the case of combined heat and power prop- mechanical energy capacities, Mr. BINGAMAN submitted an erty. ‘‘(iii) which produces— amendment intended to be proposed by ‘‘(3) PERIOD FOR WHICH CREDIT IS ALLOWED ‘‘(I) at least 20 percent of its total useful him to the bill, S. 1429, supra; as fol- FOR COMBINED HEAT AND POWER PROPERTY.— energy in the form of thermal energy, and lows: In the case of combined heat and power prop- ‘‘(II) at least 20 percent of its total energy in the form of electrical or mechanical power At the end of the bill add the following: erty, the credit under subsection (a) shall be allowed only for the period beginning on (or a combination thereof), and DIVISION II—ENERGY SECURITY TAX January 1, 2000 and ending on December 31, ‘‘(iv) the energy efficiency percentage of INCENTIVES 2002. which exceeds 60 percent (70 percent in the SECTION 1. DEPRECIATION TREATMENT OF DIS- ‘‘(4) COORDINATION WITH REHABILITATION.— case of a system with an electrical capacity TRIBUTED POWER PROPERTY. The energy percentage does not apply to in excess of 67,000 horsepower (or a combina- (a) IN GENERAL.—Section 168(e)(3)(E) of the that portion of the basis of any property tion thereof)). Internal Revenue Code (classifying certain which is attributable to qualified rehabilita- ‘‘(B) SPECIAL RULES.— property as 15-year property) is amended by tion expenditures. ‘‘(i) ENERGY EFFICIENCY PERCENTAGE.—For striking ‘and’ at the end of clause (ii), strik- ‘‘(5) TRANSITION RULES.—Rules similar to purpose of subparagraph (A)(iv), the energy ing the period at the end of clause (iii) and the rule of section 48(m) (as in effect on the efficiency percentage of a system is the inserting, ‘, and’, and by adding the fol- day before the date of the enactment of the fraction— lowing new clause: Revenue reconciliation Act of 1990) shall ‘‘(I) the numerator of which is the total ‘‘(iv) any distributed power property.’’ apply for purposes of this subsection useful electrical, thermal, and mechanical (b) CONFORMING AMENDMENTS.—(1) Section ‘‘(c) ENERGY PROPERTY DEFINED.— power produced by the system at normal op- 168(i) is amended by adding at the end the ‘‘(1) IN GENERAL.—For purposes of this sub- erating rates, and following new paragraph: part, the term ‘energy property’ means any ‘‘(II) the denominator of which is the lower ‘‘(15) DISTRIBUTED POWER PROPERTY.—the property— heating value of the primary fuel source for term ‘distributed power property’ means ‘‘(A) which is— the system. property— ‘‘(i) solar energy property, ‘‘(ii) DETERMINATIONS MADE ON BTU BASIS.— ‘‘(A) which is used in the generation of ‘‘(ii) geothermal energy property, or The energy efficiency percentage and the electricity for primary use— ‘‘(iii) combined heat and power system percentages under subparagraph (A)(iii) shall ‘‘(i) in nonresidential real or residential property, be determined on a Btu basis. rental property used in the taxpayer’s trade ‘‘(B)(i) the construction, reconstruction, or ‘‘(iii) INPUT AND OUTPUT PROPERTY NOT IN- or business, or erection of which is completed by the tax- CLUDED.—The term ‘combined heat and ‘‘(ii) in the taxpayer’s industrial manufac- payer, or power system property’ does not include turing process or plant activity, with a rated ‘‘(ii) which is acquired by the taxpayer if property used to transport the energy source total capacity in excess of 500 kilowatts, the original use of such property commences to the facility or to distribute energy pro- ‘‘(B) which also may produce usable ther- with the taxpayer, duced by the facility. mal energy or mechanical power for use in a ‘‘(C) with respect to which depreciation (or ‘‘(iv) ACCOUNTING RULE FOR PUBLIC UTILITY heating or cooling application, as long as at amortization in lieu of depreciation) is al- PROPERTY.—In the case that combined heat least 40 percent of the total useful energy lowable, and and power system property is public utility produced consists of— ‘‘(D) which meets— property (as defined in section 46(f)(5) as in ‘‘(i) with respect to assets described in sub- ‘‘(i) the performance and quality standards effect on the day before the date of the en- paragraph (A)(i), electrical power (whether (if any), and the certification requirements actment of the Revenue Reconciliation Act sold or used by the taxpayer), or (if any), which have been prescribed by the of 1990), the taxpayer may claim the credit ‘‘(ii) with respect to assets described in Secretary by regulations (after consultation under subsection (a)(1) only, if with resect to subparagraph (A)(ii), electrical power with the Secretary of Energy or the EPA Ad- such property, the taxpayer uses a normal- (whether sold or used by the taxpayer) and ministrator, as appropriate), and ization method of accounting. thermal or mechanical energy used in the ‘‘(ii) are in effect at the time the property ‘‘(v) DEPRECIATION.—No credit shall be al- taxpayer’s industrial manufacturing process is placed in service. lowed for any combined heat and power sys- or plant activity, ‘‘(2) EXCEPTION.—Such term shall not in- tem property unless the taxpayer elects to ‘‘(C) which is not used to transport pri- clude any property which is public utility treat such property for purposes of section mary fuel to the generating facility or to property (as defined in section 46(f)(5) as in 168 as having a class life of not less than 22 distribute energy within or outside of the fa- effect on the day before the date of the en- years. cility, and actment of the Revenue Reconciliation Act ‘‘(e) SPECIAL RULES.—For purposes of this ‘‘(D) where it is reasonably expected that of 1990). The preceding sentence shall not section— not more than 50 percent of the produced apply to combined heat and power system ‘‘(1) Special rule for property financed by electricity will be sold to, or used by, unre- property. subsidized energy financing or industrial de- lated persons. ‘‘(d) DEFINITIONS RELATING TO TYPES OF velopment bonds— ‘‘(A) REDUCTION OF BASIS.—For purposes of For purposes of subparagraph (B), energy ENERGY PROPERTY.—For purposes of this applying the energy percentage to any prop- output is determined on the basis of expected section— ‘‘(1) SOLAR ENERGY PROPERTY.—The term erty, if such property is financed in whole or annual output levels, measured in British ‘solar energy property’ means equipment in part by— thermal units (Btu), using standard conver- which uses solar energy— ‘‘(i) subsidized energy financing, or sion factors established by the Secretary.’’. ‘‘(A) to generate electricity, ‘‘(ii) the proceeds of a private activity bond (2) Subparagraph (B) of section 168(g)(3) is ‘‘(B) to heat or cool (or provide hot water (within the meaning of section 141) the inter- amended by inserting after the item relating for use in) a structure, or est on which is exempt from tax under sec- to subparagraph (E)(iii) in the table con- ‘‘(C) to provide solar process heat. tion 103, the amount taken into account as tained therein the following new line: ‘‘(2) GEOTHERMAL ENERGY PROPERTY.—The the basis of such property shall not exceed ‘‘(E)(iv) 22’’. term ‘geothermal energy property’ means the amount which (but for this subparagraph (c) EFFECTIVE DATE.—The amendments equipment used to produce, distribute, or use (B). made by this section are effective for prop- energy derived from a geothermal deposit ‘‘(B) DETERMINATION OF FRACTION.—For erty placed in service on or after the date of (within the meaning of section 613(e)(2)), but purposes of subparagraph (A), the fraction enactment. only, in the case of electricity generated by determined under this subparagraph is 1 re- SEC. 2. TAX CREDIT FOR COMBINED HEAT AND geothermal power, up to (but not including) duced by a fraction— POWER SYSTEM PROPERTY. the electrical transmission stage. ‘‘(ii) the numerator of which is that por- (a) IN GENERAL.—Subpart E of part IV of ‘‘(3) COMBINED HEAT AND POWER SYSTEM tion of the basis of the property which is al- subchapter A of chapter 1 of the Internal PROPERTY— locable to such financing or proceeds, and Revenue Code of 1986 is amended by inserting ‘‘(A) IN GENERAL.—The term ‘combined ‘‘(ii) the denominator of which is the basis after section 48 the following new section: heat and power system property’ means of the property. ‘‘SEC. 48A. ENERGY CREDIT property comprising a system— ‘‘(C) SUBSIDIZED ENERGY FINANCING.—For ‘‘(a) IN GENERAL.—For purposes of section ‘‘(i) which uses the same energy source for purposes of subparagraph (A), the term ‘sub- 46, the energy credit for any taxable year is the simultaneous or sequential generation of sidized energy financing’ means financing the amount equal to the energy percentage electrical power, mechanical shaft power, or provided under a Federal, State, or local pro- of the basis of each energy property placed in both, in combination with the generation of gram a principal purpose of which is to pro- service during such taxable year. steam or other forms of useful thermal en- vide subsidized financing for projects de- ‘‘(b) ENERGY PERCENTAGE.— ergy (including heating and cooling applica- signed to conserve or produce energy. ‘‘(1) IN GENERAL.—Except as otherwise pro- tions), ‘‘(2) CERTAIN PROGRESS EXPENDITURES RULE vided in this subsection, the energy percent- ‘‘(ii) which has an electrical capacity of MADE APPLICABLE.—Rules similar to the rules age is 10 percent. more than 50 kilowatts or a mechanical en- of subsections (c)(4) and(d) section 46 (as in July 28, 1999 CONGRESSIONAL RECORD — SENATE S9615 effect on the day before the date of the en- SPECTER AMENDMENT NO. 1392 subsections (c)(4) and (d) of section 46 (as in actment of the Revenue Reconciliation Act (Order to lie on the table.) effect on the day before the date of the en- of 1990) shall apply for purposes of this sec- actment of the Revenue Reconciliation Act tion.’. Mr. SPECTER submitted an amend- of 1990) shall apply for purposes of this sub- ‘‘(b) Conforming Amendments— ment intended to be proposed by him section.’’ ‘‘(1) Section 48 of such Code is amended to to the bill, S. 1429, supra; as follows: (c) TECHNICAL AMENDMENTS.— read as follows: At the end of title XI, insert the following: (1) Subparagraph (C) of section 49(a)(1) is ‘‘SEC. 48. REFORESTATION CREDIT. SEC. ll. BIOTECHNOLOGY INVESTMENT TAX amended by striking ‘‘and’’ at the end of ‘‘(a) IN GENERAL.—For purposes of section CREDIT. clause (ii), by striking the period at the end 46, the reforestation a credit for any taxable (a) ALLOWANCE OF CREDIT.—Section 46(a) of clause (iii) and inserting ‘‘, and’’, and by year is 10 percent of the portion of the amor- (relating to amount of investment credit) is adding at the end the following new clause: tizable amended by striking ‘‘and’’ at the end of ‘‘(iv) the basis of any new biotechnology basis of any qualified timber property which paragraph (2), by striking the period at the property and the cost of any used bio- was acquired during such taxable year and end of paragraph (3) and inserting ‘‘, and’’, technology property.’’ and by adding at the end the following new which is taken into account under section (2) Subparagraph (E) of section 50(a)(2) is paragraph: 194 (after the application of section 194(b)(1)). amended by striking ‘‘section 48(a)(5)(A)’’ ‘‘(4) the biotechnology investment credit.’’ ‘‘(b) DEFINITIONS.—For purposes of this and inserting ‘‘section 48 (a)(5) or (c)(5)’’. (b) AMOUNT OF CREDIT.—Section 48 is subpart the terms ‘amortizable basis’ and amended by adding at the end the following (3) Paragraph (5) of section 50(a) is amend- ‘qualified timber property’ have the respec- new subsection: ed by adding at the end the following new tive meanings given to such terms by section ‘‘(c) BIOTECHNOLOGY INVESTMENT CREDIT.— subparagraph: 194.’’. ‘‘(1) IN GENERAL.—For purposes of section ‘‘(D) SPECIAL RULES FOR CERTAIN PROP- (2) Subsection (d) section 39 of such Code is 46, the biotechnology investment credit for ERTY.—In the case of any biotechnology amended by adding at the end the following any taxable year is an amount equal to 10 property which is 3-year property (within the new paragraph: percent of the qualified investment for such meaning of section 168(e))— O CARRYBACK OF ENERGY CREDIT BE- ‘‘(9) N taxable year. ‘‘(i) the percentage set forth in clause (ii) FORE EFFECTIVE DATE.—No portion of the un- ‘‘(2) QUALIFIED INVESTMENT.— of the table contained in paragraph (1)(B) used business credit for any taxable year ‘‘(A) IN GENERAL.—For purposes of para- shall be 66 percent, which is attributable to the energy credit de- graph (1), the qualified investment for any ‘‘(ii) the percentage set forth in clause (iii) termined under section 48A, except for the taxable year is the aggregate of— of such table shall be 33 percent, and credit determined with respect to solar en- ‘‘(i) the applicable percentage of the basis ‘‘(iii) clauses (iv) and (v) of such table shall ergy property and geothermal energy prop- of each new biotechnology property placed in not apply.’’ erty, may be carried back to a taxable year service by the taxpayer during such taxable (4)(A) The section heading for section 48 is ending before the date of the enactment of year, plus amended to read as follows: section 48A.’’. ‘‘(ii) the applicable percentage of the cost (3) Paragraph (3) of section 50(c) of such ‘‘SEC. 48. OTHER CREDITS.’’ of each used biotechnology property placed (B) The table of sections for subpart E of Code is amended by adding at the end the in service by the taxpayer during such tax- following flush sentence: part IV of subchapter A of chapter 1 of such able year. Code is amended by striking the item relat- ‘‘In the case of the energy credit, the pre- ‘‘(B) APPLICABLE PERCENTAGE.—For pur- ing to section 48 and inserting the following: ceding sentence shall apply only to so much poses of subparagraph (A), the applicable of such credit as relates to solar energy prop- percentage for any property shall be deter- ‘‘Sec. 48. Other Credits.’’ erty and geothermal property (as such terms mined under paragraphs (2) and (7) of section (d) EFFECTIVE DATE.—The amendments as defined in section 48A(e)).’’. 46(c) (as in effect on the day before the date made by this section shall apply to property (4) Subclause (III) of section 29(b)(3)(A)(i) of the enactment of the Revenue Reconcili- placed in service after December 31, 1999. of such Code is amended by striking ‘‘section ation Act of 1990). 48(a)(4)(C)’’ and inserting ‘‘section ‘‘(C) CERTAIN RULES MADE APPLICABLE.— 48A(g)(1)(C)’’. The provisions of subsections (b) and (c) of GREGG AMENDMENTS NOS. 1393– (5) Subparagraph (E) of section 50(a)(2) of section 48 (as in effect on the day before the 1394 such Code is amended by striking ‘‘section date of the enactment of the Revenue Rec- 48(a)(5)’’ and inserting ‘‘section 48A(g)(2)’’. onciliation Act of 1990) shall apply for pur- (Ordered to lie on the table.) (6) Subparagraph (B) of section 168(e)(3) of poses of this paragraph. such Code is amended— Mr. GREGG submitted two amend- ‘‘(3) BIOTECHNOLOGY PROPERTY.—For pur- (A) in clause (vi)(I) by striking ‘‘section ments intended to be proposed by him poses of this subsection— 48(a)(3)’’ and inserting ‘‘paragraphs (1) and to the bill, S. 1429, supra; as follows: ‘‘(A) IN GENERAL.—The term ‘biotechnology (2) of section 48A(d)’’, and property’ means any property— AMENDMENT NO. 1393 (B) in the last sentence by striking ‘‘sec- ‘‘(i) which is used in connection with appli- tion 48(a)(3)’’ and inserting ‘‘section On page 235, strike lines 15 through 19, and cable biotechnology research, and 48A(c)(2)’’. insert: (7) Subparagraph (E) of section 168(e)(3) of ‘‘(ii) with respect to which depreciation (or (1) IN GENERAL.—Section 2031(c)(8)(A) (de- such Code, as amended by section 803(a), is amortization in lieu of depreciation) is al- fining land subject to a qualified conserva- further amended by striking ‘‘and’’ at the lowable. tion easement) is amended by striking clause end of clause (iii), by striking the period at ‘‘(B) APPLICABLE BIOTECHNOLOGY RE- (i) and by redesignating clauses (ii) and (iii) the end of clause (iv) and inserting ‘‘, and’’, SEARCH.—The term ‘applicable biotechnology as clauses (i) and (ii), respectively. and by inserting after clause (iv) the fol- research’ means the use of applicable tech- nologies to benefit society by improving lowing new clause: AMENDMENT NO. 1394 ‘‘(v) any combined heat and power system human healthcare through— ‘‘(i) producing or modifying products, and On page 235, strike lines 15 through 19, and property (as defined in section 48A(d)(4)) for insert: which a credit is followed under section 48A developing microorganisms, for specific uses, (1) IN GENERAL.—Clause (i) of section and which, but for this clause, would have a ‘‘(ii) identifying targets for small molecule pharmaceutical development, and 2031(c)(8)(A) (defining land subject to a con- recovery period of less than 15 years.’’. servation easement) is amended— (8) The table contained in subparagraph (B) ‘‘(iii) transforming biological systems into (A) by striking ‘‘25 miles’’ both places it of section 168(g)(3) of such Code, as amended useful processes and products. appears and inserting ‘‘50 miles’’, and by section 803(b)(2), is further amended by ‘‘(C) APPLICABLE TECHNOLOGIES.—The term (B) striking ‘‘10 miles’’ and inserting ‘‘25 adding at end the following ‘‘(E)(v) 11.’’ ‘applicable technologies’ means recombinant miles’’. (c) CLERICAL AMENDMENT.—The table of DNA techniques, biochemistry, molecular sections for subpart E of part IV of sub- and cellular biology, genetics and genetic en- chapter A of chapter 1 of such Code is gineering, biological cell fusion techniques, amended by striking the item relating to and other bioprocesses which use living orga- SESSIONS (AND OTHERS) section 48 and inserting the following new nisms, or parts of such organisms, for the AMENDMENT NO. 1395 items: purposes described in subparagraph (B). ‘‘Sec. 48. Reforestation credit. ‘‘(4) COORDINATION WITH OTHER CREDITS.— (Ordered to lie on the table.) ‘‘Sec. 48A Energy credit.’’. No credit shall be determined under this sub- Mr. SESSIONS (for himself, Mr. (d) EFFECTIVE DATE.—The amendments section for any amount taken into account COVERDELL, and Mr. CRAIG) submitted made by this section shall apply to periods in determining the amount of any other an amendment intended to be proposed after December 31, 1999, under rules similar credit allowable under this chapter. A tax- by him to the bill, S. 1429, supra; as fol- to the rules of section 48(m) of the Internal payer may elect which credit under this Revenue Code of 1986 (as in effect on the day chapter shall apply to any amount. lows: before the date of the enactment of the Rev- ‘‘(5) CERTAIN PROGRESS EXPENDITURE RULES On page 371, between lines 16 and 17, insert enue Reconciliation Act of 1990). MADE APPLICABLE.—Rules similar to rules of the following: S9616 CONGRESSIONAL RECORD — SENATE July 28, 1999

SEC. ll. CAPITAL GAIN TREATMENT UNDER (2) COMPUTER.—The term ‘‘computer’’ with a formula specified in regulations SECTION 631(b) TO APPLY WHETHER means a computer or peripheral equipment issued in accordance with subsection (b). The OR NOT OWNER RETAINS ECONOMIC (as defined by section 168(i)(2)(B)) of such formula shall provide that the Secretary INTEREST. Code. shall allot to each State an amount that (a) IN GENERAL.—Subsection (b) of section (3) COMPUTER SOFTWARE.—The term ‘‘com- bears the same relationship to the amounts 631 (relating to disposal of timber with a re- puter software’’ has the meaning given to appropriated under section ll02(a) for a fis- tained economic interest) is amended— such term by section 167(f) of such Code. cal year (other than funds reserved under (1) by inserting ‘‘AND OUTRIGHT SALES OF (4) UNRECOVERED BASIS.—The term ‘‘unre- section ll03(b)) as the number of covered TIMBER’’ after ‘‘ECONOMIC INTEREST’’ in the covered basis’’ means the adjusted basis of children in the State bears to the number of subsection heading, and the business Y2K asset determined as of the covered children in all such States. (2) by striking ‘‘such owner retains an eco- close of the last taxable year beginning be- (b) FORMULA.—Not later than 90 days after nomic interest in such timber’’ and inserting fore January 1, 1999. the date of enactment of this Act, the Sec- ‘‘such owner either retains an economic in- (d) SPECIAL RULES.— retary shall issue regulations specifying the terest in such timber or makes an outright (1) IN GENERAL.—Rules similar to the rules formula referred to in subsection (a). sale of such timber’’. of subsections (c) and (d) (other than para- (c) LIMIT ON STATE ADMINISTRATIVE EX- (b) EFFECTIVE DATE.—The amendments graph (1) thereof) of section 179 of such Code PENDITURES.—The State may reserve not made by this section shall apply to sales shall apply for purposes of this section. more than 1 percent of the funds made avail- after the date of the enactment of this Act. (2) TREATMENT AS DEDUCTION UNDER SEC- able through the State allotment to pay for TION 179.—For purposes of the Internal Rev- the costs of administering this title. LEAHY AMENDMENT NO. 1396 enue Code of 1986, the deduction allowed (d) DEFINITION.—In this section, the term under this section shall be treated in the ‘‘covered child’’ means a child who is en- (Ordered to lie on the table.) same manner as a deduction allowed under rolled in a public school (including a charter Mr. LEAHY submitted an amend- section 179 of such Code. school) that is an elementary school or sec- ment intended to be proposed by him (3) ORDERING RULE.—For purposes of sec- ondary school. to the bill, S. 1429, supra; as follows: tion 179 of such Code, subsection (b)(3)(C) of SEC. ll05. ELIGIBLE SCHOOLS. At the end of title XI, insert the following: such section shall be applied without regard (a) ELIGIBILITY.— to the deduction allowed under this section. SEC. ll. DEDUCTION FOR COSTS OF MAKING (1) IN GENERAL.—Schools identified by a COMPUTERS AND COMPUTER SOFT- State under paragraph (2) shall be considered WARE YEAR 2000 COMPLIANT. McCAIN AMENDMENT NO. 1397 to be eligible schools under this title. (2) DETERMINATION.—Not later than 180 (a) IN GENERAL.— Mr. MCCAIN proposed an amendment to days after the date the Secretary issues reg- (1) PROPERTY PLACED IN SERVICE IN 1999.—A the bill, S. 1429, supra; as follows: taxpayer may elect to treat the cost of a ulations under section ll04(b), each State At the appropriate place, add the fol- business Y2K asset placed in service during shall identify the public elementary schools lowing: the taxpayer’s first taxable year beginning and secondary schools in the State that are ll in 1999 as an expense which is not chargeable TITLE —EDUCATIONAL OPPORTUNI- at or below the 25th percentile for academic to capital account. The cost so treated shall TIES FOR DISADVANTAGED CHILDREN performance of schools in the State. be allowed as a deduction from gross income Subtitle A—Educational Opportunities (b) PERFORMANCE.—The State shall deter- for purposes of the Internal Revenue Code of SEC. ll01. PURPOSES. mine the academic performance of a school 1986. The purposes of this title are— under this section based on such criteria as (2) PROPERTY PLACED IN SERVICE IN 1997 OR (1) to assist States to— the State may consider to be appropriate. 1998.—A taxpayer may elect to deduct from (A) give children from low-income families SEC. ll06. SCHOLARSHIPS. gross income an amount equal to the unre- the same choices among all elementary and (a) IN GENERAL.— covered basis of a business Y2K asset placed secondary schools and other academic pro- (1) SCHOLARSHIP AWARDS.—With funds in service during the 2 taxable years pre- grams as children from wealthier families al- awarded under this title, each State awarded ceding the first taxable year beginning in ready have; a grant under this title shall provide scholar- 1999 and which is otherwise subject to depre- (B) improve schools and other academic ships to the parents of eligible children, in ciation under such Code. programs by giving parents in low-income accordance with subsections (b) and (c). The (b) LIMITATIONS.— families increased consumer power to choose State shall ensure that the scholarships may (1) IN GENERAL.—The aggregate amount al- the schools and programs that the parents be redeemed for elementary or secondary lowed as a deduction under subsection (a) determine best fit the needs of their chil- education for the children at any of a broad shall not exceed $40,000. dren; and variety of public and private schools, includ- (2) APPLICATION OF BUSINESS LIMITATIONS (C) more fully engage parents in their chil- ing religious schools, in the State. OF SECTION 179.—Rules similar to the rules of dren’s schooling; and (2) SCHOLARSHIP AMOUNT.—The amount of paragraphs (2), (3), and (4) of section 179(b) of (2) to demonstrate, through a 3-year na- each scholarship shall be $2000 per year. such Code shall apply for purposes of this tional grant program, the effects of a vouch- (3) TAX EXEMPTION.—Scholarships awarded section. For purposes of the preceding sen- er program that gives parents in low-income under this title shall not be considered in- tence, the cost of property to which the limi- families— come of the parents for Federal income tax tation in paragraph (2) of such section 179(b) (A) choice among public, private, and reli- purposes or for determining eligibility for applies shall be the sum of— gious schools for their children; and any other Federal program. (A) the amounts elected under subsection (B) access to the same academic options as (b) ELIGIBLE CHILDREN.—To be eligible to (a)(1) with respect to property placed in serv- parents in wealthy families have for their receive a scholarship under this title, a child ice during the taxpayer’s first taxable year children. shall be— beginning in 1999, and SEC. ll02. AUTHORIZATION OF APPROPRIA- (1) a child who is enrolled in a public ele- (B) the amounts elected under subsection TIONS. mentary school or secondary school that is (a)(2) with respect to the unrecovered basis (a) IN GENERAL.—There is authorized to be an eligible school; and of business Y2K assets placed in service dur- appropriated to carry out this title (other (2) a member of a family with a family in- ing the 2 taxable years preceding the first than section ll10) $1,800,000,000 for each of come that is not more than 200 percent of the taxable year beginning in 1999. fiscal years 2001 through 2003. poverty line. (c) DEFINITIONS.—For purposes of this (b) EVALUATION.—There is authorized to be (c) AWARD RULES.— section— appropriated to carry out section ll10 (1) PRIORITY.—In providing scholarships (1) BUSINESS Y2K ASSET.—The term ‘‘busi- $17,000,000 for fiscal years 2001 through 2004. under this title, the State shall provide ness Y2K asset’’ means an asset acquired by SEC. ll03. PROGRAM AUTHORITY. scholarships for eligible children through a purchase for use in the active conduct of a (a) IN GENERAL.—The Secretary shall make lottery system administered for all eligible trade or business which is— grants to States, from allotments made schools in the State by the State educational (A) any computer acquired to replace a under section ll04 to enable the States to agency. computer where such replacement is nec- carry out educational choice programs that (2) CONTINUING ELIGIBILITY.—Each State re- essary because of the year 2000 computer provide scholarships, in accordance with this ceiving a grant under this title to carry out conversion problem, and title. an educational choice program shall provide (B) any of the following items which are of (b) LIMIT ON FEDERAL ADMINISTRATIVE EX- a scholarship in each year of the program to a character subject to the allowance for de- PENDITURES.—The Secretary may reserve not each child who received a scholarship during preciation under such Code: more than $1,000,000 of the amounts appro- the previous year of the program, unless— (i) the modification of computer software priated under section ll02(a) for a fiscal (A) the child no longer resides in the area to address the year 2000 computer conversion year to pay for the costs of administering served by an eligible school; problem, and this title. (B) the child no longer attends school; (ii) computer software which is year 2000 SEC. ll04. ALLOTMENTS TO STATES. (C) the child’s family income exceeds, by 20 compliant acquired to replace computer soft- (a) ALLOTMENTS.—The Secretary shall percent or more, 200 percent of the poverty ware which is not so compliant. make the allotments to States in accordance line; or July 28, 1999 CONGRESSIONAL RECORD — SENATE S9617 (D) the child is expelled or convicted of a such assistance, to such State or to a school ‘‘In the case of any tax- The applicable percent- felony, including felonious drug possession, attended by such child. able year beginning age is— possession of a weapon on school grounds, or (e) NO DISCRETION.—Nothing in this title in— a violent act against an other student or a shall be construed to authorize the Secretary 2001 ...... 40 to exercise any direction, supervision, or 2002 ...... 60 member of the school’s faculty. 2003 ...... 80 SEC. ll07. USES OF FUNDS. control over the curriculum, program of in- After 2003 ...... 100.’’ struction, administration, or personnel of Any scholarship awarded under this title SEC. ll22. SUNSET OF ALCOHOL FUELS INCEN- for a year shall be used— any educational institution or school par- TIVES. (1) first, for— ticipating in a program under this title. (a) IN GENERAL.—The following provisions (A) the payment of tuition and fees at the SEC. ll10. EVALUATION. of the Internal Revenue Code of 1986 are each school selected by the parents of the child The Comptroller General of the United repealed: for whom the scholarship was provided; and States shall conduct an evaluation of the (1) Section 40 (relating to alcohol used as (B) the reasonable costs of the child’s program authorized by this title. Such eval- fuel). transportation to the school, if the school is uation shall, at a minimum— (2) Section 4041(b)(2) (relating to qualified not the school to which the child would be (1) assess the implementation of edu- methanol and ethanol). assigned in the absence of a program under cational choice programs assisted under this (3) Section 4041(k) (relating to fuels con- this title; title and their effect on participants, taining alcohol). (2) second, if the parents so choose, to ob- schools, and communities in the school dis- (4) Section 4081(c) (relating to taxable fuels tain supplementary academic services for tricts served, including parental involve- mixed with alcohol). the child, at a cost of not more than $500, ment in, and satisfaction with, the program (5) Section 4091(c) (relating to reduced rate from any provider chosen by the parents, and their children’s education; of tax for aviation fuel in alcohol mixture, that the State determines is capable of pro- (2) compare the educational achievement etc.). viding such services and has an appropriate of participating eligible children with the (6) Section 6427(f) (relating to gasoline, die- refund policy; and educational achievement of similar non-par- sel fuel, kerosene, and aviation fuel used to (3) finally, for educational programs that ticipating children before, during, and after produce certain alcohol fuels). help the eligible child achieve high levels of the program; and (7) The headings 9901.00.50 and 9901.00.52 of academic excellence in the school attended (3) compare— the Harmonized Tariff Schedule of the by the eligible child, if the eligible child (A) the educational achievement of eligible United States (19 U.S.C. 3007). chooses to attend a public school. children who use scholarships to attend (b) EFFECTIVE DATE.—The repeals made by SEC. ll08. STATE REQUIREMENT. schools other than the schools the children subsection (a) shall take effect on October 1, A State that receives a grant under this would attend in the absence of the program; 1999. title shall allow lawfully operating public with SEC. ll23. REPEAL OF ENHANCED OIL RECOV- and private elementary schools and sec- (B) the educational achievement of chil- ERY CREDIT. ondary schools, including religious schools, dren who attend the schools the children Section 43 of the Internal Revenue Code of if any, serving the area involved to partici- would attend in the absence of the program. 1986 is amended by adding at the end the fol- pate in the program. SEC. ll11. ENFORCEMENT. lowing: ‘‘(f) TERMINATION.—In the case of taxable ll (a) REGULATIONS.—The Secretary shall pro- SEC. 09. EFFECT OF PROGRAMS. years beginning after December 31, 1999, the (a) TITLE I.—Notwithstanding any other mulgate regulations to enforce the provi- sions of this title. enhanced oil recovery credit is zero.’’. provision of law, if a local educational agen- SEC. ll24. REPEAL OF UNLIMITED PASSIVE cy in the State would, in the absence of an (b) PRIVATE CAUSE.—No provision or re- quirement of this title shall be enforced LOSS DEDUCTIONS FOR OIL AND educational choice program that is funded GAS PROPERTIES. through a private cause of action. under this title, provide services to a partici- Section 469(c)(3) of the Internal Revenue ll pating eligible child under part A of title I of SEC. 12. DEFINITIONS. Code of 1986 (relating to working interests in the Elementary and Secondary Education In this title: oil and gas property) is amended by adding Act of 1965 (20 U.S.C. 6311 et seq.), the State (1) CHARTER SCHOOL.—The term ‘‘charter at the end the following: shall ensure the provision of such services to school’’ has the meaning given the term in ‘‘(C) TERMINATION.—This paragraph shall such child. section 10310 of the Elementary and Sec- not apply with respect to any taxable year (b) INDIVIDUALS WITH DISABILITIES.—Noth- ondary Education Act of 1965 (as redesig- beginning after December 31, 1999.’’ ing in this title shall be construed to affect nated in section 3(g) of Public Law 105–278; SEC. 25ll. SUGAR PROGRAM. the requirements of part B of the Individuals 112 Stat. 2687). (a) ELIMINATION OF AUTHORITY TO USE with Disabilities Education Act (20 U.S.C. (2) ELEMENTARY SCHOOL; LOCAL EDU- SUGAR AS COLLATERAL FOR LOANS.—Section 1411 et seq.). CATIONAL AGENCY; PARENT; SECONDARY 156 of the Agricultural Market Transition (c) AID.— SCHOOL; STATE EDUCATIONAL AGENCY.—The Act (7 U.S.C. 7272) is amended— (1) IN GENERAL.—Scholarships under this terms ‘‘elementary school’’, ‘‘local edu- (1) in subsection (d)— title shall be considered to aid families, not cational agency’’, ‘‘parent’’, ‘‘secondary (A) by striking ‘‘(d)’’ and all that follows institutions. For purposes of determining school’’, and ‘‘State educational agency’’ through ‘‘A loan under’’ and inserting ‘‘(d) Federal assistance under Federal law, a par- have the meanings given the terms in sec- TERM OF LOANS.—A loan under’’; ent’s expenditure of scholarship funds under tion 14101 of the Elementary and Secondary (B) by striking paragraph (2); and this title at a school or for supplementary Education Act of 1965 (20 U.S.C. 8801). (C) by redesignating subparagraphs (A) and academic services shall not constitute Fed- (3) POVERTY LINE.—The term ‘‘poverty (B) as paragraphs (1) and (2), respectively, eral financial aid or assistance to that school line’’ means the poverty line (as defined by and indenting appropriately; or to the provider of supplementary aca- the Office of Management and Budget, and (2) by striking subsection (g); and demic services. revised annually in accordance with section (3) by redesignating subsections (h) and (i) (2) SUPPLEMENTARY ACADEMIC SERVICES.— 673(2) of the Community Services Block as subsections (g) and (h), respectively. (A) IN GENERAL.—Notwithstanding para- Grant Act (42 U.S.C. 9902(2))) applicable to a (b) ELIMINATION OF SUGAR PRICE SUPPORT graph (1), a school or provider of supple- family of the size involved. AND PRODUCTION ADJUSTMENT PROGRAMS.— mentary academic services that receives (4) SECRETARY.—The term ‘‘Secretary’’ (1) IN GENERAL.—Notwithstanding any scholarship funds under this title shall, as a means the Secretary of Education. other provision of law— condition of participation under this title, (5) STATE.—The term ‘‘State’’ means each (A) a processor of any of the 2003 or subse- comply with the provisions of title VI of the of the 50 States. quent crops of sugarcane or sugar beets shall Civil Rights Act of 1964 (42 U.S.C. 2000d et Subtitle B—Revenue Provisions not be eligible for a loan under any provision seq.) and section 504 of the Rehabilitation SEC. ll21. PHASEOUT OF OIL AND GAS EXPENS- of law with respect to the crop; and Act of 1973 (29 U.S.C. 794). ING OF DRILLING AND DEVELOP- (B) the Secretary of Agriculture may not (B) REGULATIONS.—The Secretary shall MENT COSTS. make price support available, whether in the promulgate regulations to implement the Section 263(c) of the Internal Revenue Code form of a loan, payment, purchase, or other provisions of subparagraph (A), taking into of 1986 is amended by adding at the end the operation, for any of the 2003 and subsequent account the purposes of this title and the na- following new sentence: ‘‘This subsection crops of sugar beets and sugarcane by using ture, variety, and missions of schools and shall not apply to the applicable percentage the funds of the Commodity Credit Corpora- providers that may participate in providing of costs incurred in taxable years beginning tion or other funds available to the Sec- services to children under this title. after December 31, 1999. For purposes of the retary. (d) OTHER FEDERAL FUNDS.—No Federal, preceding sentence, the applicable percent- (2) TERMINATION OF MARKETING QUOTAS AND State, or local agency may, in any year, take age for any taxable year shall be determined ALLOTMENTS.— into account Federal funds provided to a in accordance with the following table: (A) IN GENERAL.—Part VII of subtitle B of State or to the parents of any child under ‘‘In the case of any tax- The applicable percent- title III of the Agricultural Adjustment Act this title in determining whether to provide able year beginning age is— of 1938 (7 U.S.C. 1359aa et seq.) is repealed. any other funds from Federal, State, or local in— (B) CONFORMING AMENDMENT.—Section resources, or in determining the amount of 2000 ...... 20 344(f)(2) of the Agricultural Adjustment Act S9618 CONGRESSIONAL RECORD — SENATE July 28, 1999

of 1938 (7 U.S.C. 1344(f)(2)) is amended by (2) PROTECTION OF SOCIAL SECURITY BENE- and Survivors Insurance Trust Fund and the striking ‘‘sugar cane for sugar, sugar beets FITS.—If there are sufficient balances in the Federal Disability Insurance Trust Fund.’’; for sugar,’’. Federal Old-Age and Survivors Insurance (2) in section 301(a) by— (3) GENERAL POWERS.— Trust Fund and the Federal Disability Insur- (A) redesignating paragraphs (6) and (7) as (A) DESIGNATED NONBASIC AGRICULTURAL ance Trust Fund, the Secretary of Treasury paragraphs (7) and (8), respectfully; and COMMODITIES.—Section 201(a) of the Agricul- shall give priority to the payment of social (B) inserting after paragraph (5) the fol- tural Act of 1949 (7 U.S.C. 1446(a)) is amended security benefits required to be paid by law. lowing: by striking ‘‘milk, sugar beets, and sugar- (b) POINTS OF ORDER.—Section 301 of the ‘‘(6) the debt held by the public; and’’; and cane’’ and inserting ‘‘and milk’’. Congressional Budget Act of 1974 is amended (3) in section 310(a) by— (B) POWERS OF COMMODITY CREDIT CORPORA- by adding at the end the following: (A) striking ‘‘or’’ at the end of paragraph TION.—Section 5(a) of the Commodity Credit ‘‘(j) SOCIAL SECURITY POINT OF ORDER.—It (3); Corporation Charter Act (15 U.S.C. 714c(a)) is shall not be in order in the Senate to con- (B) by redesignating paragraph (4) as para- amended by inserting after ‘‘agricultural sider a concurrent resolution on the budget, graph (5); and commodities’’ the following: ‘‘(other than an amendment thereto, or a conference re- (C) inserting the following new paragraph; sugar)’’. port thereon that violates section 13301 of ‘‘(4) specify the amounts by which the stat- (C) SECTION 32 ACTIVITIES.—Section 32 of the Budget Enforcement Act of 1990. utory limit on the debt held by the public is the Act of August 24, 1935 (49 Stat. 774, chap- ‘‘(k) DEBT HELD BY THE PUBLIC POINT OF to be changed and direct the committee hav- ter 641; 7 U.S.C. 612c), is amended in the sec- ORDER.—It shall not be in order in the Sen- ing jurisdiction to recommend such change; ond sentence of the first paragraph— ate to consider any bill, joint resolution, or’’. (i) in paragraph (1), by inserting ‘‘(other amendment, motion, or conference report (b) AMENDMENTS TO THE BALANCED BUDGET than sugar)’’ after ‘‘commodities’’; and that would— AND EMERGENCY DEFICIT CONTROL ACT OF (ii) in paragraph (3), by inserting ‘‘(other ‘‘(1) increase the limit on the debt held by 1985.—The Balanced Budget and Emergency than sugar)’’ after ‘‘commodity’’. the public in section 253A(a) of the Balanced Deficit Control Act of 1985 is amended— (4) TRANSITION PROVISIONS.—This sub- Budget and Emergency Deficit Control Act (1) in section 250, by striking subsection (b) section and the amendments made by this of 1985; or and inserting the following: subsection shall not affect the liability of ‘‘(2) provide additional borrowing author- ‘‘(b) GENERAL STATEMENT OF PURPOSE.— any person under any provision of law as in ity that would result in the limit on the debt This part provides for the enforcement of— effect before the application of this sub- held by the public in section 253A(a) of the ‘‘(1) a balanced budget excluding the re- section and the amendments made by this Balanced Budget and Emergency Deficit ceipts and disbursements of the social secu- subsection. Control Act of 1985 being exceeded. rity trust funds; and ‘‘(l) SOCIAL SECURITY SURPLUS PROTECTION (5) CROPS.—This subsection and the amend- ‘‘(2) a limit on the debt held by the public POINT OF ORDER.— ments made by this subsection shall apply to ensure that social security surpluses are ‘‘(1) IN GENERAL.—It shall not be in order in beginning with the 2003 crop of sugar beets used for social security reform or to reduce the Senate to consider a concurrent resolu- and sugarcane. debt held by the public and are not spent on tion on the budget, an amendment thereto, other programs.’’; or a conference report thereon that sets ABRAHAM (AND OTHERS) (2) in section 250(c)(1), by inserting ‘‘ ‘ debt forth a deficit in any fiscal year. AMENDMENT NO. 1398 held by the public’, ‘social security surplus’ ’’ ‘‘(2) EXCEPTION.—Paragraph (1) shall not after ‘‘outlays’, ’’; and Mr. ABRAHAM (for himself, Mr. apply if— (3) by inserting after section 253 the fol- DOMENICI, Mr. ASHCROFT, Mr. CRAPO, ‘‘(A) the limit on the debt held by the pub- lowing: Mr. ENZI, Mr. SANTORUM, Mr. GRAMS, lic in section 253A(a) of the Balanced Budget ‘‘SEC. 253A. DEBT HELD BY THE PUBLIC LIMIT. Mr. ALLARD, Mr. FRIST, AND Mr. COVER- and Emergency Deficit Control Act of 1985 is ‘‘(a) LIMIT.—The debt held by the public DELL) proposed an amendment to the suspended; or shall not exceed— bill, S. 1429, supra; as follows: ‘‘(B) the deficit for a fiscal year results solely from the enactment of— ‘‘(1) for the period beginning May 1, 2000 At the end of the bill, add the following: ‘‘(i) social security reform legislation, as through April 30, 2001, $3,618,000,000,000; ll TITLE —SOCIAL SECURITY SURPLUS defined in section 253A(e)(2) of the Balanced ‘‘(2) for the period beginning May 1, 2001 PRESERVATION AND DEBT REDUCTION Budget and Emergency Deficit Control Act through April 30, 2002, $3,488,000,000,000; ACT of 1985; or ‘‘(3) for the period beginning May 1, 2002 SEC. ll01. SHORT TITLE. ‘‘(ii) provisions of legislation that are des- through April 30, 2004, $3,349,000,000,000; This title may be cited as the ‘‘Social Se- ignated as an emergency requirement pursu- ‘‘(4) for the period beginning May 1, 2004 curity Surplus Preservation and Debt Reduc- ant to section 251(b)(2)(A) or 252(e) of the through April 30, 2006, $3,045,000,000,000; tion Act’’. Balanced Budget and Emergency Deficit ‘‘(5) for the period beginning May 1, 2006 SEC. ll02. FINDINGS. Control Act of 1985.’’. through April 30, 2008, $2,698,000,000,000; and, Congress finds that— (c) SUPERMAJORITY WAIVER AND APPEAL.— ‘‘(6) for the period beginning May 1, 2008 (1) the $69,246,000,000 unified budget surplus Subsections (c)(1) and (d)(2) of section 904 of through April 30, 2010, $2,301,000,000. achieved in fiscal year 1998 was entirely due the Congressional Budget Act of 1974 are ‘‘(b) ADJUSTMENTS FOR ACTUAL SOCIAL SE- to surpluses generated by the social security amended by striking ‘‘305(b)(2),’’ and insert- CURITY SURPLUS LEVELS.— trust funds and the cumulative unified budg- ing ‘‘301(k), 301(l), 305(b)(2),’’. ‘‘(1) ESTIMATED LEVELS.—The estimated et surpluses projected for subsequent fiscal SEC. ll04. DEDICATION OF SOCIAL SECURITY level of social security surpluses for the pur- years are primarily due to surpluses gen- SURPLUSES TO REDUCTION IN THE poses of this section is— erated by the social security trust funds; DEBT HELD BY THE PUBLIC. ‘‘(A) for fiscal year 1999, $125,000,000,000; (2) Congress and the President should bal- (a) AMENDMENTS TO THE CONGRESSIONAL ‘‘(B) for fiscal year 2000, $147,000,000,000; ance the budget excluding the surpluses gen- BUDGET ACT OF 1974.—The Congressional ‘‘(C) for fiscal year 2001, $155,000,000,000; erated by the social security trust funds; Budget Act of 1974 is amended— ‘‘(D) for fiscal year 2002, $163,000,000,000; (3) according to the Congressional Budget (1) in section 3, by adding at the end the ‘‘(E) for fiscal year 2003, $172,000,000,000; Office, balancing the budget excluding the following: ‘‘(F) for fiscal year 2004, $181,000,000,000; surpluses generated by the social security ‘‘(11)(A) The term ‘debt held by the public’ ‘‘(G) for fiscal year 2005, $195,000,000,000; trust funds will reduce the debt held by the means the outstanding face amount of all ‘‘(H) for fiscal year 2006, $205,000,000,000; public by a total of $1,859,500,000,000 by the debt obligations issued by the United States ‘‘(I) for fiscal year 2007, $217,000,000,000; end of fiscal year 2009; and Government that are held by outside inves- ‘‘(J) for fiscal year 2008, $228,000,000,000; and (4) social security surpluses should be used tors, including individuals, corporations, ‘‘(K) for fiscal year 2009, $235,000,000,000. for social security reform or to reduce the State or local governments, foreign govern- ‘‘(2) ADJUSTMENT TO THE LIMIT FOR ACTUAL debt held by the public and should not be ments, and the Federal Reserve System. SOCIAL SECURITY SURPLUSES.—After October 1 spent on other programs. ‘‘(B) For the purpose of this paragraph, the and no later than December 31 of each year, SEC. ll03. PROTECTION OF THE SOCIAL SECU- term ‘face amount’, for any month, of any the Secretary shall make the following cal- RITY TRUST FUNDS. debt obligation issued on a discount basis culations and adjustments: (a) PROTECTION BY CONGRESS.— that is not redeemable before maturity at ‘‘(A) CALCULATION.—After the Secretary (1) REAFFIRMATION OF SUPPORT.—Congress the option of the holder of the obligation is determines the actual level for the social se- reaffirms its support for the provisions of an amount equal to the sum of— curity surplus for the current year, the Sec- section 13301 of the Budget Enforcement Act ‘‘(i) the original issue price of the obliga- retary shall take the estimated level of the of 1990 that provides that the receipts and tion; plus social security surplus for that year specified disbursements of the social security trust ‘‘(ii) the portion of the discount on the ob- in paragraph (1) and subtract that actual funds shall not be counted for the purposes ligation attributable to periods before the level. of the budget submitted by the President, beginning of such month. ‘‘(B) ADJUSTMENT.— the congressional budget, or the Balanced ‘‘(12) The term ‘social security surplus’ ‘‘(i) 2000 THROUGH 2004.—With respect to the Budget and Emergency Deficit Control Act means the amount for a fiscal year that re- periods described in subsections (a)(1), (a)(2), of 1985. ceipts exceed outlays of the Federal Old-Age and (a)(3), the Secretary shall add the July 28, 1999 CONGRESSIONAL RECORD — SENATE S9619 amount calculated under subparagraph (A) which the level of real Gross Domestic Prod- (3) the President estimates that his medi- to— uct in the final report from the Department care proposal will cost $46,000,000,000 over 10 ‘‘(I) the limit set forth in subsection (a) for of Commerce is equal to or is higher than the years; and the period of years that begins on May 1st of level of real Gross Domestic Product in the (4) thus the Congressional budget resolu- the following calendar year; and quarter preceding the first two quarters that tion provides more than adequate resources ‘‘(II) each subsequent limit. caused the suspension of the pursuant to for medicare reform, including prescription ‘‘(ii) 2004 THROUGH 2010.—With respect to paragraph (1). drugs. the periods described in subsections (a)(4), ‘‘(B) ADJUSTMENT.— (b) SENSE OF THE SENATE.—It is the sense (a)(5), and (a)(6), the Secretary shall add the ‘‘(i) CALCULATION.—The Secretary shall of the Senate that the Congressional budget amount calculated under subparagraph (A) take level of the debt held by the public on resolution for fiscal year 2000 provides a to— October 1 of the year preceding the date ref- sound framework for allocating resources to ‘‘(I) the limit set forth in subsection (a) for erenced in subparagraph (A) and subtract the medicare to modernize medicare benefits, the period of years that includes May 1st of limit in subsection (a) for the period of years improve the solvency of the program, and the following calendar year; and that includes the date referenced in subpara- improve coverage of prescription drugs. ‘‘(II) each subsequent limit. graph (A). SEC. ll07. SUNSET. ‘‘(c) ADJUSTMENT TO THE LIMIT FOR EMER- ‘‘(ii) ADJUSTMENT.—The Secretary shall This title and the amendments made by GENCIES.— add the amount calculated under clause (i) this title shall expire on April 30, 2010. ‘‘(1) ESTIMATE OF LEGISLATION.— to— ‘‘(A) CALCULATION.—If legislation is en- ‘‘(I) the limit in subsection (a) for the pe- ABRAHAM (AND WYDEN) acted into law that contains a provision that riod of fiscal years that includes the date ref- is designated as an emergency requirement AMENDMENT NO. 1399 erenced in subparagraph (A); and (Ordered to lie on the table.) pursuant to section 251(b)(2)(A) or 252(e), ‘‘(II) each subsequent limit. OMB shall estimate the amount the debt Mr. ABRAHAM (for himself and Mr. ‘‘(e) ADJUSTMENT TO THE LIMIT FOR SOCIAL held by the public will change as a result of WYDEN) submitted an amendment in- SECURITY REFORM PROVISIONS THAT AFFECT the provision’s effect on the level of total ON-BUDGET LEVELS.— tended to be proposed by them to the outlays and receipts excluding the impact on ‘‘(1) ESTIMATE OF LEGISLATION.— bill, S. 1429, supra; as follows: outlays and receipts of the Federal Old-Age ‘‘(A) CALCULATION.—If social security re- On page 371, between lines 16 and 17, insert: and Survivors Insurance Trust Fund and the form legislation is enacted, OMB shall esti- ll Federal Disability Insurance Trust Fund. SEC. . EXPANSION OF DEDUCTION FOR COM- mate the amount the debt held by the public PUTER DONATIONS TO SCHOOLS. ‘‘(B) BASELINE LEVELS.—OMB shall cal- culate the changes in subparagraph (A) rel- will change as a result of the legislation’s ef- (a) EXTENSION OF AGE OF ELIGIBLE COM- ative to baseline levels for each fiscal year fect on the level of total outlays and receipts PUTERS.—Section 170(e)(6)(B)(ii) (defining through fiscal year 2010 using current esti- excluding the impact on outlays and receipts qualified elementary or secondary edu- mates. of the Federal Old-Age and Survivors Insur- cational contribution) is amended— ‘‘(C) ESTIMATE.—OMB shall include the es- ance Trust Fund and the Federal Disability (1) by striking ‘‘2 years’’ and inserting ‘‘3 timate required by this paragraph in the re- Insurance Trust Fund. years’’, and port required under section 251(a)(7) or sec- ‘‘(B) BASELINE LEVELS.—OMB shall cal- (2) by inserting ‘‘for the taxpayer’s own tion 252(d), as the case may be. culate the changes in subparagraph (A) rel- use’’ after ‘‘constructed by the taxpayer’’. ‘‘(2) ADJUSTMENT.—After January 1 and no ative to baseline levels for each fiscal year (b) REACQUIRED COMPUTERS ELIGIBLE FOR later than May 1 of each calendar year begin- through fiscal year 2010 using current esti- DONATION.— ning with calendar year 2000— mates. (1) IN GENERAL.—Section 170(e)(6)(B)(iii) ‘‘(A) with respect to the periods described ‘‘(C) ESTIMATE.—OMB shall include the es- (defining qualified elementary or secondary in subsections (a)(1), (a)(2), and (a)(3), the timate required by this paragraph in the re- educational contribution) is amended by in- Secretary shall add the amounts calculated port required under section 252(d) for social serting ‘‘, the person from whom the donor under paragraph (1)(A) for the current year security reform legislation. reacquires the property,’’ after ‘‘the donor’’. included in the report referenced in para- ‘‘(2) ADJUSTMENT TO LIMIT ON THE DEBT (2) CONFORMING AMENDMENT.—Section graph (1)(C) to— HELD BY THE PUBLIC.—If social security re- 170(e)(6)(B)(ii) is amended by inserting ‘‘or ‘‘(i) the limit set forth in subsection (a) for form legislation is enacted, the Secretary reaquired’’ after ‘‘acquired’’. the period of years that begins on May 1 of shall adjust the limit on the debt held by the (c) EFFECTIVE DATE.—The amendments that calendar year; and public for each period of fiscal years by the made by this section shall apply to contribu- ‘‘(ii) each subsequent limit; and amounts determined under paragraph (1)(A) tions made in taxable years ending after the ‘‘(B) with respect to the periods described for the relevant fiscal years included in the date of the enactment of this Act. in subsections (a)(4), (a)(5), and (a)(6), the report referenced in paragraph (1)(C). SEC. ll. CREDIT FOR COMPUTER DONATIONS Secretary shall add the amounts calculated ‘‘(f) DEFINITIONS.—In this section: TO SCHOOLS. under paragraph (1)(A) for the current year ‘‘(1) SECRETARY.—The term ‘Secretary’ (a) IN GENERAL.—Subpart D of part IV of included in the report referenced in para- means the Secretary of the Treasury. subchapter A of chapter 1 (relating to busi- graph (1)(C) to— ‘‘(2) SOCIAL SECURITY REFORM LEGISLA- ness related credits), as amended by this Act, ‘‘(i) the limit set forth in subsection (a) for TION.—The term ‘social security reform leg- is amended by adding at the end the fol- the period of years that includes May 1 of islation’ means legislation that— lowing: that calendar year; and ‘‘(A) implements structural social security ‘‘SEC. 45E. CREDIT FOR COMPUTER DONATIONS ‘‘(ii) each subsequent limit. reform and significantly extends the sol- TO SCHOOLS. ‘‘(3) EXCEPTION.—The Secretary shall not vency of the Social Security Trust Fund; and ‘‘(a) GENERAL RULE.—For purposes of sec- make the adjustments pursuant to this sec- ‘‘(B) includes a provision stating the fol- tion 38, the school computer donation credit tion if the adjustments for the current year lowing: ‘For purposes of the Social Security determined under this section is an amount are less than the on-budget surplus for the Surplus Preservation and Debt Reduction equal to 30 percent of the qualified elemen- year before the current year. Act of 1999, this Act constitutes social secu- tary or secondary educational contributions ‘‘(d) ADJUSTMENT TO THE LIMIT FOR LOW rity reform legislation’. made by the taxpayer during the taxable ECONOMIC GROWTH AND WAR.— This paragraph shall apply only to the first year. ‘‘(1) SUSPENSION OF STATUTORY LIMIT ON bill or joint resolution enacted into law as ‘‘(b) QUALIFIED ELEMENTARY OR SECONDARY DEBT HELD BY THE PUBLIC.— described in this paragraph.’’. EDUCATIONAL CONTRIBUTION.—For purposes of ‘‘(A) LOW ECONOMIC GROWTH.—If the most this section, the term ‘qualified elementary SEC. ll05. PRESIDENT’S BUDGET. recent of the Department of Commerce’s ad- or secondary educational contribution’ has vance, preliminary, or final reports of actual Section 1105(f) of title 31, United States the meaning given such term by section real economic growth indicate that the rate Code, is amended by striking ‘‘in a manner 170(e)(6)(B), except that such term shall in- of real economic growth (as measured by real consistent’’ and inserting ‘‘in compliance’’. clude the contribution of a computer (as de- GDP) for each of the most recently reported SEC. ll06. SENSE OF THE SENATE ON MEDI- fined in section 168(i)(2)(B)(ii)) only if com- quarter and the immediately preceding quar- CARE RESERVE FUND. puter software (as defined in section ter is less than 1 percent, the limit on the (a) FINDINGS.—The Senate finds that— 197(e)(3)(B)) that serves as a computer oper- debt held by the public established in this (1) the Congressional budget plan has ating system has been lawfully installed in section is suspended. $505,000,000,000 over ten years in unallocated such computer. ‘‘(B) WAR.—If a declaration of war is in ef- budget surpluses that could be used for long- ‘‘(c) INCREASED PERCENTAGE FOR CONTRIBU- fect, the limit on the debt held by the public term medicare reform, other priorities, or TIONS TO SCHOOLS IN EMPOWERMENT ZONES, established in this section is suspended. debt reduction; ENTERPRISE COMMUNITIES, AND INDIAN RES- ‘‘(2) RESTORATION OF STATUTORY LIMIT ON (2) the Congressional budget resolution for ERVATIONS.—In the case of a qualified ele- DEBT HELD BY THE PUBLIC.— fiscal year 2000 already has set aside mentary or secondary educational contribu- ‘‘(A) RESTORATION OF LIMIT.—The statutory $90,000,000,000 over ten years through a re- tion to an educational organization or entity limit on debt held by the public shall be re- serve fund for long-term medicare reform in- located in an empowerment zone or enter- stored on May 1 following the quarter in cluding prescription drug coverage; prise community designated under section S9620 CONGRESSIONAL RECORD — SENATE July 28, 1999 1391 or an Indian reservation (as defined in SEC. ll. LOANS USED TO ACQUIRE PRINCIPAL striking the period at the end of paragraph section 168(j)(6)), subsection (a) shall be ap- RESIDENCES FOR FIRST-TIME (15) and inserting ‘‘; or’’, and by inserting plied by substituting ‘50 percent’ for ‘30 per- HOMEBUYERS. after paragraph (15) the following new para- cent’. (a) LOANS USED TO ACQUIRE PRINCIPAL graph: ‘‘(d) CERTAIN RULES MADE APPLICABLE.— RESIDENCES FOR FIRST-TIME HOMEBUYERS.— ‘‘(16) any loan that is a qualified home pur- For purposes of this section, rules similar to (1) INDIVIDUAL RETIREMENT PLANS.—Section chase loan (as defined in section the rules of paragraphs (1) and (2) of section 408(e) (relating to tax treatment of accounts 408(e)(7)(B)).’’. 41(f), and section 170(e)(6)(A), shall apply. and annuities) is amended by adding at the (3) EFFECTIVE DATE.—The amendments end thereof the following new paragraph: ‘‘(e) TERMINATION.—This section shall not made by this subsection shall apply to loans apply to taxable years beginning on or after ‘‘(7) LOANS USED TO PURCHASE A HOME FOR made in years after 2001. the date which is 3 years after the date of the FIRST-TIME HOMEBUYERS.— (b) OFFSET.—Notwithstanding section enactment of the Taxpayer Refund Act of ‘‘(A) IN GENERAL.—Paragraph (3) shall not 701(c) of this Act, the effective date of the 1999.’’ apply to any qualified home purchase loan amendments made by section 701 shall be ad- made by an individual retirement plan. (b) CURRENT YEAR BUSINESS CREDIT CAL- justed by the Secretary of the Treasury as ‘‘(B) QUALIFIED HOME PURCHASE LOAN.—For CULATION.—Section 38(b) (relating to current necessary to offset the decrease in revenues purposes of this paragraph, the term ‘quali- year business credit), as amended by this to the Treasury resulting from the amend- fied home purchase loan’ means a loan— Act, is amended by striking ‘‘plus’’ at the ments made by subsection (a). ‘‘(i) made by the trustee of an individual end of paragraph (12), by striking the period retirement plan at the direction of the indi- at the end of paragraph (13) and inserting ‘‘, vidual on whose behalf such plan is estab- ROBB (AND OTHERS) AMENDMENT plus’’, and by adding at the end the fol- lished, NO. 1401 lowing: ‘‘(ii) the proceeds of which are used for the ‘‘(14) the school computer donation credit Mr. ROBB (for himself, Mr. GRAHAM, acquisition of a dwelling unit which within a determined under section 45E(a).’’ Mr. ROCKEFELLER, Ms. MIKULSKI, Mrs. reasonable period of time (determined at the (c) DISALLOWANCE OF DEDUCTION BY time the loan is made) is to be used as the MURRAY, and Mr. BRYAN) proposed an AMOUNT OF CREDIT.—Section 280C (relating principal residence for a first-time home- amendment to the bill, S. 1429, supra; to certain expenses for which credits are al- buyer, as follows: lowable) is amended by adding at the end the ‘‘(iii) which by its terms requires interest At the end add the following: following: on the loan to be paid not less frequently TITLE XVI—DELAY IN EFFECTIVE DATE ‘‘(d) CREDIT FOR SCHOOL COMPUTER DONA- than monthly, TIONS.—No deduction shall be allowed for ‘‘(iv) which by its terms requires repay- Notwithstanding any other provision of, or that portion of the qualified elementary or ment in full not later than the earlier of— amendment made by, this Act, no such pro- secondary educational contributions (as de- ‘‘(I) the date which is 15 years after the vision or amendment shall take effect until fined in section 45E(b)) made during the tax- date of acquisition of the dwelling unit, or legislation has been enacted that extends the able year that is equal to the amount of ‘‘(II) the date of the sale or other transfer solvency of the Federal Old-Age and Sur- credit determined for the taxable year under of the dwelling unit, vivors Insurance Trust Fund and the Federal section 45E(a). In the case of a corporation ‘‘(v) which by its terms treats— Disability Insurance Trust Fund under sec- which is a member of a controlled group of ‘‘(I) any amount required to be paid under tion 201 of the Social Security Act through corporations (within the meaning of section clause (iii) during any taxable year which is 2075 and the Federal Hospital Insurance 52(a)) or a trade or business which is treated not paid at the time required to be paid, and Trust Fund under part A of title XVIII of as being under common control with other ‘‘(II) any amount remaining unpaid as of such Act through 2027. trades or businesses (within the meaning of the beginning of the taxable year beginning section 52(b)), this subsection shall be ap- after the period described in clause (iv), KERRY AMENDMENT NO. 1402 plied under rules prescribed by the Secretary similar to the rules applicable under sub- as distributed during such taxable year to (Ordered to be lie on the table.) sections (a) and (b) of section 52.’’ the individual on whose behalf such plan is Mr. KERRY submitted an amend- established and subject to section 72(t)(1), (d) LIMITATION ON CARRYBACK.—Subsection and ment intended to be proposed by him (d) of section 39 (relating to carryback and ‘‘(vi) which bears interest from the date of to the bill, S. 1429, supra; as follows: carryforward of unused credits) is amended the loan at a rate not less than 2 percentage On page 371, between lines 16 and 17, insert by adding at the end the following: points below, and not more than 2 percent- the following: ‘‘(9) NO CARRYBACK OF SCHOOL COMPUTER age points above, the rate for comparable SEC. 1122. DISCLOSURE OF TAX INFORMATION TO DONATION CREDIT BEFORE EFFECTIVE DATE.— United States Treasury obligations on such FACILITATE COMBINED EMPLOY- No amount of unused business credit avail- date. MENT TAX REPORTING. able under section 45E may be carried back Section 6103(d)(5) of the Internal Revenue to a taxable year beginning on or before the Nothing in this paragraph shall be construed Code of 1986 is amended to read as follows: date of the enactment of this paragraph.’’ to require such a loan to be secured by the ‘‘(5) DISCLOSURE FOR COMBINED EMPLOYMENT (e) CLERICAL AMENDMENT.—The table of dwelling unit. ‘‘(C) LIMITATION ON AMOUNT OF LOANS.—The TAX REPORTING.—The Secretary may disclose sections for subpart D of part IV of sub- taxpayer identity information and signa- chapter A of chapter 1, as amended by this amount of borrowings to which paragraph (3) does not apply by reason of this paragraph tures to any agency, body, or commission of Act, is amended by inserting after the item any State for the purpose of carrying out relating to section 45D the following: shall not exceed $10,000. ‘‘(D) DENIAL OF INTEREST DEDUCTION.—No with such agency, body, or commission a ‘‘Sec. 45E. Credit for computer donations to deduction shall be allowed under this chap- combined Federal and State employment tax schools.’’ ter for interest on any qualified home pur- reporting program approved by the Sec- chase loan. retary. Subsections (a)(2) and (p)(4) and sec- (f) EFFECTIVE DATES.— tions 7213 and 7213A shall not apply with re- (1) IN GENERAL.—Except as provided in ‘‘(E) DEFINITIONS.—For purposes of this paragraph— spect to disclosures or inspections made pur- paragraph (2), the amendments made by this suant to this paragraph.’’ section shall apply to contributions made in ‘‘(i) FIRST-TIME HOMEBUYER.—The term taxable years beginning after the date of the ‘first-time homebuyer’ has the meaning f given such term by section 4975(h)(3)(B). enactment of this Act. AUTHORITY FOR COMMITTEES TO (2) CERTAIN CONTRIBUTIONS.—The amend- ‘‘(ii) ACQUISITION.—The term ‘acquisition’ ments made by this section shall apply to has the meaning given such term by section MEET 4975(h)(3)(D)(i). contributions made to an organization or en- COMMITTEE ON BANKING, HOUSING, AND URBAN RINCIPAL RESIDENCE tity not described in section 45E(c) of the In- ‘‘(iii) P .—The term AFFAIRS ternal Revenue Code of 1986, as added by sub- ‘principal residence’ has the same meaning as when used in section 121. Mr. GRAMS. Mr. President, I ask section (a), in taxable years beginning after unanimous consent that the Com- the date that is one year after the date of the ‘‘(iv) DATE OF ACQUISITION.—The term ‘date enactment of this Act. of acquisition’ means the date— mittee on Banking, Housing, and ‘‘(I) on which a binding contract to acquire Urban Affairs be authorized to meet the principal residence to which subpara- during the session of the Senate on graph (B) applies is entered into, or KERRY AMENDMENT NO. 1400 Wednesday, July 28, 1999, to conduct a ‘‘(II) on which construction, reconstruc- hearing on the monetary policy report (Ordered to be lie on the table.) tion, or improvement of such a principal res- to Congress pursuant to the Full Em- Mr. KERRY submitted an amend- idence is commenced.’’. (2) PROHIBITED TRANSACTION.—Section ployment and Balanced Growth Act of ment intended to be proposed by him 4975(d) (relating to exemptions from tax on 1978. to the bill, S. 1429, supra; as follows: prohibited transactions) is amended by strik- The PRESIDING OFFICER. Without At the end of title XI, add the following: ing ‘‘or’’ at the end of paragraph (14), by objection, it is so ordered. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9621 COMMITTEE ON COMMERCE, SCIENCE, AND The PRESIDING OFFICER. Without the U.S. Naval War College to honor TRANSPORTATION objection, it is so ordered. Colonel Stephen McCartney, Lieuten- Mr. GRAMS. Mr. President, I ask SELECT COMMITTEE ON INTELLIGENCE ant Colonel Jack McMahon, and First unanimous consent that the Senate Mr. GRAMS. Mr. President, I ask Sergeant Thomas Scalavino who are Committee on Commerce, Science, and unanimous consent that the Select retiring from Marine Corps Reserves. Transportation be authorized to meet Committee on Intelligence be author- Accordingly, I want to pay tribute to on Wednesday, July 28, 1999, at 2:15 ized to meet during the session of the these three distinguished gentlemen p.m. on fraud against seniors. Senate on Wednesday, July 28, 1999 at 2 from Rhode Island as they embark on The PRESIDING OFFICER. Without p.m. to hold a closed hearing on intel- the next phase of their private lives. As many know, I had the privilege of objection, it is so ordered. ligence matters. commanding a marine rifle company in COMMITTEE ON ENERGY AND NATURAL The PRESIDING OFFICER. Without Korea in the fall of 1951 and winter of RESOURCES objection, it is so ordered. Mr. GRAMS. Mr. President, I ask 1952. During that time, I came away SUBCOMMITTEE ON WATER AND POWER unanimous consent that the Com- with tremendous respect for each offi- mittee on Energy and Natural Re- Mr. GRAMS. Mr. President, I ask cer and enlisted man. They were coura- sources be granted permission to meet unanimous consent that the Sub- geous and displayed extraordinary en- during the session of the Senate on committee on Water and Power of the durance. I have never forgotten the Wednesday, July 28, for purposes of Committee on Energy and Natural Re- confidence they had in themselves, and conducting a Full Committee business sources be granted permission to meet their willingness to go into harm’s meeting which is scheduled to begin at during the session of the Senate on way. If there was dangerous work to be 9:30 a.m. The purpose of this business Wednesday, July 28, for purposes of done, they were willing to do it. Colo- meeting is to consider pending cal- conducting a Water and Power Sub- nel McCartney, Lieutenant Colonel endar business. committee hearing which is scheduled McMahon, and First Sergeant The PRESIDING OFFICER. Without to begin at 2:30 p.m. The purpose of Scalavino have displayed that same objection, it is so ordered. this hearing is to receive testimony on commitment and valor to our country. S. 624, a bill to authorize construction After graduating from the Marine COMMITTEE ON FOREIGN RELATIONS of the Fort Peck Reservation Rural Corps Platoon Leader’s Course in 1968, Mr. GRAMS. Mr. President, I ask Water System in the State of Montana, Stephen McCartney was commissioned unanimous consent that the Com- and for other purposes; S. 986, a bill to a Second Lieutenant in the Marine mittee on Foreign Relations be author- direct the Secretary of the Interior to Corps in 1969 and assigned as an infan- ized to meet during the session of the convey the Griffith Project to the try officer. In this capacity, he served Senate on Wednesday, July 28, 1999 at Southern Nevada Water Authority; S. with the 1st Marine Division in the Re- 11:00 a.m. to hold a business meeting. 1211, a bill to amend the Colorado River public of Vietnam and participated in The PRESIDING OFFICER. Without Basin Salinity Control Act to author- three major combat operations against objection, it is so ordered. ize additional measures to carry out Viet Cong and North Vietnamese army COMMITTEE ON HEALTH, EDUCATION, LABOR, the control of salinity upstream of Im- units until 1971. In 1973, Colonel AND PENSIONS perial Dam in a cost-effective manner; McCartney left active duty but re- Mr. GRAMS. Mr. President, I ask S. 1275, a bill to authorize the Sec- mained involved in the Marine Corps unanimous consent that the Com- retary of the Interior to produce and Reserve, serving with the 25th Marines. mittee on Health, Education, Labor, sell products and to sell publications However, his tour did no end there. and Pensions be authorized to meet in relating to the Hoover Dam, and to de- During Operations Desert Shield and executive session during the session of posit revenues generated from the sales Desert Storm, then Lieutenant Colonel the Senate on Wednesday, July 28, 1999, to the Colorado River Dam fund; and S. McCartney and his battalion were acti- at 9:30 a.m. 1236, a bill to extend the deadline under vated and assigned to the 1st Marine The PRESIDING OFFICER. Without the Federal Power Act for commence- Division. There he participated in di- objection, it is so ordered. ment of the construction of the rect combat operations against Iraqi COMMITTEE ON INDIAN AFFAIRS Arrowrock Dam Hydroelectric Project forces in Saudi Arabia and Kuwait. In Mr. GRAMS. Mr. President, I ask in the State of Idaho; and S. 1377, a bill 1992, McCartney was promoted to his unanimous consent that the Senate to amend the Central Utah Project present rank. In his nearly thirty years Committee on Indian Affairs be author- Completion Act regarding the use of of active and reserve service, Colonel ized to meet during the session of the funds for water development for the McCartney has served in a variety of Senate on Wednesday, July 28, 1999 at Bonneville Unit, and for other pur- other important Marine Corps billets with consistent and meritorious serv- 9:30 a.m. to conduct a hearing on S. 979, poses. ice. Indeed, Colonel McCartney’s serv- Tribal Self-Governance Amendments of The PRESIDING OFFICER. Without ices have ranged from infantry officer 1999. The hearing will be held in room objection, it is so ordered. 485, Russell Senate Office Building. to the Providence Police Department SUBCOMMITTEE ON INTERNATIONAL ECONOMIC where he retired with the rank of The PRESIDING OFFICER. Without POLICY, EXPORT AND TRADE PROMOTION objection, it is so ordered. Major, to his most recent appointment Mr. GRAMS. Mr. President, I ask as Chief of Police for the Warwick Po- COMMITTEE ON THE JUDICIARY unanimous consent that the Sub- lice Department. Mr. GRAMS. Mr. President, I ask committee on International Economic Lieutenant Colonel Jack McMahon is unanimous consent that the Com- Policy, Export and Trade Promotion be retiring from the Marine Corps Reserve mittee on the Judiciary be authorized authorized to meet during the session after serving our country for over to meet for a hearing re Combating of the Senate on Wednesday, July 28, twenty years. During these years, Methamphetamine Proliferation in 1999 at 2 p.m. to hold a hearing. Lieutenant Colonel McMahon’s reserve America, during the session of the Sen- The PRESIDING OFFICER. Without and active duty experience included ate on Wednesday, July 28, 1999, at 10 objection, it is so ordered. service as a judge advocate, as well as a.m., in SD–628. f a commanding officer of Rhode Island’s The PRESIDING OFFICER. Without Marine Corps Reserve transportation objection, it is so ordered. ADDITIONAL STATEMENTS unit in Fields Point and at the u.S. COMMITTEE ON RULES AND ADMINISTRATION Naval War College. Mr. GRAMS. Mr. President, I ask Throughout his career, Lieutenant unanimous consent that the Com- RETIREMENT OF COLONEL STE- Colonel McMahon has been the recipi- mittee on Rules and Administration be PHEN MCCARTNEY, LIEUTENANT ent of numerous commentary letters authorized to meet during the session COLONEL JACK MCMAHON, AND and awards, including the ‘‘Junior Offi- of the Senate on Wednesday, July 28, FIRST SERGEANT THOMAS cer of the Year’’ award in 1979. He has 1999 at 9:30 a.m. to receive testimony SCALAVINO been recommended for the Navy on the operations of the Smithsonian ∑ Mr. CHAFEE. Mr. President, on July Achievement, two Navy Commenda- Institution. 31, friends and colleagues will gather at tions, a Meritorious Service Medal, and S9622 CONGRESSIONAL RECORD — SENATE July 28, 1999 the Navy-Marine Corps Medal. Finally, every other United States post office. Quaid, also served in the New Jersey Lieutenant Colonel McMahon has It continues to thrive today with a de- Assembly. When Alan followed them in served as a prosecutor in the Rhode Is- livery area of more than 2800. 1974, he honed the practice of legis- land Attorney General’s office for the One hundred and forty years later, lating to a fine art, serving as both As- past nineteen years. the Galena Post Office stands proudly sembly Majority Leader and as Speak- A native of Sicily, First Sergeant in the center of town in the same con- er during his sixteen-year career. He Thomas Scalavino came to the United dition as it was in 1859. Its 5947 square was a master of strategy in the service States in 1960 and enlisted in the Ma- foot interior was the grand vision of ar- of the principal of the common good. rine Corps in 1965. Without much time chitect Arni B. Young. The two-story He was articulate, passionate, and so to spare, First Sergeant Scalavino par- building is highlighted by an impres- often right, that more times than not ticipated in eighteen operations in the sive limestone exterior. Mr. Young’s he was able to convince both natural Republic of Vietnam from 1966 to 1967 plans included a civic meeting place allies and skeptics alike. as a rifleman in such military actions with a grand cast-iron stairwell, ma- Alan was a fiercely proud Democrat as Operations Big Horn and Operation hogany interior, and arched windows to who believed wholeheartedly that Coyote. complement the lobby area. ‘‘government’’ and ‘‘the people’’ were In 1971, First Sergeant Scalavino was The Galena Post Office served as not virtually synonymous concepts. He honorably discharged, but could not only a post office and a social center knew how to keep his ‘‘eye on the stay away for long. He reenlisted in but also as a vital part of the commu- prize,’’ and he understood that ‘‘the 1981 at Transport Company in Provi- nity. The Smithsonian National Postal prize’’ was responsive, responsible gov- dence, Rhode Island at the rank of Cor- Museum has bestowed Galena’s post of- ernment. Alan did nothing by halves poral. His responsibilities included: Ad- fice with yet another honor, The Great and when he believed in something it ministrative Chief, Platoon Sergeant, American Post Office Award. This was with total engagement. His inter- Platoon Commander, and Company month the museum will host an exhibit ests and his talents spanned an ex- First Sergeant. Later, First Sergeant commemorating Galena’s Post Office traordinary range. This most political Scalavino was sent to Southwest Asia for its outstanding architectural fea- of men was also a sensitive and accom- where he participated in Operation tures, historical significance to the plished musician, a cellist and an Desert Shield, Operation Desert Storm, community, and outstanding record of opera-lover who could sing Italian and Operation Cease Fire. First Ser- service. arias perhaps not as well as Pavarotti, geant Scalavino also has received the Mr. President, on Friday I will have but certainly as energetically. He was ‘‘Navy Achievement Medal’’ for his ef- the honor to share in the celebration of also, of course, a compelling lawyer na- forts as Motor Transport Officer in the 140th anniversary of the Galena tionally known for his insight into Ocean Venture 93. Post Office. It is truly a remarkable ac- Constitutional issues and a respected Mr. President, I join with all Rhode complishment.∑ author who examined controversial Islanders in extending to Colonel f matters with perception and convic- McCartney, Lieutenant Colonel TRIBUTE TO THE HONORABLE tion. McMahon, and First Sergeant ALAN KARCHER He has left a splendid legacy for us Scalavino our best wishes. Their con- and for those he loved most, his wife tributions certainly will be remem- ∑ Mr. LAUTENBERG. Mr. President, I Peggy, children Timothy, Elizabeth bered for generations to come.∑ rise today to celebrate a man who was and Ellen, and his five grandchildren, f a good friend and an extraordinary po- who have his mark and his stature as litical mentor. I will miss the oppor- enduring memories. We will miss him, 140TH ANNIVERSARY OF THE tunity to consult with him on matters GALENA POST OFFICE but not his spirit, for that will con- important to governing. His contribu- tinue to guide us. We will miss him, ∑ Mr. DURBIN. Mr. President, I rise tion to me was a valuable one and it is but not his idealism, for that will con- today to recognize a historic institu- deep in my thought and functioning as tinue to inspire us. We will miss him, tion in the State of Illinois and the na- a U.S. Senator. He was a superb role but not his passion, for that will con- tion. On July 30, 1999, the Galena Post model for public service and I followed tinue to make us strive.∑ Office will celebrate its 140th anniver- his judgement often. I am honored to f sary making it the longest continu- offer this tribute to former New Jersey ously owned and operated post office in Assembly Speaker Alan Karcher, his MUHAMMAD ALI BOXING REFORM America. indomitable spirit, his unshakeable ACT When the post office was founded, conviction, his widespread talents, his On July 27, 1999, the Senate passed S. Galena was a thriving mining and port love for politics in the widest sense, 305. The text follows: community in northwestern Illinois. and his devotion to the people of New S. 305 The streets were bustling with miners, Jersey. Be it enacted by the Senate and House of traders, dock workers, and trappers. Alan’s death on July 27 at too young Representatives of the United States of America Though a great deal has changed since an age, was not totally unexpected—he in Congress assembled, then, many of the original buildings re- had been battling cancer for several SECTION 1. SHORT TITLE. main standing in Galena’s historic years—but the reality of it shocks all This Act may be cited as the ‘‘Muhammad downtown district. Among these struc- of us who knew him. And there are a Ali Boxing Reform Act’’. tures is the post office. lot of us who fought in the trenches of SEC. 2. FINDINGS. The idea of the Galena Post Office New Jersey politics alongside him, as The Congress makes the following findings: was initiated by Congressman Elitu B. well as those who fought in opposition. (1) Professional boxing differs from other Washburne, a pre-Civil War era politi- Alan used his considerable wit, intel- major, interstate professional sports indus- cian from Illinois. The funds for the fa- lect and spirit to master New Jersey tries in the United States in that it operates cility were authorized and appropriated without any private sector association, politics, and all of us respected him as league, or centralized industry organization by Congress on August 18, 1856. Con- the consummate politician. Alan was to establish uniform and appropriate busi- struction of the building began in 1857, political in the most classical sense of ness practices and ethical standards. This when the first limestone shipments for that word, with all of its ties to the has led to repeated occurrences of disrepu- the edifice arrived via tow-boat. Upon Greek concepts of the body politic, the table and coercive business practices in the the completion of the building’s struc- people and citizenship, and he was po- boxing industry, to the detriment of profes- ture on August 3, 1859, the Weekly litical in the most modern sense of the sional boxers nationwide. Northwestern Gazette predicted, ‘‘it word—sagacious, prudent, shrewd, and (2) Professional boxers are vulnerable to will last 1,000 years with only two exploitative business practices engaged in by artful. certain promoters and sanctioning bodies forces capable of destroying it, one Alan saw elected office as public which dominate the sport. Boxers do not being an earthquake and the other a service and an honored and honorable have an established representative group to mob.’’ This newspaper was prophetic. family tradition. Both his father, Jo- advocate for their interests and rights in the The Galena Post Office has outlived seph Karcher, and a great-uncle, John industry. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9623

(3) State officials are the proper regulators ‘‘(2) 1-YEAR LIMIT ON COERCIVE PROMOTIONAL ‘‘(B) a licensed manager or management of professional boxing events, and must pro- RIGHTS.— company (or a manager or management com- tect the welfare of professional boxers and ‘‘(A) The period of time for which pro- pany that, under State law, is required to be serve the public interest by closely super- motional rights to promote a boxer may be licensed)— vising boxing activity in their jurisdiction. granted under a contract between the boxer ‘‘(i) to have a direct or indirect financial State boxing commissions do not currently and a promoter, or between promoters with interest in the promotion of a boxer; or receive adequate information to determine respect to a boxer, may not be greater than ‘‘(ii) to be employed by or receive com- whether boxers competing in their jurisdic- 12 months in length if the boxer is required pensation or other benefits from a promoter, tion are being subjected to contract terms to grant such rights, or a boxer’s promoter is except for amounts received as consideration and business practices which may be viola- required to grant such rights with respect to under the manager’s contract with the tive of State regulations, or are onerous and a boxer, as a condition precedent to the box- boxer. confiscatory. er’s participation in a professional boxing ‘‘(2) EXCEPTION FOR SELF-PROMOTION AND (4) Promoters who engage in illegal, coer- match against another boxer who is under MANAGEMENT.—Paragraph (1) does not pro- cive, or unethical business practices can contract to the promoter. hibit a boxer from acting as his own pro- take advantage of the lack of equitable busi- ‘‘(B) A promoter exercising promotional moter or manager.’’. ness standards in the sport by holding boxing rights with respect to such boxer during the (c) EFFECTIVE DATE.—The amendments events in states with weaker regulatory 12-month period beginning on the day after made by subsection (a) apply to contracts ex- oversight. the last day of the promotional right period ecuted after the date of enactment of this (5) The sanctioning organizations which described in subparagraph (A) may not se- Act. have proliferated in the boxing industry have cure exclusive promotional rights from the SEC. 5. SANCTIONING ORGANIZATION INTEGRITY not established credible and objective cri- boxer’s opponents as a condition of partici- REFORMS. teria to rate professional boxers, and operate pating in a professional boxing match (a) IN GENERAL.—The Professional Boxing with virtually no industry or public over- against the boxer during that period, and Safety Act of 1996 (15 U.S.C. 6301 et seq.), as sight. Their ratings are susceptible to ma- any contract to the contrary— amended by section 4 of this Act, is amended nipulation, have deprived boxers of fair op- ‘‘(i) shall be considered to be in restraint of by— portunities for advancement, and have un- trade and contrary to public policy; and (1) redesignating section 16, as redesig- dermined public confidence in the integrity ‘‘(ii) unenforceable. nated by section 4 of this Act, as section 17; of the sport. ‘‘(C) Nothing in this paragraph shall be and (6) Open competition in the professional construed as pre-empting any State law con- (2) inserting after section 15 the following: boxing industry has been significantly inter- cerning interference with contracts. ‘‘SEC. 16. SANCTIONING ORGANIZATIONS. fered with by restrictive and anti-competi- ‘‘(3) PROMOTIONAL RIGHTS UNDER MANDA- tive business practices of certain promoters ‘‘(a) OBJECTIVE CRITERIA.—A sanctioning TORY BOUT CONTRACTS.—Neither a promoter organization shall establish objective and and sanctioning bodies, to the detriment of nor a sanctioning organization may require a the athletes and the ticket-buying public. consistent written criteria for the ratings of boxer, in a contract arising from a profes- professional boxers. Common practices of promoters and sanc- sional boxing match that is a mandatory ‘‘(b) APPEALS PROCESS.—A sanctioning or- tioning organizations represent restraints of bout under the rules of the sanctioning orga- interstate trade in the United States. ganization shall establish and publish an ap- nization, to grant promotional rights to any peals procedure that affords a boxer rated by (7) It is necessary and appropriate to estab- promoter for a future professional boxing lish national contracting reforms to protect that organization a reasonable opportunity, match. without the payment of any fee, to submit professional boxers and prevent exploitative ‘‘(b) EMPLOYMENT AS CONDITION OF PRO- information to contest its rating of the business practices, and to require enhanced MOTING, ETC.—No person who is a licensee, boxer. Under the procedure, the sanctioning financial disclosures to State athletic com- manager, matchmaker, or promoter may re- missions to improve the public oversight of quire a boxer to employ, retain, or provide organization shall, within 14 days after re- the sport. compensation to any individual or business ceiving a request from a boxer questioning (8) Whereas the Congress seeks to improve enterprise (whether operating in corporate that organization’s rating of the boxer— the integrity and ensure fair practices of the form or not) recommended or designated by ‘‘(1) provide to the boxer a written expla- professional boxing industry on a nationwide that person as a condition of— nation of the organization’s criteria, its rat- basis, it deems it appropriate to name this ‘‘(1) such person’s working with the boxer ing of the boxer, and the rationale or basis reform in honor of Muhammad Ali, whose ca- as a licensee, manager, matchmaker, or pro- for its rating (including any response to any reer achievements and personal contribu- moter; specific questions submitted by the boxer); tions to the sport, and positive impact on ‘‘(2) such person’s arranging for the boxer and our society, are unsurpassed in the history of to participate in a professional boxing ‘‘(2) submit a copy of its explanation to the boxing. match; or President of the Association of Boxing Com- SEC. 3. PURPOSES. ‘‘(3) such boxer’s participation in a profes- missions of the United States and to the box- The purposes of this Act are— sional boxing match. ing commission of the boxer’s domiciliary (1) to protect the rights and welfare of pro- ‘‘(c) ENFORCEMENT.— State. fessional boxers by preventing certain ex- ‘‘(1) PROMOTION AGREEMENT.—A provision ‘‘(c) NOTIFICATION OF CHANGE IN RATING.—If ploitative, oppressive, and unethical busi- in a contract between a promoter and a a sanctioning organization changes its rat- ness practices they may be subject to on an boxer, or between promoters with respect to ing of a boxer who is included, before the interstate basis; a boxer, that violates subsection (a) is con- change, in the top 10 boxers rated by that or- (2) to assist State boxing commissions in trary to public policy and unenforceable at ganization, or who, as a result of the change their efforts to provide more effective public law. is included in the top 10 boxers rated by that oversight of the sport; and ‘‘(2) EMPLOYMENT AGREEMENT.—In any ac- organization, then, after changing the box- (3) to promoting honorable competition in tion brought against a boxer to recover er’s rating, the organization shall— professional boxing and enhance the overall money (whether as damages or as money ‘‘(1) within 5 business days mail notice of integrity of the industry. owed) for acting as a licensee, manager, the change and a written explanation of the SEC 4. PROTECTING BOXERS FROM EXPLOI- matchmaker, or promoter for the boxer, the reasons for its change in that boxer’s rating TATION. court, arbitrator, or administrative body be- to the boxer at the boxer’s last known ad- (a) IN GENERAL.—The Professional Boxing fore which the action is brought may deny dress; Safety Act of 1996 (15 U.S.C. 6301 et seq.) is recovery in whole or in part under the con- ‘‘(2) immediately post a copy of the notice amended by— tract as contrary to public policy if the em- and the explanation on its Internet website (1) redesignating section 15 as 16; and ployment, retention, or compensation that is or homepage, if any, for a period of not less (2) inserting after section 14 the following: the subject of the action was obtained in vio- than 30 days; and ‘‘SEC. 15. PROTECTION FROM EXPLOITATION. lation of subsection (b).’’. ‘‘(3) mail a copy of the notice and the ex- ‘‘(a) CONTRACT REQUIREMENTS.— (b) CONFLICTS OF INTEREST.—Section 9 of planation to the President of the Association ‘‘(1) IN GENERAL.—Any contract between a such Act (15 U.S.C. 6308) is amended by— of Boxing Commissions if the organization boxer and a promoter or manager shall— (1) striking ‘‘No member’’ and inserting does not have an address for the boxer or ‘‘(A) include mutual obligations between ‘‘(a) REGULATORY PERSONNEL.—No member’’; does not have an Internet website or home- the parties; and page. ‘‘(B) specify a minimum number of profes- (2) adding at the end thereof the following: ‘‘(d) PUBLIC DISCLOSURE.— sional boxing matches per year for the boxer; ‘‘(b) FIREWALL BETWEEN PROMOTERS AND ‘‘(1) FTC FILING.—Not later than January and MANAGERS.— 31 of each year, a sanctioning organization ‘‘(C) set forth a specific period of time dur- ‘‘(1) IN GENERAL.—It is unlawful for— shall submit to the Federal Trade ing which the contract will be in effect, in- ‘‘(A) a boxer’s promoter (or a promoter Commission— cluding any provision for extension of that who is required to be licensed under State ‘‘(A) a complete description of the organi- period due to the boxer’s temporary inability law) to have a direct or indirect financial in- zation’s ratings criteria, policies, and gen- to compete because of an injury or other terest in that boxer’s licensed manager or eral sanctioning fee schedule; cause. management company; or ‘‘(B) the bylaws of the organization; S9624 CONGRESSIONAL RECORD — SENATE July 28, 1999 ‘‘(C) the appeals procedure of the organiza- boxing match in a State, a sanctioning orga- spectively, and inserting after paragraph (1) tion; and nization shall provide to the boxing commis- the following: ‘‘(D) a list and business address of the or- sion of, or responsible for regulating matches ‘‘(2) VIOLATION OF ANTI-EXPLOITATION, SANC- ganization’s officials who vote on the ratings in, that State a written statement of— TIONING ORGANIZATION, OR DISCLOSURE PROVI- of boxers. ‘‘(1) all charges, fees, and costs the organi- SIONS.—Any person who knowingly violates ‘‘(2) FORMAT; UPDATES.—A sanctioning or- zation will assess any boxer participating in any provision of section 9(b), 9(c), 15, 16, 17, ganization shall— that match; or 18 of this Act shall, upon conviction, be ‘‘(A) provide the information required ‘‘(2) all payments, benefits, complimentary imprisoned for not more than 1 year or fined under paragraph (1) in writing, and, for any benefits, and fees the organization will re- not more than— document greater than 2 pages in length, ceive for its affiliation with the event, from ‘‘(A) $100,000; and also in electronic form; and the promoter, host of the event, and all ‘‘(B) if a violation occurs in connection ‘‘(B) promptly notify the Federal Trade other sources; and with a professional boxing match the gross Commission of any material change in the ‘‘(3) such additional information as the revenues for which exceed $2,000,000, an addi- information submitted. commission may require. tional amount which bears the same ratio to ‘‘(3) FTC TO MAKE INFORMATION AVAILABLE A sanctioning organization that receives $100,000 as the amount of the gross revenues TO PUBLIC.—The Federal Trade Commission compensation from any source to refrain in excess of $2,000,000 bears to $2,000,000, shall make information received under this from exercising its authority or jurisdiction or both.’’; subsection available to the public. The Com- over, or withholding its sanction of, a profes- (3) striking in ‘‘section 9’’ in paragraph (3), mission may assess sanctioning organiza- sional boxing match in any State shall pro- as redesignated, and inserting ‘‘section 9(a)’’; tions a fee to offset the costs it incurs in vide the information required by paragraphs and processing the information and making it (2) and (3) to the boxing commission of that (4) adding at the end thereof the following: available to the public. State. ‘‘(c) ACTIONS BY STATES.—Whenever the ‘‘(4) INTERNET POSTING.—In addition to ‘‘(b) PROMOTERS.—Before a professional chief law enforcement officer of any State submitting the information required by boxing match organized, promoted, or pro- has reason to believe that a person or organi- paragraph (1) to the Federal Trade Commis- duced by a promoter is held in a State, the zation is engaging in practices which violate sion, a sanctioning organization shall pro- promoter shall provide to the boxing com- any requirement of this Act, the State, as vide the information to the public by main- mission of, or responsible for regulating parens patriae, may bring a civil action on taining a website on the Internet that— matches in, that State— behalf of its residents in an appropriate dis- ‘‘(A) is readily accessible by the general ‘‘(1) a copy of any agreement in writing to trict court of the United States— public using generally available search en- which the promoter is a party with any ‘‘(1) to enjoin the holding of any profes- gines and does not require a password or pay- boxer participating in the match; sional boxing match that involves such prac- ment of a fee for full access to all the infor- ‘‘(2) a statement in writing made under tices; mation; penalty of perjury that there are no other ‘‘(2) to enforce compliance with this Act; ‘‘(B) contains all the information required agreements, written or oral, between the ‘‘(3) to obtain the fines provided under sub- to be submitted to the Federal Trade Com- promoter and the boxer with respect to that section (b) or appropriate restitution; or mission by paragraph (1) in an easy to search match; and ‘‘(4) to obtain such other relief as the court and use format; and ‘‘(3) a statement in writing of— may deem appropriate. ‘‘(C) is updated whenever there is a mate- ‘‘(A) all fees, charges, and expenses that ‘‘(d) PRIVATE RIGHT OF ACTION.—Any boxer rial change in the information.’’. will be assessed by or through the promoter who suffers economic injury as a result of a (b) CONFLICT OF INTEREST.—Section 9 of on the boxer pertaining to the event, includ- violation of any provision of this Act may such Act (15 U.S.C. 6308), as amended by sec- ing any portion of the boxer’s purse that the bring an action in the appropriate Federal or tion 4 of this Act, is amended by adding at promoter will receive, and training expenses; State court and recover the damages suf- the end thereof the following: ‘‘(B) all payments, gift, or benefits the pro- fered, court costs, and reasonable attorneys ‘‘(c) SANCTIONING ORGANIZATIONS.— moter is providing to any sanctioning orga- fees and expenses. ‘‘(1) PROHIBITION ON RECEIPTS.—Except as nization affiliated with the event; and ‘‘(e) ENFORCEMENT AGAINST FEDERAL provided in paragraph (2), no officer or em- ‘‘(C) any reduction in the amount or per- TRADE COMMISSION, STATE ATTORNEYS GEN- ployee of a sanctioning organization may re- centage of a boxer’s purse after— ERAL, ETC.—Nothing in this Act authorizes ceive any compensation, gift, or benefit di- ‘‘(i) a previous agreement concerning the the enforcement of— rectly or indirectly from a promoter, boxer, amount or percentage of that purse has been ‘‘(1) any provision of this Act against the or manager. reached between the promoter and the boxer; Federal Trade Commission, the United ‘‘(2) EXCEPTIONS.—Paragraph (1) does not or States Attorney General, the chief legal offi- apply to— ‘‘(ii) a purse bid held for the event. cer of any State for acting or failing to act in an official capacity; ‘‘(A) the receipt of payment by a promoter, ‘‘(c) JUDGES.—Before participating in a boxer, or manager of a sanctioning organiza- professional boxing match as a judge in any ‘‘(2) subsection (d) of this section against a tion’s published fee for sanctioning a profes- State, an individual shall provide to the box- State or political subdivision of a State, or sional boxing match or reasonable expenses ing commission of, or responsible for regu- any agency or instrumentality thereof; or in connection therewith if the payment is re- lating matches in, that State a statement in ‘‘(3) section 15 against a boxer acting in his ported to the responsible boxing commission writing of all payments, including reim- capacity as a boxer.’’. under section 17; or bursement for expenses, and any other bene- SEC. 8. PROFESSIONAL BOXING SAFETY ACT ‘‘(B) the receipt of a gift or benefit of de fits that individual will receive from any AMENDMENTS. (a) DEFINITIONS.—Section 2 of the Profes- minimis value.’’. source for judging that match. (c) SANCTIONING ORGANIZATION DEFINED.— sional Boxing Safety Act of 1996 (15 U.S.C. ‘‘(d) INFORMATION TO BE AVAILABLE TO Section 2 of the Professional Boxing Safety 6301), as amended by section 5(c) of this Act, STATE ATTORNEY GENERAL.—A promoter Act of 1996 (15 U.S.C. 6301) is amended by add- is amended by adding at the end thereof the shall make information received under this ing at the end thereof the following: following: section available to the chief law enforce- ‘‘(11) SANCTIONING ORGANIZATION.—The ‘‘(12) SUSPENSION.—The term ‘suspension’ ment officer of the State in which the match term ‘sanctioning organization’ means an or- includes within its meaning the revocation is to be held upon request. ganization that ranks boxers or sanctions of a boxing license.’’. ‘‘(e) EXCEPTION.—The requirements of this professional boxing matches in the United (b) RENEWAL PERIOD FOR IDENTIFICATION section do not apply in connection with a States— CARDS.—Section 6(b)(2) of the Professional professional boxing match scheduled to last ‘‘(A) between boxers who are residents of Boxing Safety Act of 1996 (15 U.S.C. less than 10 rounds. different States; or 6305(b)(2)) is amended by striking ‘‘2 years.’’ ‘‘(f) CONFIDENTIALITY OF AGREEMENTS.— ‘‘(B) that are advertised, otherwise pro- and inserting ‘‘4 years.’’. Neither a boxing commission nor an Attor- moted, or broadcast (including closed circuit (c) STATE BOXING COMMISSION PROCE- ney General may disclose to the public any television) in interstate commerce.’’. DURES.—Section 7(a)(2) of such Act (15 U.S.C. matter furnished by a promoter under sub- 6306(a)(2)) is amended by— SEC. 6. PUBLIC INTEREST DISCLOSURES TO section (b)(1) or subsection (d) except to the STATE BOXING COMMISSIONS. (1) striking ‘‘or’’ in subparagraph (C); The Professional Boxing Safety Act of 1996 extent required in public legal, administra- (2) striking ‘‘documents.’’ at the end of (15 U.S.C. 6301 et seq.), as amended by section tive, or judicial proceedings brought against subparagraph (D) and inserting ‘‘documents; 5 of this Act, is amended by— that promoter under State law.’’. or’’; and (1) redesignating section 17, as redesig- SEC. 7. ENFORCEMENT. (3) adding at the end thereof the following: nated by section 5 of this Act, as section 18; Section 10 of the Professional Boxing Safe- ‘‘(E) unsportsmanlike conduct or other in- and ty Act of 1996 (15 U.S.C. 6309) is amended by— appropriate behavior inconsistent with gen- (2) inserting after section 16 the following: (1) inserting a comma and ‘‘other than sec- erally accepted methods of competition in a ‘‘SEC. 17. REQUIRED DISCLOSURES TO STATE tion 9(b), 15, 16, 17,’’ after ‘‘this Act’’ in sub- professional boxing match.’’. BOXING COMMISSIONS. section (b)(1); (d) STANDARDIZED PHYSICAL EXAMINA- ‘‘(a) SANCTIONING ORGANIZATIONS.—Before (2) redesignating paragraphs (2) and (3) of TIONS.—Section 5(1) of the Professional Box- sanctioning or authorizing a professional subsection (b) as paragraphs (3) and (4), re- ing Safety Act of 1996 (15 U.S.C. 6304(1)) is July 28, 1999 CONGRESSIONAL RECORD — SENATE S9625 amended by inserting after ‘‘examination’’ PAYING A GRATUITY TO MARY Sec. 204. Sediment decontamination technology. the following: ‘‘, based on guidelines en- LYDA NANCE Sec. 205. Control of aquatic plants. dorsed by the American Medical Association, Sec. 206. Use of continuing contracts required including a circulo-respiratory check and a Mr. ROTH. Mr. President, I ask unan- for construction of certain neurological examination,’’. imous consent that the Senate now projects. proceed to the immediate consider- Sec. 207. Support of Army civil works program. (e) CAT SCANS.—Section 6(b)(2) of the Pro- fessional Boxing Safety Act of 1996 (15 U.S.C. ation of S. Res. 168 submitted earlier Sec. 208. Water resources development studies 6305(b)(2)) is amended by inserting before the by Senators HELMS and BIDEN. for the Pacific region. period the following: ‘‘and, with respect to The PRESIDING OFFICER. The Sec. 209. Everglades and south Florida eco- such renewal, present proof from a physician clerk will report the resolution by system restoration. Sec. 210. Beneficial uses of dredged material. that such boxer has taken a computerized title. axial tomography (CAT) scan within the 30- Sec. 211. Harbor cost sharing. The legislative clerk read as follows: Sec. 212. Aquatic ecosystem restoration. day period preceding that date on which the A resolution (S. Res. 168) paying a gratuity Sec. 213. Watershed management, restoration, renewal application is submitted and that no to Mary Lyda Nance. and development. brain damage from boxing has been detected. There being no objection, the Senate Sec. 214. Flood mitigation and riverine restora- SEC. 9. REQUIREMENTS FOR CONTRACTS BE- proceeded to consider the resolution. tion pilot program. TWEEN BOXERS AND BROAD- Mr. ROTH. Mr. President, I ask unan- Sec. 215. Shoreline management program. CASTING COMPANIES. Sec. 216. Assistance for remediation, restora- imous consent that the resolution be tion, and reuse. (a) IN GENERAL.—The Professional Boxing agreed to and the motion to reconsider Safety Act of 1996 (15 U.S.C. 6301 et seq.), as Sec. 217. Shore damage mitigation. amended by section 6, is amended— be laid upon the table. Sec. 218. Shore protection. (1) by redesignating section 18, as redesig- The PRESIDING OFFICER. Without Sec. 219. Flood prevention coordination. nated by section 6 of this Act, as section 19; objection, it is so ordered. Sec. 220. Annual passes for recreation. and The resolution (S. Res. 168) was Sec. 221. Cooperative agreements for environ- (2) by inserting after section 17 the fol- agreed to, as follows: mental and recreational measures. Sec. 222. Nonstructural flood control projects. lowing: S. RES. 168 Sec. 223. Lakes program. ‘‘SEC. 18. CONTRACTS BETWEEN BOXERS AND Resolved, That the Secretary of the Senate Sec. 224. Construction of flood control projects BROADCASTING COMPANIES. is authorized and directed to pay, from the by non-Federal interests. contingent fund of the Senate, to Mary Lyda ‘‘(a) CONTRACT REQUIREMENTS.—Any con- Sec. 225. Enhancement of fish and wildlife re- tract between a boxer and a broadcaster for Nance, widow of Admiral James W. Nance, sources. the broadcast of a boxing match in which an employee of the Senate at the time of his Sec. 226. Sense of Congress; requirement regard- that boxer is competing shall— death, the sum of $200,000, that sum to be ing notice. ‘‘(1) include mutual obligations between considered inclusive of funeral expenses and Sec. 227. Periodic beach nourishment. the parties; and all other allowances. Sec. 228. Environmental dredging. ‘‘(2) specify either— f Sec. 229. Wetlands mitigation. ‘‘(A) the number of bouts to be broadcast; WATER RESOURCES TITLE III—PROJECT-RELATED PROVISIONS or DEVELOPMENT ACT OF 1999 Sec. 301. Missouri River Levee System. ‘‘(B) the duration of the contract. Sec. 302. Ouzinkie Harbor, Alaska. ‘‘(b) PROHIBITIONS.—A broadcaster may Mr. ROTH. Mr. President, I ask that Sec. 303. Greers Ferry Lake, Arkansas. not— the Chair lay before the Senate a mes- Sec. 304. Ten- and Fifteen-Mile Bayous, Arkan- ‘‘(1) require a boxer to employ a relative or sage from the House of Representatives sas. associate of the broadcaster in any capacity on S. 507. Sec. 305. Loggy Bayou, Red River below as a condition of entering into a contract The Presiding Officer laid before the Denison Dam, Arkansas, Lou- with the broadcaster; Senate S. 507, an Act to provide for the isiana, Oklahoma, and Texas. ‘‘(2) have a direct or indirect financial in- conservation and development of water Sec. 306. Sacramento River, Glenn-Colusa, Cali- terest in the boxer’s manager or manage- and related resources, to authorize the fornia. ment company; or Sec. 307. San Lorenzo River, California. ‘‘(3) make a payment, or provide other con- Secretary of the Army to construct Sec. 308. Terminus Dam, Kaweah River, Cali- sideration (other than of a de minimus various projects for improvements to fornia. amount or value) to a sanctioning organiza- rivers and harbors of the United Sec. 309. Delaware River mainstem and channel tion or any officer or employee of such an or- States, and for other purposes, as fol- deepening, Delaware, New Jersey, ganization in connection with any boxer lows: and Pennsylvania. with whom the broadcaster has a contract, Resolved, That the bill from the Senate (S. Sec. 310. Potomac River, Washington, District or against whom a boxer with whom a broad- 507) entitled ‘‘An Act to provide for the con- of Columbia. caster has a contract is competing. servation and development of water and re- Sec. 311. Brevard County, Florida. ‘‘(c) NOTIFICATION OF REDUCTION IN AGREED lated resources, to authorize the Secretary Sec. 312. Broward County and Hillsboro Inlet, AMOUNT.—If a broadcaster has a contract of the Army to construct various projects for Florida. with a boxer to broadcast a match in which improvements to rivers and harbors of the Sec. 313. Fort Pierce, Florida. that boxer is competing, and the broadcaster United States, and for other purposes’’, do Sec. 314. Nassau County, Florida. reduces the amount it agreed to pay the pass with the following amendments: Sec. 315. Miami Harbor Channel, Florida. boxer under that contract (whether unilater- Strike out all after the enacting clause and Sec. 316. Lake Michigan, Illinois. ally or by mutual agreement), the broad- insert: Sec. 317. Springfield, Illinois. caster shall notify, in writing within 48 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. Sec. 318. Little Calumet River, Indiana. Sec. 319. Ogden Dunes, Indiana. hours after the reduction, the supervising (a) SHORT TITLE.—This Act may be cited as State commission for that match of the re- the ‘‘Water Resources Development Act of 1999’’. Sec. 320. Saint Joseph River, South Bend, Indi- ana. duction. (b) TABLE OF CONTENTS.— Sec. 321. White River, Indiana. ‘‘(d) ENFORCEMENT.— Sec. 1. Short title; table of contents. Sec. 322. Lake Pontchartrain, Louisiana. Sec. 2. Secretary defined. ‘‘(1) CONTRACT.—A provision in a contract Sec. 323. Larose to Golden Meadow, Louisiana. between a broadcaster and a boxer that vio- TITLE I—WATER RESOURCES PROJECTS Sec. 324. Louisiana State Penitentiary Levee, lates subsection (a) is contrary to public pol- Sec. 101. Project authorizations. Louisiana. icy and unenforceable at law. Sec. 102. Small flood control projects. Sec. 325. Twelve-mile Bayou, Caddo Parish, ‘‘(2) PROHIBITIONS; NOTIFICATION.—For en- Sec. 103. Small bank stabilization projects. Louisiana. forcement of subsections (b) and (c), see sec- Sec. 104. Small navigation projects. Sec. 326. West Bank of the Mississippi River tion 10.’’. Sec. 105. Small projects for improvement of the (East of Harvey Canal), Lou- (b) BROADCASTER DEFINED.—Section 2 of environment. isiana. the Professional Boxing Safety Act of 1996 Sec. 106. Small aquatic ecosystem restoration Sec. 327. Tolchester Channel, Baltimore Harbor (15 U.S.C. 6301), as amended by section 8 of projects. and channels, Chesapeake Bay, this Act, is amended by adding at the end TITLE II—GENERAL PROVISIONS Kent County, Maryland. thereof the following: Sec. 201. Small flood control authority. Sec. 328. Sault Sainte Marie, Chippewa County, ‘‘(13) BROADCASTER.—The term ‘broad- Sec. 202. Use of non-Federal funds for com- Michigan. caster’ means any person who is a licensee as piling and disseminating informa- Sec. 329. Jackson County, Mississippi. that term is defined in section 3(24) of the tion on floods and flood damages. Sec. 330. Tunica Lake, Mississippi. Communications Act of 1934 (47 U.S.C. Sec. 203. Contributions by States and political Sec. 331. Bois Brule Drainage and Levee Dis- 153(24)).’’. subdivisions. trict, Missouri. S9626 CONGRESSIONAL RECORD — SENATE July 28, 1999 Sec. 332. Meramec River Basin, Valley Park Sec. 416. Western Lake Erie Basin, Ohio, Indi- Sec. 543. Restoration projects for Maryland, Levee, Missouri. ana, and Michigan. Pennsylvania, and West Virginia. Sec. 333. Missouri River mitigation project, Mis- Sec. 417. Schuylkill River, Norristown, Pennsyl- Sec. 544. Cape Cod Canal Railroad Bridge, Buz- souri, Kansas, Iowa, and Ne- vania. zards Bay, Massachusetts. braska. Sec. 418. Lakes Marion and Moultrie, South Sec. 545. St. Louis, Missouri. Sec. 334. Wood River, Grand Island, Nebraska. Carolina. Sec. 546. Beaver Branch of Big Timber Creek, Sec. 335. Absecon Island, New Jersey. Sec. 419. Day County, South Dakota. New Jersey. Sec. 336. New York Harbor and Adjacent Chan- Sec. 420. Corpus Christi, Texas. Sec. 547. Lake Ontario and St. Lawrence River nels, Port Jersey, New Jersey Sec. 421. Mitchell’s Cut Channel (Caney Fork water levels, New York. Sec. 337. Passaic River, New Jersey. Cut), Texas. Sec. 548. New York-New Jersey Harbor, New Sec. 338. Sandy Hook to Barnegat Inlet, New Sec. 422. Mouth of Colorado River, Texas. York and New Jersey. Jersey. Sec. 423. Kanawha River, Fayette County, West Sec. 549. Sea Gate Reach, Coney Island, New Sec. 339. Arthur Kill, New York and New Jer- Virginia. York, New York. sey. Sec. 424. West Virginia ports. Sec. 550. Woodlawn, New York. Sec. 340. New York City watershed. Sec. 425. Great Lakes region comprehensive Sec. 551. Floodplain mapping, New York. Sec. 341. New York State Canal System. study. Sec. 552. White Oak River, North Carolina. Sec. 342. Fire Island Inlet to Montauk Point, Sec. 426. Nutrient loading resulting from Sec. 553. Toussaint River, Carroll Township, New york. dredged material disposal. Ottawa County, Ohio. Sec. 343. Broken Bow Lake, Red River Basin, Sec. 427. Santee Delta focus area, South Caro- Sec. 554. Sardis Reservoir, Oklahoma. Oklahoma. lina. Sec. 555. Waurika Lake, Oklahoma, water con- Sec. 344. Willamette River temperature control, Sec. 428. Del Norte County, California. veyance facilities. Mckenzie Subbasin, Oregon. Sec. 429. St. Clair River and Lake St. Clair, Sec. 556. Skinner Butte Park, Eugene, Oregon. Sec. 345. Aylesworth Creek Reservoir, Pennsyl- Michigan. Sec. 557. Willamette River basin, Oregon. vania. Sec. 430. Cumberland County, Tennessee. Sec. 558. Bradford and Sullivan Counties, Sec. 346. Curwensville Lake, Pennsylvania. TITLE V—MISCELLANEOUS PROVISIONS Pennsylvania. Sec. 347. Delaware River, Pennsylvania and Sec. 501. Corps assumption of NRCS projects. Sec. 559. Erie Harbor, Pennsylvania. Delaware. Sec. 502. Construction assistance. Sec. 560. Point Marion Lock And Dam, Penn- Sec. 348. Mussers Dam, Pennsylvania. Sec. 503. Contaminated sediment dredging tech- sylvania. Sec. 349. Nine-Mile Run, Allegheny County, nology. Sec. 561. Seven Points’ Harbor, Pennsylvania. Pennsylvania. Sec. 504. Dam safety. Sec. 562. Southeastern Pennsylvania. Sec. 350. Raystown Lake, Pennsylvania. Sec. 505. Great Lakes remedial action plans. Sec. 563. Upper Susquehanna-Lackawanna wa- Sec. 351. South Central Pennsylvania. Sec. 506. Sea Lamprey control measures in the tershed restoration initiative. Sec. 352. Cooper River, Charleston Harbor, Great Lakes. Sec. 564. Aguadilla Harbor, Puerto Rico. South Carolina. Sec. 507. Maintenance of navigation channels. Sec. 565. Oahe Dam to Lake Sharpe, South Da- Sec. 353. Bowie County Levee, Texas. Sec. 508. Measurement of Lake Michigan diver- kota, study. Sec. 354. Clear Creek, Texas. sions. Sec. 566. Integrated water management plan- Sec. 355. Cypress Creek, Texas. Sec. 509. Upper Mississippi River environmental ning, Texas. Sec. 356. Dallas Floodway Extension, Dallas, management program. Sec. 567. Bolivar Peninsula, Jefferson, Cham- Texas. Sec. 510. Atlantic Coast of New York moni- bers, and Galveston Counties, Sec. 357. Upper Jordan River, Utah. toring. Texas. Sec. 358. Elizabeth River, Chesapeake, Virginia. Sec. 511. Water control management. Sec. 568. Galveston Beach, Galveston County, Sec. 359. Bluestone Lake, Ohio River Basin, Sec. 512. Beneficial use of dredged material. Texas. West Virginia. Sec. 513. Design and construction assistance. Sec. 569. Packery Channel, Corpus Christi, Sec. 360. Greenbrier Basin, West Virginia. Sec. 514. Lower Missouri River aquatic restora- Texas. Sec. 361. Moorefield, West Virginia. tion projects. Sec. 570. Northern West Virginia. Sec. 362. West Virginia and Pennsylvania Flood Sec. 515. Aquatic resources restoration in the Sec. 571. Urbanized peak flood management re- Control. Northwest. search. Sec. 363. Project reauthorizations. Sec. 516. Innovative technologies for watershed Sec. 572. Mississippi River Commission. Sec. 364. Project deauthorizations. restoration. Sec. 573. Coastal aquatic habitat management. Sec. 365. American and Sacramento Rivers, Sec. 517. Environmental restoration. Sec. 574. West Baton Rouge Parish, Louisiana. California. Sec. 518. Expedited consideration of certain Sec. 575. Abandoned and inactive noncoal mine Sec. 366. Martin, Kentucky. projects. restoration. Sec. 367. Southern West Virginia pilot program. Sec. 519. Dog River, Alabama. Sec. 576. Beneficial use of waste tire rubber. Sec. 368. Black Warrior and Tombigbee Rivers, Sec. 520. Elba, Alabama. Sec. 577. Site designation. Jackson, Alabama. Sec. 521. Geneva, Alabama. Sec. 578. Land conveyances. Sec. 369. Tropicana Wash and Flamingo Wash, Sec. 522. Navajo Reservation, Arizona, New Sec. 579. Namings. Nevada. Mexico, and Utah. Sec. 580. Folsom Dam and Reservoir additional Sec. 370. Comite River, Louisiana. Sec. 523. Augusta and Devalls Bluff, Arkansas. storage and additional flood con- Sec. 371. St. Mary’s River, Michigan. Sec. 524. Beaver Lake, Arkansas. trol studies. Sec. 372. City of Charlxvoix: reimbursement, Sec. 525. Beaver Lake trout production facility, Sec. 581. Wallops Island, Virginia. Michigan. Arkansas. Sec. 582. Detroit River, Detroit, Michigan. Sec. 526. Chino Dairy Preserve, California. Sec. 583. Northeastern Minnesota. TITLE IV—STUDIES Sec. 527. Novato, California. Sec. 584. Alaska. Sec. 401. Upper Mississippi and Illinois Rivers Sec. 528. Orange and San Diego Counties, Cali- Sec. 585. Central West Virginia. levees and streambanks protec- fornia. Sec. 586. Sacramento Metropolitan area water- tion. Sec. 529. Salton Sea, California. shed restoration, California. Sec. 402. Upper Mississippi River comprehensive Sec. 530. Santa Cruz Harbor, California. Sec. 587. Onondaga Lake. plan. Sec. 531. Point Beach, Milford, Connecticut. Sec. 588. East Lynn Lake, West Virginia. Sec. 403. El Dorado, Union County, Arkansas. Sec. 532. Lower St. Johns River Basin, Florida. Sec. 589. Eel River, California. Sec. 404. Sweetwater Reservoir, San Diego Sec. 533. Shoreline protection and environ- Sec. 590. North Little Rock, Arkansas. County, California. mental restoration, Lake Sec. 591. Upper Mississippi River, Mississippi Sec. 405. Whitewater River Basin, California. Allatoona, Georgia. Place, St. Paul, Minnesota. Sec. 406. Little Econlackhatchee River Basin, Sec. 534. Mayo’s Bar Lock and Dam, Coosa SEC. 2. SECRETARY DEFINED. Florida. River, Rome, Georgia. In this Act, the term ‘‘Secretary’’ means the Sec. 407. Port Everglades Inlet, Florida. Sec. 535. Comprehensive flood impact response Secretary of the Army. Sec. 408. Upper Des Plaines River and tribu- modeling system, Coralville Res- taries, Illinois and Wisconsin. ervoir and Iowa River Watershed, TITLE I—WATER RESOURCES PROJECTS Sec. 409. Cameron Parish west of Calcasieu Iowa. SEC. 101. PROJECT AUTHORIZATIONS. River, Louisiana. Sec. 536. Additional construction assistance in (a) PROJECTS WITH CHIEF’S REPORTS.—The Sec. 410. Grand Isle and vicinity, Louisiana. Illinois. following projects for water resources develop- Sec. 411. Lake Pontchartrain seawall, Lou- Sec. 537. Kanopolis Lake, Kansas. ment and conservation and other purposes are isiana. Sec. 538. Southern and Eastern Kentucky. authorized to be carried out by the Secretary Sec. 412. Westport, Massachusetts. Sec. 539. Southeast Louisiana. substantially in accordance with the plans, and Sec. 413. Southwest Valley, Albuquerque, New Sec. 540. Snug Harbor, Maryland. subject to the conditions, described in the re- Mexico. Sec. 541. Welch Point, Elk River, Cecil County, spective reports designated in this subsection: Sec. 414. Cayuga Creek, New York. and Chesapeake City, Maryland. (1) SAND POINT HARBOR, ALASKA.—The project Sec. 415. Arcola Creek Watershed, Madison, Sec. 542. West View Shores, Cecil County, for navigation, Sand Point Harbor, Alaska: Re- Ohio. Maryland. port of the Chief of Engineers dated October 13, July 28, 1999 CONGRESSIONAL RECORD — SENATE S9627 1998, at a total cost of $11,760,000, with an esti- California: Report of the Chief of Engineers eral cost of $6,235,000 and an estimated non- mated Federal cost of $6,964,000 and an esti- dated November 25, 1998, at a total cost of Federal cost of $3,121,000. mated non-Federal cost of $4,796,000. $26,600,000, with an estimated Federal cost of (16) BRUNSWICK HARBOR, GEORGIA.—The (2) RIO SALADO, SALT RIVER, PHOENIX AND $17,350,000 and an estimated non-Federal cost of project for navigation, Brunswick Harbor, Geor- TEMPE, ARIZONA.—The project for flood control $9,250,000. gia: Report of the Chief of Engineers dated Oc- and environmental restoration, Rio Salado, Salt (9) DELAWARE BAY COASTLINE, DELAWARE AND tober 6, 1998, at a total cost of $50,717,000, with River, Phoenix and Tempe, Arizona: Report of NEW JERSEY-BROADKILL BEACH, DELAWARE.—The an estimate Federal cost of $32,966,000 and an the Chief of Engineers dated August 20, 1998, at project for hurricane and storm damage reduc- estimated non-Federal cost of $17,751,000. a total cost of $88,048,000, with an estimated tion, Delaware Bay coastline, Delaware and (17) BEARGRASS CREEK, KENTUCKY.—The Federal cost of $56,355,000 and an estimated New Jersey-Broadkill Beach, Delaware: Report project for flood control, Beargrass Creek, Ken- non-Federal cost of $31,693,000. of the Chief of Engineers dated August 17, 1998, tucky: Report of the Chief of Engineers, dated (3) TUCSON DRAINAGE AREA, ARIZONA.—The at a total cost of $9,049,000, with an estimated May 12, 1998, at a total cost of $11,171,300, with project for flood control, Tucson drainage area, Federal cost of $5,674,000 and an estimated non- an estimated Federal cost of $7,261,500 and an Arizona: Report of the Chief of Engineers, dated Federal cost of $3,375,000, and at an estimated estimated non-Federal cost of $3,909,800. May 20, 1998, at a total cost of $29,900,000, with average annual cost of $538,200 for periodic (18) AMITE RIVER AND TRIBUTARIES, LOU- an estimated Federal cost of $16,768,000 and an nourishment over the 50-year life of the project, ISIANA.—The project for flood control, Amite estimated non-Federal cost of $13,132,000. with an estimated annual Federal cost of River and tributaries, Louisiana: Report of the (4) AMERICAN RIVER WATERSHED, CALI- $349,800 and an estimated annual non-Federal Chief of Engineers dated December 23, 1996, at a FORNIA.— cost of $188,400. total cost of $112,900,000, with an estimated Fed- (A) IN GENERAL.—The Folsom Dam Modifica- (10) DELAWARE BAY COASTLINE, DELAWARE eral cost of $84,675,000 and an estimated non- tion portion of the Folsom Modification Plan AND NEW JERSEY-PORT MAHON, DELAWARE.—The Federal cost of $28,225,000. Cost sharing for the described in the United States Army Corps of project for ecosystem restoration, Delaware Bay project shall be determined in accordance with Engineers Supplemental Information Report for coastline, Delaware and New Jersey-Port section 103(a) of the Water Resources Develop- the American River Watershed Project, Cali- Mahon, Delaware: Report of the Chief of Engi- ment Act of 1986 (33 U.S.C. 2213), as in effect on fornia, dated March 1996, as modified by the re- neers dated September 28, 1998, at a total cost of October 11, 1996. port entitled ‘‘Folsom Dam Modification Report, $7,644,000, with an estimated Federal cost of (19) BALTIMORE HARBOR ANCHORAGES AND New Outlets Plan,’’ dated March 1998, prepared $4,969,000 and an estimated non-Federal cost of CHANNELS, MARYLAND AND VIRGINIA.—The by the Sacramento Area Flood Control Agency, $2,675,000, and at an estimated average annual project for navigation, Baltimore harbor an- at an estimated cost of $150,000,000, with an esti- cost of $234,000 for periodic nourishment over chorages and channels, Maryland and Virginia: mated Federal cost of $97,500,000 and an esti- the 50-year life of the project, with an estimated Report of the Chief of Engineers, dated June 8, mated non-Federal cost of $52,500,000. The Sec- annual Federal cost of $152,000 and an esti- 1998, at a total cost of $28,430,000, with an esti- retary shall coordinate with the Secretary of the mated Federal cost of $19,000,000 and an esti- Interior with respect to the design and construc- mated annual non-Federal cost of $82,000. (11) DELAWARE BAY COASTLINE, DELAWARE mated non-Federal cost of $9,430,000. tion of modifications at Folsom Dam authorized AND NEW JERSEY-ROOSEVELT INLET-LEWES BEACH, (20) RED RIVER LAKE AT CROOKSTON, MIN- by this paragraph. DELAWARE.—The project for navigation mitiga- NESOTA.—The project for flood control, Red (B) REOPERATION MEASURES.—Upon comple- River Lake at Crookston, Minnesota: Report of tion of the improvements to Folsom Dam author- tion and hurricane and storm damage reduc- the Chief of Engineers, dated April 20, 1998, at ized by subparagraph (A), the variable space al- tion, Delaware Bay coastline, Delaware and a total cost of $8,950,000, with an estimated Fed- located to flood control within the Reservoir New Jersey-Roosevelt Inlet-Lewes Beach, Dela- eral cost of $5,720,000 and an estimated non- shall be reduced from the current operating ware: Report of the Chief of Engineers dated range of 400,000-670,000 acre-feet to 400,000- February 3, 1999, at a total cost of $3,393,000, Federal cost of $3,230,000. (21) TURKEY CREEK BASIN, KANSAS CITY, MIS- 600,000 acre-feet. with an estimated Federal cost of $2,620,000 and SOURI, AND KANSAS CITY, KANSAS.—The project (C) MAKEUP OF WATER SHORTAGES CAUSED BY an estimated non-Federal cost of $773,000, and for flood damage reduction, Turkey Creek FLOOD CONTROL OPERATION.—The Secretary of at an estimated average annual cost of $196,000 the Interior shall enter into, or modify, such for periodic nourishment over the 50-year life of Basin, Kansas City, Missouri, and Kansas City, agreements with the Sacramento Area Flood the project, with an estimated annual Federal Kansas: Report of the Chief of Engineers dated Control Agency regarding the operation of Fol- cost of $152,000 and an estimated annual non- April 21, 1999, at a total cost of $42,875,000, with som Dam and reservoir as may be necessary in Federal cost of $44,000. an estimated Federal cost of $25,596,000 and an order that, notwithstanding any prior agree- (12) DELAWARE BAY COASTLINE, DELAWARE estimated non-Federal cost of $17,279,000. ment or provision of law, 100 percent of the AND NEW JERSEY-VILLAS AND VICINITY, NEW JER- (22) LOWER CAPE MAY MEADOWS, CAPE MAY water needed to make up for any water shortage SEY.—The project for shore protection and eco- POINT, NEW JERSEY.—The project for navigation caused by variable flood control operation dur- system restoration, Delaware Bay coastline, mitigation, ecosystem restoration, and hurricane ing any year at Folsom Dam and resulting in a Delaware and New Jersey-Villas and vicinity, and storm damage reduction, Lower Cape May significant impact on recreation at Folsom Res- New Jersey: Report of the Chief of Engineers Meadows, Cape May Point, New Jersey: Report ervoir shall be replaced, to the extent the water dated April 21, 1999, at a total cost of $7,520,000, of the Chief of Engineers dated April 5, 1999, at is available for purchase, by the Secretary of the with an estimated Federal cost of $4,888,000 and a total cost of $15,952,000, with an estimated Interior. an estimated non-Federal cost of $2,632,000. Federal cost of $12,118,000 and an estimated (D) SIGNIFICANT IMPACT ON RECREATION.—For (13) DELAWARE COAST FROM CAPE HENELOPEN non-Federal cost of $3,834,000, and at an esti- the purposes of this paragraph, a significant im- TO FENWICK ISLAND, BETHANY BEACH/SOUTH mated average annual cost of $1,114,000 for peri- pact on recreation is defined as any impact that BETHANY BEACH, DELAWARE.—The project for odic nourishment over the 50-year life of the results in a lake elevation at Folsom Reservoir hurricane and storm damage reduction, Dela- project, with an estimated annual Federal cost below 435 feet above sea level starting on May 15 ware Coast from Cape Henelopen to Fenwick Is- of $897,000 and an estimated annual non-Fed- and ending on September 15 of any given year. land, Bethany Beach/South Bethany Beach, eral cost of $217,000. (5) OAKLAND HARBOR, CALIFORNIA.—The Delaware: Report of the Chief of Engineers (23) NEW JERSEY SHORE PROTECTION: TOWN- project for navigation, Oakland Harbor, Cali- dated April 21, 1999, at a total cost of SENDS INLET TO CAPE MAY INLET, NEW JERSEY.— fornia: Report of the Chief of Engineers dated $22,205,000, with an estimated Federal cost of The project for hurricane and storm damage re- April 21, 1999, at a total cost of $252,290,000, $14,433,000 and an estimated non-Federal cost of duction and ecosystem restoration, New Jersey with an estimated Federal cost of $128,081,000 $7,772,000, and at an estimated average annual Shore Protection: Townsends Inlet to Cape May and an estimated non-Federal cost of cost of $1,584,000 for periodic nourishment over Inlet, New Jersey: Report of the Chief of Engi- $124,209,000. the 50-year life of the project, with an estimated neers dated September 28, 1998, at a total cost of (6) SOUTH SACRAMENTO COUNTY STREAMS, annual Federal cost of $1,030,000 and an esti- $56,503,000, with an estimated Federal cost of CALIFORNIA.—The project for flood control, envi- mated annual non-Federal cost of $554,000. $36,727,000 and an estimated non-Federal cost of ronmental restoration and recreation, South (14) JACKSONVILLE HARBOR, FLORIDA.— $19,776,000, and at an estimated average annual Sacramento County streams, California: Report (A) IN GENERAL.—The project for navigation, cost of $2,000,000 for periodic nourishment over of the Chief of Engineers dated October 6, 1998, Jacksonville Harbor, Florida: Report of the the 50-year life of the project, with an estimated at a total cost of $65,500,000, with an estimated Chief of Engineers April 21, 1999, at a total cost annual Federal cost of $1,300,000 and an esti- Federal cost of $41,200,000 and an estimated of $26,116,000, with an estimated Federal cost of mated annual non-Federal cost of $700,000. non-Federal cost of $24,300,000. $9,129,000 and an estimated non-Federal cost of (24) GUANAJIBO RIVER, PUERTO RICO.—The (7) UPPER GUADALUPE RIVER, CALIFORNIA.— $16,987,000. project for flood control, Guanajibo River, Puer- The project for flood control and recreation, (B) SPECIAL RULE.—Notwithstanding subpara- to Rico: Report of the Chief of Engineers, dated Upper Guadalupe River, California: Locally graph (A), the Secretary may construct the February 27, 1996, at a total cost of $27,031,000, Preferred Plan (known as the ‘‘Bypass Channel project to a depth of 40 feet if the non-Federal with an estimated Federal cost of $20,273,250 Plan’’), Report of the Chief of Engineers dated interest agrees to pay any additional costs above and an estimated non-Federal cost of $6,757,750. August 19, 1998, at a total cost of $140,328,000, those for the recommended plan. Cost sharing for the project shall be determined with an estimated Federal cost of $70,164,000 (15) TAMPA HARBOR-BIG BEND CHANNEL, FLOR- in accordance with section 103(a) of the Water and an estimated non-Federal cost of IDA.—The project for navigation, Tampa Har- Resources Development Act 1986 (33 U.S.C. 2213) $70,164,000. bor-Big Bend Channel, Florida: Report of the as in effect on October 11, 1986. (8) YUBA RIVER BASIN, CALIFORNIA.—The Chief of Engineers dated October 13, 1998, at a (25) RIO GRANDE DE MANATI, BARCELONETA, project for flood control, Yuba River Basin, total cost of $9,356,000, with an estimated Fed- PUERTO RICO.—The project for flood control, Rio S9628 CONGRESSIONAL RECORD — SENATE July 28, 1999

Grande De Manati, Barceloneta, Puerto Rico: and approved an environmental impact state- (11) PORT INDIAN, WEST NORRITON TOWNSHIP, Report of the Chief of Engineers, dated January ment for the project that includes— MONTGOMERY COUNTY, PENNSYLVANIA.—Project 22, 1999, at a total cost of $13,491,000, with an (I) an analysis of the impacts of project depth for flood control, Port Indian, West Norriton estimated Federal cost of $8,785,000 and an esti- alternatives ranging from 42 feet through 48 Township, Montgomery County, Pennsylvania. mated non-Federal cost of $4,706,000. feet; and (12) PORT PROVIDENCE, UPPER PROVIDENCE (26) RIO NIGUA AT SALINAS, PUERTO RICO.—The (II) a selected plan for navigation and an as- TOWNSHIP, PENNSYLVANIA.—Project for flood project for flood control, Rio Nigua at Salinas, sociated mitigation plan as required by section control, Port Providence, Upper Providence Puerto Rico: Report of the Chief of Engineers, 906(a) of the Water Resources Development Act Township, Pennsylvania. dated April 15, 1997, at a total cost of of 1986 (33 U.S.C. 2283); and (13) SPRINGFIELD TOWNSHIP, MONTGOMERY $13,702,000, with an estimated Federal cost of (ii) the Secretary of the Interior, the Secretary COUNTY, PENNSYLVANIA.—Project for flood con- $7,645,000 and an estimated non-Federal cost of of Commerce, the Administrator of the Environ- trol, Springfield Township, Montgomery Coun- $6,057,000. mental Protection Agency, and the Secretary ty, Pennsylvania. (27) SALT CREEK, GRAHAM, TEXAS.—The have approved the selected plan and have deter- (14) FIRST CREEK, KNOXVILLE, TENNESSEE.— project for flood control, environmental restora- mined that the mitigation plan adequately ad- Project for flood control, First Creek, Knoxville, tion and recreation, Salt Creek, Graham, Texas: dresses the potential environmental impacts of Tennessee. Report of the Chief of Engineers dated October the project. (15) METRO CENTER LEVEE, CUMBERLAND 6, 1998, at a total cost of $10,080,000, with an es- (C) MITIGATION REQUIREMENTS.—The mitiga- RIVER, NASHVILLE, TENNESSEE.—Project for flood timated Federal cost of $6,560,000 and an esti- tion plan shall be implemented in advance of or control, Metro Center Levee, Cumberland River, mated non-Federal cost of $3,520,000. concurrently with construction of the project. Nashville, Tennessee. (b) PROJECTS SUBJECT TO REPORT.—The fol- (9) DES PLAINES RIVER, ILLINOIS.—The project (b) FESTUS AND CRYSTAL CITY, MISSOURI.— lowing projects for water resources development for flood control, Des Plaines River, Illinois, at (1) MAXIMUM FEDERAL EXPENDITURE.—The and conservation and other purposes are au- a total cost of $44,300,000 with an estimated Fed- maximum amount of Federal funds that may be thorized to be carried out by the Secretary sub- eral cost of $28,800,000 and an estimated non- expended for the project for flood control, stantially in accordance with the plans, and Federal cost of $15,500,000. Festus and Crystal City, Missouri, shall be subject to the conditions, recommended in a (10) NEW JERSEY SHORE PROTECTION, BRIGAN- $10,000,000. final report of the Corps of Engineers, if the re- TINE INLET TO GREAT EGG HARBOR, BRIGANTINE (2) REVISION OF PROJECT COOPERATION AGREE- port is completed not later than September 30, ISLAND, NEW JERSEY.—The project for hurricane MENT.—The Secretary shall revise the project co- 1999. and storm damage reduction, New Jersey shore operation agreement for the project referred to (1) NOME, ALASKA.—The project for naviga- protection, Brigantine Inlet to Great Egg Har- in paragraph (1) to take into account the tion, Nome, Alaska, at a total cost of $24,608,000, bor, Brigantine Island, New Jersey, at a total change in the Federal participation in such with an estimated Federal cost of $19,660,000 cost of $4,970,000, with an estimated Federal cost project pursuant to paragraph (1). and an estimated non-Federal cost of $4,948,000. of $3,230,000 and an estimated non-Federal cost (3) COST SHARING.—Nothing in this section (2) SEWARD HARBOR, ALASKA.—The project for of $1,740,000, and at an estimated average an- shall be construed to affect any cost-sharing re- navigation, Seward Harbor, Alaska, at a total nual cost of $465,000 for periodic nourishment quirement applicable to the project referred to in cost of $12,240,000, with an estimated Federal over the 50-year life of the project, with an esti- paragraph (1) under the Water Resources Devel- cost of $4,364,000 and an estimated non-Federal mated annual Federal cost of $302,000 and an opment Act of 1986. cost of $7,876,000. estimated annual non-Federal cost of $163,000. SEC. 103. SMALL BANK STABILIZATION (3) HAMILTON AIRFIELD, CALIFORNIA.—The (11) COLUMBIA RIVER CHANNEL, OREGON AND PROJECTS. project for wetlands restoration, Hamilton Air- WASHINGTON.—The project for navigation, Co- The Secretary shall conduct a study for each field, California, at a total cost of $55,200,000, lumbia River Channel, Oregon and Washington, of the following projects and, after completion with an estimated Federal cost of $41,400,000 at a total cost of $183,623,000 with an estimated of such study, shall carry out the project under and an estimated non-Federal cost of Federal cost $106,132,000 and an estimated non- section 14 of the Flood Control Act of 1946 (33 $13,800,000. Federal cost of $77,491,000. U.S.C. 701r): (4) DELAWARE BAY COASTLINE, DELAWARE AND (12) JOHNSON CREEK, ARLINGTON, TEXAS.—The (1) SAINT JOSEPH RIVER, INDIANA.—Project for NEW JERSEY: OAKWOOD BEACH, NEW JERSEY.— locally preferred project for flood control, John- streambank erosion control, Saint Joseph River, The project for shore protection, Delaware Bay son Creek, Arlington, Texas, at a total cost of Indiana. Coastline, Delaware and New Jersey: Oakwood $20,300,000, with an estimated Federal cost of (2) SAGINAW RIVER, BAY CITY, MICHIGAN.— Beach, New Jersey, at a total cost of $3,360,000, $12,000,000 and an estimated non-Federal cost of Project for streambank erosion control, Saginaw with an estimated Federal cost of $2,184,000 and $8,300,000. River, Bay City, Michigan. an estimated non-Federal cost of $1,176,000. (13) HOWARD HANSON DAM, WASHINGTON.—The (3) BIG TIMBER CREEK, NEW JERSEY.—Project (5) DELAWARE BAY COASTLINE, DELAWARE AND project for water supply and ecosystem restora- for streambank erosion control, Big Timber NEW JERSEY: REEDS BEACH AND PIERCES POINT, tion, Howard Hanson Dam, Washington, at a Creek, New Jersey. NEW JERSEY.—The project for shore protection total cost of $75,600,000, with an estimated Fed- (4) LAKE SHORE ROAD, ATHOL SPRINGS, NEW and ecosystem restoration, Delaware Bay Coast- eral cost of $36,900,000 and an estimated non- YORK.—Project for streambank erosion control, line, Delaware and New Jersey: Reeds Beach Federal cost of $38,700,000. Lake Shore Road, Athol Springs, New York. and Pierces Point, New Jersey, at a total cost of SEC. 102. SMALL FLOOD CONTROL PROJECTS. (5) MARIST COLLEGE, POUGHKEEPSIE, NEW $4,057,000, with an estimated Federal cost of (a) IN GENERAL.—The Secretary shall conduct YORK.—Project for streambank erosion control, $2,637,000 and an estimated non-Federal cost of a study for each of the following projects and, Marist College, Poughkeepsie, New York. $1,420,000. after completion of such study, shall carry out (6) MONROE COUNTY, OHIO.—Project for (6) LITTLE TALBOT ISLAND, DUVAL COUNTY, the project under section 205 of the Flood Con- streambank erosion control, Monroe County, FLORIDA.—The project for hurricane and storm trol Act of 1948 (33 U.S.C. 701s): Ohio. damage prevention, Little Talbot Island, Duval (1) LANCASTER, CALIFORNIA.—Project for flood (7) GREEN VALLEY, WEST VIRGINIA.—Project for County, Florida, at a total cost of $5,915,000, control, Lancaster, California, westside streambank erosion control, Green Valley, West with an estimated Federal cost of $3,839,000 and stormwater retention facility. Virginia. an estimated non-Federal cost of $2,076,000. (2) GATEWAY TRIANGLE AREA, FLORIDA.— (7) PONCE DE LEON INLET, FLORIDA.—The Project for flood control, Gateway Triangle SEC. 104. SMALL NAVIGATION PROJECTS. project for navigation and related purposes, area, Collier County, Florida. The Secretary shall conduct a study for each Ponce de Leon Inlet, Volusia County, Florida, (3) PLANT CITY, FLORIDA.—Project for flood of the following projects and, after completion at a total cost of $5,454,000, with an estimated control, Plant City, Florida. of such study, shall carry out the project under Federal cost of $2,988,000 and an estimated non- (4) STONE ISLAND, LAKE MONROE, FLORIDA.— section 107 of the River and Harbor Act of 1960 Federal cost of $2,466,000. Project for flood control, Stone Island, Lake (33 U.S.C. 577): (8) SAVANNAH HARBOR EXPANSION, GEORGIA.— Monroe, Florida. (1) GRAND MARAIS, ARKANSAS.—Project for (A) IN GENERAL.—Subject to subparagraph (5) OHIO RIVER, ILLINOIS.—Project for flood navigation, Grand Marais, Arkansas. (B), the project for navigation, Savannah Har- control, Ohio River, Illinois. (2) FIELDS LANDING CHANNEL, HUMBOLDT HAR- bor expansion, Georgia, including implementa- (6) REPAUPO CREEK, NEW JERSEY.—Project for BOR, CALIFORNIA.—Project for navigation, tion of the mitigation plan, with such modifica- flood control, Repaupo Creek, New Jersey. Fields Landing Channel, Humboldt Harbor, tions as the Secretary deems appropriate, at a (7) OWASCO LAKE SEAWALL, NEW YORK.— California. total cost of $230,174,000 (of which amount a Project for flood control, Owasco Lake seawall, (3) SAN MATEO (PILLAR POINT HARBOR), CALI- portion is authorized for implementation of the New York. FORNIA.—Project for navigation San Mateo (Pil- mitigation plan), with an estimated Federal cost (8) PORT CLINTON, OHIO.—Project for flood lar Point Harbor), California. of $145,160,000 and an estimated non-Federal control, Port Clinton, Ohio. (4) AGANA MARINA, GUAM.—Project for naviga- cost of $85,014,000. (9) NORTH CANADIAN RIVER, OKLAHOMA.— tion, Agana Marina, Guam. (B) CONDITIONS.—The project authorized by Project for flood control, North Canadian River, (5) AGAT MARINA, GUAM.—Project for naviga- subparagraph (A) may be carried out only Oklahoma. tion, Agat Marina, Guam. after— (10) ABINGTON TOWNSHIP, PENNSYLVANIA.— (6) APRA HARBOR FUEL PIERS, GUAM.—Project (i) the Secretary, in consultation with affected Project for flood control, Baeder and Wana- for navigation, Apra Harbor Fuel Piers, Guam. Federal, State of Georgia, State of South Caro- maker Roads, Abington Township, Pennsyl- (7) APRA HARBOR PIER F–6, GUAM.—Project for lina, regional, and local entities, has reviewed vania. navigation, Apra Harbor Pier F–6, Guam. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9629

(8) APRA HARBOR SEAWALL, GUAM.—Project for (9) ONEIDA LAKE, NEW YORK.—Project for (1) in subsection (a) by inserting ‘‘arundo,’’ navigation including a seawall, Apra Harbor, aquatic ecosystem restoration, Oneida Lake, after ‘‘milfoil,’’; Guam. Oneida County, New York. (2) in subsection (b) by striking ‘‘$12,000,000’’ (9) GUAM HARBOR, GUAM.—Project for naviga- (10) OTSEGO LAKE, NEW YORK.—Project for and inserting ‘‘$15,000,000.’’; and tion, Guam Harbor, Guam. aquatic ecosystem restoration, Otsego Lake, Ot- (3) by adding at the end the following: (10) ILLINOIS RIVER NEAR CHAUTAUQUA PARK, sego County, New York. ‘‘(c) SUPPORT.—In carrying out this program, ILLINOIS.—Project for navigation, Illinois River (11) NORTH FORK OF YELLOW CREEK, OHIO.— the Secretary is encouraged to utilize contracts, near Chautauqua Park, Illinois. Project for aquatic ecosystem restoration, North cooperative agreements, and grants with col- (11) WHITING SHORELINE WATERFRONT, WHIT- Fork of Yellow Creek, Ohio. leges and universities and other non-Federal en- ING, INDIANA.—Project for navigation, Whiting (12) WHEELING CREEK WATERSHED, OHIO.— tities.’’. Shoreline Waterfront, Whiting, Indiana. Project for aquatic ecosystem restoration, SEC. 206. USE OF CONTINUING CONTRACTS RE- (12) NARAGUAGUS RIVER, MACHIAS, MAINE.— Wheeling Creek watershed, Ohio. QUIRED FOR CONSTRUCTION OF Project for navigation, Naraguagus River, (13) SPRINGFIELD MILLRACE, OREGON.—Project CERTAIN PROJECTS. Machias, Maine. for aquatic ecosystem restoration, Springfield (a) IN GENERAL.—Notwithstanding any other (13) UNION RIVER, ELLSWORTH, MAINE.— Millrace, Oregon. provision of law, the Secretary shall not imple- Project for navigation, Union River, Ellsworth, (14) UPPER AMAZON CREEK, OREGON.—Project ment a fully allocated funding policy with re- Maine. for aquatic ecosystem restoration, Upper Ama- spect to a water resources project if initiation of (14) DETROIT WATERFRONT, MICHIGAN.— zon Creek, Oregon. construction has occurred but sufficient funds (15) LAKE ONTELAUNEE RESERVOIR, BERKS Project for navigation, Detroit River, Michigan, are not available to complete the project. The COUNTY, PENNSYLVANIA.—Project for aquatic including dredging and removal of a reef. Secretary shall enter into continuing contracts ecosystem restoration and distilling pond facili- (15) FORTESCUE INLET, DELAWARE BAY, NEW for such project. ties, Lake Ontelaunee Reservoir, Berks County, JERSEY.—Project for navigation for Fortescue (b) INITIATION OF CONSTRUCTION CLARIFIED.— Inlet, Delaware Bay, New Jersey. Pennsylvania. For the purposes of this section, initiation of (16) BLACKSTONE RIVER BASIN, RHODE ISLAND (16) BUFFALO AND LASALLE PARK, NEW YORK.— construction for a project occurs on the date of AND MASSACHUSETTS.—Project for aquatic eco- Project for navigation, Buffalo and LaSalle the enactment of an Act that appropriates funds system restoration and fish passage facilities, Park, New York. for the project from one of the following appro- Blackstone River Basin, Rhode Island and Mas- (17) STURGEON POINT, NEW YORK.—Project for priation accounts: navigation, Sturgeon Point, New York. sachusetts. (1) Construction, General. (18) FAIRPORT HARBOR, OHIO.—Project for TITLE II—GENERAL PROVISIONS (2) Operation and Maintenance, General. navigation, Fairport Harbor, Ohio, including a SEC. 201. SMALL FLOOD CONTROL AUTHORITY. (3) Flood Control, Mississippi River and Trib- recreation channel. Section 205 of the Flood Control Act of 1948 utaries. SEC. 105. SMALL PROJECTS FOR IMPROVEMENT (33 U.S.C. 701s) is amended— SEC. 207. SUPPORT OF ARMY CIVIL WORKS PRO- OF THE ENVIRONMENT. (1) by striking ‘‘construction of small GRAM. (a) IN GENERAL.—The Secretary shall conduct projects’’ and inserting ‘‘implementation of The requirements of section 2361 of title 10, a study for each of the following projects and, small structural and nonstructural projects’’; United States Code, shall not apply to any con- after completion of such study, shall carry out and tract, cooperative research and development the project under section 1135 of the Water Re- (2) by striking ‘‘$5,000,000’’ and inserting agreement, cooperative agreement, or grant en- sources Development Act of 1986 (33 U.S.C. ‘‘$7,000,000’’. tered into under section 229 of the Water Re- 2309a): SEC. 202. USE OF NON-FEDERAL FUNDS FOR COM- sources Development Act of 1996 (110 Stat. 3703) (1) ILLINOIS RIVER IN THE VICINITY OF HAVANA, PILING AND DISSEMINATING INFOR- between the Secretary and Marshall University ILLINOIS.—Project for the improvement of the MATION ON FLOODS AND FLOOD or entered into under section 350 of this Act be- environment, Illinois River in the vicinity of Ha- DAMAGES. tween the Secretary and Juniata College. vana, Illinois. The last sentence of section 206(b) of the SEC. 208. WATER RESOURCES DEVELOPMENT (2) KNITTING MILL CREEK, VIRGINIA.—Project Flood Control Act of 1960 (33 U.S.C. 709a(b)) is STUDIES FOR THE PACIFIC REGION. for the improvement of the environment, Knit- amended by inserting before the period the fol- Section 444 of the Water Resources Develop- ting Mill Creek, Virginia. lowing: ‘‘; except that this limitation on fees ment Act of 1996 (110 Stat. 3747) is amended by (b) PINE FLAT DAM, KINGS RIVER, CALI- shall not apply to funds voluntarily contributed striking ‘‘interest of navigation’’ and inserting FORNIA.—The Secretary shall carry out under by such entities for the purpose of expanding ‘‘interests of water resources development, in- section 1135(a) of the Water Resources Develop- the scope of the services requested by such enti- cluding navigation, flood damage reduction, ment Act of 1986 (33 U.S.C. 2309a(a)) a project to ties’’. and environmental restoration’’. construct a turbine bypass at Pine Flat Dam, SEC. 203. CONTRIBUTIONS BY STATES AND POLIT- Kings River, California, in accordance with the ICAL SUBDIVISIONS. SEC. 209. EVERGLADES AND SOUTH FLORIDA Project Modification Report and Environmental Section 5 of the Flood Control Act of June 22, ECOSYSTEM RESTORATION. Assessment dated September 1996. 1936 (33 U.S.C. 701h), is amended by inserting (a) PROGRAM EXTENSION.—Section 528(b)(3) of the Water Resources Development Act of 1996 SEC. 106. SMALL AQUATIC ECOSYSTEM RESTORA- ‘‘or environmental restoration’’ after ‘‘flood TION PROJECTS. control’’. (110 Stat. 3769) is amended— (1) in subparagraph (B) by striking ‘‘1999’’ The Secretary shall conduct a study for each SEC. 204. SEDIMENT DECONTAMINATION TECH- of the following projects and, after completion NOLOGY. and inserting ‘‘2000’’; and of such study, shall carry out the project under Section 405 of the Water Resources Develop- (2) in subparagraph (C)(i) by striking ‘‘1999’’ section 206 of the Water Resources Development ment Act of 1992 (33 U.S.C. 2239 note; 106 Stat. and inserting ‘‘2003’’. (b) CREDIT.—Section 528(b)(3) of such Act is Act of 1996 (33 U.S.C. 2330): 4863) is amended— amended by adding at the end the following: (1) CONTRA COSTA COUNTY, BAY DELTA, CALI- (1) by adding at the end of subsection (a) the ‘‘(D) CREDIT OF PAST AND FUTURE ACTIVI- FORNIA.—Project for aquatic ecosystem restora- following: TIES.—The Secretary may provide a credit to the tion, Contra Costa County, Bay Delta, Cali- ‘‘(4) PRACTICAL END-USE PRODUCTS.—Tech- non-Federal interests toward the non-Federal fornia. nologies selected for demonstration at the pilot share of a project implemented under subpara- (2) INDIAN RIVER, FLORIDA.—Project for aquat- scale shall be intended to result in practical ic ecosystem restoration and lagoon restoration, end-use products. graph (A). The credit shall be for reasonable Indian River, Florida. ‘‘(5) ASSISTANCE BY THE SECRETARY.—The Sec- costs of work performed by the non-Federal in- (3) LITTLE WEKIVA RIVER, FLORIDA.—Project retary shall assist the project to ensure expedi- terests if the Secretary determines that the work for aquatic ecosystem restoration and erosion tious completion by providing sufficient quan- substantially expedited completion of the project control, Little Wekiva River, Florida. tities of contaminated dredged material to con- and is compatible with and an integral part of (4) COOK COUNTY, ILLINOIS.—Project for duct the full-scale demonstrations to stated ca- the project, and the credit is provided pursuant aquatic ecosystem restoration and lagoon res- pacity.’’; to a specific project cooperation agreement.’’. toration and protection, Cook County, Illinois. (2) in subsection (c) by striking the first sen- (c) CALOOSAHATCHEE RIVER BASIN, FLOR- (5) GRAND BATTURE ISLAND, MISSISSIPPI.— tence and inserting the following: ‘‘There is au- IDA.—Section 528(e)(4) of such Act is amended Project for aquatic ecosystem restoration, Grand thorized to be appropriated to carry out this sec- by inserting before the period at the end of the Batture Island, Mississippi. tion $22,000,000 to complete technology testing, first sentence the following: ‘‘if the Secretary (6) HANCOCK, HARRISON, AND JACKSON COUN- technology commercialization, and the develop- determines that such land acquisition is compat- TIES, MISSISSIPPI.—Project for aquatic ecosystem ment of full scale processing facilities within the ible with and an integral component of the Ev- restoration and reef restoration along the Gulf New York/New Jersey Harbor.’’; and erglades and South Florida ecosystem restora- Coast, Hancock, Harrison, and Jackson Coun- (3) by adding at the end the following: tion, including potential land acquisition in the ties, Mississippi. ‘‘(e) SUPPORT.—In carrying out the program Caloosahatchee River basin or other areas’’. (7) MISSISSIPPI RIVER AND RIVER DES PERES, under this section, the Secretary is encouraged SEC. 210. BENEFICIAL USES OF DREDGED MATE- ST. LOUIS, MISSOURI.—Project for aquatic eco- to utilize contracts, cooperative agreements, and RIAL. system restoration and recreation, Mississippi grants with colleges and universities and other Section 204 of the Water Resources Develop- River and River Des Peres, St. Louis, Missouri. non-Federal entities.’’. ment Act of 1992 (106 Stat. 4826–4827) is (8) HUDSON RIVER, NEW YORK.—Project for SEC. 205. CONTROL OF AQUATIC PLANTS. amended— aquatic ecosystem restoration, Hudson River, Section 104 of the River and Harbor Act of (1) in subsection (c) by striking ‘‘cooperative New York. 1958 (33 U.S.C. 610) is amended— agreement in accordance with the requirements S9630 CONGRESSIONAL RECORD — SENATE July 28, 1999 of section 221 of the Flood Control Act of 1970’’ practicable, in consultation and coordination (6) Napa County, California, at Yountville, and inserting ‘‘binding agreement with the Sec- with the Federal Emergency Management Agen- St. Helena, Calistoga, and American Canyon. retary’’; and cy and other appropriate Federal agencies, and (7) Santa Clara basin, California, at Upper (2) by adding at the end the following: in consultation and coordination with appro- Guadalupe River and tributaries, San ‘‘(g) NON-FEDERAL INTERESTS.—Notwith- priate State, tribal, and local agencies. Francisquito Creek, and Upper Penitencia standing section 221(b) of the Flood Control Act (3) NONSTRUCTURAL APPROACHES.—The stud- Creek. of 1968 (42 U.S.C. 1962d–5b(b)), the Secretary, ies and projects shall emphasize, to the max- (8) Pine Mount Creek, New Jersey. after coordination with the appropriate State imum extent practicable and appropriate, non- (9) Chagrin River, Ohio. and local government officials having jurisdic- structural approaches to preventing or reducing (10) Blair County, Pennsylvania, at Altoona tion over an area in which a project under this flood damages. and Frankstown Township. (11) Lincoln Creek, Wisconsin. section will be carried out, may allow a non- (4) USE OF STATE, TRIBAL, AND LOCAL STUDIES (f) PROGRAM REVIEW.— AND PROJECTS.—The studies and projects shall profit entity to serve as the non-Federal interest (1) IN GENERAL.—The program established for the project.’’. include consideration of and coordination with under this section shall be subject to an inde- SEC. 211. HARBOR COST SHARING. any State, tribal, and local flood damage reduc- pendent review to evaluate the efficacy of the (a) IN GENERAL.—Sections 101 and 214 of the tion or riverine and wetland restoration studies program in achieving the dual goals of flood Water Resources Development Act of 1986 (33 and projects that conserve, restore, and manage hazard mitigation and riverine restoration. U.S.C. 2211 and 2241; Public Law 99–662) are hydrologic and hydraulic regimes and restore (2) REPORT.—Not later than April 15, 2003, the amended by striking ‘‘45 feet’’ each place it ap- the natural functions and values of floodplains. Secretary shall transmit to the Committee on pears and inserting ‘‘53 feet’’. (c) COST-SHARING REQUIREMENTS.— Transportation and Infrastructure of the House (b) APPLICABILITY.—The amendments made by (1) STUDIES.—Studies conducted under this of Representatives and the Committee on Envi- subsection (a) shall only apply to a project, or section shall be subject to cost sharing in ac- ronment and Public Works of the Senate a re- separable element thereof, on which a contract cordance with section 105 of the Water Re- port on the findings of the review conducted for physical construction has not been awarded sources Development Act of 1986 (33 U.S.C. under this subsection with any recommenda- before the date of the enactment of this Act. 2215). tions concerning continuation of the program. (2) ENVIRONMENTAL RESTORATION AND NON- SEC. 212. AQUATIC ECOSYSTEM RESTORATION. (g) COST LIMITATIONS.— STRUCTURAL FLOOD CONTROL PROJECTS.—The Section 206 of the Water Resources Develop- (1) MAXIMUM FEDERAL COST PER PROJECT.—No non-Federal interests shall pay 35 percent of the ment Act of 1996 (110 Stat. 3679–3680) is more than $30,000,000 may be expended by the cost of any environmental restoration or non- amended— United States on any single project under this structural flood control project carried out (1) by adding at the end of subsection (b) the section. under this section. The non-Federal interests following: ‘‘Before October 1, 2003, the Federal (2) COMMITTEE RESOLUTION PROCEDURE.— shall provide all land, easements, rights-of-way, (A) LIMITATION ON APPROPRIATIONS.—No ap- share may be provided in the form of grants or dredged material disposal areas, and relocations propriation shall be made to construct any reimbursements of project costs.’’; and necessary for such projects. The value of such project under this section the total Federal cost (2) by adding at the end of subsection (c) the land, easements, rights-of-way, dredged mate- of construction of which exceeds $15,000,000 if following: ‘‘Notwithstanding section 221(b) of rial disposal areas, and relocations shall be the project has not been approved by resolutions the Flood Control Act of 1970 (42 U.S.C. 1962d– credited toward the payment required under this adopted by the Committee on Transportation 5b(b)), the Secretary, after coordination with paragraph. and Infrastructure of the House of Representa- the appropriate State and local government offi- (3) STRUCTURAL FLOOD CONTROL PROJECTS.— tives and the Committee on Environment and cials having jurisdiction over an area in which Any structural flood control measures carried Public Works of the Senate. a project under this section will be carried out, out under this section shall be subject to cost (B) REPORT.—For the purpose of securing may allow a nonprofit entity to serve as the sharing in accordance with section 103(a) of the consideration of approval under this paragraph, non-Federal interest for the project.’’. Water Resources Development Act of 1986 (33 the Secretary shall transmit a report on the pro- SEC. 213. WATERSHED MANAGEMENT, RESTORA- U.S.C. 2213(a)). posed project, including all relevant data and TION, AND DEVELOPMENT. (4) OPERATION AND MAINTENANCE.—The non- information on all costs. (a) NONPROFIT ENTITY AS NON-FEDERAL IN- Federal interests shall be responsible for all (h) AUTHORIZATION OF APPROPRIATIONS.— TEREST.—Section 503(a) of the Water Resources costs associated with operating, maintaining, re- There is authorized to be appropriated to carry Development Act of 1996 (110 Stat. 3756) is placing, repairing, and rehabilitating all out this section— amended by adding at the end the following: projects carried out under this section. (1) $25,000,000 for fiscal year 2000; ‘‘Notwithstanding section 221(b) of the Flood (d) PROJECT JUSTIFICATION.— (2) $25,000,000 for fiscal year 2001 if $12,500,000 Control Act of 1970 (42 U.S.C. 1962d–5b(b)), the (1) IN GENERAL.—Notwithstanding any other or more is appropriated to carry out subsection Secretary, after coordination with the appro- provision of law or requirement for economic (e) for fiscal year 2000; priate State and local government officials hav- justification established pursuant to section 209 (3) $25,000,000 for fiscal year 2002 if $12,500,000 ing jurisdiction over an area in which a project of the Flood Control Act of 1970 (42 U.S.C. 1962– or more is appropriated to carry out subsection under this section will be carried out, may allow 2), the Secretary may implement a project under (e) for fiscal year 2001; and a nonprofit entity to serve as the non-Federal this section if the Secretary determines that the (4) $25,000,000 for fiscal year 2003 if $12,500,000 interest for the project.’’. project— or more is appropriated to carry out subsection (b) PROJECT LOCATIONS.—Section 503(d) of (A) will significantly reduce potential flood (e) for fiscal year 2002. such Act is amended— damages; SEC. 215. SHORELINE MANAGEMENT PROGRAM. (1) in paragraph (7) by inserting before the pe- (B) will improve the quality of the environ- (a) REVIEW.—The Secretary shall review the riod at the end ‘‘, including Clear Lake’’; and ment; and implementation of the Corps of Engineers’ (2) by adding at the end the following: (C) is justified considering all costs and bene- shoreline management program, with particular ‘‘(14) Fresno Slough watershed, California. ficial outputs of the project. attention to inconsistencies in implementation ‘‘(15) Hayward Marsh, Southern San Fran- (2) ESTABLISHMENT OF SELECTION AND RATING among the divisions and districts of the Corps of cisco Bay watershed, California. CRITERIA AND POLICIES.—Not later than 180 days Engineers and complaints by or potential in- ‘‘(16) Kaweah River watershed, California. after the date of the enactment of this section, equities regarding property owners in the Sa- ‘‘(17) Malibu Creek watershed, California. the Secretary, in cooperation with State, tribal, vannah District including an accounting of the ‘‘(18) Illinois River watershed, Illinois. and local agencies, shall develop, and transmit number and disposition of complaints over the ‘‘(19) Catawba River watershed, North Caro- to the Committee on Transportation and Infra- last 5 years in the District. lina. structure of the House of Representatives and (b) REPORT.—As expeditiously as practicable ‘‘(20) Cabin Creek basin, West Virginia. the Committee on Environment and Public after the date of the enactment of this Act, the ‘‘(21) Lower St. Johns River basin, Florida.’’. Works of the Senate, criteria for selecting and Secretary shall transmit to the Committee on SEC. 214. FLOOD MITIGATION AND RIVERINE RES- rating projects to be carried out under this sec- Transportation and Infrastructure of the House TORATION PILOT PROGRAM. tion and shall establish policies and procedures of Representatives and the Committee on Envi- (a) IN GENERAL.—The Secretary may under- for carrying out the studies and projects under- ronment and Public Works of the Senate a re- take a program for the purpose of conducting taken under this section. Such criteria shall in- port describing the results of the review con- projects that reduce flood hazards and restore clude, as a priority, the extent to which the ap- ducted under subsection (a). the natural functions and values of rivers propriate State government supports the project. SEC. 216. ASSISTANCE FOR REMEDIATION, RES- throughout the United States. (e) PRIORITY AREAS.—In carrying out this sec- TORATION, AND REUSE. (b) STUDIES AND PROJECTS.— tion, the Secretary shall examine the potential (a) IN GENERAL.—The Secretary may provide (1) AUTHORITY.—In carrying out the program, for flood damage reductions at appropriate loca- to State and local governments assessment, the Secretary may conduct studies to identify tions, including the following: planning, and design assistance for remediation, appropriate flood damage reduction, conserva- (1) Upper Delaware River, New York. environmental restoration, or reuse of areas lo- tion, and restoration measures and may design (2) Willamette River floodplain, Oregon. cated within the boundaries of such State or and implement projects described in subsection (3) Pima County, Arizona, at Paseo De Las local governments where such remediation, envi- (a). Iglesias and Rillito River. ronmental restoration, or reuse will contribute (2) CONSULTATION AND COORDINATION.—The (4) Los Angeles and San Gabriel Rivers, Cali- to the conservation of water and related re- studies and projects carried out under this sec- fornia. sources of drainage basins and watersheds with- tion shall be conducted, to the maximum extent (5) Murrieta Creek, California. in the United States. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9631

(b) BENEFICIAL USE OF DREDGED MATERIAL.— pation in shoreline protection, and (ii) utiliza- Secretary shall calculate benefits of non- In providing assistance under subsection (a), tion of a systems approach to sand management. structural projects using methods similar to the Secretary shall encourage the beneficial use (3) UTILIZATION OF SPECIFIC LOCATION DATA.— structural projects, including similar treatment of dredged material, consistent with the findings In developing the report, the Secretary shall uti- in calculating the benefits from losses avoided of the Secretary under section 204 of the Water lize data from specific locations on the Atlantic, from both structural and nonstructural alter- Resources Development Act of 1992 (33 U.S.C. Pacific, Great Lakes, and Gulf of Mexico coasts. natives. In carrying out this subsection, the Sec- 2326). (d) NATIONAL COASTAL DATA BANK.— retary should avoid double counting of bene- (c) NON-FEDERAL SHARE.—The non-Federal (1) ESTABLISHMENT OF DATA BANK.—Not later fits.’’. share of the cost of assistance provided under than 2 years after the date of the enactment of (b) REEVALUATION OF FLOOD CONTROL subsection (a) shall be 50 percent. this Act, the Secretary shall establish a national PROJECTS.—At the request of a non-Federal in- (d) AUTHORIZATION OF APPROPRIATIONS.— coastal data bank containing data on the geo- terest for a flood control project, the Secretary There is authorized to be appropriated to carry physical and climatological characteristics of shall conduct a reevaluation of a previously au- out this section $3,000,000 for each of fiscal the Nation’s shorelines. thorized project to consider nonstructural alter- years 2000 through 2004. (2) CONTENT.—To the extent practical, the na- natives in light of the amendments made by sub- SEC. 217. SHORE DAMAGE MITIGATION. tional coastal data bank shall include data re- section (a). (a) IN GENERAL.—Section 111 of the River and garding current and predicted shoreline posi- (c) COST SHARING.—Section 103(b) of the Harbor Act of 1968 (33 U.S.C. 426i; 100 Stat. tions, information on federally-authorized shore Water Resources Development Act of 1986 (33 4199) is amended by inserting after ‘‘navigation protection projects, and data on the movement U.S.C. 2213(b)) is amended by adding at the end works’’ the following: ‘‘and shore damages at- of sand along the Nation’s shores, including im- the following: ‘‘At any time during construction tributable to the Atlantic Intracoastal Water- pediments to such movement caused by natural of the project, where the Secretary determines way and the Gulf Intracoastal Waterway’’. and manmade features. that the costs of lands, easements, rights-of- (b) PALM BEACH COUNTY, FLORIDA.—The (3) ACCESS.—The national coastal data bank way, dredged material disposal areas, and relo- project for navigation, Palm Beach County, shall be made readily accessible to the public. cations in combination with other costs contrib- Florida, authorized by section 2 of the River SEC. 219. FLOOD PREVENTION COORDINATION. uted by the non-Federal interests will exceed 35 and Harbor Act of March 2, 1945 (59 Stat. 11), is Section 206 of the Flood Control Act of 1960 percent, any additional costs for the project, but modified to authorize the Secretary to undertake (33 U.S.C. 709a) is amended— not to exceed 65 percent of the total costs of the beach nourishment as a dredged material dis- (1) by redesignating subsections (b) and (c) as project, shall be a Federal responsibility and posal option under the project. subsections (c) and (d), respectively; and shall be contributed during construction as part (c) GALVESTON COUNTY, TEXAS.—The Sec- (2) by inserting after subsection (a) the fol- of the Federal share.’’. retary may place dredged material from the Gulf lowing: SEC. 223. LAKES PROGRAM. Intracoastal Waterway on the beaches along ‘‘(b) FLOOD PREVENTION COORDINATION.—The Section 602(a) of the Water Resources Devel- Rollover Pass, Galveston County, Texas, to sta- Secretary shall coordinate with the Director of opment Act of 1986 (110 Stat. 3758) is amended— bilize beach erosion. the Federal Emergency Management Agency (1) by striking ‘‘and’’ at the end of paragraph SEC. 218. SHORE PROTECTION. and the heads of other Federal agencies to en- (15); (a) NON-FEDERAL SHARE OF PERIODIC NOUR- sure that flood control projects and plans are (2) by striking the period at the end of para- ISHMENT.—Section 103(d) of the Water Resources complementary and integrated to the extent graph (16) and inserting a semicolon; and Development Act of 1986 (100 Stat. 4085–5086) is practicable and appropriate.’’. (3) by adding at the end the following: amended— SEC. 220. ANNUAL PASSES FOR RECREATION. ‘‘(17) Clear Lake, Lake County, California, re- (1) by inserting ‘‘(1) CONSTRUCTION.—’’ before Section 208(c)(4) of the Water Resources De- moval of silt and aquatic growth and measures ‘‘Costs of constructing’’; velopment Act of 1996 (16 U.S.C. 460d note; 110 to address excessive sedimentation and high nu- (2) by inserting at the end the following: Stat. 3680) is amended by striking ‘‘1999, or the trient concentration; ‘‘(2) PERIODIC NOURISHMENT.— date of transmittal of the report under para- ‘‘(18) Osgood Pond, Milford, Hillsborough ‘‘(A) IN GENERAL.—Subject to subparagraph graph (3)’’ and inserting ‘‘2003’’. County, New Hampshire, removal of silt and (B), the non-Federal share of costs of periodic SEC. 221. COOPERATIVE AGREEMENTS FOR ENVI- aquatic growth and measures to address exces- nourishment measures for shore protection or RONMENTAL AND RECREATIONAL sive sedimentation; and beach erosion control that are carried out— MEASURES. ‘‘(19) Flints Pond, Hollis, Hillsborough Coun- ‘‘(i) after January 1, 2001, shall be 40 percent; (a) IN GENERAL.—The Secretary is authorized ty, New Hampshire, removal of silt and aquatic ‘‘(ii) after January 1, 2002, shall be 45 percent; to enter into cooperative agreements with non- growth and measures to address excessive sedi- and Federal public bodies and non-profit entities for mentation.’’. ‘‘(iii) after January 1, 2003, shall be 50 per- the purpose of facilitating collaborative efforts SEC. 224. CONSTRUCTION OF FLOOD CONTROL cent; involving environmental protection and restora- PROJECTS BY NON-FEDERAL INTER- ‘‘(B) BENEFITS TO PRIVATELY OWNED tion, natural resources conservation, and recre- ESTS. SHORES.—All costs assigned to benefits of peri- ation in connection with the development, oper- (a) CONSTRUCTION BY NON-FEDERAL INTER- odic nourishment measures to privately owned ation, and management of water resources ESTS.—Section 211(d)(1) of the Water Resources shores (where use of such shores is limited to projects under the jurisdiction of the Depart- Development Act of 1996 (33 U.S.C. 701b– private interests) or to prevention of losses of ment of the Army. 13(d)(1)) is amended— private lands shall be borne by the non-Federal (b) REPORT.—Not later than 18 months after (1) by striking ‘‘(b) or’’; interest and all costs assigned to the protection the date of the enactment of this Act, the Sec- (2) by striking ‘‘Any non-Federal’’ and insert- of federally owned shores for such measures retary shall transmit to the Committee on Trans- ing the following: shall be borne by the United States.’’; and portation and Infrastructure of the House of ‘‘(A) STUDIES AND DESIGN ACTIVITIES UNDER (C) by indenting paragraph (1) (as designated Representatives and the Committee on Environ- SUBSECTION (b).—A non-Federal interest may by subparagraph (A) of this paragraph) and ment and Public Works of the Senate a report only carry out construction for which studies aligning such paragraph with paragraph (2) (as that includes— and design documents are prepared under sub- added by subparagraph (B) of this paragraph). (1) a listing and general description of the co- section (b) if the Secretary approves such con- (b) UTILIZATION OF SAND FROM OUTER CONTI- operative agreements entered into by the Sec- struction. The Secretary shall approve such con- NENTAL SHELF.—Section 8(k)(2)(B) of the Outer retary with non-Federal public bodies and enti- struction unless the Secretary determines, in Continental Shelf Lands Act (43 U.S.C. ties under subsection (a); writing, that the design documents do not meet 1337(k)(2)(B)) is amended by striking ‘‘an agen- (2) a determination of whether such agree- standard practices for design methodologies or cy of the Federal Government’’ and inserting ‘‘a ments are facilitating collaborative efforts; and that the project is not economically justified or Federal, State, or local government agency’’. (3) a recommendation on whether such agree- environmentally acceptable or does not meet the (c) REPORT ON NATION’S SHORELINES.— ments should be further encouraged. requirements for obtaining the appropriate per- (1) IN GENERAL.—Not later than 3 years after SEC. 222. NONSTRUCTURAL FLOOD CONTROL mits required under the Secretary’s authority. the date of the enactment of this Act, the Sec- PROJECTS. The Secretary shall not unreasonably withhold retary shall report to Congress on the state of (a) ANALYSIS OF BENEFITS.—Section 308 of the approval. Nothing in this subparagraph may be the Nation’s shorelines. Water Resources Development Act of 1990 (33 construed to affect any regulatory authority of (2) CONTENTS.—The report shall include— U.S.C. 2318; 104 Stat. 4638) is amended— the Secretary. (A) a description of the extent of, and eco- (1) in the heading to subsection (a) by insert- ‘‘(B) STUDIES AND DESIGN ACTIVITIES UNDER nomic and environmental effects caused by, ero- ing ‘‘ELEMENTS EXCLUDED FROM’’ before ‘‘BEN- SUBSECTION (c).—Any non-Federal’’; and sion and accretion along the Nation’s shores EFIT-COST’’; (3) by aligning the remainder of subparagraph and the causes thereof; (2) by redesignating subsections (b) through (B) (as designated by paragraph (2) of this sub- (B) a description of resources committed by (e) as subsections (c) through (f), respectively; section) with subparagraph (A) (as inserted by local, State, and Federal governments to restore and paragraph (2) of this subsection). and renourish shorelines; (3) by inserting after subsection (a) the fol- (b) CONFORMING AMENDMENT.—Section (C) a description of the systematic movement lowing: 211(d)(2) of such Act is amended by inserting of sand along the Nation’s shores; and ‘‘(b) FLOOD DAMAGE REDUCTION BENEFITS.— ‘‘(other than paragraph (1)(A))’’ after ‘‘this (D) recommendations regarding (i) appro- In calculating the benefits of a proposed project subsection’’. priate levels of Federal and non-Federal partici- for nonstructural flood damage reduction, the (c) REIMBURSEMENT.— S9632 CONGRESSIONAL RECORD — SENATE July 28, 1999

(1) IN GENERAL.—Section 211(e)(1) of such Act (2) in subsection (d) by striking ‘‘non-Federal eration and maintenance of the expanded is amended— responsibility’’ and inserting ‘‘shared as a cost project. (A) in the matter preceding subparagraph (1) of construction’’. SEC. 306. SACRAMENTO RIVER, GLENN-COLUSA, by inserting after ‘‘constructed pursuant to this SEC. 229. WETLANDS MITIGATION. CALIFORNIA. section’’ the following: ‘‘and provide credit for In carrying out a water resources project that (a) IN GENERAL.—The project for flood con- the non-Federal share of the project’’; involves wetlands mitigation and that has an trol, Sacramento River, California, authorized (B) by striking ‘‘and’’ at the end of subpara- impact that occurs within the service area of a by section 2 of the Act entitled ‘‘An Act to pro- graph (A); mitigation bank, the Secretary, to the maximum vide for the control of the floods of the Mis- (C) by striking the period at the end of sub- extent practicable and where appropriate, shall sissippi River and of the Sacramento River, paragraph (B) and inserting ‘‘; and’’; and give preference to the use of the mitigation bank California, and for other purposes’’, approved (D) by adding at the end the following: if the bank contains sufficient available credits March 1, 1917 (39 Stat. 949), and modified by ‘‘(C) if the construction work is reasonably to offset the impact and the bank is approved in section 102 of the Energy and Water Develop- equivalent to Federal construction work.’’. accordance with the Federal Guidance for the ment Appropriations Act, 1990 (103 Stat. 649), (2) SPECIAL RULES.—Section 211(e)(2)(A) of Establishment, Use and Operation of Mitigation section 301(b)(3) of the Water Resources Devel- such Act is amended— Banks (60 Fed. Reg. 58605 (November 28, 1995)) opment Act of 1996 (110 Stat. 3110), and title I of (A) by striking ‘‘subject to amounts being or other applicable Federal law (including regu- the Energy and Water Development Appropria- made available in advance in appropriations lations). tions Act, 1999 (112 Stat. 1841), is further modi- Acts’’ and inserting ‘‘subject to appropriations’’; fied to authorize the Secretary— and TITLE III—PROJECT-RELATED (1) to carry out the portion of the project at (B) by inserting after ‘‘the cost of such work’’ PROVISIONS Glenn-Colusa, California, at a total cost of the following: ‘‘, or provide credit (depending on SEC. 301. MISSOURI RIVER LEVEE SYSTEM. $26,000,000, with an estimated Federal cost of the request of the non-Federal interest) for the The project for flood control, Missouri River $20,000,000 and an estimated non-Federal cost of non-Federal share of such work,’’. Levee System, authorized by section 10 of the $6,000,000; and (3) SCHEDULE AND MANNER OF REIMBURSE- Act entitled ‘‘An Act authorizing the construc- (2) to carry out bank stabilization work in the MENTS.—Section 211(e) of such Act (33 U.S.C. tion of certain public works on rivers and har- vicinity of the riverbed gradient facility, par- 701b–13(e)) is amended by adding at the end the bors for flood control, and other purposes’’, ap- ticularly in the vicinity of River Mile 208. following: proved December 22, 1944 (58 Stat. 897), is modi- (b) CREDIT.—The Secretary shall provide the ‘‘(6) SCHEDULE AND MANNER OF REIMBURSE- fied to provide that project costs totaling non-Federal interests for the project referred to MENT.— $2,616,000 expended on Units L–15, L–246, and in subsection (a) a credit of up to $4,000,000 to- ‘‘(A) BUDGETING.—The Secretary shall budget L–385 out of the Construction, General account ward the non-Federal share of the project costs and request appropriations for reimbursements of the Corps of Engineers before the date of the for the direct and indirect costs incurred by the under this section on a schedule that is con- enactment of the Water Resources Development non-Federal sponsor in carrying out activities sistent with a Federal construction schedule. Act of 1986 (33 U.S.C. 2201 note) shall not be associated with environmental compliance for ‘‘(B) COMMENCEMENT OF REIMBURSEMENTS.— treated as part of total project costs. the project. Such credit may be in the form of Reimbursements under this section may com- SEC. 302. OUZINKIE HARBOR, ALASKA. reimbursements for costs which were incurred by mence upon approval of a project by the Sec- (a) MAXIMUM FEDERAL EXPENDITURE.—The the non-Federal interests prior to an agreement retary. maximum amount of Federal funds that may be with the Corps of Engineers, to include the ‘‘(C) CREDIT.—At the request of a non-Federal expended for the project for navigation, value of lands, easements, rights-of-way, reloca- interest, the Secretary may reimburse the non- Ouzinkie Harbor, Alaska, shall be $8,500,000. tions, or dredged material disposal areas. Federal interest by providing credit toward fu- (b) REVISION OF PROJECT COOPERATION SEC. 307. SAN LORENZO RIVER, CALIFORNIA. ture non-Federal costs of the project. AGREEMENT.—The Secretary shall revise the The project for flood control and habitat res- ‘‘(D) SCHEDULING.—Nothing in this paragraph project cooperation agreement for the project re- toration, San Lorenzo River, California, author- shall affect the President’s discretion to sched- ferred to in subsection (a) to take into account ized by section 101(a)(5) of the Water Resources ule new construction starts.’’. the change in the Federal participation in such Development Act of 1996 (110 Stat. 3663), is SEC. 225. ENHANCEMENT OF FISH AND WILDLIFE project pursuant to subsection (a). modified to authorize the Secretary to expand RESOURCES. (c) COST SHARING.—Nothing in this section the boundaries of the project to include bank Section 906(e) of the Water Resources Develop- shall be construed to affect any cost-sharing re- stabilization for a 1,000-foot portion of the San ment Act of 1986 (33 U.S.C. 2283(e)) is amended quirement applicable to the project referred to in Lorenzo River. by inserting after the second sentence the fol- subsection (a) under the Water Resources Devel- SEC. 308. TERMINUS DAM, KAWEAH RIVER, CALI- lowing: ‘‘Not more than 80 percent of the non- opment Act of 1986. FORNIA. (a) TRANSFER OF TITLE TO ADDITIONAL Federal share of such first costs may be satisfied SEC. 303. GREERS FERRY LAKE, ARKANSAS. LAND.—If the non-Federal interests for the through in-kind contributions, including facili- The project for flood control, Greers Ferry project for flood control and water supply, Ter- ties, supplies, and services that are necessary to Lake, Arkansas, authorized by the Act entitled minus Dam, Kaweah River, California, author- carry out the enhancement project.’’. ‘‘An Act authorizing the construction of certain ized by section 101(b)(5) of the Water Resources SEC. 226. SENSE OF CONGRESS; REQUIREMENT public works on rivers and harbors for flood Development Act of 1996 (110 Stat. 3667), trans- REGARDING NOTICE. control, and other purposes’’, approved June 28, fers to the Secretary without consideration title (a) PURCHASE OF AMERICAN-MADE EQUIPMENT 1938 (52 Stat. 1218), is modified to authorize the to perimeter lands acquired for the project by AND PRODUCTS.—It is the sense of Congress Secretary to construct water intake facilities for the non-Federal interests, the Secretary may ac- that, to the greatest extent practicable, all the benefit of Lonoke and White Counties, Ar- cept the transfer of such title. equipment and products purchased with funds kansas. made available under this Act should be Amer- (b) LANDS, EASEMENT, AND RIGHTS-OF-WAY.— SEC. 304. TEN- AND FIFTEEN-MILE BAYOUS, AR- Nothing in this section shall be construed to ican made. KANSAS. OTICE TO RECIPIENTS OF ASSISTANCE.—In change, modify, or otherwise affect the responsi- (b) N The project for flood control, St. Francis River providing financial assistance under this Act, bility of the non-Federal interests to provide Basin, Missouri and Arkansas, authorized by the Secretary, to the greatest extent practicable, lands, easements, rights-of-way, relocations, section 204 of the Flood Control Act of 1950 (64 shall provide to each recipient of the assistance and dredged material disposal areas necessary Stat. 172), is modified to expand the project for the Terminus Dam project and to perform a notice describing the statement made in sub- boundaries to include Ten- and Fifteen-Mile section (a). operation and maintenance for the project. Bayous near West Memphis, Arkansas. Notwith- (c) OPERATION AND MAINTENANCE.—Upon re- SEC. 227. PERIODIC BEACH NOURISHMENT. standing section 103(f) of the Water Resources quest by the non-Federal interests, the Secretary (a) IN GENERAL.—Section 506(a) of the Water Development Act of 1986 (100 Stat. 4086), the shall carry out operation, maintenance, repair, Resources Development Act of 1996 (110 Stat. flood control work at Ten- and Fifteen-Mile replacement, and rehabilitation of the project if 3757) is amended by adding at the end the fol- Bayous shall not be considered separable ele- the non-Federal interests enter into a binding lowing: ments of the St. Francis River Basin project. agreement with the Secretary to reimburse the ‘‘(5) LEE COUNTY, FLORIDA.—Project for shore- SEC. 305. LOGGY BAYOU, RED RIVER BELOW Secretary for 100 percent of the costs of such op- line protection, Lee County, Captiva Island seg- DENISON DAM, ARKANSAS, LOU- eration, maintenance, repair, replacement, and ment, Florida.’’. ISIANA, OKLAHOMA, AND TEXAS. rehabilitation. (b) PROJECTS.—Section 506(b)(3) of such Act The project for flood control on the Red River (d) HOLD HARMLESS.—The non-Federal inter- (110 Stat. 3758) is amended by striking subpara- Below Denison Dam, Arkansas, Louisiana, ests shall hold the United States harmless for graph (A) and redesignating subparagraphs (B) Oklahoma, and Texas, authorized by section 10 ownership, operation, and maintenance of lands through (D) as subparagraphs (A) through (C), of the Flood Control Act of 1946 (60 Stat. 647), and facilities of the Terminus Dam project title respectively. is modified to direct the Secretary to conduct a to which is transferred to the Secretary under SEC. 228. ENVIRONMENTAL DREDGING. study to determine the feasibility of expanding this section. Section 312 of the Water Resources Develop- the project to include mile 0.0 to mile 7.8 of SEC. 309. DELAWARE RIVER MAINSTEM AND ment Act of 1990 (104 Stat. 4639–4640) is Loggy Bayou between the Red River and Flat CHANNEL DEEPENING, DELAWARE, amended— River. If the Secretary determines as a result of NEW JERSEY, AND PENNSYLVANIA. (1) in subsection (b)(1) by striking ‘‘50’’ and the study that the project should be expanded, The project for navigation, Delaware River inserting ‘‘35’’; and the Secretary may assume responsibility for op- Mainstem and Channel Deepening, Delaware, July 28, 1999 CONGRESSIONAL RECORD — SENATE S9633 New Jersey and Pennsylvania, authorized by such work is compatible with and integral to the any damage to the beach and shoreline that is section 101(6) of the Water Resources Develop- project. the result of a Federal navigation project. The ment Act of 1992 (106 Stat. 4802), is modified as SEC. 313. FORT PIERCE, FLORIDA. cost of the mitigation shall be allocated to the follows: (a) IN GENERAL.—The project for shore protec- Federal navigation project as operation and (1) The Secretary is authorized to provide tion and harbor mitigation, Fort Pierce, Florida, maintenance. non-Federal interests credit toward cash con- authorized by section 301 of the River and Har- SEC. 320. SAINT JOSEPH RIVER, SOUTH BEND, IN- tributions required for construction and subse- bor Act of 1965 (79 Stat. 1092) and section DIANA. quent to construction for engineering and de- 506(a)(2) of the Water Resources Development (a) MAXIMUM TOTAL EXPENDITURE.—The sign and construction management work that is Act of 1996 (110 Stat. 3757), is modified to incor- maximum total expenditure for the project for performed by non-Federal interests and that the porate an additional 1 mile into the project in streambank erosion, recreation, and pedestrian Secretary determines is necessary to implement accordance with a final approved General Re- access features, Saint Joseph River, South Bend, the project. Any such credits extended shall re- evaluation Report, at a total cost for initial Indiana, shall be $7,800,000. duce the Philadelphia District’s private sector nourishment for the entire project of $9,128,000, (b) REVISION OF PROJECT COOPERATION performance goals for engineering work by a with an estimated Federal cost of $7,073,500 and AGREEMENT.—The Secretary shall revise the like amount. an estimated non-Federal cost of $2,054,500. project cooperation agreement for the project re- (2) The Secretary is authorized to provide to (b) PERIOD NOURISHMENT.—Periodic nourish- ferred to in subsection (a) to take into account non-Federal interests credit toward cash con- ment is authorized for the project in accordance the change in the Federal participation in such tributions required during construction and sub- with section 506(a)(2) of Water Resources Devel- project pursuant to subsection (a). sequent to construction for the costs of con- opment Act of 1996 (110 Stat. 3757). (c) COST SHARING.—Nothing in this section struction carried out by the non-Federal interest (c) REVISION OF THE PROJECT COOPERATION shall be construed to affect any cost-sharing re- on behalf of the Secretary and that the Sec- AGREEMENT.—The Secretary shall revise the quirement applicable to the project referred to in retary determines is necessary to implement the project cooperation agreement for the project re- subsection (a) under title I of the Water Re- project. ferred to in subsection (a) to take into account sources Development Act of 1986 (33 U.S.C. 2211 (3) The Secretary is authorized to enter into the change in Federal participation in the et seq.). an agreement with a non-Federal interest for project pursuant to subsection (a). SEC. 321. WHITE RIVER, INDIANA. the payment of disposal or tipping fees for SEC. 314. NASSAU COUNTY, FLORIDA. The project for flood control, Indianapolis on dredged material from a Federal project other The project for beach erosion control, Nassau West Fork of the White River, Indiana, author- than for the construction or operation and County (Amelia Island), Florida, authorized by ized by section 5 of the Act entitled ‘‘An Act au- maintenance of the new deepening project as de- section 3(a)(3) of the Water Resources Develop- thorizing the construction of certain public scribed in the Limited Reevaluation Report of ment Act of 1988 (102 Stat. 4013), is modified to works on rivers and harbors for flood control, May 1997, where the non-Federal interest has authorize the Secretary to construct the project and other purposes’’, approved June 22, 1936 (49 supplied the corresponding disposal capacity. at a total cost of $17,000,000, with an estimated Stat. 1586), and modified by section 323 of the (4) The Secretary is authorized to enter into Federal cost of $13,300,000 and an estimated Water Resources Development Act of 1996 (110 an agreement with a non-Federal interest that non-Federal cost of $3,700,000. Stat. 3716), is further modified to authorize the will provide that the non-Federal interest may Secretary to undertake riverfront alterations as SEC. 315. MIAMI HARBOR CHANNEL, FLORIDA. carry out or cause to have carried out, on behalf described in the Central Indianapolis Water- The project for navigation, Miami Harbor of the Secretary, a disposal area management front Concept Master Plan, dated February Channel, Florida, authorized by section program for dredged material disposal areas 1994, at a total cost of $110,975,000, with an esti- 101(a)(9) of the Water Resources Development necessary to construct, operate, and maintain mated Federal cost of $52,475,000 and an esti- Act of 1990 (104 Stat. 4606), is modified to in- the project and to authorize the Secretary to re- mated non-Federal cost of $58,500,000. imburse the non-Federal interest for the costs of clude construction of artificial reefs and related environmental mitigation required by Federal, SEC. 322. LAKE PONTCHARTRAIN, LOUISIANA. the disposal area management program activi- The project for hurricane-flood protection, ties carried out by the non-Federal interest. State, and local environmental permitting agen- cies for the project. Lake Pontchartrain, Louisiana, authorized by SEC. 310. POTOMAC RIVER, WASHINGTON, DIS- section 204 of the Flood Control Act of 1965 (79 SEC. 316. LAKE MICHIGAN, ILLINOIS. TRICT OF COLUMBIA. Stat. 1077), is modified— The project for flood control, Potomac River, The project for storm damage reduction and (1) to direct the Secretary to conduct a study Washington, District of Columbia, authorized by shoreline erosion protection, Lake Michigan, Il- to determine the feasibility of constructing a section 5 of the Flood Control Act of June 22, linois, from Wilmette, Illinois, to the Illinois-In- pump adjacent to each of the 4 proposed drain- 1936 (69 Stat. 1574), and modified by section diana State line, authorized by section age structures for the Saint Charles Parish fea- 301(a)(4) of the Water Resources Development 101(a)(12) of the Water Resources Development ture of the project; and Act of 1996 (110 Stat. 3707), is further modified Act of 1996 (110 Stat. 3664), is modified to au- (2) to authorize the Secretary to construct to authorize the Secretary to construct the thorize the Secretary to provide a credit against such pumps upon completion of the study. the non-Federal share of the cost of the project project at a Federal cost of $6,129,000. SEC. 323. LAROSE TO GOLDEN MEADOW, LOU- SEC. 311. BREVARD COUNTY, FLORIDA. for costs incurred by the non-Federal interest— ISIANA. (1) in constructing Reach 2D and Segment 8 of (a) STUDY.—The Secretary, in cooperation The project for hurricane protection Larose to Reach 4 of the project; and with the non-Federal interest, shall conduct a Golden Meadow, Louisiana, authorized by sec- (2) in reconstructing Solidarity Drive in Chi- study of any damage to the project for shoreline tion 204 of the Flood Control Act of 1965 (79 cago, Illinois, prior to entry into a project co- protection, Brevard County, Florida, authorized Stat. 1077), is modified to direct the Secretary to operation agreement with the Secretary. by section 101(b)(7) of the Water Resources De- convert the Golden Meadow floodgate into a velopment Act of 1996 (110 Stat. 3667), to deter- SEC. 317. SPRINGFIELD, ILLINOIS. navigation lock if the Secretary determines that mine whether the damage is the result of a Fed- Section 417 of the Water Resources Develop- the conversion is feasible. eral navigation project. ment Act of 1996 (110 Stat. 3743) is amended— SEC. 324. LOUISIANA STATE PENITENTIARY (b) CONDITIONS.—In conducting the study, the (1) by inserting ‘‘(a) IN GENERAL.—’’ before LEVEE, LOUISIANA. Secretary shall utilize the services of an inde- ‘‘The Secretary’’; and The Louisiana State Penitentiary Levee pendent coastal expert who shall consider all (2) by adding at the end the following: project, Louisiana, authorized by section 401(a) relevant studies completed by the Corps of Engi- ‘‘(b) COST SHARING.—The non-Federal share of the Water Resources Development Act of 1986 neers and the project’s local sponsor. The study of assistance provided under this section before, (100 Stat. 4117), is modified to direct the Sec- shall be completed within 120 days of the date of on, or after the date of the enactment of this retary to provide credit to the non-Federal inter- the enactment of this Act. subsection shall be 50 percent.’’. est toward the non-Federal share of the cost of (c) MITIGATION OF DAMAGES.—After comple- SEC. 318. LITTLE CALUMET RIVER, INDIANA. the project. The credit shall be for cost of work tion of the study, the Secretary shall mitigate The project for flood control, Little Calumet performed by the non-Federal interest prior to any damage to the shoreline protection project River, Indiana, authorized by section 401(a) of the execution of a project cooperation agreement that is the result of a Federal navigation the Water Resources Development Act of 1986 as determined by the Secretary to be compatible project. The costs of the mitigation shall be allo- (100 Stat. 4115), is modified to authorize the Sec- with and an integral part of the project. cated to the Federal navigation project as oper- retary to construct the project substantially in SEC. 325. TWELVE-MILE BAYOU, CADDO PARISH, ation and maintenance. accordance with the report of the Corps of Engi- LOUISIANA. SEC. 312. BROWARD COUNTY AND HILLSBORO neers, at a total cost of $167,000,000, with an es- The Secretary shall be responsible for mainte- INLET, FLORIDA. timated Federal cost of $122,000,000 and an esti- nance of the levee along Twelve-Mile Bayou The project for shoreline protection, Broward mated non-Federal cost of $45,000,000. from its junction with the existing Red River County and Hillsboro Inlet, Florida, authorized SEC. 319. OGDEN DUNES, INDIANA. Below Denison Dam Levee approximately 26 by section 301 of the River and Harbor Act of (a) STUDY.—The Secretary shall conduct a miles upstream to its terminus at high ground in 1965 (79 Stat. 1090), is modified to authorize the study of beach erosion in and around the town the vicinity of Black Bayou, Caddo Parish, Secretary to reimburse the non-Federal interest of Ogden Dunes, Indiana, to determine whether Louisiana, if the Secretary determines that such for the Federal share of the cost of the damage is the result of a Federal navigation maintenance is economically justified and envi- preconstruction planning and design for the project. ronmentally acceptable and that the levee was project upon execution of a contract to con- (b) MITIGATION OF DAMAGES.—After comple- constructed in accordance with appropriate de- struct the project if the Secretary determines tion of the study, the Secretary shall mitigate sign and engineering standards. S9634 CONGRESSIONAL RECORD — SENATE July 28, 1999 SEC. 326. WEST BANK OF THE MISSISSIPPI RIVER SEC. 331. BOIS BRULE DRAINAGE AND LEVEE DIS- sey, authorized by section 202(b) of the Water (EAST OF HARVEY CANAL), LOU- TRICT, MISSOURI. Resources Development Act of 1986 (100 Stat. ISIANA. (a) MAXIMUM FEDERAL EXPENDITURE.—The 4098), is modified to authorize the Secretary to (a) IN GENERAL.—The project for flood control maximum amount of Federal funds that may be construct that portion of the project that is lo- and storm damage reduction, West Bank of the allocated for the project for flood control, Bois cated between Military Ocean Terminal Ba- Mississippi River (East of Harvey Canal), Lou- Brule Drainage and Levee District, Missouri, yonne and Global Terminal in Bayonne, New isiana, authorized by section 401(b) of the Water authorized pursuant to section 205 of the Flood Jersey, substantially in accordance with the re- Resources Development Act of 1986 (100 Stat. Control Act of 1948 (33 U.S.C. 701s), shall be port of the Corps of Engineers, at a total cost of 4128) and section 101(a)(17) of the Water Re- $15,000,000. $103,267,000, with an estimated Federal cost of sources Development Act of 1996 (110 Stat. 3665), (b) REVISION OF THE PROJECT COOPERATION $76,909,000 and an estimated non-Federal cost of is modified— AGREEMENT.—The Secretary shall revise the $26,358,000. project cooperation agreement for the project re- (1) to provide that any liability under the SEC. 337. PASSAIC RIVER, NEW JERSEY. ferred to in subsection (a) to take into account Comprehensive Environmental Response, Com- Section 101(a)(18)(B) of the Water Resources the change in Federal participation in the pensation, and Liability Act of 1980 (42 U.S.C. Development Act of 1990 (104 Stat. 4608–4609) is project pursuant to subsection (a). 9601 et seq.) from the construction of the project amended by inserting ‘‘, including an esplanade is a Federal responsibility; and (c) COST SHARING.—Nothing in this section shall be construed to affect any cost-sharing re- for safe pedestrian access with an overall width (2) to authorize the Secretary to carry out op- of 600 feet’’ after ‘‘public access to Route 21’’. eration and maintenance of that portion of the quirement applicable to the project referred to in subsection (a) under title I of the Water Re- SEC. 338. SANDY HOOK TO BARNEGAT INLET, NEW project included in the report of the Chief of En- JERSEY. gineers, dated May 1, 1995, referred to as ‘‘Al- sources Development Act of 1986 (33 U.S.C. 2211 et seq.). The project for shoreline protection, Sandy giers Channel’’, if the non-Federal sponsor re- Hook to Barnegat Inlet, New Jersey, authorized imburses the Secretary for the amount of such SEC. 332. MERAMEC RIVER BASIN, VALLEY PARK LEVEE, MISSOURI. by section 101 of the River and Harbor Act of operation and maintenance included in the re- 1958 (72 Stat. 299), is modified— port of the Chief of Engineers. The project for flood control, Meramec River Basin, Valley Park Levee, Missouri, authorized (1) to include the demolition of Long Branch (b) COMBINATION OF PROJECTS.—The Sec- by section 2(h) of an Act entitled ‘‘An Act to de- pier and extension of Ocean Grove pier; and retary shall carry out work authorized as part authorize several projects within the jurisdiction (2) to authorize the Secretary to reimburse the of the Westwego to Harvey Canal project, the of the Army Corps of Engineers’’ (95 Stat. 1682– non-Federal sponsor for the Federal share of East of Harvey Canal project, and the Lake 1683) and modified by section 1128 of the Water costs associated with the demolition of Long Cataouatche modifications as a single project, to Resources Development Act of 1986, (100 Stat. Branch pier and the construction of the Ocean be known as the West Bank and vicinity, New 4246), is further modified to authorize the Sec- Grove pier. Orleans, Louisiana, hurricane protection retary to construct the project at a maximum SEC. 339. ARTHUR KILL, NEW YORK AND NEW JER- project, with a combined total cost of Federal expenditure of $35,000,000. SEY. $280,300,000. SEC. 333. MISSOURI RIVER MITIGATION PROJECT, The project for navigation, Arthur Kill, New SEC. 327. TOLCHESTER CHANNEL, BALTIMORE MISSOURI, KANSAS, IOWA, AND NE- York and New Jersey, authorized by section HARBOR AND CHANNELS, CHESA- BRASKA. 202(b) of the Water Resources Development Act PEAKE BAY, KENT COUNTY, MARY- (a) IN GENERAL.—The project for mitigation of of 1986 (100 Stat. 4098) and modified by section LAND. fish and wildlife losses, Missouri River Bank 301(b)(11) of the Water Resources Development The project for navigation, Tolchester Chan- Stabilization and Navigation Project, Missouri, Act of 1996 (110 Stat. 3711), is further modified nel, Baltimore Harbor and Channels, Chesa- Kansas, Iowa, and Nebraska, authorized by sec- to authorize the Secretary to construct the por- peake Bay, Kent County, Maryland, authorized tion 601 of the Water Resources Development tion of the project at Howland Hook Marine by section 101 of the River and Harbor Act of Act of 1986 (100 Stat. 4143), is modified to in- Terminal substantially in accordance with the 1958 (72 Stat. 297), is modified to authorize the crease by 118,650 acres the lands and interests in report of the Corps of Engineers, dated Sep- Secretary to straighten the navigation channel lands to be acquired for the project. tember 30, 1998, at a total cost of $315,700,000, in accordance with the District Engineer’s Navi- (b) STUDY.— with an estimated Federal cost of $183,200,000 gation Assessment Report and Environmental (1) IN GENERAL.—The Secretary, in conjunc- and an estimated non-Federal cost of Assessment, dated April 30, 1997. This modifica- tion with the States of Nebraska, Iowa, Kansas, $132,500,000. tion shall be carried out in order to improve and Missouri, shall conduct a study to deter- SEC. 340. NEW YORK CITY WATERSHED. navigation safety. mine the cost of restoring, under the authority Section 552(i) of the Water Resources Develop- SEC. 328. SAULT SAINTE MARIE, CHIPPEWA COUN- of the Missouri River fish and wildlife mitiga- ment Act of 1996 (110 Stat. 3781) is amended by TY, MICHIGAN. tion project, a total of 118,650 acres of lost Mis- striking ‘‘$22,500,000’’ and inserting The project for navigation Sault Sainte Marie, souri River habitat. ‘‘$42,500,000’’. Chippewa County, Michigan, authorized by sec- (2) REPORT.—The Secretary shall report to SEC. 341. NEW YORK STATE CANAL SYSTEM. tion 1149 of the Water Resources Development Congress on the results of the study not later Section 553(e) of the Water Resources Develop- Act of 1986 (100 Stat. 4254–4255) and modified by than 6 months after the date of the enactment ment Act of 1996 (110 Stat. 3781) is amended by section 330 of the Water Resources Development of this Act. striking ‘‘$8,000,000’’ and inserting Act of 1996 (110 Stat. 3717–3718), is further modi- SEC. 334. WOOD RIVER, GRAND ISLAND, NE- ‘‘$18,000,000’’. fied to provide that the amount to be paid by BRASKA. non-Federal interests pursuant to section 101(a) The project for flood control, Wood River, SEC. 342. FIRE ISLAND INLET TO MONTAUK of the Water Resources Development Act of 1986 Grand Island, Nebraska, authorized by section POINT, NEW YORK. (33 U.S.C. 2211(a)) and subsection (a) of such 101(a)(19) of the Water Resources Development The project for combined beach erosion con- section 330 shall not include any interest pay- Act of 1996 (110 Stat. 3665), is modified to au- trol and hurricane protection, Fire Island Inlet ments. thorize the Secretary to construct the project to Montauk Point, Long Island, New York, au- substantially in accordance with the report of thorized by the River and Harbor Act of 1960 (74 SEC. 329. JACKSON COUNTY, MISSISSIPPI. the Corps of Engineers dated June 29, 1998, at a Stat. 483) and modified by the River and Harbor The project for environmental infrastructure, total cost of $17,039,000, with an estimated Fed- Act of 1962, the Water Resources Development Jackson County, Mississippi, authorized by sec- eral cost of $9,730,000 and an estimated non- Act of 1974, and the Water Resources Develop- tion 219(c)(5) of the Water Resources Develop- Federal cost of $7,309,000. ment Act of 1986, is further modified to direct ment Act of 1992 (106 Stat. 4835) and modified by SEC. 335. ABSECON ISLAND, NEW JERSEY. the Secretary, in coordination with the heads of section 504 of the Water Resources Development The project for storm damage reduction and other Federal departments and agencies, to com- Act of 1996 (110 Stat. 3757), is further modified shoreline protection, Brigantine Inlet to Great plete all procedures and reviews expeditiously to direct the Secretary to provide a credit, not to Egg Harbor Inlet, Absecon Island, New Jersey, and to adopt and transmit to Congress not later exceed $5,000,000, against the non-Federal share authorized by section 101(b)(13) of the Water Re- than June 30, 1999, a mutually acceptable shore of the cost of the project for the costs incurred sources Development Act of 1996 (110 Stat. 3668), erosion plan for the Fire Island Inlet to by the Jackson County Board of Supervisors is modified to provide that, if, after October 12, Moriches Inlet reach of the project. since February 8, 1994, in constructing the 1996, the non-Federal interests carry out any SEC. 343. BROKEN BOW LAKE, RED RIVER BASIN, project if the Secretary determines that such work associated with the project that is later OKLAHOMA. costs are for work that the Secretary determines recommended by the Chief of Engineers and ap- The project for flood control and water sup- is compatible with and integral to the project. proved by the Secretary, the Secretary may ply, Broken Bow Lake, Red River Basin, Okla- SEC. 330. TUNICA LAKE, MISSISSIPPI. credit the non-Federal interests toward the non- homa, authorized by section 203 of the Flood The project for flood control, Mississippi River Federal share of the cost of the project an Control Act of 1958 (72 Stat. 309) and modified Channel Improvement Project, Tunica Lake, amount equal to the Federal share of the cost of by section 203 of the Flood Control Act of 1962 Mississippi, authorized by the Act entitled: ‘‘An such work, without interest. (76 Stat. 1187), section 102(v) of the Water Re- Act for the control of floods on the Mississippi SEC. 336. NEW YORK HARBOR AND ADJACENT sources Development Act of 1992 (106 Stat. 4808), River and its tributaries, and for other pur- CHANNELS, PORT JERSEY, NEW JER- and section 338 of the Water Resources Develop- poses’’, approved May 15, 1928 (45 Stat. 534–538), SEY ment Act of 1996 (110 Stat. 3720), is further modi- is modified to include construction of a weir at The project for navigation, New York Harbor fied to require the Secretary to make seasonal the Tunica Cutoff, Mississippi. and Adjacent Channels, New York and New Jer- adjustments to the top of the conservation pool July 28, 1999 CONGRESSIONAL RECORD — SENATE S9635 at the project as follows (if the Secretary deter- terest in preparing environmental and feasibility Secretary shall allow the non-Federal interest to mines that the adjustments will be undertaken documentation for the project before entering participate in the financing of the project in ac- at no cost to the United States and will ade- into an agreement with the Corps of Engineers cordance with section 903(c) of the Water Re- quately protect impacted water and related re- with respect to the project if the Secretary deter- sources Development Act of 1986 (100 Stat. 4184) sources): mines such costs are for work that is compatible to the extent that the Secretary’s evaluation in- (1) Maintain an elevation of 599.5 from No- with and integral to the project. dicates that applying such section is necessary vember 1 through March 31. SEC. 350. RAYSTOWN LAKE, PENNSYLVANIA. to implement the project. (2) Increase elevation gradually from 599.5 to (a) RECREATION PARTNERSHIP INITIATIVE.— SEC. 354. CLEAR CREEK, TEXAS. 602.5 during April and May. Section 519(b) of the Water Resources Develop- Section 575 of the Water Resources Develop- (3) Maintain an elevation of 602.5 from June 1 ment Act of 1996 (110 Stat. 3765) is amended— ment Act of 1996 (110 Stat. 3789) is amended— to September 30. (1) by redesignating paragraph (3) as para- (1) in subsection (a)— (4) Decrease elevation gradually from 602.5 to graph (4); and (A) by inserting ‘‘or nonstructural (buyout) 599.5 during October. (2) by inserting after paragraph (2) the fol- actions’’ after ‘‘flood control works con- SEC. 344. WILLAMETTE RIVER TEMPERATURE lowing: structed’’; and CONTROL, MCKENZIE SUBBASIN, OR- ‘‘(3) ENGINEERING AND DESIGN SERVICES.—The (B) by inserting ‘‘or nonstructural (buyout) EGON. Secretary may perform, at full Federal expense, actions’’ after ‘‘construction of the project’’; (a) IN GENERAL.—The project for environ- engineering and design services for project in- and mental restoration, Willamette River Tempera- frastructure expected to be associated with the (2) in subsection (b)— ture Control, McKenzie Subbasin, Oregon, au- development of the site at Raystown Lake, (A) by striking ‘‘and’’ at the end of paragraph thorized by section 101(a)(25) of the Water Re- Hesston, Pennsylvania.’’. (3); sources Development Act of 1996 (110 Stat. 3665), (b) CONSTRUCTION ASSISTANCE.— is modified to authorize the Secretary to con- (B) by striking the period at the end of para- (1) IN GENERAL.—Consistent with the master graph (3) and inserting ‘‘; and’’; and struct the project substantially in accordance plan described in section 318 of the Water Re- with the Feature Memorandum dated July 31, (C) by adding at the end the following: sources Development Act of 1992 (106 Stat. 4848), ‘‘(4) the project for flood control, Clear Creek, 1998, at a total cost of $64,741,000. the Secretary may provide a grant to Juniata (b) REPORT.—Not later than 90 days after the Texas, authorized by section 203 of the Flood College for the construction of facilities and Control Act of 1968 (82 Stat. 742).’’. date of the enactment of this Act, the Secretary structures at Raystown Lake, Pennsylvania, to shall report to Congress on the reasons for the interpret and understand environmental condi- SEC. 355. CYPRESS CREEK, TEXAS. cost growth of the Willamette River project and tions and trends. As a condition of the receipt of (a) IN GENERAL.—The project for flood con- outline the steps the Corps of Engineers is tak- such financial assistance, officials at Juniata trol, Cypress Creek, Texas, authorized by sec- ing to control project costs, including the appli- College shall coordinate with the Baltimore Dis- tion 3(a)(13) of the Water Resources Develop- cation of value engineering and other appro- trict of the Army Corps of Engineers. ment Act of 1988 (102 Stat. 4014), is modified to priate measures. In the report, the Secretary (2) AUTHORIZATION OF APPROPRIATIONS.— authorize the Secretary to carry out a non- shall also include a cost estimate for, and rec- There is authorized to be appropriated $5,000,000 structural flood control project at a total cost of ommendations on the advisability of, adding for fiscal years beginning after September 30, $5,000,000. fish screens to the project. 1998, to carry out this subsection. (b) REIMBURSEMENT FOR WORK.—The Sec- SEC. 345. AYLESWORTH CREEK RESERVOIR, SEC. 351. SOUTH CENTRAL PENNSYLVANIA. retary may reimburse the non-Federal interest PENNSYLVANIA. for the Cypress Creek project for work done by (a) AUTHORIZATION OF APPROPRIATIONS.—Sec- The project for flood control, Aylesworth tion 313(g)(1) of the Water Resources Develop- the non-Federal interest on the nonstructural Creek Reservoir, Pennsylvania, authorized by ment Act of 1992 (106 Stat. 4846) is amended by flood control project in an amount equal to the section 203 of the Flood Control Act of 1962 (76 striking ‘‘$80,000,000’’ and inserting estimate of the Federal share, without interest, Stat. 1182), is modified to authorize the Sec- ‘‘$180,000,000’’. of the cost of such work— (1) if, after authorization and before initiation retary to transfer, in each of fiscal years 1999 (b) CORPS OF ENGINEERS EXPENSES.—Section and 2000, $50,000 to the Aylesworth Creek Res- 313(g) of such Act (106 Stat. 4846) is amended by of construction of such nonstructural project, ervoir Park Authority for recreational facilities. adding at the end the following: the Secretary approves the plans for construc- SEC. 346. CURWENSVILLE LAKE, PENNSYLVANIA. ‘‘(4) CORPS OF ENGINEERS EXPENSES.—10 per- tion of such nonstructural project by the non- Section 562 of the Water Resources Develop- cent of the amounts appropriated to carry out Federal interest; and ment Act of 1996 (110 Stat. 3784) is amended by this section for each of fiscal years 2000 through (2) if the Secretary finds, after a review of adding at the end the following: ‘‘The Secretary 2002 may be used by the Corps of Engineers dis- studies and design documents prepared to carry shall provide design and construction assistance trict offices to administer and implement out such nonstructural project, that construc- for recreational facilities at Curwensville Lake projects under this section at 100 percent Fed- tion of such nonstructural project is economi- and, when appropriate, may require the non- eral expense.’’. cally justified and environmentally acceptable. Federal interest to provide not more than 25 per- SEC. 352. COOPER RIVER, CHARLESTON HARBOR, SEC. 356. DALLAS FLOODWAY EXTENSION, DAL- cent of the cost of designing and constructing SOUTH CAROLINA. LAS, TEXAS. such facilities. The Secretary may transfer, in The project for rediversion, Cooper River, The project for flood control, Dallas Floodway each of fiscal years 1999 through 2003, $100,000 Charleston Harbor, South Carolina, authorized Extension, Dallas, Texas, authorized by section to the Clearfield County Municipal Services and by section 101 of the River and Harbor Act of 301 of the River and Harbor Act of 1965 (79 Stat. Recreation Authority for recreational facili- 1968 (82 Stat. 731) and modified by title I of the 1091) and modified by section 351 of the Water ties.’’. Energy and Water Development Appropriations Resources Development Act of 1996 (110 Stat. SEC. 347. DELAWARE RIVER, PENNSYLVANIA AND Act, 1992 (105 Stat. 516), is further modified to 3724), is further modified to add environmental DELAWARE. authorize the Secretary to pay to the State of restoration and recreation as project purposes. The project for navigation, Delaware River, South Carolina not more than $3,750,000 if the SEC. 357. UPPER JORDAN RIVER, UTAH. Philadelphia to Wilmington, Pennsylvania and Secretary and the State enter into a binding The project for flood control, Upper Jordan Delaware, authorized by section 3(a)(12) of the agreement for the State to perform all future op- River, Utah, authorized by section 101(a)(23) of Water Resources Development Act of 1988 (102 eration of, including associated studies to assess the Water Resources Development Act of 1990 Stat. 4014), is modified to authorize the Sec- the efficacy of, the St. Stephen, South Carolina, (104 Stat. 4610) and modified by section retary to extend the channel of the Delaware fish lift. The agreement must specify the terms 301(a)(14) of the Water Resources Development River at Camden, New Jersey, to within 150 feet and conditions under which payment will be Act of 1996 (110 Stat. 3709), is further modified of the existing bulkhead and to relocate the 40- made and the rights of, and remedies available to direct the Secretary to carry out the locally foot deep Federal navigation channel, eastward to, the Federal Government to recover all or a preferred project, entitled ‘‘Upper Jordan River within Philadelphia Harbor, from the Ben portion of such payment in the event the State Flood Control Project, Salt Lake County, Franklin Bridge to the Walt Whitman Bridge, suspends or terminates operation of the fish lift Utah—Supplemental Information’’ and identi- into deep water. or fails to operate the fish lift in a manner satis- fied in the document of Salt Lake County, Utah, SEC. 348. MUSSERS DAM, PENNSYLVANIA. factory to the Secretary. Maintenance of the dated July 30, 1998, at a total cost of $12,870,000, Section 209 of the Water Resources Develop- fish lift shall remain a Federal responsibility. with an estimated Federal cost of $8,580,000 and ment Act of 1992 (106 Stat. 4830) is amended by SEC. 353. BOWIE COUNTY LEVEE, TEXAS. an estimated non-Federal cost of $4,290,000. striking subsection (e) and redesignating sub- The project for flood control, Red River Below SEC. 358. ELIZABETH RIVER, CHESAPEAKE, VIR- section (f) as subsection (e). Denison Dam, Texas and Oklahoma, authorized GINIA. SEC. 349. NINE-MILE RUN, ALLEGHENY COUNTY, by section 10 of the Flood Control Act of 1946 (60 Notwithstanding any other provision of law, PENNSYLVANIA. Stat. 647), is modified to direct the Secretary to after September 30, 1999, the City of Chesa- The Nine-Mile Run project, Allegheny Coun- implement the Bowie County Levee feature of peake, Virginia, shall not be obligated to make ty, Pennsylvania, carried out pursuant to sec- the project in accordance with the plan defined the annual cash contribution required under tion 206 of the Water Resources Development as Alternative B in the draft document entitled paragraph 1(9) of the Local Cooperation Agree- Act of 1996 (33 U.S.C. 2330; 110 Stat. 3679–3680), ‘‘Bowie County Local Flood Protection, Red ment dated December 12, 1978, between the Gov- is modified to authorize the Secretary to provide River, Texas Project Design Memorandum No. 1, ernment and the city for the project for naviga- a credit toward the non-Federal share of the Bowie County Levee’’, dated April 1997. In eval- tion, southern branch of Elizabeth River, Chesa- project for costs incurred by the non-Federal in- uating and implementing this modification, the peake, Virginia. S9636 CONGRESSIONAL RECORD — SENATE July 28, 1999

SEC. 359. BLUESTONE LAKE, OHIO RIVER BASIN, the project for a 50-year period at an estimated (5) BUCKSPORT HARBOR, MAINE.—That portion WEST VIRGINIA. average annual cost of $1,251,000, with an esti- of the project for navigation, Bucksport Harbor, Section 102(ff) of the Water Resources Devel- mated annual Federal cost of $1,007,000 and an Maine, authorized by the River and Harbor Act opment Act of 1992 (106 Stat. 4810) is amended estimated annual non-Federal cost of $244,000. of 1902, consisting of a 16-foot deep channel be- by striking ‘‘take such measures as are techno- (e) CASS RIVER, MICHIGAN (VASSAR).—The ginning at a point N268.748.16, E423.390.76, logically feasible’’ and inserting ‘‘implement project for flood protection, Cass River, Michi- thence running north 47 degrees 02 minutes 23 Plan C/G, as defined in the Evaluation Report gan (Vassar), authorized by section 203 of the seconds east 51.76 feet to a point N268.783.44, of the District Engineer, dated December 1996,’’. Flood Control Act of 1958 (72 Stat. 311) and de- E423.428.64, thence running north 67 degrees 54 SEC. 360. GREENBRIER BASIN, WEST VIRGINIA. authorized pursuant to section 1001(b)(2) of the minutes 32 seconds west 1513.94 feet to a point Section 579(c) of the Water Resources Develop- Water Resources Development Act of 1986 (33 N269.352.81, E422.025.84, thence running south ment Act of 1996 (110 Stat. 3790) is amended by U.S.C. 579a(b)(2)), is authorized to be carried 47 degrees 02 minutes 23 seconds west 126.15 feet striking ‘‘$12,000,000’’ and inserting out by the Secretary. to a point N269.266.84, E421.933.52, thence run- ‘‘$73,000,000’’. (f) SAGINAW RIVER, MICHIGAN (SHIAWASSEE ning south 70 degrees 24 minutes 28 seconds east SEC. 361. MOOREFIELD, WEST VIRGINIA. FLATS).—The project for flood control, Saginaw 1546.79 feet to the point of origin. Effective October 1, 1999, the project for flood River, Michigan (Shiawassee Flats), authorized (6) CARVERS HARBOR, VINALHAVEN, MAINE.— control, Moorefield, West Virginia, authorized by section 203 of the Flood Control Act of 1958 That portion of the project for navigation, by section 101(a)(25) of the Water Resources De- (72 Stat. 311) and deauthorized pursuant to sec- Carvers Harbor, Vinalhaven, Maine, authorized velopment Act of 1990 (104 Stat. 4610-4611), is tion 1001(b)(2) of the Water Resources Develop- by the Act of June 3, 1896 (commonly known as modified to provide that the non-Federal inter- ment Act of 1986 (33 U.S.C. 579a(b)(2)), is au- the ‘‘River and Harbor Appropriations Act of est shall not be required to pay the unpaid bal- thorized to be carried out by the Secretary. 1896’’) (29 Stat. 202, chapter 314), consisting of ance, including interest, of the non-Federal (g) PARK RIVER, GRAFTON, NORTH DAKOTA.— the 16-foot anchorage beginning at a point with share of the cost of the project. The project for flood control, Park River, Graf- coordinates N137,502.04, E895,156.83, thence run- SEC. 362. WEST VIRGINIA AND PENNSYLVANIA ton, North Dakota, authorized by section 401(a) ning south 6 degrees 34 minutes 57.6 seconds FLOOD CONTROL. of the Water Resources Development Act of 1986 west 277.660 feet to a point N137,226.21, Section 581(a) of the Water Resources Devel- (100 Stat. 4121) and deauthorized pursuant to E895,125.00, thence running north 53 degrees, 5 opment Act of 1996 (110 Stat. 3790) is amended to section 1001(a) of such Act (33 U.S.C. 579a(a)), minutes 42.4 seconds west 127.746 feet to a point read as follows: is authorized to be carried out by the Secretary. N137,302.92, E895022.85, thence running north 33 ‘‘(a) IN GENERAL.—The Secretary may design (h) MEMPHIS HARBOR, MEMPHIS, TEN- degrees 56 minutes 9.8 seconds east 239.999 feet and construct— NESSEE.—The project for navigation, Memphis to the point of origin. ‘‘(1) flood control measures in the Cheat and Harbor, Memphis, Tennessee, authorized by sec- (7) EAST BOOTHBAY HARBOR, MAINE.—The Tygart River basins, West Virginia, at a level of tion 601(a) of the Water Resources Development project for navigation, East Boothbay Harbor, protection that is sufficient to prevent any fu- Act of 1986 (100 Stat. 4145) and deauthorized Maine, authorized by the first section of the Act ture losses to these communities from flooding pursuant to 1001(a) of such Act (33 U.S.C entitled, ‘‘An Act making appropriations for the such as occurred in January 1996 but no less 579a(a)), is authorized to be carried out by the construction, repair, and preservation of certain than a 100-year level of protection; and Secretary. public works on rivers and harbors, and for ‘‘(2) structural and nonstructural flood con- other purposes’’, approved June 25, 1910 (36 SEC. 364. PROJECT DEAUTHORIZATIONS. trol, streambank protection, stormwater man- Stat. 631). (a) IN GENERAL.—The following projects or agement, and channel clearing and modification (8) SEARSPORT HARBOR, SEARSPORT, MAINE.— measures in the Lower Allegheny, Lower portions of projects are not authorized after the That portion of the project for navigation, Monongahela, West Branch Susquehanna, and date of the enactment of this Act: Searsport Harbor, Searsport, Maine, authorized Juniata River basins, Pennsylvania, at a level (1) BRIDGEPORT HARBOR, CONNECTICUT.—That by section 101 of the River and Harbor Act of of protection that is sufficient to prevent any portion of the project for navigation, Bridgeport 1962 (76 Stat. 1173), consisting of the 35-foot future losses to communities in these basins from Harbor, Connecticut, authorized by section 101 turning basin beginning at a point with coordi- flooding such as occurred in January 1996, but of the River and Harbor Act of 1958 (72 Stat. nates N225,008.38, E395,464.26, thence running no less than a 100-year level of flood protection 297), consisting of a 2.4-acre anchorage area, 9 north 43 degrees 49 minutes 53.4 seconds east with respect to those measures that incorporate feet deep, and an adjacent 0.6-acre anchorage, 6 362.001 feet to a point N225,269.52, E395,714.96, levees or floodwalls.’’. feet deep, located on the west side of Johnsons thence running south 71 degrees 27 minutes 33.0 River. SEC. 363. PROJECT REAUTHORIZATIONS. seconds east 1,309.201 feet to a point N224,853.22, (2) CLINTON HARBOR, CONNECTICUT.—That (a) LEE CREEK, ARKANSAS AND OKLAHOMA.— E396,956.21, thence running north 84 degrees 3 The project for flood protection on Lee Creek, portion of the project for navigation, Clinton minutes 45.7 seconds west 1,499.997 feet to the Arkansas and Oklahoma, authorized by section Harbor, Connecticut, authorized by the Rivers point of origin. 204 of the Flood Control Act of 1965 (79 Stat. and Harbors Act of 1945, House Document 240, (9) WELLS HARBOR, MAINE.—The following 1078) and deauthorized pursuant to section 76th Congress, 1st Session, lying upstream of a portions of the project for navigation, Wells 1001(b)(1) of the Water Resources Development line designated by the 2 points N158,592.12, Harbor, Maine, authorized by section 101 of the Act of 1986 (33 U.S.C. 579a(b)(1)), is authorized E660,193.92 and N158,444.58, E660,220.95. River and Harbor Act of 1960 (74 Stat. 480): ASS HARBOR, MAINE.—The following por- to be carried out by the Secretary. (3) B (A) The portion of the 6-foot channel the (b) INDIAN RIVER COUNTY, FLORIDA.—The tions of the project for navigation, Bass Harbor, boundaries of which begin at a point with co- project for shore protection, Indian River Coun- Maine, authorized on May 7, 1962, under section ordinates N177,992.00, E394,831.00, thence run- ty, Florida, authorized by section 501 of the 107 of the River and Harbor Act of 1960 (33 ning south 83 degrees 58 minutes 14.8 seconds Water Resources and Development Act of 1986 U.S.C. 577): west 10.38 feet to a point N177,990.91, (100 Stat. 4134) and deauthorized pursuant to (A) Beginning at a bend in the project, E394,820.68, thence running south 11 degrees 46 section 1001(b)(1) of the Water Resources Devel- N149040.00, E538505.00, thence running easterly minutes 47.7 seconds west 991.76 feet to a point opment Act of 1986 (33 U.S.C. 579a(b)(1)), is au- about 50.00 feet along the northern limit of the N177,020.04, E394,618.21, thence running south thorized to be carried out by the Secretary. project to a point N149061.55, E538550.11, thence 78 degrees 13 minutes 45.7 seconds east 10.00 feet (c) LIDO KEY, FLORIDA.—The project for shore running southerly about 642.08 feet to a point, to a point N177,018.00, E394,628.00, thence run- protection, Lido Key, Florida, authorized by N14877.64, E538817.18, thence running south- ning north 11 degrees 46 minutes 22.8 seconds section 101 of the River and Harbor Act of 1970 westerly about 156.27 feet to a point on the west- east 994.93 feet to the point of origin. (84 Stat. 1819) and deauthorized pursuant to erly limit of the project, N148348.50, E538737.02, (B) The portion of the 6-foot anchorage the section 1001(b)(2) of the Water Resources Devel- thence running northerly about 149.00 feet boundaries of which begin at a point with co- opment Act of 1986 (33 U.S.C 579a(b)(2)), is au- along the westerly limit of the project to a bend ordinates N177,778.07, E394,336.96, thence run- thorized to be carried out by the Secretary. in the project, N148489.22, E538768.09, thence ning south 51 degrees 58 minutes 32.7 seconds (d) ST. AUGUSTINE, ST. JOHNS COUNTY, FLOR- running northwesterly about 610.39 feet along west 15.49 feet to a point N177,768.53, IDA.— the westerly limit of the project to the point of E394,324.76, thence running south 11 degrees 46 (1) IN GENERAL.—The project for shore protec- origin. minutes 26.5 seconds west 672.87 feet to a point tion and storm damage reduction, St. Augustine, (B) Beginning at a point on the westerly limit N177,109.82, E394,187.46, thence running south St. Johns County, Florida, authorized by section of the project, N148118.55, E538689.05, thence 78 degrees 13 minutes 45.7 seconds east 10.00 feet 501 of the Water Resources Development Act of running southeasterly about 91.92 feet to a to a point N177,107.78, E394,197.25, thence run- 1986 and deauthorized pursuant to section point, N148041.43, E538739.07, thence running ning north 11 degrees 46 minutes 25.4 seconds 1001(a) of such Act (33 U.S.C. 579a(a)), is au- southerly about 65.00 feet to a point, N147977.86, east 684.70 feet to the point of origin. thorized to include navigation mitigation as a E538725.51, thence running southwesterly about (C) The portion of the 10-foot settling basin project purpose and to be carried out by the Sec- 91.92 feet to a point on the westerly limit of the the boundaries of which begin at a point with retary substantially in accordance with the project, N147927.84, E538648.39, thence running coordinates N177,107.78, E394,197.25, thence run- General Reevaluation Report dated November northerly about 195.00 feet along the westerly ning north 78 degrees 13 minutes 45.7 seconds 18, 1998, at a total cost of $16,086,000, with an limit of the project to the point of origin. west 10.00 feet to a point N177,109.82, estimated Federal cost of $12,949,000 and an esti- (4) BOOTHBAY HARBOR, MAINE.—The project E394,187.46, thence running south 11 degrees 46 mated non-Federal cost of $3,137,000. for navigation, Boothbay Harbor, Maine, au- minutes 15.7 seconds west 300.00 feet to a point (2) PERIODIC NOURISHMENT.—The Secretary is thorized by the River and Harbor Act of 1912 (37 N176,816.13, E394,126.26, thence running south authorized to carry out periodic nourishment for Stat. 201). 78 degrees 12 minutes 21.4 seconds east 9.98 feet July 28, 1999 CONGRESSIONAL RECORD — SENATE S9637 to a point N176,814.09, E394,136.03, thence run- N232,178.82, E758,726.25, thence running south to include the area located south of the inner ning north 11 degrees 46 minutes 29.1 seconds 85 degrees 33 minutes 16.0 seconds east to the harbor settling basin in existence on the date of east 300.00 feet to the point of origin. point of origin. the enactment of this Act beginning at a point (D) The portion of the 10-foot settling basin (B) A portion of the 30-foot west maneuvering with coordinates N176,726.36, E394,556.97, thence the boundaries of which begin at a point with basin, authorized by the River and Harbor Act running north 78 degrees 13 minutes 17.9 sec- coordinates N177,018.00, E394,628.00, thence run- of 3 July 1930, beginning at a point with coordi- onds west 160.00 feet to a point N176,759.02, ning north 78 degrees 13 minutes 45.7 seconds nates N232,139.91, E758,773.61, thence running E394,400.34, thence running south 11 degrees 47 west 10.00 feet to a point N177,020.04, north 81 degrees 49 minutes 30.1 seconds east minutes 03.8 seconds west 45 feet to a point E394,618.21, thence running south 11 degrees 46 160.76 feet to a point N232,162.77, E758.932.74, N176,714.97, E394,391.15, thence running south minutes 44.0 seconds west 300.00 feet to a point thence running north 85 degrees 33 minutes 16.0 78 degrees 13 minutes 17.9 seconds 160.00 feet to N176,726.36, E394,556.97, thence running south seconds west 141.85 feet to a point N232,173.77, a point N176,682.31, E394,547.78, thence running 78 degrees 12 minutes 30.3 seconds east 10.03 feet E758,791.32, thence running south 27 degrees 36 north 11 degrees 47 minutes 03.8 seconds east 45 to a point N176,724.31, E394,566.79, thence run- minutes 52.8 seconds west to the point of origin. feet to the point of origin. ning north 11 degrees 46 minutes 22.4 seconds (b) ANCHORAGE AREA, CLINTON HARBOR, CON- (4) RELOCATION.—The Secretary may relocate east 300.00 feet to the point of origin. NECTICUT.—That portion of the Clinton Harbor, the settling basin feature of the Wells Harbor, (10) FALMOUTH HARBOR, MASSACHUSETTS.— Connecticut, navigation project referred to in Maine, navigation project referred to in sub- That portion of the project for navigation, Fal- subsection (a)(2) beginning at a point beginning: section (a)(9) to the outer harbor between the mouth Harbor, Massachusetts, authorized by N158,444.58, E660,220.95, thence running north jetties. section 101 of the River and Harbor Act of 1948 79 degrees 37 minutes 14 seconds east 833.31 feet (5) ADDITIONAL ACTIONS.—In carrying out the lying southeasterly of a line commencing at a to a point N158,594.72, E661,040.67, thence run- operation and the maintenance of the Wells point N199,286.41, E844,394.91, thence running ning south 80 degrees 51 minutes 53 seconds east Harbor, Maine, navigation project referred to in north 66 degrees 52 minutes 3.31 seconds east 181.21 feet to a point N158,565.95, E661,219.58, subsection (a)(9), the Secretary shall undertake 472.95 feet to a point N199,472.21, E844,829.83, thence running north 57 degrees 38 minutes 04 each of the actions of the Corps of Engineers thence running north 43 degrees 9 minutes 28.3 seconds west 126.02 feet to a point N158,633.41, specified in section IV(B) of the memorandum of seconds east 262.64 feet to a point N199,633.80, E660,113.14, thence running south 79 degrees 37 agreement relating to the project dated January E845,009.48, thence running north 21 degrees 40 minutes 14 seconds west 911.61 feet to a point 20, 1998, including those actions specified in minutes 11.26 seconds east 808.38 feet to a point N158,469.17, E660,216.44, thence running south such section IV(B) that the parties agreed to ask N200,415.05, E845,307.98, thence running north 10 degrees 22 minutes 46 seconds east 25 feet re- the Corps of Engineers to undertake. 32 degrees 25 minutes 29.01 seconds east 160.76 turning to a point N158,444.58, E660,220.95 is re- (d) ANCHORAGE AREA, GREEN HARBOR, MASSA- feet to a point N200,550.75, E845,394.18, thence designated as an anchorage area. CHUSETTS.—The portion of the Green Harbor, (c) WELLS HARBOR, MAINE.— running north 24 degrees 56 minutes 42.29 sec- Massachusetts, navigation project referred to in (1) PROJECT MODIFICATION.—The Wells Har- onds east 1,410.29 feet to a point N201,829.48, subsection (a)(11) consisting of a 6-foot deep E845,988.97. bor, Maine, navigation project referred to in subsection (a)(9) is modified to authorize the channel that lies northerly of a line whose co- (11) GREEN HARBOR, MASSACHUSETTS.—That ordinates are North 394825.00, East 831660.00 portion of the project for navigation, Green Har- Secretary to realign the channel and anchorage areas based on a harbor design capacity of 150 and North 394779.28, East 831570.64 is redesig- bor, Massachusetts, undertaken pursuant to nated as an anchorage area. section 107 of the River and Harbor Act of 1960 craft. SEC. 365. AMERICAN AND SACRAMENTO RIVERS, (33 U.S.C. 577), consisting of the 6-foot deep (2) REDESIGNATIONS.— (A) 6-FOOT ANCHORAGE.—The following por- CALIFORNIA. channel beginning at a point along the west tions of the Wells Harbor, Maine, navigation (a) IN GENERAL.—The project for flood dam- limit of the existing project, North 395990.43, project referred to in subsection (a)(9) shall be age reduction, American and Sacramento Riv- East 831079.16, thence running northwesterly redesignated as part of the 6-foot anchorage: ers, California, authorized by section 101(a)(1) about 752.85 feet to a point, North 396722.80, (i) The portion of the 6-foot channel the of the Water Resources Development Act of 1996 East 830904.76, thence running northwesterly boundaries of which begin at a point with co- (110 Stat. 3662–3663), is modified to direct the about 222.79 feet to a point along the west limit ordinates N177,990.91, E394,820.68, thence run- Secretary to include the following improvements of the existing project, North 396844.34, East ning south 83 degrees 58 minutes 40.8 seconds as part of the overall project: 830718.04, thence running southwesterly about west 94.65 feet to a point N177,980.98, (1) Raising the left bank of the non-Federal 33.72 feet along the west limit of the existing E394,726.55, thence running south 11 degrees 46 levee upstream of the Mayhew Drain for a dis- project to a point, North 396810.80, East minutes 22.4 seconds west 962.83 feet to a point tance of 4,500 feet by an average of 2.5 feet. 830714.57, thence running southeasterly about N177,038.40, E394,530.10, thence running south (2) Raising the right bank of the American 195.42 feet along the west limit of the existing 78 degrees 13 minutes 45.7 seconds east 90.00 feet River levee from 1,500 feet upstream to 4,000 feet project to a point, North 396704.19, East to a point N177,020.04, E394,618.21, thence run- downstream of the Howe Avenue bridge by an 830878.35, thence running about 544.66 feet ning north 11 degrees 46 minutes 47.7 seconds average of 1 feet. along the west limit of the existing project to a east 991.76 feet to the point of origin. (3) Modifying the south levee of the Natomas point, North 396174.35, East 831004.52, thence (ii) The portion of the 10-foot inner harbor Cross Canal for a distance of 5 miles to ensure running southeasterly about 198.49 feet along settling basin the boundaries of which begin at that the south levee is consistent with the level the west limit of the existing project to the point a point with coordinates N177,020.04, of protection provided by the authorized levee of beginning. E394,618.21, thence running north 78 degrees 13 along the east bank of the Sacramento River. (12) NEW BEDFORD AND FAIRHAVEN HARBOR, minutes 30.5 seconds west 160.00 feet to a point (4) Modifying the north levee of the Natomas MASSACHUSETTS.—The following portions of the N177,052.69, E394,461.58, thence running south Cross Canal for a distance of 5 miles to ensure project for navigation, New Bedford and 11 degrees 46 minutes 45.4 seconds west 299.99 that the height of the levee is equivalent to the Fairhaven Harbor, Massachusetts: feet to a point N176,759.02, E394,400.34, thence height of the south levee as authorized by para- (A) A portion of the 25-foot spur channel lead- running south 78 degrees 13 minutes 17.9 sec- graph (3). ing to the west of Fish Island, authorized by the onds east 160 feet to a point N176,726.36, (5) Installing gates to the existing Mayhew River and Harbor Act of 3 March 1909, begin- E394,556.97, thence running north 11 degrees 46 Drain culvert and pumps to prevent backup of ning at a point with coordinates N232,173.77, minutes 44.0 seconds east 300.00 feet to the point floodwater on the Folsom Boulevard side of the E758,791.32, thence running south 27 degrees 36 of origin. gates. minutes 52.8 seconds west 38.2 feet to a point (B) 6-FOOT CHANNEL.—The following portion (6) Installation of a slurry wall in the north N232,139.91, E758,773.61, thence running south of the Wells Harbor, Maine, navigation project levee of the American River from the east levee 87 degrees 35 minutes 31.6 seconds west 196.84 referred to in subsection (a)(9) shall be redesig- of the Natomas east Main Drain upstream for a feet to a point N232,131.64, E758,576.94, thence nated as part of the 6-foot channel: the portion distance of approximately 1.2 miles. running north 47 degrees 47 minutes 48.4 sec- of the 6-foot anchorage the boundaries of which (7) Installation of a slurry wall in the north onds west 502.72 feet to a point N232,469.35, begin at a point with coordinates N178,102.26, levee of the American River from 300 feet west of E758,204.54, thence running north 10 degrees 10 E394,751.83, thence running south 51 degrees 59 Jacob Lane north for a distance of approxi- minutes 20.3 seconds west 438.88 feet to a point minutes 42.1 seconds west 526.51 feet to a point mately 1 mile to the end of the existing levee. N232,901.33, E758,127.03, thence running north N177,778.07, E394,336.96, thence running south (b) COST LIMITATIONS.—Section 101(a)(1)(A) of 79 degrees 49 minutes 43.1 seconds east 121.69 11 degrees 46 minutes 26.6 seconds west 511.83 the Water Resources Development Act of 1996 feet to a point N232,922.82, E758,246.81, thence feet to a point N177,277.01, E394,232.52, thence (110 Stat. 3662) is amended by striking ‘‘at a running south 04 degrees 29 minutes 17.6 sec- running south 78 degrees 13 minutes 17.9 sec- total cost of’’ and all that follows through onds east 52.52 feet to a point N232,870.46, onds east 80.00 feet to a point N177,260.68, ‘‘$14,225,000,’’ and inserting the following: ‘‘at a E758,250.92, thence running south 23 degrees 56 E394,310.84, thence running north 11 degrees 46 total cost of $91,900,000, with an estimated Fed- minutes 11.2 seconds east 49.15 feet to a point minutes 24.8 seconds east 482.54 feet to a point eral cost of $68,925,000 and an estimated non- N323,825.54, E758,270.86, thence running south N177,733.07, E394,409.30, thence running north Federal cost of $22,975,000,’’. 79 degrees 49 minutes 27.0 seconds west 88.19 feet 51 degrees 59 minutes 41.0 seconds east 402.63 (c) COST SHARING.—For purposes of section to a point N232,809.96, E758,184.06, thence run- feet to a point N177,980.98, E394,726.55, thence 103 of the Water Resources Development Act of ning south 10 degrees 10 minutes 25.7 seconds running north 11 degrees 46 minutes 27.6 sec- 1986 (33 U.S.C. 2213), the modifications author- east 314.83 feet to a point N232,500.08, onds east 123.89 feet to the point of origin. ized by this section shall be subject to the same E758,239.67, thence running south 56 degrees 33 (3) REALIGNMENT.—The 6-foot anchorage area cost sharing in effect for the project for flood minutes 56.1 seconds east 583.07 feet to a point described in paragraph (2)(B) shall be realigned damage reduction, American and Sacramento S9638 CONGRESSIONAL RECORD — SENATE July 28, 1999 Rivers, California, authorized by section TITLE IV—STUDIES SEC. 407. PORT EVERGLADES INLET, FLORIDA. 101(a)(1) of the Water Resources Development SEC. 401. UPPER MISSISSIPPI AND ILLINOIS RIV- The Secretary shall conduct a study to deter- Act of 1996 (110 Stat. 3662). ERS LEVEES AND STREAMBANKS mine the feasibility of carrying out a sand by- SEC. 366. MARTIN, KENTUCKY. PROTECTION. pass project at Port Everglades Inlet, Florida. The project for flood control, Martin, Ken- The Secretary shall conduct a study of erosion SEC. 408. UPPER DES PLAINES RIVER AND TRIBU- tucky, authorized by section 202(a) of the En- damage to levees and infrastructure on the TARIES, ILLINOIS AND WISCONSIN. ergy and Water Development Appropriations upper Mississippi and Illinois Rivers and the im- (a) IN GENERAL.—The Secretary is directed to Act, 1981 (94 Stat. 1339) is modified to authorize pact of increased barge and pleasure craft traf- conduct a study of the upper Des Plaines River the Secretary to take all necessary measures to fic on deterioration of levees and other flood and tributaries, Illinois and Wisconsin, up- prevent future losses that would occur from a control structures on such rivers. stream of the confluence with Salt Creek at Riv- flood equal in magnitude to a 100-year fre- SEC. 402. UPPER MISSISSIPPI RIVER COM- erside, Illinois, to determine the feasibility of im- quency event. PREHENSIVE PLAN. provements in the interests of flood damage re- SEC. 367. SOUTHERN WEST VIRGINIA PILOT PRO- (a) DEVELOPMENT.—The Secretary shall de- duction, environmental restoration and protec- GRAM. velop a plan to address water and related land tion, water quality, recreation, and related pur- Section 340(g) of the Water Resources Devel- resources problems and opportunities in the poses. opment Act of 1992 (106 Stat. 4856) is amended to Upper Mississippi and Illinois River Basins, ex- (b) SPECIAL RULE.—In conducting the study, read as follows: tending from Cairo, Illinois, to the headwaters the Secretary may not exclude from consider- ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.— of the Mississippi River, in the interest of sys- ation and evaluation flood damage reduction There is authorized to be appropriated to carry temic flood damage reduction by means of a measures based on restrictive policies regarding out the pilot program under this section mixture of structural and nonstructural flood the frequency of flooding, drainage area, and $40,000,000 for fiscal years beginning after Sep- control and floodplain management strategies, amount of runoff. tember 30, 1992. Such sums shall remain avail- continued maintenance of the navigation (c) CONSULTATION AND USE OF EXISTING able until expended.’’. project, management of bank caving and ero- DATA.—The Secretary shall consult with appro- SEC. 368. BLACK WARRIOR AND TOMBIGBEE RIV- sion, watershed nutrient and sediment manage- priate State and Federal agencies and shall ERS, JACKSON, ALABAMA. ment, habitat management, recreation needs, make maximum use of existing data and ongoing The project for navigation, Black Warrior and and other related purposes. programs and efforts of States and Federal Tombigbee Rivers, vicinity of Jackson, Alabama, (b) CONTENTS.—The plan shall contain rec- agencies in conducting the study. as authorized by section 106 of the Energy and ommendations on future management plans and SEC. 409. CAMERON PARISH WEST OF CALCASIEU Water Development Appropriations Act, 1987 actions to be carried out by the responsible Fed- (100 Stat. 3341–199), is modified to authorize the RIVER, LOUISIANA. eral and non-Federal entities and shall specifi- The Secretary shall conduct a study to deter- Secretary to acquire lands for mitigation of the cally address recommendations to authorize con- habitat losses attributable to the project, includ- mine the feasibility of carrying out a project for struction of a systemic flood control project in storm damage reduction and environmental res- ing the navigation channel, dredged material accordance with a plan for the Upper Mis- disposal areas, and other areas directly im- toration, Cameron Parish west of Calcasieu sissippi River. The plan shall include rec- River, Louisiana. pacted by construction of the project. Notwith- ommendations for Federal action where appro- SEC. 410. GRAND ISLE AND VICINITY, LOUISIANA. standing section 906 of the Water Resources De- priate and recommendations for follow-on stud- velopment Act of 1986 (33 U.S.C. 2283), the Sec- ies for problem areas for which data or current In carrying out a study of the storm damage retary may construct the project prior to acqui- technology does not allow immediate solutions. reduction benefits to Grand Isle and vicinity, sition of the mitigation lands if the Secretary Louisiana, the Secretary shall include benefits (c) CONSULTATION AND USE OF EXISTING takes such actions as may be necessary to en- that a storm damage reduction project for Grand DATA.—The Secretary shall consult with appro- sure that any required mitigation lands will be priate State and Federal agencies and shall Isle and vicinity, Louisiana, may have on the acquired not later than 2 years after initiation make maximum use of existing data and ongoing mainland coast of Louisiana as project benefits of construction of the new channel and such ac- programs and efforts of States and Federal attributable to the Grand Isle project. quisition will fully mitigate any adverse envi- agencies in developing the plan. SEC. 411. LAKE PONTCHARTRAIN SEAWALL, LOU- ronmental impacts resulting from the project. ISIANA. (d) COST SHARING.—Development of the plan SEC. 369. TROPICANA WASH AND FLAMINGO under this section shall be at Federal expense. (a) IN GENERAL.—The Secretary shall com- WASH, NEVADA. Feasibility studies resulting from development of plete a post-authorization change report on the Any Federal costs associated with the such plan shall be subject to cost sharing under project for hurricane-flood protection, Lake Tropicana and Flamingo Washes, Nevada, au- section 105 of the Water Resources Development Pontchartrain, Louisiana, and vicinity, author- thorized by section 101(13) of the Water Re- Act of 1986 (33 U.S.C. 2215). ized by section 204 of the Flood Control Act of sources Development Act of 1992 (106 Stat. 4803), (e) REPORT.—The Secretary shall submit a re- 1965 (79 Stat. 1077), to incorporate and accom- incurred by the non-Federal interest to accel- port that includes the comprehensive plan to the plish structural modifications to the seawall erate or modify construction of the project, in Committee on Transportation and Infrastruc- fronting protection along the south shore of cooperation with the Corps of Engineers, shall ture of the House of Representatives and the Lake Pontchartrain from the New Basin Canal be considered to be eligible for reimbursement by Committee on Environment and Public Works of on the west to the Inner harbor Navigation the Secretary. the Senate not later than 3 years after the date Canal on the east. SEC. 370. COMITE RIVER, LOUISIANA. of the enactment of this Act. (b) REPORT.—The Secretary shall ensure expe- The Comite River Diversion Project for flood ditious completion of the post-authorization control, authorized as part of the project for SEC. 403. EL DORADO, UNION COUNTY, ARKAN- SAS. change report required by subsection (a) not flood control, Amite River and Tributaries, Lou- The Secretary shall conduct a study to deter- later than 180 days after the date of the enact- isiana, by section 101(11) of the Water Resources ment of this section. Development Act of 1992 (106 Stat. 4802–4803) mine the feasibility of improvements to regional SEC. 412. WESTPORT, MASSACHUSETTS. and modified by section 301(b)(5) of the Water water supplies for El Dorado, Union County, The Secretary shall conduct a study to deter- Resources Development Act of 1996 (110 Stat. Arkansas. mine the feasibility of carrying out a navigation 3709–3710), is further modified to authorize the SEC. 404. SWEETWATER RESERVOIR, SAN DIEGO project for the town of Westport, Massachusetts, Secretary to include the costs of highway relo- COUNTY, CALIFORNIA. and the possible beneficial uses of dredged mate- cations to be cost shared as a project construc- The Secretary shall conduct a study of the po- rial for shoreline protection and storm damage tion feature if the Secretary determines that tential water quality problems and pollution reduction in the area. In determining the bene- such treatment of costs is necessary to facilitate abatement measures in the watershed in and fits of the project, the Secretary shall include construction of the project. around Sweetwater Reservoir, San Diego Coun- ty, California. the benefits derived from using dredged material SEC. 371. ST. MARY’S RIVER, MICHIGAN. for shoreline protection and storm damage re- SEC. 405. WHITEWATER RIVER BASIN, CALI- The project for navigation, St. Mary’s River, duction. Michigan, is modified to direct the Secretary to FORNIA. provide an additional foot of overdraft between The Secretary shall undertake and complete a SEC. 413. SOUTHWEST VALLEY, ALBUQUERQUE, NEW MEXICO. Point Louise Turn and the Locks and Sault feasibility study for flood damage reduction in Saint Marie, Michigan, consistent with the the Whitewater River basin, California, and, The Secretary shall undertake and complete a channels upstream of Point Louise Turn. The based upon the results of such study, give pri- feasibility study for flood damage reduction in modification shall be carried out as operation ority consideration to including the rec- the Southwest Valley, Albuquerque, New Mex- and maintenance to improve navigation safety. ommended project, including the Salton Sea ico, and, based upon the results of such study, give priority consideration to including the rec- SEC. 372. CITY OF CHARLXVOIX: REIMBURSE- wetlands restoration project, in the flood mitiga- MENT, MICHIGAN. tion and riverine restoration pilot program au- ommended project in the flood mitigation and The Secretary, shall review and, if consistent thorized in section 214 of this Act. riverine restoration pilot program authorized in with authorized project Purposes, reimburse the SEC. 406. LITTLE ECONLACKHATCHEE RIVER section 214 of this Act. City of Charlevoix, Michigan, for the Federal BASIN, FLORIDA. SEC. 414. CAYUGA CREEK, NEW YORK. share of costs associated with construction of The Secretary shall conduct a study of pollu- The Secretary shall conduct a study to deter- the new revetment to the Federal navigation tion abatement measures in the Little mine the feasibility of carrying out a project for project at Charlevoix Harbor, Michigan. Econlackhatchee River basin, Florida. flood control for Cayuga Creek, New York. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9639

SEC. 415. ARCOLA CREEK WATERSHED, MADISON, tection of water and related resources of the (b) THORNTON RESERVOIR, COOK COUNTY, IL- OHIO. Great Lakes basin. LINOIS.— The Secretary shall conduct a study to deter- (b) REPORT.—Not later than 4 years after the (1) IN GENERAL.—The Thornton Reservoir mine the feasibility of a project to provide envi- date of the enactment of this Act, the Secretary project, an element of the project for flood con- ronmental restoration and protection for the shall submit to the Committee on Transportation trol, Chicagoland Underflow Plan, Illinois, au- Arcola Creek watershed, Madison, Ohio. and Infrastructure of the House of Representa- thorized by section 3(a)(5) of the Water Re- SEC. 416. WESTERN LAKE ERIE BASIN, OHIO, INDI- tives and the Committee on Environment and sources Development Act of 1988 (102 Stat. 4013), ANA, AND MICHIGAN. Public Works of the Senate a report that in- is modified to authorize the Secretary to include (a) IN GENERAL.—The Secretary shall conduct cludes the strategic plan for Corps of Engineers additional permanent flood control storage at- a study to develop measures to improve flood programs in the Great Lakes basin and details tributable to the Natural Resources Conserva- control, navigation, water quality, recreation, of proposed Corps of Engineers environmental, tion Service Thornton Reservoir (Structure 84), and fish and wildlife habitat in a comprehensive navigation, and flood damage reduction projects Little Calumet River Watershed, Illinois, ap- manner in the western Lake Erie basin, Ohio, in the region. proved under the Watershed Protection and Indiana, and Michigan, including watersheds of (c) AUTHORIZATION OF APPROPRIATIONS.— Flood Prevention Act (16 U.S.C. 1001 et seq.). the Maumee, Ottawa, and Portage Rivers. There is authorized to be appropriated to carry (2) COST SHARING.—Costs for the Thornton (b) COOPERATION.—In carrying out the study, out this section $1,000,000 for fiscal years 2000 Reservoir project shall be shared in accordance the Secretary shall cooperate with interested through 2003. with section 103 of the Water Resources Devel- Federal, State, and local agencies and non- SEC. 426. NUTRIENT LOADING RESULTING FROM opment Act of 1986 (33 U.S.C. 2213). governmental organizations and consider all rel- DREDGED MATERIAL DISPOSAL. (3) TRANSITIONAL STORAGE.—The Secretary of evant programs of such agencies. (a) STUDY.—The Secretary shall conduct a Agriculture may cooperate with non-Federal in- (c) REPORT.—Not later than 1 year after the study of nutrient loading that occurs as a result terests to provide, on a transitional basis, flood date of the enactment of this Act, the Secretary of discharges of dredged material into open- control storage for the Natural Resources Con- shall submit to Congress a report on the results water sites in the Chesapeake Bay. servation Service Thornton Reservoir (Structure of the study, including findings and rec- (b) REPORT.—Not later than 18 months after 84) in the west lobe of the Thornton quarry in ommendations. the date of the enactment of this Act, the Sec- advance of Corps’ construction. SEC. 417. SCHUYLKILL RIVER, NORRISTOWN, retary shall transmit to Congress a report on the (4) CREDITING.—The Secretary may credit PENNSYLVANIA. results of the study. against the non-Federal share of the Thornton The Secretary shall conduct a study to deter- SEC. 427. SANTEE DELTA FOCUS AREA, SOUTH Reservoir project all design, lands, easements, mine the feasibility of carrying out a project for CAROLINA. rights-of-way (as of the date of authorization), flood control for Schuylkill River, Norristown, The Secretary shall conduct a study of the and construction costs incurred by the non-Fed- Pennsylvania, including improvement to exist- Santee Delta focus area, South Carolina, to de- eral interests before the signing of the project ing stormwater drainage systems. termine the feasibility of carrying out a project cooperation agreement. SEC. 418. LAKES MARION AND MOULTRIE, SOUTH for enhancing wetlands values and public rec- (5) REEVALUATION REPORT.—The Secretary CAROLINA. reational opportunities in the area. shall determine the credits authorized by para- The Secretary shall conduct a study to deter- SEC. 428. DEL NORTE COUNTY, CALIFORNIA. graph (4) that are integral to the Thornton Res- mine the feasibility of carrying out a project for The Secretary shall undertake and complete a ervoir project and the current total project costs Lakes Marion and Moultrie to provide water feasibility study for designating a permanent based on a limited reevaluation report. supply, treatment, and distribution to Calhoun, disposal site for dredged materials from Federal SEC. 502. CONSTRUCTION ASSISTANCE. Clarendon, Colleton, Dorchester, Orangeburg, navigation projects in Del Norte County, Cali- Section 219(e) of the Water Resources Develop- and Sumter Counties, South Carolina. fornia. ment Act of 1992 (106 Stat. 4836–4837) is amended SEC. 419. DAY COUNTY, SOUTH DAKOTA. SEC. 429. ST. CLAIR RIVER AND LAKE ST. CLAIR, by striking paragraphs (5) and (6) and inserting The Secretary shall conduct an investigation MICHIGAN. the following: of flooding and other water resources problems (a) PLAN.—The Secretary, in coordination ‘‘(5) $25,000,000 for the project described in between the James River and Big Sioux water- with State and local governments and appro- subsection (c)(2); sheds in South Dakota and an assessment of priate Federal and provincial authorities of ‘‘(6) $20,000,000 for the project described in flood damage reduction needs of the area. Canada, shall develop a comprehensive manage- subsection (c)(9); ment plan for St. Clair River and Lake St. Clair. SEC. 420. CORPUS CHRISTI, TEXAS. ‘‘(7) $30,000,000 for the project described in Such plan shall include the following elements: The Secretary shall include, as part of the subsection (c)(16); (1) The causes and sources of environmental study authorized in a resolution of the Com- ‘‘(8) $30,000,000 for the project described in degradation. mittee on Public Works and Transportation of subsection (c)(17); (2) Continuous monitoring of organic, biologi- ‘‘(9) $20,000,000 for the project described in the House of Representatives, dated August 1, cal, metallic, and chemical contamination levels. 1990, a review of two 175-foot-wide barge shelves subsection (c)(19); (3) Timely dissemination of information of ‘‘(10) $15,000,000 for the project described in on either side of the navigation channel at the such contamination levels to public authorities, Port of Corpus Christi, Texas. subsection (c)(20); other interested parties, and the public. ‘‘(11) $11,000,000 for the project described in SEC. 421. MITCHELL’S CUT CHANNEL (CANEY (b) REPORT.—Not later than 1 year after the subsection (c)(21); FORK CUT), TEXAS. date of the enactment of this Act, the Secretary ‘‘(12) $2,000,000 for the project described in The Secretary shall conduct a study to deter- shall transmit to Congress a report that includes subsection (c)(22); mine the feasibility of carrying out a project for the plan developed under subsection (a), to- ‘‘(13) $3,000,000 for the project described in navigation, Mitchell’s Cut Channel (Caney Fork gether with recommendations of potential res- subsection (c)(23); Cut), Texas. toration measures. ‘‘(14) $1,500,000 for the project described in SEC. 422. MOUTH OF COLORADO RIVER, TEXAS. (c) AUTHORIZATION OF APPROPRIATIONS.— subsection (c)(24); The Secretary shall conduct a study to deter- There is authorized to be appropriated to carry ‘‘(15) $2,000,000 for the project described in mine the feasibility of carrying out a project for out this section $400,000. subsection (c)(25); navigation at the mouth of the Colorado River, SEC. 430. CUMBERLAND COUNTY, TENNESSEE. ‘‘(16) $8,000,000 for the project described in Texas, to provide a minimum draft navigation The Secretary shall conduct a study to deter- subsection (c)(26); channel extending from the Colorado River mine the feasibility of improvements to regional ‘‘(17) $8,000,000 for the project described in through Parkers Cut (also known as ‘‘Tiger Is- water supplies for Cumberland County, Ten- subsection (c)(27), of which $3,000,000 shall be land Cut’’), or an acceptable alternative, to nessee. available only for providing assistance for the Matagorda Bay. TITLE V—MISCELLANEOUS PROVISIONS Montoursville Regional Sewer Authority, SEC. 423. KANAWHA RIVER, FAYETTE COUNTY, SEC. 501. CORPS ASSUMPTION OF NRCS Lycoming County; WEST VIRGINIA. PROJECTS. ‘‘(18) $10,000,000 for the project described in The Secretary shall conduct a study to deter- (a) LLAGAS CREEK, CALIFORNIA.—The Sec- subsection (c)(28); and mine the feasibility of developing a public port retary is authorized to complete the remaining ‘‘(19) $1,000,000 for the project described in along the Kanawha River in Fayette County, reaches of the Natural Resources Conservation subsection (c)(29).’’. West Virginia, at a site known as ‘‘Longacre’’. Service’s flood control project at Llagas Creek, SEC. 503. CONTAMINATED SEDIMENT DREDGING SEC. 424. WEST VIRGINIA PORTS. California, undertaken pursuant to section 5 of TECHNOLOGY. The Secretary shall conduct a study to deter- the Watershed Protection and Flood Prevention (a) CONTAMINATED SEDIMENT DREDGING mine the feasibility of expanding public port de- Act (16 U.S.C. 1005), substantially in accordance PROJECT.— velopment in West Virginia along the Ohio with the Natural Resources Conservation Serv- (1) REVIEW.—The Secretary shall conduct a River and navigable portion of the Kanawha ice watershed plan for Llagas Creek, Depart- review of innovative dredging technologies de- River from its mouth to river mile 91.0 ment of Agriculture, and in accordance with the signed to minimize or eliminate contamination SEC. 425. GREAT LAKES REGION COMPREHENSIVE requirements of local cooperation as specified in of a water column upon removal of contami- STUDY. section 4 of such Act, at a total cost of nated sediments. The Secretary shall complete (a) STUDY.—The Secretary shall conduct a $45,000,000, with an estimated Federal cost of such review by June 1, 2001. comprehensive study of the Great Lakes region $21,800,000 and an estimated non-Federal cost of (2) TESTING.—After completion of the review to ensure the future use, management, and pro- $23,200,000. under paragraph (1), the Secretary shall select S9640 CONGRESSIONAL RECORD — SENATE July 28, 1999 the technology of those reviewed that the Sec- serting ‘‘long-term resource monitoring, comput- on which a report is transmitted under sub- retary determines will increase the effectiveness erized data inventory and analysis, and applied section (b). of removing contaminated sediments and signifi- research program.’’; and (b) REPORT.—Not later than 180 days after the cantly reduce contamination of the water col- (3) by striking subparagraph (C) and inserting date of the enactment of this Act, the Secretary umn. Not later than December 31, 2001, the Sec- the following: shall transmit to the Committee on Transpor- retary shall enter into an agreement with a pub- ‘‘In carrying out subparagraph (A), the Sec- tation and Infrastructure and the Committee on lic or private entity to test such technology in retary shall establish an independent technical Appropriations of the House of Representatives the vicinity of Peoria Lakes, Illinois. advisory committee to review projects, moni- and the Committee on Environment and Public (b) AUTHORIZATION OF APPROPRIATIONS.— toring plans, and habitat and natural resource Works and the Committee on Appropriations of There is authorized to be appropriated to carry needs assessments.’’. the Senate a report containing the following: out this section $2,000,000. (b) REPORTS.—Section 1103(e)(2) of such Act (1) A description of the primary objectives of SEC. 504. DAM SAFETY. (33 U.S.C. 652(e)(2)) is amended to read as fol- streamlining water control management activi- (a) ASSISTANCE.—The Secretary is authorized lows: ties. to provide assistance to enhance dam safety at ‘‘(2) REPORTS.—Not later than December 31, (2) A description of the benefits provided by the following locations: 2004, and not later than December 31st of every streamlining water control management activi- (1) Healdsburg Veteran’s Memorial Dam, Cali- sixth year thereafter, the Secretary, in consulta- ties through consolidation of centers for such fornia. tion with the Secretary of the Interior and the activities. (2) Felix Dam, Pennsylvania. States of Illinois, Iowa, Minnesota, Missouri, (3) A determination of whether or not benefits (3) Kehly Run Dam, Pennsylvania. and Wisconsin, shall transmit to Congress a re- to users of regional water control management (4) Owl Creek Reservoir, Pennsylvania. port that— centers will be retained in each district office of (5) Sweet Arrow Lake Dam, Pennsylvania. ‘‘(A) contains an evaluation of the programs the Corps of Engineers that does not have a re- (b) AUTHORIZATION OF APPROPRIATIONS.— described in paragraph (1); gional center. There is authorized to be appropriated $6,000,000 ‘‘(B) describes the accomplishments of each of (4) A determination of whether or not users of to carry out this section. such programs; such regional centers will receive a higher level SEC. 505. GREAT LAKES REMEDIAL ACTION ‘‘(C) provides updates of a systemic habitat of benefits from streamlining water management PLANS. needs assessment; and control management activities. Section 401(a)(2) of the Water Resources De- ‘‘(D) identifies any needed adjustments in the (5) A list of the Members of Congress who rep- velopment Act of 1990 (110 Stat. 3763) is amended authorization.’’. resent a district that currently includes a water by adding at the end the following: ‘‘Nonprofit (c) AUTHORIZATION OF APPROPRIATIONS.—Sec- control management center that is to be elimi- public or private entities may contribute all or a tion 1103(e) of such Act (33 U.S.C. 652(e)) is nated under a proposed regionalized plan. portion of the non-Federal share.’’. amended— SEC. 512. BENEFICIAL USE OF DREDGED MATE- SEC. 506. SEA LAMPREY CONTROL MEASURES IN (1) in paragraph (3) by striking ‘‘not to ex- RIAL. THE GREAT LAKES. ceed’’ and all that follows before the period at The Secretary is authorized to carry out the (a) IN GENERAL.—In conjunction with the the end and inserting ‘‘$22,750,000 for fiscal year following projects under section 204 of the Water Great Lakes Fishery Commission, the Secretary 1999 and each fiscal year thereafter’’; Resources Development Act of 1992 (33 U.S.C. is authorized to undertake a program for the (2) in paragraph (4) by striking ‘‘not to ex- 2326): control of sea lampreys in and around waters of ceed’’ and all that follows before the period at (1) BODEGA BAY, CALIFORNIA.—A project to the Great Lakes. The program undertaken pur- the end and inserting ‘‘$10,420,000 for fiscal year make beneficial use of dredged materials from a suant to this section may include projects which 1999 and each fiscal year thereafter’’; and Federal navigation project in Bodega Bay, Cali- consist of either structural or nonstructural (3) by striking paragraph (5) and inserting the fornia. measures or a combination thereof. following: (2) SABINE REFUGE, LOUISIANA.—A project to (b) COST SHARING.—Projects carried out under ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.— make beneficial use of dredged materials from this section on lands owned by the United There is authorized to be appropriated to carry Federal navigation projects in the vicinity of States shall be carried out at full Federal ex- out paragraph (1)(A) $350,000 for each of fiscal Sabine Refuge, Louisiana. pense. The non-Federal share of the cost of any years 1999 through 2009.’’. (3) HANCOCK, HARRISON, AND JACKSON COUN- such project undertaken on lands not in Federal (d) TRANSFER OF AMOUNTS.—Section 1103(e)(6) TIES, MISSISSIPPI.—A project to make beneficial ownership shall be 35 percent. of such Act is amended to read as follows: use of dredged material from a Federal naviga- (c) NON-FEDERAL INTERESTS.—Notwith- ‘‘(6) TRANSFER OF AMOUNTS.—For fiscal year tion project in Hancock, Harrison, and Jackson standing section 221(b) of the Flood Control Act 1999, and each fiscal year thereafter, the Sec- Counties, Mississippi. of 1970 (42 U.S.C. 1962d–5b(b)), the Secretary, retary, in consultation with the Secretary of the (4) ROSE CITY MARSH, ORANGE COUNTY, after coordination with the appropriate State Interior and the States of Illinois, Iowa, Min- TEXAS.—A project to make beneficial use of and local government officials having jurisdic- nesota, Missouri, and Wisconsin, may transfer dredged material from a Federal navigation tion over an area in which a project under this not to exceed 20 percent of the amounts appro- project in Rose City Marsh, Orange County, section will be carried out, may allow a non- priated to carry out subparagraph (A) or (B) of Texas. profit entity to serve as the non-Federal interest paragraph (1) to the amounts appropriated to (5) BESSIE HEIGHTS MARSH, ORANGE COUNTY, for the project. carry out the other of such subparagraphs.’’. TEXAS.—A project to make beneficial use of (d) AUTHORIZATION OF APPROPRIATIONS.— (e) HABITAT NEEDS ASSESSMENT.—Section dredged material from a Federal navigation There is authorized to be appropriated to carry 1103(h)(2) of such Act (33 U.S.C. 652(h)(2)) is project in Bessie Heights Marsh, Orange Coun- out this section $2,000,000 for each of fiscal amended by adding at the end the following: ty, Texas. years 2000 through 2005. ‘‘The Secretary shall complete the on-going SEC. 513. DESIGN AND CONSTRUCTION ASSIST- SEC. 507. MAINTENANCE OF NAVIGATION CHAN- habitat needs assessment conducted under this ANCE. NELS. paragraph not later than September 30, 2000, Section 507(2) of the Water Resources Develop- Section 509(a) of the Water Resources Devel- and shall include in each report required by opment Act of 1996 (110 Stat. 3759) is amended ment Act of 1996 (110 Stat. 3758) is amended to subsection (e)(2) the most recent habitat needs read as follows: by adding at the end the following: assessment conducted under this paragraph.’’. ‘‘(12) Acadiana Navigation Channel, Lou- ‘‘(2) Expansion and improvement of Long Pine (f) CONFORMING AMENDMENTS.—Section 1103 Run Dam and associated water infrastructure isiana. of such Act (33 U.S.C. 652) is amended— ‘‘(13) Contraband Bayou, Louisiana, as part in accordance with the requirements of sub- (1) in subsection (e)(7) by striking ‘‘para- of the Calcasieu River and Pass Ship Channel. sections (b) through (e) of section 313 of the graphs (1)(B) and (1)(C)’’ and inserting ‘‘para- ‘‘(14) Lake Wallula Navigation Channel, Water Resources Development Act of 1992 (106 graph (1)(B)’’; and Washington. Stat. 4845) at a total cost of $20,000,000.’’. (2) in subsection (f)(2)— ‘‘(15) Wadley Pass (also known as McGriff SEC. 514. LOWER MISSOURI RIVER AQUATIC RES- Pass), Suwanee River, Florida.’’. (A) by striking ‘‘(2)(A)’’ and inserting ‘‘(2)’’; TORATION PROJECTS. and (a) IN GENERAL.—Not later than 1 year after SEC. 508. MEASUREMENT OF LAKE MICHIGAN DI- (B) by striking subparagraph (B). VERSIONS. funds are made available for such purposes, the Section 1142(b) of the Water Resources Devel- SEC. 510. ATLANTIC COAST OF NEW YORK MONI- Secretary shall complete a comprehensive opment Act of 1986 (42 U.S.C. 1962d–20 note; 100 TORING. report— Stat. 4253) is amended by striking ‘‘$250,000’’ Section 404(c) of the Water Resources Develop- (1) identifying a general implementation strat- and inserting ‘‘$1,250,000’’. ment Act of 1992 (106 Stat. 4863) is amended by egy and overall plan for environmental restora- striking ‘‘1993, 1994, 1995, 1996, and 1997’’ and SEC. 509. UPPER MISSISSIPPI RIVER ENVIRON- tion and protection along the Lower Missouri MENTAL MANAGEMENT PROGRAM. inserting ‘‘1993 through 2003’’. River between Gavins Point Dam and the con- (a) AUTHORIZED ACTIVITIES.—Section SEC. 511. WATER CONTROL MANAGEMENT. fluence of the Missouri and Mississippi Rivers; 1103(e)(1) of the Water Resources Development (a) IN GENERAL.—In evaluating potential im- and Act of 1986 (33 U.S.C. 652(e)(1)) is amended— provements for water control management ac- (2) recommending individual environmental (1) by inserting ‘‘and’’ at the end of subpara- tivities and consolidation of water control man- restoration projects that can be considered by graph (A); agement centers, the Secretary may consider a the Secretary for implementation under section (2) in subparagraph (B) by striking ‘‘long- regionalized water control management plan but 206 of the Water Resources Development Act of term resource monitoring program; and’’ and in- may not implement such a plan until the date 1996 (33 U.S.C. 2330; 110 Stat. 3679–3680). July 28, 1999 CONGRESSIONAL RECORD — SENATE S9641

(b) SCOPE OF PROJECTS.—Any environmental New Jersey, and innovative facilities to manage lands, easements, rights of way, relocations, restoration projects recommended under sub- and treat additional flows in the Passaic Valley, and dredged material disposal areas including section (a) shall provide for such activities and Passaic River basin, New Jersey.’’. retaining dikes required for the project. measures as the Secretary determines to be nec- (c) NASHUA, NEW HAMPSHIRE.—Section 219(c) (e) OPERATION MAINTENANCE.—The non-Fed- essary to protect and restore fish and wildlife of such Act is amended by adding at the end the eral share of the cost of operation, maintenance, habitat without adversely affecting private following: repair, replacement, or rehabilitation of the property rights or water related needs of the re- ‘‘(19) NASHUA, NEW HAMPSHIRE.—A sewer and project carried out with assistance under this gion surrounding the Missouri River, including drainage system separation and rehabiliation section shall be 100 percent. flood control, navigation, and enhancement of program for Nashua, New Hampshire.’’. (f) CREDIT TOWARD NON-FEDERAL SHARE.— water supply, and shall include some or all of (d) FALL RIVER AND NEW BEDFORD, MASSA- The value of the lands, easements, rights of the following components: CHUSETTS.—Section 219(c) of such Act is further way, relocations, and dredged material disposal (1) Modification and improvement of naviga- amended by adding at the end the following: areas, including retaining dikes, provided by the tion training structures to protect and restore ‘‘(20) FALL RIVER AND NEW BEDFORD, MASSA- non-Federal sponsor shall be credited toward fish and wildlife habitat. CHUSETTS.—Elimination or control of combined the non-Federal share. (2) Modification and creation of side channels sewer overflows in the cities of Fall River and SEC. 520. ELBA, ALABAMA. to protect and restore fish and wildlife habitat. New Bedford, Massachusetts.’’. The Secretary is authorized to repair and re- (3) Restoration and creation of fish and wild- (e) ADDITIONAL PROJECT DESCRIPTIONS.—Sec- habilitate a levee in the City of Elba, Alabama life habitat. tion 219(c) of such Act is further amended by at a total cost of $12,900,000. adding at the end the following: (4) Physical and biological monitoring for SEC. 521. GENEVA, ALABAMA. ‘‘(21) FINDLAY TOWNSHIP, PENNSYLVANIA.— evaluating the success of the projects. The Secretary is authorized to repair and re- Water and sewer lines in Findlay Township, Al- (c) COORDINATION.—To the maximum extent habilitate a levee in the City of Geneva, Ala- legheny County, Pennsylvania. practicable, the Secretary shall integrate bama at a total cost of $16,600,000. ‘‘(22) DILLSBURG BOROUGH AUTHORITY, PENN- projects carried out in accordance with this sec- SEC. 522. NAVAJO RESERVATION, ARIZONA, NEW tion with other Federal, tribal, and State res- SYLVANIA.—Water and sewer systems in Frank- lin Township, York County, Pennsylvania. MEXICO, AND UTAH. toration activities. (a) IN GENERAL.—In cooperation with other (d) COST SHARING.—The report under sub- ‘‘(23) HAMPTON TOWNSHIP, PENNSYLVANIA.— Water, sewer, and stormsewer improvements in appropriate Federal and local agencies, the Sec- section (a) shall be undertaken at full Federal retary shall undertake a survey of, and provide expense. Hampton Township, Cumberland County, Penn- sylvania. technical, planning, and design assistance for, SEC. 515. AQUATIC RESOURCES RESTORATION IN OWAMENCIN TOWNSHIP PENNSYL watershed management, restoration, and devel- THE NORTHWEST. ‘‘(24) T , - VANIA.—Sanitary sewer and water lines in opment on the Navajo Indian Reservation, Ari- (a) IN GENERAL.—In cooperation with other Towamencin Township, Montgomery County, zona, New Mexico, and Utah. Federal agencies, the Secretary is authorized to Pennsylvania. (b) COST SHARING.—The Federal share of the develop and implement projects for fish screens, ‘‘(25) DAUPHIN COUNTY, PENNSYLVANIA.—Com- cost of activities carried out under this section fish passage devices, and other similar measures bined sewer and water system rehabilitation for shall be 75 percent. Funds made available under agreed to by non-Federal interests and relevant the City of Harrisburg, Dauphin County, Penn- the Indian Self-Determination and Education Federal agencies to mitigate adverse impacts as- sylvania. Assistance Act (25 U.S.C. 450 et seq.) may be sociated with irrigation system water diversions ‘‘(26) LEE, NORTON, WISE, AND SCOTT COUN- used by the Navajo Nation in meeting the non- by local governmental entities in the States of TIES, VIRGINIA.—Water supply and wastewater Federal share of the cost of such activities. Oregon, Washington, Montana, and Idaho. treatment in Lee, Norton, Wise, and Scott Coun- (c) AUTHORIZATION OF APPROPRIATIONS.— (b) PROCEDURE AND PARTICIPATION.— ties, Virginia. There is authorized to be appropriated to carry (1) CONSULTATION REQUIREMENT; USE OF EX- ‘‘(27) NORTHEAST PENNSYLVANIA.—Water-re- out this section $12,000,000 for fiscal years be- ISTING DATA.—In providing assistance under lated infrastructure in Lackawanna, Lycoming, ginning after September 30, 1999. subsection (a), the Secretary shall consult with Susquehanna, Wyoming, Pike, and Monroe SEC. 523. AUGUSTA AND DEVALLS BLUFF, ARKAN- other Federal, State, and local agencies and Counties, Pennsylvania, including assistance SAS. make maximum use of data and studies in exist- for the Montoursville Regional Sewer Authority, (a) IN GENERAL.—The Secretary is authorized ence on the date of the enactment of this Act. Lycoming County. to perform operations, maintenance, and reha- (2) PARTICIPATION BY NON-FEDERAL INTER- ‘‘(28) CALUMET REGION, INDIANA.—Water-re- bilitation on 37 miles of levees in and around ESTS.—Participation by non-Federal interests in lated infrastructure in Lake and Porter Coun- Augusta and Devalls Bluff, Arkansas. projects under this section shall be voluntary. ties, Indiana. (b) REIMBURSEMENT.—After performing the The Secretary shall not take any action under ‘‘(29) CLINTON COUNTY, PENNSYLVANIA.— operations, maintenance, and rehabilitation this section that will result in a non-Federal in- Water-related infrastructure in Clinton County, under subsection (a), the Secretary may seek re- terest being held financially responsible for an Pennsylvania.’’. imbursement from the Secretary of the Interior action under a project unless the non-Federal SEC. 518. EXPEDITED CONSIDERATION OF CER- of an amount equal to the costs allocated to interest has voluntarily agreed to participate in TAIN PROJECTS. benefits to a Federal wildlife refuge of such op- the project. The Secretary shall expedite completion of the erations, maintenance, and rehabilitation. (c) COST SHARING.—Projects carried out under reports for the following projects and proceed SEC. 524. BEAVER LAKE, ARKANSAS. this section on lands owned by the United directly to project planning, engineering, and (a) WATER SUPPLY STORAGE REALLOCATION.— States shall be carried out at full Federal ex- design: The Secretary shall reallocate approximately pense. The non-Federal share of the cost of any (1) Arroyo Pasajero, San Joaquin River basin, 31,000 additional acre-feet at Beaver Lake, Ar- such project undertaken on lands not in Federal California, project for flood control. kansas, to water supply storage at no additional ownership shall be 35 percent. (2) Success Dam, Tule River, California, cost to the Beaver Water District or the Carroll- (d) AUTHORIZATION OF APPROPRIATIONS.— project for flood control and water supply. Boone Water District above the amount that has There is authorized to be appropriated to carry (3) Alafia Channel, Tampa Harbor, Florida, already been contracted for. At no time may the out this section $10,000,000 for fiscal years be- project for navigation. bottom of the conservation pool be at an ele- ginning after September 30, 1999. (4) Columbia Slough, Portland, Oregon, vation that is less than 1,076 feet NGVD. SEC. 516. INNOVATIVE TECHNOLOGIES FOR WA- project for ecosystem restoration. (b) CONTRACT PRICING.—The contract price TERSHED RESTORATION. (5) Ohio River Greenway, Indiana, project for for additional storage for the Carroll-Boone The Secretary shall use, and encourage the environmental restoration and recreation. Water District beyond that which is provided for use of, innovative treatment technologies, in- SEC. 519. DOG RIVER, ALABAMA. in subsection (a) shall be based on the original cluding membrane technologies, for watershed (a) IN GENERAL.—The Secretary is authorized construction cost of Beaver Lake and adjusted and environmental restoration and protection to establish, in cooperation with non-Federal in- to the 1998 price level net of inflation between projects involving water quality. terests, a pilot project to restore natural water the date of initiation of construction and the SEC. 517. ENVIRONMENTAL RESTORATION. depths in the Dog River, Alabama, between its date of the enactment of this Act. (a) ATLANTA, GEORGIA.—Section 219(c)(2) of mouth and the Interstate Route 10 crossing, and SEC. 525. BEAVER LAKE TROUT PRODUCTION FA- the Water Resources Development Act of 1992 in the downstream portion of its principal tribu- CILITY, ARKANSAS. (106 Stat. 4835) is amended by inserting before taries. (a) EXPEDITED CONSTRUCTION.—The Secretary the period ‘‘and watershed restoration and de- (b) FORM OF ASSISTANCE.—Assistance pro- shall construct, under the authority of section velopment in the regional Atlanta watershed, vided under subsection (a) shall be in the form 105 of the Water Resources Development Act of including Big Creek and Rock Creek’’. of design and construction of water-related re- 1976 (90 Stat. 2921) and section 1135 of the Water (b) PATERSON AND PASSAIC VALLEY, NEW JER- source protection and development projects af- Resources Development Act of 1986 (100 Stat. SEY.—Section 219(c)(9) of such Act (106 Stat. fecting the Dog River, including environmental 4251–4252), the Beaver Lake trout hatchery as 4836) is amended to read as follows: restoration and recreational navigation. expeditiously as possible, but in no event later ‘‘(9) PATERSON, PASSAIC COUNTY, AND PASSAIC (c) NON-FEDERAL SHARE.—The non-Federal than September 30, 2002. VALLEY, NEW JERSEY.—Drainage facilities to al- share of the cost of the project carried out with (b) MITIGATION PLAN.—Not later than 2 years leviate flooding problems on Getty Avenue in assistance under this section shall be 90 percent. after the date of the enactment of this Act, the the vicinity of St. Joseph’s Hospital for the City (d) LANDS, EASEMENTS, AND RIGHTS-OF- Secretary, in conjunction with the State of Ar- of Paterson, New Jersey, and Passaic County, WAY.—The non-Federal sponsor provide all kansas, shall prepare a plan for the mitigation S9642 CONGRESSIONAL RECORD — SENATE July 28, 1999

of effects of the Beaver Dam project on Beaver (b) TOPOGRAPHIC SURVEY.—The Secretary is (b) EFFECTIVE DATE.—For the purposes of this Lake. Such plan shall provide for construction authorized to provide 1-foot contour topo- section, the effective date of that memorandum of the Beaver Lake trout production facility and graphic survey maps of the Lower St. Johns of understanding shall be deemed to be the date related facilities. River basin, Florida, to non-Federal interests of the enactment of this Act. SEC. 526. CHINO DAIRY PRESERVE, CALIFORNIA. for analyzing environmental data and estab- SEC. 538. SOUTHERN AND EASTERN KENTUCKY. (a) TECHNICAL ASSISTANCE.—The Secretary, in lishing benchmarks for subbasins. Section 531(h) of the Water Resources Devel- coordination with the heads of other Federal SEC. 533. SHORELINE PROTECTION AND ENVI- opment Act of 1996 (110 Stat. 3774) is amended agencies, shall provide technical assistance to RONMENTAL RESTORATION, LAKE State and local agencies in the study, design, ALLATOONA, GEORGIA. by striking ‘‘$10,000,000’’ and inserting and implementation of measures for flood dam- (a) IN GENERAL.—The Secretary, in coopera- ‘‘$25,000,000’’. age reduction and environmental restoration tion with the Administrator of the Environ- SEC. 539. SOUTHEAST LOUISIANA. and protection in the Santa Ana River water- mental Protection Agency, is authorized to Section 533(c) of the Water Resources Develop- shed, California, with particular emphasis on carry out the following water-related environ- ment Act of 1996 (110 Stat. 3775) is amended by structural and nonstructural measures in the vi- mental restoration and resource protection ac- striking ‘‘$100,000,000’’ and inserting cinity of the Chino Dairy Preserve. tivities to restore Lake Allatoona and the ‘‘$200,000,000’’. (b) COMPREHENSIVE STUDY.—The Secretary Etowah River in Georgia: SEC. 540. SNUG HARBOR, MARYLAND. shall conduct a feasibility study to determine (1) LAKE ALLATOONA/ETOWAH RIVER SHORELINE the most cost-effective plan for flood damage re- RESTORATION DESIGN.—Develop pre-construction (a) IN GENERAL.—The Secretary, in coordina- duction and environmental restoration and pro- design measures to alleviate shoreline erosion tion with the Director of the Federal Emergency tection in the vicinity of the Chino Dairy Pre- and sedimentation problems. Management Agency, is authorized— serve, Santa Ana River watershed, Orange (2) LITTLE RIVER ENVIRONMENTAL RESTORA- (1) to provide technical assistance to the resi- County and San Bernardino County, Cali- TION.—Conduct a feasibility study to evaluate dents of Snug Harbor, in the vicinity of Berlin, fornia. environmental problems and recommend envi- Maryland, for purposes of flood damage reduc- SEC. 527. NOVATO, CALIFORNIA. ronmental infrastructure restoration measures tion; The Secretary shall carry out a project for for the Little River within Lake Allatoona, (2) to conduct a study of a project for non- flood control under section 205 of the Flood Georgia. structural measures for flood damage reduction Control Act of 1948 (33 U.S.C. 701s) at Rush (b) AUTHORIZATION OF APPROPRIATIONS.— in the vicinity of Snug Harbor, Maryland, tak- Creek, Novato, California. There is authorized to be appropriated for fiscal ing into account the relationship of both the SEC. 528. ORANGE AND SAN DIEGO COUNTIES, years beginning after September 30, 1999— Ocean City Inlet and Assateague Island to the CALIFORNIA. (1) $850,000 to carry out subsection (a)(1); and flooding; and (2) $250,000 to carry out subsection (a)(2). The Secretary, in cooperation with local gov- (3) after completion of the study, to carry out ernments, may prepare special area management SEC. 534. MAYO’S BAR LOCK AND DAM, COOSA the project under the authority of section 205 of RIVER, ROME, GEORGIA. plans in Orange and San Diego Counties, Cali- the Flood Control Act of 1948 (33 U.S.C. 701s). fornia, to demonstrate the effectiveness of using The Secretary is authorized to provide tech- such plans to provide information regarding nical assistance, including planning, engineer- (b) FEMA ASSISTANCE.—The Director, in co- aquatic resources. The Secretary may use such ing, and design assistance, for the reconstruc- ordination with the Secretary and under the au- plans in making regulatory decisions and issue tion of the Mayo’s Bar Lock and Dam, Coosa thorities of the Robert T. Stafford Disaster Re- permits consistent with such plans. River, Rome, Georgia. The non-Federal share of lief and Emergency Assistance Act (42 U.S.C. 5121 note), may provide technical assistance and SEC. 529. SALTON SEA, CALIFORNIA. assistance under this section shall be 50 percent. nonstructural measures for flood damage mitiga- (a) TECHNICAL ASSISTANCE.—The Secretary, in SEC. 535. COMPREHENSIVE FLOOD IMPACT RE- tion in the vicinity of Snug Harbor, Maryland. coordination with other Federal agencies, shall SPONSE MODELING SYSTEM, provide technical assistance to Federal, State, CORALVILLE RESERVOIR AND IOWA (c) FEDERAL SHARE.—The Federal share of the and local agencies in the study, design, and im- RIVER WATERSHED, IOWA. cost of assistance under this section shall not plementation of measures for the environmental (a) IN GENERAL.—The Secretary, in coopera- exceed $3,000,000. The non-Federal share of such restoration and protection of the Salton Sea, tion with the University of Iowa, shall conduct cost shall be determined in accordance with the California. a study and develop a Comprehensive Flood Im- Water Resources Development Act of 1986 or the (b) STUDY.—The Secretary, in coordination pact Response Modeling System for Coralville Robert T. Stafford Disaster Relief and Emer- with other Federal, State, and local agencies, Reservoir and the Iowa River watershed, Iowa. gency Assistance Act, as appropriate. ONTENTS OF TUDY shall conduct a study to determine the most ef- (b) C S .—The study shall SEC. 541. WELCH POINT, ELK RIVER, CECIL COUN- fective plan for the Corps of Engineers to assist include— TY, AND CHESAPEAKE CITY, MARY- in the environmental restoration and protection (1) an evaluation of the combined hydrologic, LAND. geomorphic, environmental, economic, social, of the Salton Sea, California. (a) SPILLAGE OF DREDGED MATERIALS.—The and recreational impacts of operating strategies SEC. 530. SANTA CRUZ HARBOR, CALIFORNIA. Secretary shall carry out a study to determine if The Secretary is authorized to modify the co- within the Iowa River watershed; the spillage of dredged materials that were re- (2) development of an integrated, dynamic operative agreement with the Santa Cruz Port moved as part of the project for navigation, In- flood impact model; and District, California, to reflect unanticipated ad- land Waterway from Delaware River to Chesa- (3) development of a rapid response system to ditional dredging effort and to extend such peake Bay, Delaware and Maryland, authorized be used during flood and other emergency situa- agreement for 10 years. by the first section of the Act of August 30, 1935 tions. SEC. 531. POINT BEACH, MILFORD, CONNECTICUT. (49 Stat. 1030), is a significant impediment to (c) REPORT TO CONGRESS.—Not later than 5 (a) MAXIMUM FEDERAL EXPENDITURE.—The years after the date of the enactment of this vessels transiting the Elk River near Welch maximum amount of Federal funds that may be Act, the Secretary shall transmit to Congress a Point, Maryland. If the Secretary determines expended for the project for hurricane and report containing the results of the study and that the spillage is an impediment to navigation, storm damage reduction, Point Beach, Milford, modeling system together with such rec- the Secretary may conduct such dredging as Connecticut, shall be $3,000,000. ommendations as the Secretary determines to be may be required to permit navigation on the (b) REVISION OF PROJECT COOPERATION appropriate. river. AGREEMENT.—The Secretary shall revise the (d) AUTHORIZATION OF APPROPRIATIONS.— (b) DAMAGE TO WATER SUPPLY.—The Sec- project cooperation agreement for the project re- There is authorized to be appropriated to carry retary shall carry out a study to determine if ferred to in subsection (a) to take into account out this section $900,000 for each of fiscal years additional compensation is required to fully the change in the Federal participation in such 2000 through 2004. compensate the City of Chesapeake, Maryland, project. SEC. 536. ADDITIONAL CONSTRUCTION ASSIST- for damage to the city’s water supply resulting (c) COST SHARING.—Nothing in this section from dredging of the Chesapeake and Delaware shall be construed to affect any cost-sharing re- ANCE IN ILLINOIS. The Secretary may carry out the project for Canal project. If the Secretary determines that quirement applicable to the project referred to in such additional compensation is required, the subsection (a) under section 101 of the Water Georgetown, Illinois, and the project for Olney, Illinois, referred to in House Report Number Secretary may provide the compensation to the Resources Development Act of 1986 (31 U.S.C. City of Chesapeake. 2211). 104–741, accompanying Public Law 104–182. SEC. 542. WEST VIEW SHORES, CECIL COUNTY, SEC. 532. LOWER ST. JOHNS RIVER BASIN, FLOR- SEC. 537. KANOPOLIS LAKE, KANSAS. MARYLAND. IDA. (a) WATER STORAGE.—The Secretary shall (a) COMPUTER MODEL.— offer to the State of Kansas the right to pur- Not later than 1 year after the date of the en- (1) IN GENERAL.—The Secretary may apply the chase water storage in Kanopolis Lake, Kansas, actment of this Act, the Secretary shall carry computer model developed under the St. Johns at a price calculated in accordance with and in out an investigation of the contamination of the River basin feasibility study to assist non-Fed- a manner consistent with the terms of the memo- well system in West View Shores, Cecil County, eral interests in developing strategies for im- randum of understanding entitled ‘‘Memo- Maryland. If the Secretary determines that the proving water quality in the Lower St. Johns randum of Understanding Between the State of disposal site from any Federal navigation River basin, Florida. Kansas and the U.S. Department of the Army project has contributed to the contamination of (2) COST SHARING.—The non-Federal share of Concerning the Purchase of Municipal and In- the wells, the Secretary may provide alternative the cost of assistance provided under this sub- dustrial Water Supply Storage’’, dated Decem- water supplies, including replacement of wells, section shall be 50 percent. ber 11, 1985. at full Federal expense. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9643 SEC. 543. RESTORATION PROJECTS FOR MARY- beachfill with revetment and T-groin for the Sea SEC. 555. WAURIKA LAKE, OKLAHOMA, WATER LAND, PENNSYLVANIA, AND WEST Gate Reach on Coney Island, New York, as CONVEYANCE FACILITIES. VIRGINIA. identified in the March 1998 report prepared for For the project for construction of the water Section 539 of the Water Resources Develop- the Corps of Engineers, New York District, enti- conveyances authorized by the first section of ment Act of 1996 (110 Stat. 3776–3777) is tled ‘‘Field Data Gathering, Project Perform- Public Law 88–253 (77 Stat. 841), the requirement amended— ance Analysis and Design Alternative Solutions for the Waurika Project Master Conservancy (1) in subsection (a)(1) by striking ‘‘tech- to Improve Sandfill Retention’’, at a total cost District to repay the $2,900,000 in costs (includ- nical’’; of $9,000,000, with an estimated Federal cost of (2) in subsection (a)(1) by inserting ‘‘(or in the ing interest) resulting from the October 1991 set- $5,850,000 and an estimated non-Federal cost of case of projects located on lands owned by the tlement of the claim before the United States $3,150,000. United States, to Federal interests)’’ after ‘‘in- Claims Court, and the payment of $1,190,451 of terests’’; SEC. 550. WOODLAWN, NEW YORK. the final cost representing the difference be- (3) in subsection (a)(3) by inserting ‘‘or in (a) IN GENERAL.—The Secretary shall provide tween the 1978 estimate of cost and the actual conjunction’’ after ‘‘consultation’’; and planning, design, and other technical assistance cost determined after completion of such project (4) by inserting at the end of subsection (d) to non-Federal interests for identifying and in 1991, are waived. the following: ‘‘Funds authorized to be appro- mitigating sources of contamination at SEC. 556. SKINNER BUTTE PARK, EUGENE, OR- priated to carry out section 340 of the Water Re- Woodlawn Beach in Woodlawn, New York. EGON. sources Development Act of 1992 (106 Stat. 4856) (b) COST SHARING.—The non-Federal share of (a) STUDY.—The Secretary shall conduct a are authorized for projects undertaken under the cost of assistance provided under this sec- study of the south bank of the Willamette River, subsection (a)(1)(B).’’. tion shall be 50 percent. in the area of Skinner Butte Park from Ferry SEC. 544. CAPE COD CANAL RAILROAD BRIDGE, SEC. 551. FLOODPLAIN MAPPING, NEW YORK. Street Bridge to the Valley River footbridge, to BUZZARDS BAY, MASSACHUSETTS. (a) IN GENERAL.—The Secretary shall provide determine the feasibility of carrying out a (a) ALTERNATIVE TRANSPORTATION.—The Sec- assistance for a project to develop maps identi- project to stabilize the river bank, and to restore retary is authorized to provide up to $300,000 for fying 100- and 500-year flood inundation areas and enhance riverine habitat, using a combina- alternative transportation that may arise as a in the State of New York. tion of structural and bioengineering tech- result of the operation, maintenance, repair, (b) REQUIREMENTS.—Maps developed under niques. and rehabilitation of the Cape Cod Canal Rail- the project shall include hydrologic and hy- (b) CONSTRUCTION.—If, upon completion of road Bridge. draulic information and shall accurately show the study, the Secretary determines that the (b) OPERATION AND MAINTENANCE CONTRACT the flood inundation of each property by flood project is feasible, the Secretary shall partici- RENEGOTIATION.—Not later than 60 days after risk in the floodplain. The maps shall be pro- pate with non-Federal interests in the construc- the date of the enactment of this Act, the Sec- duced in a high resolution format and shall be tion of the project. retary shall enter into negotiation with the made available to all flood prone areas in the (c) COST SHARE.—The non-Federal share of owner of the railroad right-of-way for the Cape State of New York in an electronic format. the cost of the project shall be 35 percent. Cod Canal Railroad Bridge for the purpose of (c) PARTICIPATION OF FEMA.—The Secretary establishing the rights and responsibities for the and the non-Federal sponsor of the project shall (d) LANDS, EASEMENTS, AND RIGHTS-OF- operation and maintenance of the Bridge. The work with the Director of the Federal Emer- WAY.—The non-Federal interest shall provide Secretary is authorized to include in any new gency Management Agency to ensure the valid- lands, easements, rights-of-way, relocations, contract the termination of the prior contract ity of the maps developed under the project for and dredged material disposal areas necessary numbered ER–W175–ENG–1. flood insurance purposes. for construction of the project. The value of such items shall be credited toward the non- SEC. 545. ST. LOUIS, MISSOURI. (d) FORMS OF ASSISTANCE.—In carrying out (a) DEMONSTRATION PROJECT.—The Secretary, the project, the Secretary may enter into con- Federal share of the cost of the project. in consultation with local officials, shall con- tracts or cooperative agreements with the non- (e) AUTHORIZATION OF APPROPRIATIONS.— duct a demonstration project to improve water Federal sponsor or provide reimbursements of There is authorized to be appropriated to carry quality in the vicinity of St. Louis, Missouri. project costs. out this section $1,000,000 for fiscal years begin- (b) AUTHORIZATION OF APPROPRIATIONS.— (e) FEDERAL SHARE.—The Federal share of the ning after September 30, 1999. There is authorized to be appropriated $1,700,000 cost of the project shall be 75 percent. SEC. 557. WILLAMETTE RIVER BASIN, OREGON. to carry out this section. (f) AUTHORIZATION OF APPROPRIATIONS.— The Secretary, Director of the Federal Emer- SEC. 546. BEAVER BRANCH OF BIG TIMBER There is authorized to be appropriated to carry gency Management Agency, Administrator of CREEK, NEW JERSEY. out this section $12,000,000 for fiscal years be- the Environmental Protection Agency, and Upon request of the State of New Jersey or a ginning after September 30, 1998. political subdivision thereof, the Secretary may heads of other appropriate Federal agencies SEC. 552. WHITE OAK RIVER, NORTH CAROLINA. compile and disseminate information on floods shall, using existing authorities, assist the State and flood damages, including identification of The Secretary shall conduct a study to deter- of Oregon in developing and implementing a areas subject to inundation by floods, and pro- mine if water quality deterioration and sedi- comprehensive basin-wide strategy in the Wil- vide technical assistance regarding floodplain mentation of the White Oak River, North Caro- lamette River basin of Oregon for coordinated management for Beaver Branch of Big Timber lina, are the result of the Atlantic Intracoastal and integrated management of land and water Creek, New Jersey. Waterway navigation project. If the Secretary resources to improve water quality, reduce flood determines that the water quality deterioration SEC. 547. LAKE ONTARIO AND ST. LAWRENCE hazards, ensure sustainable economic activity, RIVER WATER LEVELS, NEW YORK. and sedimentation are the result of the project, and restore habitat for native fish and wildlife. Upon request, the Secretary shall provide the Secretary shall take appropriate measures to The heads of such Federal agencies may provide technical assistance to the International Joint mitigate the deterioration and sedimentation. technical assistance, staff and financial support Commission and the St. Lawrence River Board SEC. 553. TOUSSAINT RIVER, CARROLL TOWN- for development of the basin-wide management of Control in undertaking studies on the effects SHIP, OTTAWA COUNTY, OHIO. strategy. The heads of Federal agencies shall of fluctuating water levels on the natural envi- The Secretary is authorized to provide tech- seek to exercise flexibility in administrative ac- ronment, recreational boating, property flood- nical assistance for the removal of military ord- tions and allocation of funding to reduce bar- ing, and erosion along the shorelines of Lake nance from the Toussaint River, Carroll Town- riers to efficient and effective implementing of Ontario and the St. Lawrence River in New ship, Ottawa County, Ohio. the strategy. York. The Commission and Board are encour- SEC. 554. SARDIS RESERVOIR, OKLAHOMA. SEC. 558. BRADFORD AND SULLIVAN COUNTIES, aged to conduct such studies in a comprehensive (a) IN GENERAL.—The Secretary shall accept PENNSYLVANIA. and thorough manner before implementing any from the State of Oklahoma or an agent of the The Secretary is authorized to provide assist- change to water regulation Plan 1958–D. State an amount, as determined under sub- ance for water-related environmental infrastruc- SEC. 548. NEW YORK-NEW JERSEY HARBOR, NEW section (b), as prepayment of 100 percent of the ture and resource protection and development YORK AND NEW JERSEY. water supply cost obligation of the State under projects in Bradford and Sullivan Counties, The Secretary may enter into cooperative Contract No. DACW56–74–JC–0314 for water Pennsylvania, using the funds and authorities agreements with non-Federal interests to inves- supply storage at Sardis Reservoir, Oklahoma. provided in title I of the Energy and Water De- tigate, develop, and support measures for sedi- (b) DETERMINATION OF AMOUNT.—The amount velopment Appropriations Act, 1999 (Public Law ment management and reduction of contami- to be paid by the State of Oklahoma under sub- 105–245) under the heading ‘‘CONSTRUCTION, nant sources which affect navigation in the section (a) shall be subject to adjustment in ac- GENERAL’’ (112 Stat. 1840) for similar projects in Port of New York-New Jersey and the environ- cordance with accepted discount purchase meth- Lackawanna, Lycoming, Susquehanna, Wyo- mental conditions of the New York-New Jersey ods for Federal Government properties as deter- ming, Pike, and Monroe Counties, Pennsyl- Harbor estuary. Such investigation shall include mined by an independent accounting firm des- vania. an analysis of the economic and environmental ignated by the Director of the Office of Manage- benefits and costs of potential sediment manage- ment and Budget. The cost of such determina- SEC. 559. ERIE HARBOR, PENNSYLVANIA. ment and contaminant reduction measures. tion shall be paid for by the State of Oklahoma The Secretary may reimburse the appropriate SEC. 549. SEA GATE REACH, CONEY ISLAND, NEW or an agent of the State. non-Federal interest not more than $78,366 for YORK, NEW YORK. (c) EFFECT.—Nothing in this section affects architect and engineering costs incurred in con- The Secretary is authorized to construct a any of the rights or obligations of the parties to nection with the Erie Harbor basin navigation project for shoreline protection which includes a the contract referred to in subsection (a). project, Pennsylvania. S9644 CONGRESSIONAL RECORD — SENATE July 28, 1999 SEC. 560. POINT MARION LOCK AND DAM, PENN- of Texas, shall provide technical, planning, and SEC. 570. NORTHERN WEST VIRGINIA. SYLVANIA. design assistance to non-Federal interests in de- The projects described in the following reports The project for navigation, Point Marion Lock veloping integrated water management plans are authorized to be carried out by the Secretary and Dam, Borough of Point Marion, Pennsyl- and projects that will serve the cities, counties, substantially in accordance with the plans, and vania, as authorized by section 301(a) of the water agencies, and participating planning re- subject to the conditions, recommended in such Water Resources Development Act of 1986 (100 gions under the jurisdiction of the State of reports: Stat. 4110), is modified to direct the Secretary, in Texas. (1) PARKERSBURG, WEST VIRGINIA.—Report of the operation and maintenance of the project, to (b) PURPOSES OF ASSISTANCE.—Assistance pro- the Corps of Engineers entitled ‘‘Parkersburg/ mitigate damages to the shoreline, at a total cost vided under subsection (a) shall be in support of Vienna Riverfront Park Feasibility Study’’, of $2,000,000. The cost of the mitigation shall be non-Federal planning and projects for the fol- dated June 1998, at a total cost of $8,400,000, allocated as an operation and maintenance cost lowing purposes: with an estimated Federal cost of $4,200,000, and of a Federal navigation project. (1) Plan and develop integrated, near- and an estimated non-Federal cost of $4,200,000. SEC. 561. SEVEN POINTS’ HARBOR, PENNSYL- long-term water management plans that address (2) WEIRTON, WEST VIRGINIA.—Report of the VANIA. the planning region’s water supply, water con- Corps of Engineers entitled ‘‘Feasibility Master (a) IN GENERAL.—The Secretary is authorized, Plan for Weirton Port and Industrial Center, servation, and water quality needs. at full Federal expense, to construct a break- West Virginia Public Port Authority’’, dated De- (2) Study and develop strategies and plans water-dock combination at the entrance to cember 1997, at a total cost of $18,000,000, with that restore, preserve, and protect the State’s Seven Points’ Harbor, Pennsylvania. an estimated Federal cost of $9,000,000, and an and planning region’s natural ecosystems. (b) OPERATION AND MAINTENANCE COSTS.—All estimated non-Federal cost of $9,000,000. (3) Facilitate public communication and par- operation and maintenance costs associated (3) ERICKSON/WOOD COUNTY, WEST VIRGINIA.— with the facility constructed under this section ticipation. Report of the Corps of Engineers entitled ‘‘Fea- shall be the responsibility of the lessee of the (4) Integrate such activities with other ongo- sibility Master Plan for Erickson/Wood County marina complex at Seven Points’ Harbor. ing Federal and State projects and activities as- Port District, West Virginia Public Port Author- (c) AUTHORIZATION OF APPROPRIATIONS.— sociated with the State of Texas water plan and ity’’, dated July 7, 1997, at a total cost of There is authorized to be appropriated $850,000 the State of Texas legislation. $28,000,000, with an estimated Federal cost of to carry out this section. (c) COST SHARING.—The non-Federal share of $14,000,000, and an estimated non-Federal cost SEC. 562. SOUTHEASTERN PENNSYLVANIA. the cost of assistance provided under subsection of $14,000,000. 1 Section 566(b) of the Water Resources Devel- (a) shall be 50 percent, of which up to ⁄2 of the (4) MONONGAHELA RIVER, WEST VIRGINIA.— opment Act of 1996 (110 Stat. 3786) is amended non-Federal share may be provided as in kind Monongahela River, West Virginia, Comprehen- by inserting ‘‘environmental restoration,’’ after services. sive Study Reconnaissance Report, dated Sep- ‘‘water supply and related facilities,’’. (d) AUTHORIZATION OF APPROPRIATIONS.— tember 1995, consisting of the following ele- SEC. 563. UPPER SUSQUEHANNA-LACKAWANNA There is authorized to be appropriated to carry ments: WATERSHED RESTORATION INITIA- out this section, $10,000,000 for the fiscal years (A) Morgantown Riverfront Park, Morgan- TIVE. beginning after September 30, 1999. town, West Virginia, at a total cost of $1,600,000, (a) IN GENERAL.—The Secretary, in coopera- SEC. 567. BOLIVAR PENINSULA, JEFFERSON, with an estimated Federal cost of $800,000 and tion with appropriate Federal, State, and local CHAMBERS, AND GALVESTON COUN- an estimated non-Federal cost of $800,000. agencies and nongovernmental institutions, is TIES, TEXAS. (B) Caperton Rail to Trail, Monongahela authorized to prepare a watershed plan for the (a) SHORE PROTECTION PROJECT.—The Sec- County, West Virginia, at a total cost of Upper Susquehanna-Lackawanna Watershed retary is authorized to design and construct a $4,425,000, with an estimated Federal cost of (USGS Cataloguing Unit 02050107). The plan shore protection project between the south jetty $2,212,500 and an estimated non-Federal cost of shall utilize geographic information system and of the Sabine Pass Channel and the north jetty $2,212,500. shall include a comprehensive environmental as- of the Galveston Harbor Entrance Channel in (C) Palatine Park, Fairmont, West Virginia, sessment of the watershed’s ecosystem, a com- Jefferson, Chambers, and Galveston Counties, at a total cost of $1,750,000, with an estimated prehensive flood plain management plan, a Texas, including beneficial use of dredged mate- Federal cost of $875,000 and an estimated non- flood plain protection plan, water resource and rial from Federal navigation projects. Federal cost of $875,000. environmental restoration projects, water qual- (b) APPLICABILITY OF BENEFIT-COST RATIO SEC. 571. URBANIZED PEAK FLOOD MANAGEMENT ity improvement, and other appropriate infra- WAIVER AUTHORITY.—In evaluating and imple- RESEARCH. structure and measures. menting the project, the Secretary shall allow (a) IN GENERAL.—The Secretary shall develop (b) NON-FEDERAL SHARE.—The non-Federal the non-Federal interest to participate in the fi- and implement a research program to evaluate share of the cost of preparation of the plan nancing of the project in accordance with sec- opportunities to manage peak flood flows in ur- under this section shall be 50 percent. Services tion 903(c) of the Water Resources Development banized watersheds located in the State of New and materials instead of cash may be credited Act of 1986 (100 Stat. 4184), notwithstanding any Jersey. toward the non-Federal share of the cost of the limitation on the purpose of projects to which (b) SCOPE OF RESEARCH.—The research pro- plan. such section applies, to the extent that the Sec- gram authorized by subsection (a) shall be ac- (c) AUTHORIZATION OF APPROPRIATIONS.— retary’s evaluation indicates that applying such complished through the New York District. The There is authorized to be appropriated to carry section is necessary to implement the project. research shall specifically include the following: out this section $5,000,000 for fiscal years begin- (1) Identification of key factors in urbanized SEC. 568. GALVESTON BEACH, GALVESTON COUN- ning after September 30, 1999. TY, TEXAS. watersheds that are under development and im- SEC. 564. AGUADILLA HARBOR, PUERTO RICO. The Secretary is authorized to design and pact peak flows in the watersheds and The Secretary shall conduct a study to deter- construct a shore protection project between the downsteam of the watersheds. (2) Development of peak flow management mine if erosion and additional storm damage Galveston South Jetty and San Luis Pass, Gal- models for 4 to 6 watersheds in urbanized areas risks that exist in the vicinity of Aguadilla Har- veston County, Texas, using innovative nourish- located with widely differing geology, areas, bor, Puerto Rico, are the result of a Federal ment techniques, including beneficial use of shapes, and soil types that can be used to deter- navigation project. If the Secretary determines dredged material from Federal navigation mine optimal flow reduction factors for indi- that such erosion and additional storm damage projects. risks are the result of the project, the Secretary vidual watersheds. shall take appropriate measures to mitigate the SEC. 569. PACKERY CHANNEL, CORPUS CHRISTI, (3) Utilization of such management models to TEXAS. erosion and storm damage. determine relationships between flow and reduc- (a) IN GENERAL.—The Secretary shall con- SEC. 565. OAHE DAM TO LAKE SHARPE, SOUTH tion factors and change in imperviousness, soil DAKOTA, STUDY. struct a navigation and storm protection project types, shape of the drainage basin, and other Section 441 of the Water Resources Develop- at Packery Channel, Mustang Island, Texas, pertinent parameters from existing to ultimate ment Act of 1996 (110 Stat. 3747) is amended— consisting of construction of a channel and a conditions in watersheds under consideration (1) by inserting ‘‘(a) INVESTIGATION.—’’ before channel jetty and placement of sand along the for development. ‘‘The Secretary’’; and length of the seawall. (4) Development and validation of an inexpen- (2) by adding at the end the following: (b) ECOLOGICAL AND RECREATIONAL BENE- sive accurate model to establish flood reduction ‘‘(b) REPORT.—Not later than September 30, FITS.—In evaluating the project, the Secretary factors based on runoff curve numbers, change 1999, the Secretary shall transmit to Congress a shall include the ecological and recreational in imperviousness, the shape of the basin, and report on the results of the investigation under benefits of reopening the Packery Channel. other pertinent factors. this section. The report shall include the exam- (c) APPLICABILITY OF BENEFIT-COST RATIO (c) REPORT TO CONGRESS.—The Secretary ination of financing options for regular mainte- WAIVER AUTHORITY.—In evaluating and imple- shall evaluate policy changes in the planning nance and preservation of the lake. The report menting the project, the Secretary shall allow process for flood control projects based on the shall be prepared in coordination and coopera- the non-Federal interest to participate in the fi- results of the research authorized by this section tion with the Natural Resources Conservation nancing of the project in accordance with sec- and transmit to Congress a report not later than Service, other Federal agencies, and State and tion 903(c) of the Water Resources Development 3 years after the date of the enactment of this local officials.’’. Act of 1986 (100 Stat. 4184), notwithstanding any Act. SEC. 566. INTEGRATED WATER MANAGEMENT limitation on the purpose of projects to which (d) AUTHORIZATION OF APPROPRIATIONS.— PLANNING, TEXAS. such section applies, to the extent that the Sec- There is authorized to be appropriated to carry- (a) IN GENERAL.—The Secretary, in coopera- retary’s evaluation indicates that applying such out this section $3,000,000 for fiscal years begin- tion with other Federal agencies and the State section is necessary to implement the project. ning after September 30, 1999. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9645

(e) FLOW REDUCTION FACTORS DEFINED.—In tion of abandoned and inactive noncoal mine (E) ADMINISTRATIVE COSTS.—The Secretary this section, the term ‘‘flow reduction factors’’ sites. Such assistance shall be provided through shall require Holnam Inc. to pay reasonable ad- means the ratio of estimated allowable peak the rehabilitation of abandoned mine sites pro- ministrative costs associated with the exchange. flows of stormwater after projected development gram, managed by the Sacramento District Of- (4) VALUE OF PROPERTIES.—If the appraised when compared to pre-existing conditions. fice of the Corps of Engineers. fair market value, as determined by the Sec- SEC. 572. MISSISSIPPI RIVER COMMISSION. (f) AUTHORIZATION OF APPROPRIATIONS.— retary, of the land conveyed to Holnam Inc. by Section 8 of the Flood Control Act of May 15, There is authorized to be appropriated to carry the Secretary under paragraph (1) exceeds the 1928 (Public Law 391, 70th Congress), is amend- out this section $5,000,000. appraised fair market value, as determined by ed by striking ‘‘$7,500’’ and inserting ‘‘$21,500’’. SEC. 576. BENEFICIAL USE OF WASTE TIRE RUB- the Secretary, of the land conveyed to the BER. SEC. 573. COASTAL AQUATIC HABITAT MANAGE- United States by Holnam Inc. under paragraph MENT. (a) IN GENERAL.—The Secretary is authorized (1), Holnam Inc. shall make a payment equal to to conduct pilot projects to encourage the bene- (a) IN GENERAL.—The Secretary may cooper- the excess in cash or a cash equivalent to the ate with the Secretaries of Agriculture and the ficial use of waste tire rubber, including crumb United States. Interior, the Administrators of the Environ- rubber, recycled from tires. Such beneficial use (b) CANDY LAKE PROJECT, OSAGE COUNTY, mental Protection Agency and the National may include marine pilings, underwater fram- OKLAHOMA.— Oceanic and Atmospheric Administration, other ing, floating docks with built-in flotation, util- (1) DEFINITIONS.—In this subsection, the fol- appropriate Federal, State, and local agencies, ity poles, and other uses associated with trans- lowing definitions apply: and affected private entities, in the development portation and infrastructure projects receiving (A) FAIR MARKET VALUE.—The term ‘‘fair mar- of a management strategy to address problems Federal funds. The Secretary shall, when ap- ket value’’ means the amount for which a will- associated with toxic microorganisms and the re- propriate, encourage the use of waste tire rub- ing buyer would purchase and a willing seller sulting degradation of ecosystems in the tidal ber, including crumb rubber, in such federally would sell a parcel of land, as determined by a and nontidal wetlands and waters of the United funded projects. qualified, independent land appraiser. (b) AUTHORIZATION OF APPROPRIATIONS.— (B) PREVIOUS OWNER OF LAND.—The term States for the States along the Atlantic Ocean. There is authorized to be appropriated to carry ‘‘previous owner of land’’ means a person (in- As part of such management strategy, the Sec- out this section $5,000,000 for fiscal years begin- cluding a corporation) that conveyed, or a de- retary may provide planning, design, and other ning after September 30, 1998. scendant of a deceased individual who con- technical assistance to each participating State veyed, land to the Corps of Engineers for use in in the development and implementation of non- SEC. 577. SITE DESIGNATION. the Candy Lake project in Osage County, Okla- regulatory measures to mitigate environmental Section 102(c)(4) of the Marine Protection, Re- homa. problems and restore aquatic resources. search, and Sanctuaries Act of 1972 (33 U.S.C. (2) LAND CONVEYANCES.— (b) COST SHARING.—The Federal share of the 1412(c)(4)) is amended by striking ‘‘January 1, (A) IN GENERAL.—The Secretary shall convey, cost of measures undertaken under this section 2000’’ and inserting ‘‘January 1, 2005’’. in accordance with this subsection, all right, shall not exceed 65 percent. SEC. 578. LAND CONVEYANCES. title, and interest of the United States in and to (c) OPERATION AND MAINTENANCE.—The non- (a) EXCHANGE OF LAND IN PIKE COUNTY, MIS- the land acquired by the United States for the Federal share of operation and maintenance SOURI.— Candy Lake project in Osage County, Okla- costs for projects constructed with assistance (1) EXCHANGE OF LAND.—Subject to para- homa. provided under this section shall be 100 percent. graphs (3) and (4), at such time as Holnam Inc. (B) PREVIOUS OWNERS OF LAND.— (d) AUTHORIZATION OF APPROPRIATION.— conveys all right, title, and interest in and to (i) IN GENERAL.—The Secretary shall give a There is authorized to be appropriated to carry the land described in paragraph (2)(A) to the previous owner of land the first option to pur- out this section $7,000,000 for fiscal years begin- United States, the Secretary shall convey all chase the land described in subparagraph (A). ning after September 30, 1999. right, title, and interest in the land described in (ii) APPLICATION.— SEC. 574. WEST BATON ROUGE PARISH, LOU- paragraph (2)(B) to Holnam Inc. (2) DESCRIPTION OF LANDS.—The lands re- (I) IN GENERAL.—A previous owner of land ISIANA. that desires to purchase the land described in The Secretary shall expedite completion of the ferred to in paragraph (1) are the following: (A) NON-FEDERAL LAND.—152.45 acres with ex- subparagraph (A) that was owned by the pre- report for the West Baton Rouge Parish, Lou- isting flowage easements situated in Pike Coun- vious owner of land, or by the individual from isiana, project for waterfront and riverine pres- ty, Missouri, described a portion of Government whom the previous owner of land is descended, ervation, restoration, and enhancement modi- Tract Number FM–9 and all of Government shall file an application to purchase the land fications along the Mississippi River. Tract Numbers FM–11, FM–10, FM–12, FM–13, with the Secretary not later than 180 days after SEC. 575. ABANDONED AND INACTIVE NONCOAL and FM–16, owned and administered by the the official date of notice to the previous owner MINE RESTORATION. Holnam Inc. of land under paragraph (3). (a) IN GENERAL.—The Secretary is authorized (B) FEDERAL LAND.—152.61 acres situated in (II) FIRST TO FILE HAS FIRST OPTION.—If more to provide technical, planning, and design as- Pike County, Missouri, known as Government than 1 application is filed to purchase a parcel sistance to Federal and non-Federal interests Tract Numbers FM–17 and a portion of FM–18, of land described in subparagraph (A), the first for carrying out projects to address water qual- administered by the Corps of Engineers. option to purchase the parcel of land shall be ity problems caused by drainage and related ac- (3) CONDITIONS OF EXCHANGE.—The exchange determined in the order in which applications tivities from abandoned and inactive noncoal of land authorized by paragraph (1) shall be for the parcel of land were filed. mines. subject to the following conditions: (iii) IDENTIFICATION OF PREVIOUS OWNERS OF (b) SPECIFIC MEASURES.—Assistance provided (A) DEEDS.— LAND.—As soon as practicable after the date of under subsection (a) may be in support of (i) FEDERAL LAND.—The instrument of convey- the enactment of this Act, the Secretary shall, to projects for the following purposes: ance used to convey the land described in para- the extent practicable, identify each previous (1) Management of drainage from abandoned graph (2)(B) to Holnam Inc. shall contain such owner of land. and inactive noncoal mines. reservations, terms, and conditions as the Sec- (iv) CONSIDERATION.—Consideration for land (2) Restoration and protection of streams, riv- retary considers necessary to allow the United conveyed under this paragraph shall be the fair ers, wetlands, other waterbodies, and riparian States to operate and maintain the Mississippi market value of the land. areas degraded by drainage from abandoned River 9-Foot Navigation Project. (C) DISPOSAL.—Any land described in sub- and inactive noncoal mines. (ii) NON-FEDERAL LAND.—The conveyance of paragraph (A) for which an application to pur- (3) Demonstration of management practices the land described in paragraph (2)(A) to the chase the land has not been filed under sub- and innovative and alternative treatment tech- Secretary shall be by a warranty deed accept- paragraph (B)(ii) within the applicable time pe- nologies to minimize or eliminate adverse envi- able to the Secretary. riod shall be disposed of in accordance with law. ronmental effects associated with drainage from (B) REMOVAL OF IMPROVEMENTS.—Holnam (D) EXTINGUISHMENT OF EASEMENTS.—All abandoned and inactive noncoal mines. Inc. may remove any improvements on the land flowage easements acquired by the United States (c) NON-FEDERAL SHARE.—The non-Federal described in paragraph (2)(A). The Secretary for use in the Candy Lake project in Osage share of the cost of assistance under subsection may require Holnam Inc. to remove any im- County, Oklahoma, are extinguished. (a) shall be 50 percent; except that the Federal provements on the land described in paragraph (3) NOTICE.— share with respect to projects located on lands (2)(A). In either case, Holnam Inc. shall hold (A) IN GENERAL.—The Secretary shall notify— owned by the United States shall be 100 percent. the United States harmless from liability, and (i) each person identified as a previous owner (d) EFFECT ON AUTHORITY OF THE SECRETARY the United States shall not incur cost associated of land under paragraph (2)(B)(iii), not later OF THE INTERIOR.—Nothing in this section shall with the removal or relocation of any such im- than 90 days after identification, by United be construed as affecting the authority of the provements. States mail; and Secretary of the Interior under title IV of the (C) TIME LIMIT FOR EXCHANGE.—The land ex- (ii) the general public, not later than 90 days Surface Mining Control and Reclamation Act of change authorized by paragraph (1) shall be after the date of the enactment of this Act, by 1977 (30 U.S.C. 1231 et seq.). completed not later than 2 years after the date publication in the Federal Register. (e) TECHNOLOGY DATABASE FOR RECLAMATION of the enactment of this Act. (B) CONTENTS OF NOTICE.—Notice under this OF ABANDONED MINES.—The Secretary is au- (D) LEGAL DESCRIPTION.—The Secretary shall paragraph shall include— thorized to provide assistance to non-Federal provide the legal description of the land de- (i) a copy of this subsection; and non-profit entities to develop, manage, and scribed in paragraph (2). The legal description (ii) information sufficient to separately iden- maintain a database of conventional and inno- shall be used in the instruments of conveyance tify each parcel of land subject to this sub- vative, cost-effective technologies for reclama- of the land. section; and S9646 CONGRESSIONAL RECORD — SENATE July 28, 1999 (iii) specification of the fair market value of retary shall transfer to the Summerfield Ceme- shall be responsible for all other costs, including each parcel of land subject to this subsection. tery Association, Oklahoma, all right, title, and real estate transaction and environmental com- (C) OFFICIAL DATE OF NOTICE.—The official interest of the United State in and to the land pliance costs, associated with the conveyance. date of notice under this paragraph shall be the described in paragraph (3) for use as a cemetery. (3) TERMS AND CONDITIONS.— later of— (2) REVERSION.—If the land to be transferred (A) MANAGEMENT OF LANDS.—All lands that (i) the date on which actual notice is mailed; under this subsection ever cease to be used as a are conveyed under paragraph (1) shall be re- or not-for-profit cemetery or for other public pur- tained in public ownership and shall be man- (ii) the date of publication of the notice in the poses the land shall revert to the United States. aged in perpetuity for fish and wildlife mitiga- Federal Register. (3) DESCRIPTION.—The land to be conveyed tion purposes in accordance with a plan ap- (c) LAKE HUGO, OKLAHOMA, AREA LAND CON- under this subsection is the approximately 10 proved by the Secretary. If the lands are not VEYANCE.— acres of land located in Leflore County, Okla- managed for such purposes in accordance with (1) IN GENERAL.—As soon as practicable after homa, and described as follows: the plan, title to the lands shall revert to the the date of the enactment of this Act, the Sec- United States. If the lands revert to the United retary shall convey at fair market value to INDIAN BASIN MERIDIAN Section 23, Township 5 North, Range 23 East States under this subparagraph, the Secretary Choctaw County Industrial Authority, Okla- shall manage the lands for such purposes. homa, the property described in paragraph (2). SW SE SW NW (B) TERMS AND CONDITIONS.—The Secretary (2) DESCRIPTION.—The property to be con- NW NE NW SW may require such additional terms and condi- 1 veyed under paragraph (1) is— N ⁄2 SW SW NW. tions in connection with the conveyance as the (A) that portion of land at Lake Hugo, Okla- (4) CONSIDERATION.—The conveyance under Secretary considers appropriate to protect the homa, above elevation 445.2 located in the N1⁄2 this subsection shall be without consideration. interests of the United States. of the NW1⁄4 of Section 24, R 18 E, T 6 S, and the All costs associated with the conveyance shall (4) PAYMENTS.— S1⁄2 of the SW1⁄4 of Section 13, R 18 E, T 6 S be paid by the Summerfield Cemetery Associa- (A) AGREEMENTS.—The Secretary is author- bounded to the south by a line 50 north on the tion, Oklahoma. ized to pay to the State of South Carolina not centerline of Road B of Sawyer Bluff Public Use (5) OTHER TERMS AND CONDITIONS.—The con- more than $4,850,000 if the Secretary and the 1 Area and to the north by the ⁄2 quarter section veyance under this subsection shall be subject to State enter into a binding agreement for the line forming the south boundary of Wilson Point such other terms and conditions as the Sec- State to manage for fish and wildlife mitigation Public Use Area; and retary considers necessary and appropriate to purposes, in perpetuity, the lands conveyed (B) a parcel of property at Lake Hugo, Okla- protect the interests of the United States. under this subsection and the lands not covered homa, commencing at the NE corner of the SE1⁄4 (f) DEXTER, OREGON.— by the conveyance that are designated in red in SW1⁄4 of Section 13, R 18 E, T 6 S, 100 feet north, (1) IN GENERAL.—The Secretary shall convey Exhibit A of Army License Number DACW21–3– then east approximately 1⁄2 mile to the county to the Dexter Sanitary District all right, title, 85–1904. line road between Section 13, R 18 E, T 6 S, and and interest of the United States in and to a (B) TERMS AND CONDITIONS.—The agreement Section 18, R 19 E, T 6 S. parcel of land consisting of approximately 5 shall specify the terms and conditions under (3) TERMS AND CONDITIONS.—The conveyances acres located at Dexter Lake, Oregon, under which the payment will be made and the rights under this subsection shall be subject to such lease to the Dexter Sanitary District. of, and remedies available to, the Federal Gov- terms and conditions, including payment of rea- (2) CONSIDERATION.—Land to be conveyed ernment to recover all or a portion of the pay- sonable administrative costs and compliance under this section shall be conveyed without ment in the event the State fails to manage the with applicable Federal floodplain management consideration. If the land is no longer held in lands in a manner satisfactory to the Secretary. and flood insurance programs, as the Secretary public ownership or no longer used for waste- (h) CHARLESTON, SOUTH CAROLINA.—The Sec- considers necessary and appropriate to protect water treatment purposes, title to the land shall retary is authorized to convey the property of the interests of the United States. revert to the Secretary. the Corps of Engineers known as the ‘‘Equip- (d) CONVEYANCE OF PROPERTY IN MARSHALL (3) TERMS AND CONDITIONS.—The conveyance ment and Storage Yard’’, located on Meeting COUNTY, OKLAHOMA.— by the United States shall be subject to such (1) IN GENERAL.—The Secretary shall convey Street in Charleston, South Carolina, in as-is terms and conditions as the Secretary considers condition for fair-market value with all proceeds to the State of Oklahoma all right, title, and in- appropriate to protect the interests of the United terest of the United States to real property lo- from the conveyance to be applied by the Corps States. of Engineers, Charleston District, to offset a cated in Marshall County, Oklahoma, and in- (4) DESCRIPTION.—The exact acreage and de- cluded in the Lake Texoma (Denison Dam), portion of the costs of moving or leasing (or scription of the land to be conveyed under para- both) an office facility in the City of Charleston. Oklahoma and Texas, project consisting of ap- graph (1) shall be determined by such surveys as proximately 1,580 acres and leased to the State (i) CLARKSTON, WASHINGTON.— the Secretary considers necessary. The cost of (1) IN GENERAL.—The Secretary shall convey of Oklahoma for public park and recreation the surveys shall be borne by the Dexter Sani- to the Port of Clarkston, Washington, all right, purposes. tary District. (2) CONSIDERATION.—Consideration for the title, and interest of the United States in and to (g) RICHARD B. RUSSELL DAM AND LAKE, conveyance under paragraph (1) shall be the a portion of the land described in Army Lease SOUTH CAROLINA.— fair market value of the real property, as deter- Number DACW68–1–97–22, consisting of approxi- (1) IN GENERAL.—Upon execution of an agree- mately 31 acres, the exact boundaries of which mined by the Secretary. All costs associated ment under paragraph (4) and subject to the re- with the conveyance under paragraph (1) shall shall be determined by the Secretary and the quirements of this subsection, the Secretary Port of Clarkston. be paid by the State of Oklahoma. shall convey, without consideration, to the State (3) DESCRIPTION.—The exact acreage and legal (2) ADDITIONAL LAND.—The Secretary may of South Carolina all right, title, and interest of description of the real property to be conveyed convey to the Port of Clarkston, Washington, at the United States to the lands described in para- under paragraph (1) shall be determined by a fair market value as determined by the Sec- graph (2) that are managed, as of the date of survey satisfactory to the Secretary. The cost of retary, such additional land located in the vi- the enactment of this Act, by the South Caro- the survey shall be paid by the State of Okla- cinity of Clarkston, Washington, as the Sec- lina Department of Natural Resources for fish homa. retary determines to be excess to the needs of the and wildlife mitigation purposes in connection (4) ENVIRONMENTAL COMPLIANCE.—Before Columbia River Project and appropriate for con- making the conveyance under paragraph (1), with the Richard B. Russell Dam and Lake, veyance. the Secretary shall— South Carolina, project. (3) TERMS AND CONDITIONS.—The conveyances (A) conduct an environmental baseline survey (2) DESCRIPTION.— made under paragraphs (1) and (2) shall be sub- to determine if there are levels of contamination (A) IN GENERAL.—Subject to subparagraph ject to such terms and conditions as the Sec- for which the United States would be respon- (B), the lands to be conveyed under paragraph retary determines to be necessary to protect the sible under the Comprehensive Environmental (1) are described in Exhibits A, F, and H of interests of the United States, including a re- Response, Compensation, and Liability Act of Army Lease Number DACW21–1–93–0910 and as- quirement that the Port of Clarkston pay all ad- 1980 (42 U.S.C. 9601 et seq.); and sociated Supplemental Agreements or are des- ministrative costs associated with the convey- (B) ensure that the conveyance complies with ignated in red in Exhibit A of Army License ances (including the cost of land surveys and the National Environmental Policy Act of 1969 Number DACW21–3–85–1904; except that all des- appraisals and costs associated with compliance (42 U.S.C. 4321 et seq.). ignated lands in the license that are below ele- with applicable environmental laws, including (5) OTHER TERMS AND CONDITIONS.—The con- vation 346 feet mean sea level or that are less regulations). veyance under paragraph (1) shall be subject to than 300 feet measured horizontally from the top (4) USE OF LAND.—The Port of Clarkston shall such other terms and conditions as the Sec- of the power pool are excluded from the convey- be required to pay the fair market value, as de- retary considers necessary and appropriate to ance. Management of the excluded lands shall termined by the Secretary, of any land conveyed protect the interests of the United States, in- continue in accordance with the terms of Army pursuant to paragraph (1) that is not retained cluding reservation by the United States of a License Number DACW21–3–85–1904 until the in public ownership or is used for other than flowage easement over all portions of the real Secretary and the State enter into an agreement public park or recreation purposes, except that property to be conveyed that are at or below ele- under paragraph (4). the Secretary shall have a right of reverter to re- vation 645.0 NGVD. (B) SURVEY.—The exact acreage and legal de- claim possession and title to any such land. (e) SUMMERFIELD CEMETERY ASSOCIATION, scription of the lands to be conveyed under (j) LAND CONVEYANCE TO MATEWAN, WEST OKLAHOMA, LAND CONVEYANCE.— paragraph (1) shall be determined by a survey VIRGINIA.— (1) IN GENERAL.—As soon as practicable after satisfactory to the Secretary, with the cost of (1) IN GENERAL.—The United States shall con- the date of the enactment of this Act, the Sec- the survey to be paid by the State. The State vey by quit claim deed to the Town of Matewan, July 28, 1999 CONGRESSIONAL RECORD — SENATE S9647 West Virginia, all right, title, and interest of the North 59°45′ East 34 feet. South 08°28′ East 88 feet to an iron pin and United States in and to four parcels of land North 69°50′ East 44 feet. cap designated as U.S.A. Corner No. M–9–1 deemed excess by the Secretary of the Army, act- North 58°11′ East 79 feet. point on the northerly right-of-way line of a ing through the Chief of the U.S. Army Corps of North 66°13′ East 102 feet. street (known as McCoy Alley); thence, leaving ° ′ Engineers, to the structural project for flood North 69 43 East 98 feet. said Project boundary and with the northerly ° ′ control constructed by the Corps of Engineers North 77 39 East 18 feet. right-of-way of said street. North 72°39′ East 13 feet to a point at the along the Tug Fork River pursuant to section South 83°01′ West 38 feet to a point on the intersection of said Project boundary, and the 202 of Public Law 96–367. right-of-way line of said floodwall; thence, leav- southerly right-of-way of said Railroad, with (2) PROPERTY DESCRIPTION.—The parcels of ing the right-of-way of said street, and with the the westerly right-of-way line of State Route 49/ land referred to in paragraph (1) are as follows: right-of-way of said floodwall. 10; thence, leaving said Project boundary, and (A) A certain parcel of land in the State of North 57°49′ West 180 feet. the southerly right-of-way of said Railroad, and West Virginia, Mingo County, Town of South 79°30′ West 34 feet to a point of begin- with the westerly right-of-way of said road. Matewan, and being more particularly bounded ning, containing 0.24 acre, more or less. The South 03°21′ East 100 feet to a point at the and described as follows: bearings and coordinate used herein are ref- intersection of the westerly right-of-way of said Beginning at a point on the southerly right- erenced to the West Virginia State Plane Coordi- road with the right-of-way of said floodwall; of-way line of a 40-foot-wide street right-of-way nate System, South Zone. thence, leaving the right-of-way of said road, (known as McCoy Alley), having an approxi- (k) MERRISACH LAKE, ARKANSAS COUNTY, AR- mate coordinate value of N228,695, E1,662,397, in and with the right-of-way line of said floodwall. South 79°30′ West 69 feet. KANSAS.— the line common to the land designated as South 78°28′ West 222 feet. (1) LAND CONVEYANCE.—Notwithstanding any U.S.A. Tract No. 834, and the land designated South 80°11′ West 65 feet. other provision of law, the Secretary shall con- as U.S.A. Tract No. 837, said point being South North 38°40′ West 14 feet to the point of begin- vey to eligible private property owners at fair 51°52′ East 81.8 feet from an iron pin and cap ning, containing 0.53 acre, more or less. The market value, as determined by the Secretary, marked M–12 on the boundary of the Matewan bearings and coordinate used herein are ref- all right, title, and interest of the United States Area Structural Project, on the north right-of- erenced to the West Virginia State Plane Coordi- in and to certain lands acquired for Navigation way line of said street, at a corner common to nate System, South Zone. Pool No. 2, McClellan-Kerr Arkansas River designated U.S.A. Tracts Nos. 834 and 836; (C) A certain parcel of land in the State of Navigation System, Merrisach Lake Project, Ar- thence, leaving the right-of-way of said street, West Virginia, Mingo County, Town of kansas County, Arkansas. with the line common to the land of said Tract Matewan, and being more particularly bounded (2) PROPERTY DESCRIPTION.—The lands to be No. 834, and the land of said Tract No. 837. and described as follows: conveyed under paragraph (1) include those South 14°37′ West 46 feet to the corner common Beginning at a point on the southerly right- lands lying between elevation 163, National Geo- to the land of said Tract No. 834, and the land of-way line of the Norfolk and Western Rail- detic Vertical Datum of 1929, and the Federal of said Tract No. 837; thence, leaving the land road, having an approximate coordinate value Government boundary line for Tract Numbers of said Tract No. 837, severing the lands of said of N228,936 E1,661,672, and being at the intersec- 102, 129, 132–1, 132–2, 132–3, 134, 135, 136–1, 136– Project. tion of the easterly right-of-way line of State 2, 138, 139, 140, 141, 142, 143, 144, and 145, lo- South 14°37′ West 46 feet. Route 49/10 with the boundary of the Matewan cated in sections 18, 19, 29, 30, 31, and 32, Town- ° ′ South 68 07 East 239 feet. Area Structural Project; thence, leaving the ship 7 South, Range 2 West, and the SE1⁄4 of North 26°05′ East 95 feet to a point on the right-of-way of said road, and with said Project Section 36, Township 7 South, Range 3 West, southerly right-of-way line of said street; boundary, and the southerly right-of-way of Fifth Principal Meridian, with the exception of thence, with the right-of-way of said street, con- said Railroad. any land designated for public park purposes. tinuing to sever the lands of said Project. North 77°49′ East 89 feet to an iron pin and (3) TERMS AND CONDITIONS.—Any lands con- South 63°55′ East 206 feet; thence, leaving the cap designated as U.S.A. Corner No. M–4. veyed under paragraph (1) shall be subject to— right-of-way of said street, continuing to sever North 79°30′ East 74 feet to an iron pin and (A) a perpetual flowage easement prohibiting the lands of said Project. cap designated as U.S.A. Corner No. M–5–1; human habitation and restricting construction ° ′ South 26 16 West 63 feet; thence, with a curve thence, leaving the southerly right-of-way of activities; to the left having a radius of 70 feet, a delta of said Railroad, and continuing with the bound- (B) the reservation of timber rights by the ° ′ 33 58 , an arc length of 41 feet, the chord bear- ary of said Project. United States; and ing. South 06°33′ East 102 to an iron pipe and cap (C) such additional terms and conditions as ° ′ South 09 17 West 41 feet; thence, leaving said designated U.S.A. Corner No. M–6–1 on the the Secretary considers appropriate to protect curve, continuing to sever the lands of said northerly right-of-way line of State Route 49/28; the interests of the United States. Project. thence, leaving the boundary of said Project, (4) ELIGIBLE PROPERTY OWNER DEFINED.—In ° ′ South 07 42 East 31 feet to a point on the and with the right-of-way of said road, severing this subsection, the term ‘‘eligible private prop- right-of-way line of the floodwall; thence, with the lands of said Project. erty owner’’ means the owner of record of land the right-of-way of said floodwall, continuing to North 80°59′ West 171 feet to a point at the contiguous to lands owned by the United States sever the lands of said Project. intersection of the Northerly right-of-way line of in connection with the project referred to in South 77°04′ West 71 feet. said State Route 49/28 with the easterly right-of- paragraph (1). North 77°10′ West 46 feet. way line of said State Route 49/10; thence, leav- SEC. 579. NAMINGS. North 67°07′ West 254 feet. ing the right-of-way of said State Route 49/28 (a) FRANCIS BLAND FLOODWAY DITCH, ARKAN- North 67°54′ West 507 feet. and with the right-of-way of said State Route SAS.— North 57°49′ West 66 feet to the intersection of 49/10. the right-of-way line of said floodwall with the North 03°21′ West 42 feet to the point of begin- (1) DESIGNATION.—8-Mile Creek in Paragould, southerly right-of-way line of said street; ning, containing 0.27 acre, more or less. The Arkansas, shall be known and designated as the thence, leaving the right-of-way of said bearings and coordinate used herein are ref- ‘‘Francis Bland Floodway Ditch’’. floodwall and with the southerly right-of-way erenced to the West Virginia State Plane Coordi- (2) LEGAL REFERENCE.—Any reference in a of said street, continuing to sever the lands of nate System, South Zone. law, map, regulation, document, paper, or other said Project. (D) A certain parcel of land in the State of record of the United States to the creek referred North 83°01′ East 171 feet. West Virginia, Mingo County, Town of to in paragraph (1) shall be deemed to be a ref- North 89°42′ East 74 feet. Matewan, and being more particularly bounded erence to the ‘‘Francis Bland Floodway Ditch’’. South 83°39′ East 168 feet. and described as follows: (b) LAWRENCE BLACKWELL MEMORIAL BRIDGE, South 83°38′ East 41 feet. Beginning at a point at the intersection of the ARKANSAS.— South 77°26′ East 28 feet to the point of begin- easterly right-of-way line of State Route 49/10 (1) DESIGNATION.—The bridge over lock and ning, containing 2.59 acres, more or less. The with the right-of-way line of the floodwall, hav- dam numbered 4 on the Arkansas River, Arkan- bearings and coordinate used herein are ref- ing an approximate coordinate value of N228,826 sas, constructed as part of the project for navi- erenced to the West Virginia State Plane Coordi- E1,661,679; thence, leaving the right-of-way of gation on the Arkansas River and tributaries, nate System, South Zone. said floodwall, and with the right-of-way of shall be known and designated as the ‘‘Law- (B) A certain parcel of land in the State of said State Route 49/10. rence Blackwell Memorial Bridge’’. West Virginia, Mingo County, Town of North 03°21′ West 23 feet to a point at the (2) LEGAL REFERENCE.—Any reference in a Matewan, and being more particularly bounded intersection of the easterly right-of-way line of law, map, regulation, document, paper, or other and described as follows: said State Route 49/10 with the southerly right- record of the United States to the bridge referred Beginning at an iron pin and cap designated of-way line of State Route 49/28; thence, leaving to in paragraph (1) shall be deemed to be a ref- Corner No. M2–2 on the southerly right-of-way the right-of-way of said State Route 49/10 and erence to the ‘‘Lawrence Blackwell Memorial line of the Norfolk and Western Railroad, hav- with the right-of-way of said State Route 49/28. Bridge’’. ing an approximate coordinate value of N228,755 South 80°59′ East 168 feet. SEC. 580. FOLSOM DAM AND RESERVOIR ADDI- E1,661,242, and being at the intersection of the North 82°28′ East 45 feet to an iron pin and TIONAL STORAGE AND ADDITIONAL right-of-way line of the floodwall with the cap designated as U.S.A. Corner No. M–8–1 on FLOOD CONTROL STUDIES. boundary of the Matewan Area Structural the boundary of the Western Area Structural (a) FOLSOM FLOOD CONTROL STUDIES.— Project; thence, leaving the right-of-way of said Project; thence, leaving the right-of-way of said (1) IN GENERAL.—The Secretary, in consulta- floodwall and with said Project boundary, and State Route 49/28, and with said Project bound- tion with the State of California and local water the southerly right-of-way of said Railroad. ary. resources agencies, shall undertake a study of S9648 CONGRESSIONAL RECORD — SENATE July 28, 1999

increasing surcharge flood control storage at the entered into under this subsection shall be 75 (A) PLAN.—Development by the Secretary, in Folsom Dam and Reservoir. percent. The Federal share may be in the form consultation with appropriate Federal and State (2) LIMITATIONS.—The study of the Folsom of grants or reimbursements of project costs. officials, of a facilities or resource protection Dam and Reservoir undertaken under para- (B) CREDIT FOR DESIGN WORK.—The non-Fed- and development plan, including appropriate graph (1) shall assume that there is to be no in- eral interest shall receive credit for the reason- engineering plans and specifications. crease in conservation storage at the Folsom able costs of design work completed by the non- (B) LEGAL AND INSTITUTIONAL STRUCTURES.— Reservoir. Federal interest prior to entering into a local co- Establishment of such legal and institutional (3) REPORT.—Not later than March 1, 2000, operation agreement with the Secretary for a structures as are necessary to ensure the effec- the Secretary shall transmit to Congress a report project. The credit for the design work shall not tive long-term operation of the project by the on the results of the study under this sub- exceed 6 percent of the total construction costs non-Federal interest. section. of the project. (3) COST SHARING.— (A) IN GENERAL.—The Federal share of the (b) AMERICAN AND SACRAMENTO RIVERS (C) CREDIT FOR INTEREST.—In the event of a FLOOD CONTROL STUDY.— delay in the funding of the non-Federal share of project costs under each local cooperation agree- (1) IN GENERAL.—The Secretary shall under- a project that is the subject of an agreement ment entered into under this subsection shall be 75 percent. The Federal share may be in the take a study of all levees on the American River under this section, the non-Federal interest form of grants or reimbursements of project and on the Sacramento River downstream and shall receive credit for reasonable interest in- costs. immediately upstream of the confluence of such curred in providing the non-Federal share of a (B) CREDIT FOR DESIGN WORK.—The non-Fed- Rivers to access opportunities to increase poten- project’s cost. tial flood protection through levee modifica- eral interest shall receive credit for the reason- (D) LAND, EASEMENTS, AND RIGHTS-OF-WAY able costs of design work completed by the non- tions. CREDIT.—The non-Federal interest shall receive (2) DEADLINE FOR COMPLETION.—Not later Federal interest prior to entering into a local co- credit for land, easements, rights-of-way, and operation agreement with the Secretary for a than March 1, 2000, the Secretary shall transmit relocations toward its share of project costs (in- to Congress a report on the results of the study project. The credit for the design work shall not cluding all reasonable costs associated with ob- exceed 6 percent of the total construction costs undertaken under this subsection. taining permits necessary for the construction, SEC. 581. WALLOPS ISLAND, VIRGINIA. of the project. operation, and maintenance of the project on (C) CREDIT FOR INTEREST.—In the event of a (a) EMERGENCY ACTION.—The Secretary shall publicly owned or controlled land), but not to delay in the funding of the non-Federal share of take emergency action to protect Wallops Is- exceed 25 percent of total project costs. a project that is the subject of an agreement land, Virginia, from damaging coastal storms, (E) OPERATION AND MAINTENANCE.—The non- under this section, the non-Federal interest by improving and extending the existing sea- Federal share of operation and maintenance shall receive credit for reasonable interest in- wall, replenishing and renourishing the beach, costs for projects constructed with assistance curred in providing the non-Federal share of a and constructing protective dunes. provided under this section shall be 100 percent. project’s cost. (b) REIMBURSEMENT.—The Secretary may seek (e) APPLICABILITY OF OTHER FEDERAL AND (D) LAND, EASEMENTS, AND RIGHTS-OF-WAY reimbursement from other Federal agencies STATE LAWS.—Nothing in this section shall be CREDIT.—The non-Federal interest shall receive whose resources are protected by the emergency construed as waiving, limiting, or otherwise af- credit for land, easements, rights-of-way, and action taken under subsection (a). fecting the applicability of any provision of Fed- relocations toward its share of project costs (in- (c) AUTHORIZATION OF APPROPRIATIONS.— eral or State law that would otherwise apply to cluding all reasonable costs associated with ob- There is authorized to be appropriated to carry a project to be carried out with assistance pro- taining permits necessary for the construction, out this section $8,000,000. vided under this section. operation, and maintenance of the project on SEC. 582. DETROIT RIVER, DETROIT, MICHIGAN. (f) REPORT.—Not later than December 31, publicly owned or controlled land), but not to (a) IN GENERAL.—The Secretary is authorized 2001, the Secretary shall transmit to Congress a exceed 25 percent of total project costs. to repair and rehabilitate the seawalls on the report on the results of the pilot program carried (E) OPERATION AND MAINTENANCE.—The non- Detroit River in Detroit, Michigan. out under this section, together with rec- Federal share of operation and maintenance (b) AUTHORIZATION OF APPROPRIATIONS.— ommendations concerning whether or not such costs for projects constructed with assistance There is authorized to be appropriated for fiscal program should be implemented on a national provided under this section shall be 100 percent. years beginning after September 30, 1999, basis. (e) APPLICABILITY OF OTHER FEDERAL AND $1,000,000 to carry out this section. (g) NORTHEASTERN MINNESOTA DEFINED.—In STATE LAWS.—Nothing in this section shall be SEC. 583. NORTHEASTERN MINNESOTA. this section, the term ‘‘northeastern Minnesota’’ construed as waiving, limiting, or otherwise af- (a) ESTABLISHMENT OF PROGRAM.—The Sec- means the counties of Cook, Lake, St. Louis, fecting the applicability of any provision of Fed- retary may establish a pilot program for pro- Koochiching, Itasca, Cass, Crow Wing, Aitkin, eral or State law that would otherwise apply to viding environmental assistance to non-Federal Carlton, Pine, Kanabec, Mille Lacs, Morrison, a project to be carried out with assistance pro- interests in northeastern Minnesota. Benton, Sherburne, Isanti, and Chisago, Min- vided under this section. (b) FORM OF ASSISTANCE.—Assistance under nesota. (f) REPORT.—Not later than December 31, this section may be in the form of design and (h) AUTHORIZATION OF APPROPRIATIONS.— 2001, the Secretary shall transmit to Congress a construction assistance for water-related envi- There is authorized to be appropriated to carry report on the results of the pilot program carried ronmental infrastructure and resource protec- out this section $40,000,000 for fiscal years be- out under this section, together with rec- tion and development projects in northeastern ginning after September 30, 1999. Such sums ommendations concerning whether or not such Minnesota, including projects for wastewater shall remain available until expended. program should be implemented on a national treatment and related facilities, water supply basis. SEC. 584. ALASKA. and related facilities, environmental restoration, (g) AUTHORIZATION OF APPROPRIATIONS.— (a) ESTABLISHMENT OF PROGRAM.—The Sec- and surface water resource protection and de- There is authorized to be appropriated to carry retary may establish a pilot program for pro- velopment. out this section $25,000,000 for fiscal years be- viding environmental assistance to non-Federal (c) PUBLIC OWNERSHIP REQUIREMENT.—The ginning after September 30, 1999. Such sums Secretary may provide assistance for a project interests in Alaska. shall remain available until expended. (b) FORM OF ASSISTANCE.—Assistance under under this section only if the project is publicly SEC. 585. CENTRAL WEST VIRGINIA. this section may be in the form of design and owned. (a) ESTABLISHMENT OF PROGRAM.—The Sec- construction assistance for water-related envi- (d) LOCAL COOPERATION AGREEMENT.— retary may establish a pilot program for pro- (1) IN GENERAL.—Before providing assistance ronmental infrastructure and resource protec- viding environmental assistance to non-Federal under this section, the Secretary shall enter into tion and development projects in Alaska, includ- interests in central West Virginia. a local cooperation agreement with a non-Fed- ing projects for wastewater treatment and re- (b) FORM OF ASSISTANCE.—Assistance under eral interest to provide for design and construc- lated facilities, water supply and related facili- this section may be in the form of design and tion of the project to be carried out with the as- ties, and surface water resource protection and construction assistance for water-related envi- sistance. development. ronmental infrastructure and resource protec- (2) REQUIREMENTS.—Each local cooperation (c) OWNERSHIP REQUIREMENTS.—The Sec- tion and development projects in central West agreement entered into under this subsection retary may provide assistance for a project Virginia, including projects for wastewater shall provide for the following: under this section only if the project is publicly treatment and related facilities, water supply (A) PLAN.—Development by the Secretary, in owned or is owned by a native corporation as and related facilities, and surface water re- consultation with appropriate Federal and State defined by section 1602 of title 43, United States source protection and development. officials, of a facilities or resource protection Code. (c) PUBLIC OWNERSHIP REQUIREMENT.—The and development plan, including appropriate (d) LOCAL COOPERATION AGREEMENTS.— Secretary may provide assistance for a project engineering plans and specifications. (1) IN GENERAL.—Before providing assistance under this section only if the project is publicly (B) LEGAL AND INSTITUTIONAL STRUCTURES.— under this section, the Secretary shall enter into owned. Establishment of such legal and institutional a local cooperation agreement with a non-Fed- (d) LOCAL COOPERATION AGREEMENTS.— structures as are necessary to ensure the effec- eral interest to provide for design and construc- (1) IN GENERAL.—Before providing assistance tive long-term operation of the project by the tion of the project to be carried out with the as- under this section, the Secretary shall enter into non-Federal interest. sistance. a local cooperation agreement with a non-Fed- (3) COST SHARING.— (2) REQUIREMENTS.—Each local cooperation eral interest to provide for design and construc- (A) IN GENERAL.—The Federal share of project agreement entered into under this subsection tion of the project to be carried out with the as- costs under each local cooperation agreement shall provide for the following: sistance. July 28, 1999 CONGRESSIONAL RECORD — SENATE S9649

(2) REQUIREMENTS.—Each local cooperation tion within the watershed where the Federal (b) COST SHARING.— agreement entered into under this subsection Government would be a responsible party under (1) IN GENERAL.—The Federal share of the cost shall provide for the following: any Federal environmental law. of the project shall be 50 percent. The Federal (A) PLAN.—Development by the Secretary, in (b) AUTHORIZATION OF APPROPRIATIONS.— share may be provided in the form of grants or consultation with appropriate Federal and State There is authorized to be appropriated to carry reimbursements of project costs. officials, of a facilities or resource protection out this section $5,000,000 for fiscal years begin- (2) CREDIT FOR NON-FEDERAL WORK.—The and development plan, including appropriate ning after September 30, 1999. non-Federal interest shall receive credit toward engineering plans and specifications. SEC. 587. ONONDAGA LAKE. the non-Federal share of the cost of the project (B) LEGAL AND INSTITUTIONAL STRUCTURES.— (a) IN GENERAL.—The Secretary is authorized for reasonable costs incurred by the non-Federal Establishment of such legal and institutional to plan, design, and construct projects for the interests as a result of participation in the plan- structures as are necessary to ensure the effec- environmental restoration, conservation, and ning, design, and construction of the project. tive long-term operation of the project by the management of Onondaga Lake, New York, and (3) LAND, EASEMENTS, AND RIGHTS-OF-WAY non-Federal interest. to provide, in coordination with the Adminis- CREDIT.—The non-Federal interest shall receive (3) COST SHARING.— trator of the Environmental Protection Agency, credit toward the non-Federal share of the cost (A) IN GENERAL.—The Federal share of the financial assistance to the State of New York of the project for land, easements, rights-of- project costs under each local cooperation agree- and political subdivisions thereof for the devel- way, and relocations provided by the non-Fed- ment entered into under this subsection shall be opment and implementation of projects to re- eral interest with respect to the project. 75 percent. The Federal share may be in the store, conserve, and manage Onondaga Lake. (4) OPERATION AND MAINTENANCE.—The non- form of grants or reimbursements of project (b) PARTNERSHIP.—In carrying out this sec- Federal share of operation and maintenance costs. tion, the Secretary shall establish a partnership costs for the project shall be 100 percent. (B) CREDIT FOR DESIGN WORK.—The non-Fed- with appropriate Federal agencies (including (c) AUTHORIZATION OF APPROPRIATIONS.— eral interest shall receive credit for the reason- the Environmental Protection Agency) and the There is authorized to be appropriated $3,000,000 able costs of design work completed by the non- State of New York and political subdivisions to carry out this section. Federal interest prior to entering into a local co- thereof for the purpose of project development Amend the title so as to read ‘‘An Act to operation agreement with the Secretary for a and implementation. Such partnership shall be provide for the conservation and develop- project. The credit for the design work shall not dissolved not later than 15 years after the date ment of water and related resources, to au- exceed 6 percent of the total construction costs of the enactment of this Act. thorize the United States Army Corps of En- of the project. (c) COST SHARING.—The non-Federal share of gineers to construct various projects for im- (C) CREDIT FOR INTEREST.—In the event of a the cost of a project constructed under sub- provements to rivers and harbors of the delay in the funding of the non-Federal share of section (a) shall be not less than 30 percent of United States, and for other purposes.’’. the total cost of the project and may be provided a project that is the subject of an agreement Mr. ROTH. Mr. President, I ask unan- under this section, the non-Federal interest through in-kind services. shall receive credit for reasonable interest in- (d) EFFECT ON LIABILITY.—Financial assist- imous consent that the Senate insist curred in providing the non-Federal share of a ance provided under this section shall not re- on its amendment, agree to the request project’s cost. lieve from liability any person who would other- of the House for a conference, and the (D) LAND, EASEMENTS, AND RIGHTS-OF-WAY wise be liable under Federal or State law for Chair be authorized to appoint con- CREDIT.—The non-Federal interest shall receive damages, response costs, natural resource dam- ferees on the part of the Senate. credit for land, easements, rights-of-way, and ages, restitution, equitable relief, or any other The PRESIDING OFFICER. Without relocations toward its share of project costs (in- relief. objection, it is so ordered. cluding all reasonable costs associated with ob- (e) AUTHORIZATION OF APPROPRIATIONS.— The Presiding Officer (Mr. ENZI) ap- taining permits necessary for the construction, There is authorized to be appropriated operation, and maintenance of the project on $10,000,000 to carry out the purposes of this sec- pointed Mr. CHAFEE, Mr. WARNER, Mr. publicly owned or controlled land), but not to tion. SMITH of New Hampshire, Mr. exceed 25 percent of total project costs. (f) REPEAL.—Section 401 of the Great Lakes VOINOVICH, Mr. BAUCUS, Mr. MOYNIHAN, (E) OPERATION AND MAINTENANCE.—The non- Critical Programs Act of 1990 (104 Stat. 3010) and Mrs. BOXER conferees on the part Federal share of operation and maintenance and section 411 of the Water Resources Develop- of the Senate. ment Act of 1990 (104 Stat. 4648) are repealed as costs for projects constructed with assistance f provided under this section shall be 100 percent. of the date of the enactment of this Act. (e) APPLICABILITY OF OTHER FEDERAL AND SEC. 588. EAST LYNN LAKE, WEST VIRGINIA. ORDERS FOR THURSDAY, JULY 29, STATE LAWS.—Nothing in this section shall be The Secretary shall defer any decision relat- 1999 construed as waiving, limiting, or otherwise af- ing to the leasing of mineral resources under- fecting the applicability of any provision of Fed- lying East Lynn Lake, West Virginia, project Mr. ROTH. Mr. President, I can unan- eral or State law that would otherwise apply to lands to the Federal entity vested with such imous consent that when the Senate a project to be carried out with assistance pro- leasing authority. completes its business today, it ad- vided under this section. SEC. 589. EEL RIVER, CALIFORNIA. journ until the hour of 9:30 a.m. on (f) REPORT.—Not later than December 31, The Secretary shall conduct a study to deter- Thursday, July 29. I further ask con- mine if flooding in the City of Ferndale, Cali- 2001, the Secretary shall transmit to Congress a sent that on Thursday, immediately report on the results of the pilot program carried fornia, is the result of a Federal flood control out under this section, together with rec- project on the Eel River. If the Secretary deter- following the prayer, the Journal of ommendations concerning whether or not such mines that the flooding is the result of the proceedings be approved to date, the program should be implemented on a national project, the Secretary shall take appropriate morning hour be deemed to have ex- basis. measures (including dredging of the Salt River pired, and the time for the two leaders (g) CENTRAL WEST VIRGINIA DEFINED.—In this and construction of sediment ponds at the con- be reserved for their use later in the section, the term ‘‘central West Virginia’’ means fluence of Francis, Reas, and Williams Creeks) day. the counties of Mason, Jackson, Putnam, to mitigate the flooding. The PRESIDING OFFICER. Without Kanawha, Roane, Wirt, Calhoun, Clay, Nich- SEC. 590. NORTH LITTLE ROCK, ARKANSAS. objection, it is so ordered. olas, Braxton, Gilmer, Lewis, Upshur, Ran- (a) IN GENERAL.—The Secretary shall review a dolph, Pendleton, Hardy, Hampshire, Morgan, report prepared by the non-Federal interest con- f Berkeley, and Jefferson, West Virginia. cerning flood protection for the Dark Hollow PROGRAM (h) AUTHORIZATION OF APPROPRIATIONS.— area of North Little Rock, Arkansas. If the Sec- There is authorized to be appropriated to carry retary determines that the report meets the eval- Mr. ROTH. For the information of all out this section $10,000,000 for fiscal years be- uation and design standards of the Corps of En- Senators, the Senate will reconvene to- ginning after September 30, 1999. Such sums gineers and that the project is economically jus- morrow morning at 9:30. By previous shall remain available until expended. tified, technically sound, and environmentally order, the Senate will immediately SEC. 586. SACRAMENTO METROPOLITAN AREA acceptable, the Secretary shall carry out the begin a stacked series of votes on the WATERSHED RESTORATION, CALI- project. FORNIA. (b) TREATMENT OF DESIGN AND PLAN PREPA- Abraham Social Security lockbox (a) IN GENERAL.—The Secretary is authorized RATION COSTS.—The costs of design and prepa- amendment, the Baucus motion to re- to undertake environmental restoration activi- ration of plans and specifications shall be in- commit, and the Graham amendment ties included in the Sacramento Metropolitan cluded as project costs and paid during con- regarding effective dates of the provi- Water Authority’s ‘‘Watershed Management struction. sions in the Taxpayer Refund Act of Plan’’. These activities shall be limited to clean- SEC. 591. UPPER MISSISSIPPI RIVER, MISSISSIPPI 1999. Following the votes, Senator up of contaminated groundwater resulting di- PLACE, ST. PAUL, MINNESOTA. GRAMM of Texas will be recognized to rectly from the acts of any Federal agency or (a) IN GENERAL.—The Secretary may enter Department of the Federal Government at or in into a cooperative agreement to participate in a offer an amendment regarding across- the vicinity of McClellan Air Force Base, Cali- project for the planning, design, and construc- the-board tax cuts, estate taxes, and fornia; Mather Air Force Base, California; Sac- tion of infrastructure and other improvements at capital gains taxes. By previous con- ramento Army Depot, California; or any loca- Mississippi Place, St. Paul, Minnesota. sent, there will be 10 hours of debate S9650 CONGRESSIONAL RECORD — SENATE July 28, 1999 time remaining on the bill tomorrow. the House, and the Chair appoints. Mr. NOMINATIONS Therefore, it is hoped that the Senate DOMENICI, Mr. COCHRAN, Mr. GORTON, Executive nominations received by can continue to make significant Mr. MCCONNELL, Mr. BENNETT, Mr. the Senate July 28, 1999: progress on the bill and that the Sen- BURNS, Mr. CRAIG, Mr. STEVENS, Mr. ate action can be completed no later REID, Mr. BYRD, Mr. HOLLINGS, Mrs. EXPORT-IMPORT BANK OF THE UNITED STATES than Friday. MURRAY, Mr. KOHL, Mr. DORGAN, and DORIAN VANESSA WEAVER, OF ARKANSAS, TO BE A f Mr. INOUYE conferees on the part of the MEMBER OF THE BOARD OF DIRECTORS OF THE EXPORT- Senate. IMPORT BANK OF THE UNITED STATES FOR A TERM EX- ENERGY AND WATER DEVELOP- PIRING JANUARY 20, 2003, VICE MARIA LUISA MABILAGAN f HALEY, RESIGNED. MENT APPROPRIATIONS ACT, 2000 ADJOURNMENT UNTIL 9:30 A.M. EXECUTIVE OFFICE OF THE PRESIDENT The PRESIDING OFFICER. Under TOMORROW MARTIN NEIL BAILY, OF MARYLAND, TO BE A MEMBER OF THE COUNCIL OF ECONOMIC ADVISERS, VICE JANET L. the order of the Senate of June 14, 1999, Mr. ROTH. If there is no further busi- YELLEN. having received H.R. 2605, the Senate ness to come before the Senate, I now will proceed to the bill, all after the ask unanimous consent that the Sen- SOCIAL SECURITY ADMINISTRATION enacting clause is stricken, and the ate stand in adjournment under the JAMES G. HUSE, JR., OF MARYLAND, TO BE INSPECTOR text of S. 1186 is inserted. H.R. 2605, as previous order. GENERAL, SOCIAL SECURITY ADMINISTRATION, VICE amended, is read a third time and There being no objection, the Senate, DAVID C. WILLIAMS, RESIGNED. passed. The Senate insists on its at 10:43 p.m., adjourned until Thursday, amendment, requests a conference with July 29, 1999, at 9:30 a.m.