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GISLATTVE HISTORY OF T 
ENERGY POLICY ACT OF W 












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I g. Prt. 103-01 

COMMITTEE PRINT j VolumeO 



LEGISLATIVE HISTORY OF THE 
ENERGY POLICY ACT OF 1992 



PREPARED FOR THE 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

BY THE 

CONGRESSIONAL RESEARCH SERVICE 
LIBRARY OF CONGRESS 



VOLUME 6 OF 6 




NOVEMBER 1994 



Printed for the use of the 
Committee on Energy and Natural Resources 



U.S. GOVERNMENT PRINTING OFFICE 
OC WASHINGTON : 1994 

12 'S'31 11 

03/96 53-€05-0D wc 



For sale by the U.S. Government Printing Office 
Su p e rin te nd ent of Document*, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-046254-1 



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COMMITTEE ON ENERGY AND NATURAL RESOURCES 

J. BENNETT JOHNSTON, Louisiana, Chairman 
DALE BUMPERS, Arkansas MALCOLM WALLOP, Wyoming 

WENDELL H. FORD, Kentucky MARK O. HATFIELD, Oregon 

BILL BRADLEY, New Jeraey PETE V. DOMENICI, New Mexico 

JEFF BINGAMAN, New Mexico FRANK H. MURKOWSKI, Alaska 

DANIEL K. AKAKA, Hawaii DON NICKLES, Oklahoma 

RICHARD C. SHELBY, Alabama LARRY E. CRAIG, Idaho 

PAUL WELLSTONE, Minnesota ROBERT F. BENNETT, Utah 

BEN NIGHTHORSE CAMPBELL, Colorado ARLEN SPECTER, Pennsylvania 
HARLAN MATHEWS, Tennessee TRENT LOTT, Mississippi 

BYRON L. DORGAN, North Dakota 

Benjamin S. Cooper, Staff Director 

D. MlCHABL Harvey, Chief Counsel 

PATRICIA A. MCDONALD, Staff Director for the Minority 

GARY G. ELLSWORTH, Chief Counsel for the Minority 

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FOREWORD 



The passage of the National Energy Policy Act on October 8, 
1992 was the culmination of an effort initiated two years earlier, 
when I first began working with the members and staff of the 
Energy and Natural Resources Committee to fashion a legislative 
framework for a balanced and comprehensive national energy pol- 
icy. 

It was clear at that time, in the autumn of 1990, that the chal- 
lenge would be a formidable one. For the past two decades, each 
new Congress and each succeeding administration had struggled to 
mount a response to America's ever growing dependence on 
imported oil. The issue, however, had proved to be as difficult and 
divisive as any on the domestic agenda. Lacking a consensus for 
any meaningful plan of action, we maintained, by default, an 
energy policy that could be summed up in two words: a oil imports." 

While domestic energy production continued to decline through- 
out the 1970s and '80s, our reliance on imported oil rose to nearly 
50 percent of consumption, costing the U.S. treasury nearly $55 bil- 
lion per year and accounting for 64 percent of our entire trade defi- 
cit. During that period, our economy was rocked by two separate 
energy crises — both rooted in our dependence on oil from the Mid- 
dle East — and still there was no consensus on a policy to lessen 
that dependence. 

Then, in August, 1990, came Saddam Hussein's invasion of 
Kuwait. America now faced a third energy crisis. We were forced 
to respond on a massive scale, committing more than half a million 
military personnel to combat in the Persian Gulf. 

Observing the buildup of Operation Desert Shield through Octo- 
ber and November of 1990, I concluded that the specter of a full 
scale war to protect our access to the oil supplies of the Middle 
East might finally prove to be the catalyst that could unite Amer- 
ica behind a rational and effective energy policy. 

The goal I established for the committee was to develop a biparti- 
san, balanced, and comprehensive proposal. 

Some seven months, 17 hearings, and 13 markup sessions later, 
our committee produced legislation containing 16 titles, running to 
almost 500 pages of statutory language and covering every facet of 
energy policy. The bill drew heavily from the agenda of the 
environmental community, proposing the broadest program of 
energy conservation measures ever assembled, alone with initia- 
tives to promote alternative and renewable fuels. At the same time, 
the legislation offered a blueprint for maximizing energy produc- 
tion from every available domestic resource including coal, oil, 
natural gas, and nuclear energy. 

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IV 

Our committee reported the legislation, then titled The National 
Energy Security Act, on May 23. 1991, only to face months of 
delays on the Senate floor. In October opponents of two of the more 
controversial titles of the bill — a provision to allow oil and gas 
exploration in a small portion of the Arctic National Wildlife Ref- 
uge (ANWR) and a second title providing for higher corporate aver- 
age fuel economy (CAFE) standards for automobiles— joined forces 
in a fierce campaign to derail the legislation. A motion to halt their 
filibuster failed November 1 on a vote of 50-44 and the legislation 
appeared doomed. 

Moving the bill forward would require a major compromise, but 
even with the removal of the titles pertaining to ANWK and CAFE, 
the bill still represented the most sweeping, balanced and promis- 
ing energy policy ever to be considered by either the House or Sen- 
ate. 

On January 29, 1992, I returned to the Senate floor with the 
revised legislation. The Senate moved to avert a second filibuster 
and on February 19, approved the bill by a vote of 94-4. In the 
House, the legislation faced another difficult and prolonged debate 
before winning approval May 27. 

Returning to the Senate with House amendments, the legislation 
encountered a third filibuster. Seven weeks passed before the fili- 
buster could be halted. The Senate adopted the bill for a second 
time on July 30, 1992, sending it to conference with the House. 

Through September, House and Senate conferees attempted to 
reconcile differences over key provisions of the bill. With Congress 
nearing adjournment, the fate of the bill remained very much in 
doubt until the negotiations — stretching into the early morning 
hours of October 1— -finally yielded an agreement. 

The legislation faced yet another challenge when the conference 
report was stalled by a fourth Senate filibuster. Not until the clos- 
ing day of the 102nd Congress was the filibuster broken. The 
National Energy Policy Act — the product of one of the most dif- 
ficult, protracted, and, at times, acrimonious debates in recent Sen- 
ate history — was adopted in the end by a voice vote. 

While it will be years before the scores of programs set forth in 
this law are fully implemented — and longer still before its overall 
impact can be accurately assessed — there should be no doubt that 
the National Energy Policy Act will, in time, accomplish the impor- 
tant objectives for which it was written. It will reduce America's 
dependence on imported oil while delivering cheaper and cleaner 
energy to the American consumer. 

On the morning of October 8, 1992, as the Senate concluded 
debate on this bill, I stated my belief that the measure represented 
nothing less than "a legislative miracle." The passage of time and 
the added perspective it offers have only re-enforced that convic- 
tion. 

J. Bennett Johnston. 
October 20, 1994 



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LETTER OF SUBMITTAL 



Congressional Research Service, 

The Library of Congress, 
Washington, DC, September 15, 1994. 
Hon. J. Bennett Johnston, 

Chairman, Committee on Energy and Natural Resources, Washing- 
ton, DC. 
Dear Mr. Chairman: In response to your request, we have pre- 

Kred a legislative history of the Energy Policy Act of 1992 (Public 
w 102-486). 

This document contains the major bills, reports, and debates 
which comprise the actions of Congress in passing this many-fac- 
eted legislation. A section-by-section analysis is included for the 
convenience of the reader. 

The history should be of considerable aid to legislators, public 
officials, industries, and the general public who are affected by its 
provisions and wish to understand the intent of Congress. Its 
publication will make all of the necessary materials, many of which 
are out of print, available in one comprehensive document. 

The legislative history was compiled and indexed by Carl E. 
Behrens and Duane A. Thompson, with major editorial help from 
Diana J. Sloan, all of the Environment and Natural Resources Pol- 
icy Division. 
We hope this document will serve your Committee's needs. 
Sincerely, 

Dan Mulhollan, 

Director. 



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CONTENTS 



it* 

Foreword Ill 

Letter of Submittal v 

Energy Policy Act of 1992 (Public Law 102-486) (Vol. 1) „ 1 

S. 341, National Energy Security Act of 1991, as introduced (Vol. 1) 360 

S. 1220, National Energy Security Act of 1991, Report 102-72 (Vol. 2) 645 

S. 1220, Senate Floor Debate, June 5, 1991-November 25, 1991 (Vol. 2) 1247 

S. 2166, National Energy Security Act of 1992, Senate Floor Debate, January 
29, 1992-March 3, 1992 (Vol. 3) 1697 

HJl. 776, Comprehensive National Energy Policy Act, Report of the Commit- 
tee of Energy and Commerce (Rept. 102-474, Part 1) (Vol 4) .„ 2553 

HJl. 776, Report of the Committee on Science, Space and Technology (Rept. 
102-474, Part 2) (Vol. 4) ~ 2947 

H.R. 776, Report. of the Committee on Public Works and Transportation 
(Rept. 102-474, Part 3) (Vol. 4) 3149 

HJL 776, Report of the Committee on Foreign Affairs (Rept. 102-474, Part 
4) (Vol. 4) 3213 

HJl. 776, Report of the Committee on Government Operations (Rept. 102- 
474, Part 5) (Vol. 4) 3254 

HJl. 776, Report of the Committee on Ways and Means (Rept. 102-474, 
Part 6) (Vol. 4) ~ 3323 

HJl. 776, Report of the Committee on the Judiciary (Rept. 102-474, Part 
7) (Vol. 4) 3416 

H.R. 776, Report of the Committee on Interior and Insular Affairs (Rept. 
102-474, Part 8) (Vol. 5) 3439 

HJl. 776, Report of the Committee on Merchant Marine and Fisheries (Rept. 
102-474, F&rt 9) (Vol. 5) 3710 

H.R. 776, House Floor Debate, May 19-27, 1992 (Vol. 5) 3783 

H.R. 776, Senate Floor Debate, July 20-29, 1992 (Vol. 6) 4195 

HJl. 776, Energy Policy Act of 1992, Conference Report, Joint Explanatory 
Statement (Vol. 6) 4455 

HJl. 776, Conference, House Floor Debate, October 5, 1992 (Vol. 6) 4519 

H.R. 776, Conference, Senate Floor Debate, October 8, 1992 (Vol. 6) 4680 

Index 4944 

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CONGRESSIONAL RECORD 

(SENATE) 

July 20, 1002 

P«C» 80022 

IMPROVED ENERGY EFFICIENCY 

MOTION TO PROCEED 

CLOTURE MOTION 

Mr. BAUCUS. Mr. President, on 
behalf of the majority leader, and in 
concurrence with the previous consent 
agreement, I now move to proceed to 
Calendar No. 493, H.R. 776, the ener- 
gy bill, and I send to the desk a clo- 
ture motion on the motion to proceed. 

The PRESIDING OFFICER. The 
cloture motion having been presented 
under rule XXII, the Chair, directs 
the clerk to read the motion. 

The assistant legislative clerk read 
as follows: 

CLOTURE MOTION 
W*, Um undersigned Senator*, in accordance 
with the provision* of rule XXII of the Standing 
Rules of the Senate, hereby move to bring to a 
close debate on the motion to p rocee d to the 
consideration of H JL 776, an act to provide for 
unproved energy efficiency: 

J. Bennett jphnston, David L. Boron, Alan 
Cranston, Frits HoUings, Bob Kerrey, Robert 
Byrd, Howell Heflin, John Breaux, George Mitch- 
ell, Howard M. Metsenbaum, J. Lieberman, J JL 
Biden, Jr., P.R. Lautenberg, Jim Saaser, Slade 
Gorton, Warren B. Rudman, Phil Gramm, Con- 
nie Mack. Jake Garn, Frank H. Murkowaki. 

Mr. BAUCUS. Mr. President, I ask 
unanimous consent that the mandato- 
ry live quorum as required under rule 
XXII be waived. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. BAUCUS. Mr. President, I now 
withdraw the motion to proceed. 

The PRESIDING OFFICER. The 
Senator has that right. The motion is 
withdrawn. 

Mr. BAUCUS. Mr. President, I 



suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. LAUTENBERG. Mr. President, 
I ask unanimous consent that the 
order for the quorum call be rescind- 
ed. 

ThePRESIDINGOFFICER. 
Without objection, it is so ordered. 

CONGRESSIONAL RECORD 

(SENATE) 

July 23, 1992 

PAGE S10196 

UNANIMOUS-CONSENT AGREEMENT - 
DEBATE ON THE MOTION TO INVOKE 
CLOTURE ON THE MOTION TO PROCEED 
TO H JL 776 
Mr. MITCHELL. Mr. President, 
pursuant to a previous order, ap- 
proved unanimously by the Senate 
and printed at page 2 of today's calen- 
dar of business, I have the authority 
to set the time for a vote on the mo- 
tion to invoke cloture on the motion 
to proceed to H.R. 776, the energy bill, 
following consultation with the Repub- 
lican leader. 

Mr. President, I have consulted 
with the Republican leader, as well as 
with the chairman of the Energy 
Committee and the manager of the 
pending bill, and I now announce that 
the vote on the motion to invoke clo- 
ture on the motion to proceed to Cal- 
endar No. 493, H.R. 776, the energy 
bill, will occur at 7:30 p.m. this eve- 
ning. 

Mr. President, I now ask unanimous 
consent that the 40 minutes prior to 
that time be for debate on the motion 
to invoke cloture on the motion to 
proceed to the energy bill with the 
time controlled as follows: 10 minutes 
each for Senators Bentsen, Packwood, 



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Johnston, and Wallop. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

ORDER OF PROCEDURE 
Mr. MITCHELL. Mr. President, 
I am advised by the Senators involved 
in discussion of the pending matter 
that negotiations are underway, in- 
deed have been ongoing for some time 
in an effort to resolve the matter the 
way a majority of Senators would find 
acceptable. Under this procedure, 
that can continue until 6:50 p.m., 
approximately another 1 1/2 hours, at 
which time we will turn to the energy 
bill. I hope and I encourage my col- 
leagues to try to reach agreement in a 
way that will permit us to finish the 
pending interstate waste bill. If agree- 
ment cannot be reached, either be- 
tween now and 6:50 or thereafter, 
then the cloture motion on the pend- 
ing bill, which I earlier filed, will ripen 
under the rules on the second legisla- 
tive day following today, unless there 
is agreement otherwise. 

I wish merely to restate my inten- 
tion that we will at some point, sooner 
or later, I hope sooner, but in any 
event sooner or later complete action 
on the interstate waste bill. I encour- 
age my colleagues to try to do that in 
a way that we can complete action on 
it this evening. 

Again, so that Senators can adjust 
their schedules accordingly, between 
6:50 p.m. and 7:30 p.m. there will be 
40 minutes of debate on the energy 
bill, with 10 minutes each under the 
control of Senators Bentsen, 
Packwood, Johnston, and Wallop and 
the vote on the motion to invoke clo- 
ture on the motion to proceed to the 
energy bill will occur at 7:30 p.m. 

Mr. President, I thank my col- 
leagues. I yield the floor. 



Mr. CONRAD addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from North Dakota. 

Mr. CONRAD. Mr. President, I just 
reported to the majority leader, we 
are making progress on the pending 
matter and hopefully we can complete 
that before the end of the day. We 
have made substantial progress in the 
last hour or so and hopefully it can be 
resolved in a way that is acceptable to 
all parties. 

With that, I yield the floor and 
suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. BAUCUS. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. BAUCUS. Mr. President, I ask 
unanimous consent that the previous 
order relative to debate on the cloture 
vote on the motion to proceed to H.R. 
776 be modified to delete the 10 min- 
utes for debate under Senator 
Packwood's control, and that the 
cloture vote occur at 7:20 p.m. this 
evening. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. BAUCUS. Mr. President, I 
suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll 

Mr. DOMENICI. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. DOMENICL Mr. President, I 
ask unanimous consent that I be per- 



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mitted to proceed for 10 minutes as in 
morning business. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

IMPROVED ENERGY EFFICIENCY 
CLOTURE MOTION 

The PRESIDING OFFICER. 
Pursuant to the previous order there 
will now be 30 minutes of debate rela- 
tive to the motion to invoke cloture 
on the motion to proceed to H.R. 776. 

The Senator from Texas (Mr. 
Bentsen), the Senator from Louisiana 
(Mr. Johnston), and the Senator from 
Wyoming (Mr. Wallop) each control 10 
minutes of the debate time. 

Mr. BENTSEN. Mr. President, 
tonight we can pave the way for the 
passage of a very comprehensive ener- 
gy bill to help production, to help 
conservation, and to curtail depen- 
dence on foreign oil. 

In accordance with the unanimous 
consent agreement reached prior to 
the Fourth of July recess, we are 
scheduled to vote on cloture today on 
the motion to proceed to H.R. 776, the 
House-passed energy bill. 

As my colleagues are well aware, 
the Senate has already considered and 
passed energy legislation once this 
year. In February, the Senate, after 
debating at length, passed by an over- 
whelming 94 to 4 vote S. 2166, the 
National Energy Strategy Act of 1992. 
The House, however, did not act on 
that particular bill. Instead, the 
House acted on a new bill - H.R. 776. 
And they included in it an energy tax 
title, in addition to the nontax titles. 

Of course, since the Senate had 
already acted once on energy legisla- 
tion, it would have been easier to have 
gone straight to the conference on the 
House bill by unanimous consent. 



That would have been the most direct 
approach. However, some Senators 
raised objections to that approach, as 
was their right. Thus, H.R. 776 was 
referred to the Finance Committee for 
review of its tax provisions, and the 
Finance Committee promptly reported 
out a substitute for the tax title. 
When the Senate turns to H.R. 776, 
the energy legislation we will consider 
will combine this new tax title with 
the nontax provisions from S. 2166 
passed by the Senate in February. 

I urge my colleagues to vote for 
cloture so that we can move expedi- 
tiously to consider this bill - to debate 
and vote on the merits of the legisla- 
tion. It is a major energy conserva- 
tion measure. It is important to the 
future well-being of our country. We 
have a lot of work to be done in con- 
ference to iron out the differences 
between the House and Senate bills, 
and we have a short time to get it 
done. 

Undue delay in the Senate - of a bill 
that has, in large part, already been 
passed by the Senate - could well be 
fatal to passage of energy legislation 
in this Congress. But this energy bill 
is simply too important to delay indef- 
initely on procedural grounds. Most of 
us know that. Ninety-four of us have 
already voted for S. 2166. And the 
Finance Committee has approved the 
new tax title. 

These are important provisions that 
are critical to the development of a 
meaningful national energy policy - 
something I think this entire country 
has been without for far too long. For 
many, it took a war in the Persian 
Gulf to drive that point home. In fact, 
the U.S. energy policy as it exists 
today is best described by just two 
words: Desert Storm. 

We simply cannot continue to go 



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down the road of an increasing - and 
I believe a very dangerous - depen- 
dence on foreign oil. We now import 
almost half of the oil we consume - 
some 46 percent on a gross basis. 
That represents an increase by almost 
one-half over our import dependence 
in 1985. 

This trend of increasing imports is 
expected to continue. I do not see it 
turning around, even under the most 
optimistic production estimates, as- 
suming we can maintain current pro- 
duction levels, estimates place U.S. oil 
dependence in excess of 50 percent by 
the middle of this decade. But it is 
far from clear that domestic produc- 
tion is going to hold. For example, in 
the last 6 years, domestic oil produc- 
tion has plunged nearly 15 percent, 
resulting in production that is at its 
lowest level in over 30 years. A quick 
look at the active drilling rig count - 
which recently dropped to the lowest 
level since World War II - does not 
bode well for future domestic produc- 
tion either. 

We talk about the loss of jobs in the 
automobile industry. Perhaps we have 
had far more loss of jobs in the oil 
industry. People do not seem to share 
the concern on that. Yet, if you look 
at the deficit in trade and merchan- 
dise trade, almost 75 percent of that 
comes from oil. 

If you look beyond the current de- 
cade, the Congressional Office of 
Technology Assessment suggests that 
oil imports could reach almost 70 
percent by the year 2010. Let me give 
you an example of what that means. 
That means 36 supertankers every 
day. Thirty-six supertankers every 
day to meet that kind of a need. That 
is what they will have to deliver. 

That kind of dependence has obvi- 
ous energy and national security con- 



sequences, and so far this is just a 
sampling of the possible consequences. 
By our dependence on foreign oil, we 
have had a very adverse effect on our 
economy every year. Look at our 
balance of payments deficit. In 1991, 
oil imports accounted for about $50 
billion, or as I stated earlier, some 75 
percent of our $66 billion merchandise 
trade deficit. As import levels in- 
crease, we can expect our oil import 
trade deficit to also mount. 

We must act this year to address 
this kind of a situation, and we should 
not imperil energy legislation by fur- 
ther procedural delay. 

All of you are familiar with the 
nontax provisions that the Senate 
passed in February, and I will leave it 
to the distinguished chairman of the 
Energy Committee to get into that 
detail and make those very valid 
points. Let me speak to how the Fi- 
nance Committee's tax provisions 
address the growing dependence on 
foreign oil, and also at the same time 
doing things to benefit our environ- 
ment. I think fending off 36 
supertankers filled with oil every day 
is one of those things that reflect 
concern for the environment. 

These provisions follow, to a signifi- 
cant extent, the so-called green tax 
package that was adopted by the 
House. There are three main compo- 
nents to the Finance Committee pack- 
age. 

First, the Finance Committee 
amendment encourages energy conser- 
vation to reduce our Nation's energy 
consumption. For example, it encour- 
ages conservation in the transporta- 
tion sector - which accounts for al- 
most two-thirds of our oil consump- 
tion in this country. It does it by 
tilting the tax treatment of 
employer-provided transportation 



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4199 



benefits more toward mass transit and 
less toward parking provided by em- 
ployers for their employees. It also 
promotes conservation in the residen- 
tial, commercial, and industrial sec- 
tors by excluding utility rebates, and 
they do that to encourage the use of 
conservation machinery and equip- 
ment. It excludes those measures 
from the taxpayer's income. So he 
has a major bonus if he utilizes it. 

Second, the Finance Committee 
amendment stimulates the develop- 
ment of alternative and renewable 
energy sources that will lessen our 
reliance on foreign oil and also provide 
significant environmental benefits. 
For example, it provides tax credits 
for solar, geothermal, ocean thermal, 
wind, and renewable biomass energy 
sources. It also provides tax incen- 
tives to further the use of domestical- 
ly produced, clean-burning fuels in 
both cars and trucks used on our 
Nation's highways - clean-burning 
fuels, such as natural gas, electricity 
and, as the Presiding Officer is well 
concerned and interested in - metha- 
nol and ethanol. 

Third, the Finance Committee 
amendment provides incentives for 
the domestic production of oil and gas 
by providing limited relief from the 
minimum tax, to reduce our reliance 
on foreign oil. 

Thus, the Finance Committee 
amendment offers a balanced ap- 
proach. Its tax components comple- 
ment the energy bill that the Senate 
has passed. And it has the backing of 
major environmental groups, who 
recognize the importance that energy 
conservation and alternative energy 
sources, in particular, will have on our 
energy future. These groups, inciden- 
tally, also back the excise tax increas- 
es on ozone-depleting chemicals that 



are used to pay the energy tax provi- 
sions in the committee amendment. 

I urge my colleagues to vote to in- 
voke cloture on the motion to proceed 
so we can ensure that these provisions 
are enacted this year. 

We should at least have the oppor- 
tunity to debate the substance of the 
provisions, and we should do nothing 
that jeopardizes the enactment of this 
very important energy policy legisla- 
tion. The Senate has spoken very 
strongly on the nontax provisions, and 
the Finance Committee strongly sup- 
ports the provisions it reported out. 

I urge my colleagues to support this 
piece of legislation and proceed on it. 

The PRESIDING OFFICER. The 
time has expired. 

Mr. BENTSEN. I yield to my distin- 
guished friend, the chairman of the 
Energy Committee, who has done a 
massive, excellent .effort in putting 
this legislation together. 

The PRESIDING OFFICER. The 
Senator from Louisiana. 

Mr. JOHNSTON. Mr. President, I 
thank my colleague from Texas. 

I yield myself 5 minutes. 

Mr. President, when we set out to 
craft an energy bill some time ago, we 
did it in the afterglow of Desert Storm 
when we had sent 500,000 American 
troops on account of energy to the 
Middle East. We did it at a time when 
energy production was going down 
fast, when energy consumption was 
going up fast, when the country was 
taking no steps, no steps to reverse 
that trend. 

So we set about to put together a 
comprehensive, balanced, effective 
energy bill that would reverse the 
trend. And some thousand pages and 
over a year later, we have it, and it 
has passed this Senate by 94 to 4. A 
similar bill, not exactly the same, has 



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passed the House by almost a 10 to 1 
margin, and the question tonight is 
whether the Senate is going to allow 
us to consider that bill. 

Mr. President, we are being held 
hostage to those who want to pass 
other legislation or who oppose other 
legislation and will not let us get to 
the bill. 

This is a highly controversial bill 
that has many sections that are going 
to take a long time to work out We 
have transmission access which is part 
of the Public Utility Holding Company 
Act reform, is one of the most 
far-reaching; one of the most contro- 
versial, one of the most difficult areas 
of the law that anybody ever consid- 
ers. I think we can work that section 
out, but it is going to take a lot of 
time. 

We cannot do it overnight. We have 
got everything in this bill - from alter- 
native fuels that mandates 4 million 
vehicles by the year 2000, to use alter- 
native fuels. That is in the Senate 
bill. The House has no such mandate. 
That is a central question that is 
going to take a lot of time to work 
out. 

Mr. President, if we do not get to 
this energy bill tonight, if we do not 
invoke cloture, I fear for the future of 
this bill. I do not think we are going 
to have time. I mean you just cannot 
get over there and work it out in a 
few hours. This is over 1,000 pages 
long. 

There are a lot of people who would 
like to see this bill defeated - big oil 
does not much like this bill; some of 
the bigger utilities do not particularly 
like this bill They like the natural 
monopoly they have but across the 
broad range of American energy users 
and consumers, and environmentalists 
and most producers like this bill very, 



very much. And to use the words of a 
letter just received today, 'it would be 
tragic if this well-crafted legislation, 
representing strong bipartisan and 
multi-interest efforts, were allowed to 
founder after having passed both 
Houses with an overwhelming majori- 
ty of votes/ 

Mr. President, this letter, by the 
way, urges prompt Senate action on 
this Comprehensive Natural Energy 
Policy Act, and points out that 'The 
result, if enacted, will be vigorous 
competition in wholesale power gener- 
ation and more efficient use of whole- 
sale electricity transmission grids, 
benefiting electricity consumers, the 
environment, and America's interna- 
tional competitiveness. ' 

That letter is signed by the Sierra 
Club, the American Wind Energy 
Association, Citizen Action, Electricity 
Consumers Resource Council, Friends 
of the Earth, Integrated Waste Servic- 
es Association, National Wildlife Fed- 
eration, American Public Power Asso- 
ciation, Consumer Federation of 
America, Environmental Action, Inde- 
pendent Energy Producers, National 
Rural Electric Cooperatives Associa- 
tion, Texas Industrial Energy Con- 
sumers, and the Union of Concerned 
Scientists. 

Mr. President, I ask unanimous 
consent that the letter referred to, 
signed by the environmental groups, 
be printed in the Record. 

There being no objection, the letter 
was ordered to be printed in the Re- 
cord, as follows: 

July 23. 1992. 
Ro Cooforonco on S. 2166 and H.R. 776 • Nation- 
al Enorgy Stratogy. 

Hon. Goorga J. Mitcholl. Majority Laador. VS. 
Sonata, Washington, DC. 

Daar Sonator Mitcholl: Wo. tho undoraignod, 
art a broad and divorao coalition rooroaonting 
industrial and laaidontial ■liciridty conauaooni. 



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competitive power generators, electric utilities, 
and environmental advocates. We write to urgs 
prompt Sonata action on tha Comprahenaiva 
National Energy Policy Act, recently aant to the 
Senate by the Houae and amended by the Senate 
Finance Committee. 

Each aignatory haa worked closely with Mem- 
bora of the Senate and Houae to ensure that the 
electricity title - amending the Public Utility 
Holding Company Act of 1936 fPUHCA*) and 
to electricity tranamiaaion 
eontaina atrong incentives to bring 
competition and increased efficiency into the 
country's wholesale electric power market*. 
While the House and Senate bills differ in how 
they would achieve auch a wholesale power 
market, we are confident that the Senate provi- 
sions can be reconciled with the greater competi- 
tive incentives and consumer protections con- 
tained in the House proposal. 

As you know. Congress haa been debating 
PUHCA reform for over ten years. In the past 
two years, our unique coalition haa found com- 
mon ground by integrating PUHCA reform with 
to electricity transmission 
The result, if enacted, will be vigorous 
competition in wholesale power generation and 
more efficient use of wholesale electricity trans- 
mission grids, benefiting electricity consumers, 
the environment, and America's international 
competitiveness. 

We understand that difficult issues have 
delayed Senate action. However, it would be 
tragic if this well crafted legislation, representing 
strong bipartisan and multi-interest efforts, were 
allowed to founder after having named both 
Houses with an overwhelming majority of votes. 

In closing, we thank you for your leadership 
and urge you to bring this important legislation 
to the Senate floor and to conference with the 
House am soon as possible. 

American Wind Energy Association, Citizen 
Action, Electricity Consumers Resource Council, 
Friends of the Earth, Integrated Waste Services 
Association, National Wildlife Federation, Sierra 
Club, American Public Power Association, Con- 
eumer Federation of America, Environmental 
Action, Independent Energy Producers, National 
Rural Electric Cooperatives Association, Texas 
Industrial Energy Consumers, Union of Con- 
cerned Scientists. 

Mr. JOHNSTON. Mr. President, I 
read this because this is sort of the 
environmental side of this equation. 
I could have an even longer list of 
those who consume, such as the Na- 



tional Association of Manufacturers, 
such as the Chamber of Commerce, 
those who produce, from big utilities 
to those who produce natural gas, 
down the line. 

This is the most balanced bill we 
have ever had. 

If we do not get cloture tonight, 
then just what do we do? We move on 
to other legislation. We have a bill in 
here that the majority leader has 
promised to consider on dealing with 
abortion. How long is that going to 
take? Before we know, we will be out 
for the August recess and we will not 
be coming back until September 7. 
And there is not going to be time. 

This Senate has to make up its 
mind whether it is going to sacrifice 
this bill which is supported by the 
Democrats, supported by the Republi- 
cans, supported by the Senate, sup- 
ported by the House, supported by the 
President, supported by the environ- 
mentalists, by the producers, by the 
consumers, by everybody, and yet the 
question is, are we going to tie our- 
selves in knots and not even consider 
the bill? 

America is watching and America 
has been watching, Mr. President, as 
we have not acted on various pieces of 
legislation. They call it gridlock, and 
some people in Congress say, well, the 
American people just do not under- 
stand, they do not understand how 
difficult this legislation is. 

Mr. President, the question is the 
very simple, straightforward: Are you 
going to consider this legislation or 
not? And if you vote not to consider it, 
then count yourself as a Member who 
stands for gridlock. And if this bill 
goes down because we do not have 
time to work it out, then point the 
finger at yourself if you vote no on 
cloture. x^" ~ x_ 



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We need to get to cloture. We need 
to do it tonight because we have a lot 
of work to do, and I hope the Senate 
will invoke cloture. 

I reserve the remainder of my time. 

The PRESIDING OFFICER (Mr. 
Breaux). The Senator has 3 minutes 
remaining. 

Who yields time? 

The Chair will advise that the time 
will be deducted equally between the 
Senator from Louisiana and the Sena- 
tor from Wyoming if no one yields 
time. 

Mr. JOHNSTON. Mr. President, 
who has time remaining? 

The PRESIDING OFFICER. The 
Senator from Wyoming controls 10 
minutes, and the Senator from Louisi- 
ana has approximately 3 minutes. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent, since I do not 
have but 3 minutes, that the time be 
deducted from those who are not here, 
since they are not here to defend 
themselves, and I do not think they 
are coming. 

The PRESIDING OFFICER. Is 
there objection to the 
unanimous-consent request? 

Hearing none, it is so ordered. The 
time will be deducted. 

Mr. JOHNSTON. Mr. President, I 
suggest the absence of a quorum, with 
the time charged as previously stated. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. WIRTH. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. WIRTH. Mr. President, I realize 
that time is controlled by Senator 
Johnston. I ask unanimous consent 



that the remaining minute be yielded 
tome. 

The PRESIDING OFFICER. The 
Senator from Louisiana has 2 minutes 
remaining. 

Mr. JOHNSTON. Mr. President, I 
yield 1 remaining minute to the Sena- 
tor from Colorado. 

Mr. WIRTH. I thank the distin- 
guished Senator for yielding. I wish 
to commend him, Senator Wallop and 
others on this legislation. It is abso- 
lutely imperative that we vote for 
cloture. This is one of the single most 
important pieces of legislation that we 
are going to face this year. 

We have an opportunity now, for 
the first time in well over a decade, to 
do something about energy. The situ- 
ation that we face was clearly illus- 
trated over and over and over again. 
We are seeing ramifications of that 
now with all the potential reaction 
from the Persian Gulf war, plus the 
enormous hemorrhaging of our scarce 
national treasury that is going out for 



I just wanted to come over and put 
in a word or two in support of the 
chairman in proceeding to H.R. 776, 
which we have to do as rapidly as 
possible. 

I hope my colleagues all vote for 
cloture, and let us get on with this 
very, very important piece of national 
legislation. 

Let us get to the point. This bill is 
our one and only chance to enact an 
energy policy this year. If we stop 
here, we are not going to get another 
chance. If we want an energy bill, 
now is the time. 

The chairman of the Energy Com- 
mittee and the chairman of the Fi- 
nance Committee have made clear 
their intention to substitute the text 
of the energy bill the Senate passed 



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4203 



last February for the nontax provi- 
sions of the House bill, and to resist 
all amendments to those provisions. 

I am going to support that strategy, 
and support it strongly. I urge all my 
colleagues to do the same. 

The Senate-passed bill was thor- 
oughly debated. Dozens of amend- 
ments were offered, debated, and 
decided. We went through every is- 
sue, and everyone had their fair shot. 
The chairman had to make major 
changes in the bill in order to get a 
consensus on moving it forward. To 
his credit, he made those changes, 
because he was committed to getting 
the best bill possible enacted into law. 
Not a perfect bill. Not everything I 
wanted. Not everything the chairman 
wanted. Not everything the adminis- 
tration or the ranking member of the 
committee wanted. But the best - the 
most - that could actually be success- 
fully passed by this body. 

The bill took the Energy Committee 
a year to put together. After it was 
reported, it took us months to get to 
the point where we could proceed. To 
the credit of all involved, we did find 
that point, and kept moving forward. 
Let us not stop now. 

Was the result perfect? No. But it 
must have been pretty good, because 
we passed it 94-4. 

That is the way the legislative pro- 
cess is supposed to work. It worked 
last February. Let us not forget that. 
We passed an enormously complicated, 
comprehensive, 400-page energy policy 
bill, by an overwhelming margin. Let 
us not lose sight of that for one min- 
ute. 

Let us not lose that now in an ef- 
fort to see who can use the threat of 
killing this bill to get more into it. We 
have already been through that. We 
had to set aside some very important 



issues in order to reach consensus. 
Let us not destroy that consensus, or 
kill its product. If we want the Sen- 
ate to work, we should honor the 
work we have already done. 

Mr. President, there is a very 
strong argument to be made that the 
single best thing we could do for this 
country's energy policy would be to 
require our automobiles to go further 
on less gasoline. This bill would not 
do that. But I also know that an 
amendment to raise the CAFE stan- 
dards would cut the consensus behind 
this bill to shreds. So I strongly be- 
lieve such an amendment should not 
be offered now. 

Mr. President, there is strong dis- 
agreement on some of the tax items in 
this bill. But we will not get to vote 
on those issues and move forward if 
we do not get cloture on the motion to 
proceed. 

I want to remind people what is in 
this bill, and why we need to move 
forward on it. The Senate version of 
this bill includes conservation initia- 
tives which will cut consumers' energy 
bills by more than $30 billion over the 
next two decades. It creates a com- 
prehensive energy planning process 
which, for the first time, will be aimed 
at meeting our energy needs at the 
least cost. It will change the way we 
regulate our utilities to enable far 
greater competition in the generation 
of electric power, and change utility 
regulation to encourage private in- 
vestment in even more energy conser- 
vation. 

It provides a breakthrough in re- 
quiring us to develop real, workable 
alternatives to gasoline as a fuel for 
our cars and trucks. Without those 
alternatives, we are doomed to in- 
creasing dependence on imported oil. 

It takes giant steps in streamlining 



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the approval of new natural gas pipe- 
lines, and in promoting the use of 
natural gas as an efficient, 
cleanburning, and domestically pro- 
duced fuel for our future. 

And the tax provisions of this bill 
not only help promote the develop- 
ment of solar, wind power, and other 
renewable energy resources, but also 
provide significant aid to independent 
oil and gas producers, enabling them 
to continue to explore to replace the 
fuel reserves we are using up today. 

Can we turn our backs on that? I 
hope not. If you are interested in 
achieving some real, on-the-ground 
progress on energy policy in this coun- 
try, please vote for cloture on this bill. 
Without that vote, all our work, and 
all the on-the-ground results I spoke 
of before, will die. 

I urge all my colleagues to join in 
keeping this energy bill alive. 

Mr. President, I think that uses up 
my time. I yield the floor and suggest 
the absence of a quorum. 

The PRESIDING OFFICER. The 
absence of a quorum is noted. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. WIRTH. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

CLOTURE MOTION 

The PRESIDING OFFICER. Under 
the previous order, pursuant to rule 
XXII, the Chair lays before the Senate 
the pending cloture motion, which the 
clerk will now state. 

The legislative clerk read as follows: 

CLOTURE MOTION 



We, tha undersigned Senators, in accordance 
with the provisions of rule XXII of the Standing 
Rules of the Senate, hereby move to bring to a 
close debate on the motion to p r o ce e d to the 
co n sid e ration of H JL 776, an act to provide for 
improved energy efficiency: 

J. Bennett Johnston, David L. Boren, Alan 
Cranston. Fritz Hollings, Bob Kerrey. Robert 
Byrd. Howell Heflin. John Breaui. George Mitch- 
ell, Howard M. Metienbaum, J. Lieberman, J.R. 
Biden, Jr., FJi. Lautenberg, Jim Sasser. Slade 
Gorton, Warren B. Rudman, Phil Gramm, Con- 
nie Mack. Jake Gam. Frank H. Murkowski. 

VOTE 

The PRESIDING OFFICER. The 
question is, Is it the sense of the Sen- 
ate that debate on the motion to pro- 
ceed to H.R. 776, an act to provide for 
improved energy efficiency, shall be 
brought to a close? The yeas and nays 
are required. The clerk will now call 
the roll. 

The legislative clerk called the roll. 

Mr. FORD. I announce that the 
Senator from North Dakota (Mr. 
Burdick) and the Senator from Ten- 
nessee (Mr. Gore) are necessarily 
absent. 

Mr. SIMPSON. I announce that the 
Senator from Utah (Mr. Garn), the 
Senator from Utah (Mr. Hatch), the 
Senator from Oregon (Mr. Packwood), 
the Senator from Alaska (Mr. 
Stevens), and the Senator from Idaho 
(Mr. Symms) are necessarily absent. 

I further announce that the Senator 
from North Carolina (Mr. Helms) and 
the Senator from Delaware (Mr. Roth) 
are absent due to illness. 

I further announce that, if present 
and voting, the Senator from Utah 
(Mr. Hatch) would vote 'nay.' 

The PRESIDING OFFICER. Are 
there any other Senators in the 
Chamber who desire to vote? 

The yeas and nays resulted - yeas 
58, nays 33, as follows: 



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(ROLLCALL VOTE NO. 160 LEG.) 




YEAS-6S 




Adams 


Akaka 


Baucus 


Ben teen 


Biden 


Bingaman 


Bonn 


Bradley 


Bros us 


Bcyan 


Bumper* 


Byrd 


Conrad 


Cranston 


Dsschle 


DeConcini 


Dixon 


Dodd 


Exon 


Ford 


Fowler 


Glenn 


Graham 


Grassley 


Hsrirfn 


Heflin 


Hollings 


Inouye 


Johnston 


Kennedy 


Kemgr 


Kerry 


Kohl 


Lsutenperg 


Leahy 


Levin 


Liebermsn 


Metienbaum 


Mikulski 


Mitchell 


Moynihan 


Nickles 


Nunn 


PeU 


Pryor 


Raid 


RiegU 


Robb 


Rockefeller 


Sanford 


Sarbsnes 


Saaaar 


Shelby 


Simon 


gptrtar 


Wellatona 


Wirth 


Woflbfd 








NAYS- 33 


Bond 


Brown 


Burns 


Chsfee 


CoaU 


Cochran 


Cohan 


Craig 


D'Amsto 


Danforth 


Dole 


Domenid 


Durenberger 


Gorton 


Gramm 


Hatfield 


Jeffords 


Kassebsum 


Kaaten 


Lot! 


Lugar 


Mack 


McCain 


McConnell 


Murkowski 


Premier 


Rudman 


Seymour 


Simpson 


Smith 


Thurmond 


Wallop 


Warner 




NOT VOT1NC 


-9 


Burdick 


Gam 


Gore 


Hatch 


Helma 


Psckwood 


Roth 


Stevens 


Symros 



The PRESIDING OFFICER. On 
this vote the yeas are 58, the nays are 
33. Three-fifths of the Senators duly 
chosen not having voted in the affir- 
mative, the motion is not agreed to. 

Under the previous order, the next 
order of business is the vote on final 
passage of S. 2877, as amended. The 
yeas and nays have been ordered. 
The clerk will call the roll. 

Mr. JOHNSTON. Mr. President, I 



ask unanimous consent that I be al- 
lowed to ask the majority leader a 
question before we have the vote. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, 
despite the best efforts of the majority 
leader and those of us who are trying 
to pass this bill seems to be the victim 
of what is being called gridlock across 
America. I wonder if the majority 
leader has any idea about where we 
might go from here. Do we reconsider 
this at some time or do we abandon 
the energy bill? I am wondering if the 
majority leader has some advice for 
us. 

Mr. MITCHELL. Mr. President, I 
am disappointed that we were not 
able to obtain cloture on the motion 
to proceed to this bill. I think it is a 
very important measure. It contains 
a large number of provisions that are 
desirable and in the national interest. 

To answer the specific question 
raised, it is not my intention to aban- 
don the bill, but, rather I think it now 
best if the distinguished chairman of 
the committee, myself and other inter- 
ested Senators meet to consult and 
attempt to determine the best course 
of action with respect to the bill. 

Mr. JOHNSTON. I wonder, Mr. 
President, if I may ask whether there 
is any hope that those who are work- 
ing on the so-called Rockefeller 
amendment might be able to resolve 
that tonight and we might bring the 
bill back tomorrow and perhaps finish 
it up at that time. 

Mr. WALLOP. Mr. President, will 
the majority leader yield? 

Let me just say that we worked in 
Senator Byrd's office. We were not 
able to get to that conference until 
5:30. We worked right up until the 
moment that the vote was called. 



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And in that process we were very 
close. 

There are not many things that 
need to be resolved. There is a scor- 
ing problem on one of the resolutions 
that we thought we had. It seems to 
me that with a good-faith effort we 
can get finished so we can proceed to 
the bill. 

I regret, more than the majority 
leader because I think there is more 
in this bill that I like than he likes, 
that we were unable to do that. But 
I think it is important that we resolve 
this tax issue, that is, tax applied to 
people to sataify an obligation which 
was incurred by people other than 
themselves. We are trying to solve 
the problem in a way that is equita- 
ble. 

The problem is rather simple. 
There are some families and miners in 
this country who were, or thought 
they were beneficiaries of contracts. 
Their companies now no longer exist 
or their companies have abandoned or 
pulled out of union contracts, one 
thing and another, and those are 
people whose concern is shared by 
Senator Rockefeller, Senator Ford, 
and myself. The other concern is 
whose obligation it is to satisfy it. 

We think we are very close, we are 
trying hard, and I believe we will get 
it done. 

Mr. JOHNSTON. I know the Sena- 
tors are working hard, as this has 
been pending for 4 or 5 weeks, if I 
recall. I just wonder if they are going 
to meet again tonight and whether we 
might expect to be able to move to- 
morrow or is it some undetermined 
time next week when the next meet- 
ing is? 

In other words, a lot of Senators are 
going to be heading out tomorrow 
unless we are going to be considering 



this bill, I guess. 

Mr. DOLE. Will the Senator from 
Louisiana yield? 

Mr. JOHNSTON. Certainly. 

Mr. DOLE. I want to underscore 
what the Senator from Wyoming has 
said. I was sort of an observer in the 
meeting in Senator Byrd's office. 
There was a lot of progress made. If 
we resolve it, there need not be any 
motion to proceed; we could proceed 
to the bill. It should not take long to 
pass it. We passed it once in the Sen- 
ate 94 to 4. It has already been 
through this body one time. Hopefully, 
there would not be any amendments. 

So I think with a little more pa- 
tience and the good faith negotiations 
they were having in Senator Byrd's 
office with Senator Rockefeller, Sena- 
tor Ford, Senator Wallop, and Senator 
Byrd, this could maybe be resolved by 
Monday. 

Mr. JOHNSTON. I thank 
the Senators. 

CONGRESSIONAL RECORD 

(SENATE) 

July 27, 1992 

PAGES10S5S 

IMPROVED ENERGY EFFICIENCY 
CLOTURE MOTION 

Mr. MITCHELL. Mr. President, 
I move to proceed to the consideration 
of H.R. 776, an act to provide for 
improved energy efficiency, and I send 
a cloture motion on the motion to 
proceed to the desk and ask that it be 
stated. 

The PRESIDING OFFICER. The 
clerk will report the cloture motion. 

The assistant legislative clerk read 
as follows: 

CLOTURE MOTION 

We, the undersigned Senators, in aeeordancs 
with the provision* of rule XXII of the Standing 



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Rules of the Senate, hereby move to bring to a 
close debate on the motion to proceed to the 
consideration of H.R. 776. en set to provide for 
improved energy efficiency: 

J. Bennett Johnston, David L. Boren, Alan 
Cranston, Fritz Hollings, Bob Kerrey, Robert 
Byrd, Howell Heflin, John Breaux, George Mitch- 
ell, Howard M. Mettenbaum, J. Lieberman, Joe 
Biden, Prank R. Lsutenberg. Jim Sssser, Slade 
Gorton, Warren B. Rudman, Phil Gramm, Con- 
nie Mack, Jake Gam, Frank H. Murkowski. 

Mr. MITCHELL. Mr. President, I 
withdraw the motion to proceed to the 
energy bill, and I ask unanimous con- 
sent that the vote on the motion to 
invoke cloture on the motion to pro- 
ceed to H.R. 776 occur at 2:15 p.m. on 
Tuesday, July 28, and that notwith- 
standing the invoking of cloture on 
the motion, the Senate remain on the 
Agriculture appropriations bill until it 
has been disposed of. 

ThePRESIDING OFFICER. 
Without objection, it is so ordered. 

CONGRESSIONAL RECORD 

(SENATE) 

July 28. 1992 

PAGES 10397 

MANDATORY LIVE QUORUM WAIVED ON 

CLOTURE VOTE ON THE MOTION TO 

PROCEED TO H.R. 776 

Mr. PRYOR. Mr. President, on 
behalf of the majority leader, I ask 
unanimous consent that the mandato- 
ry live quorum, as required under rule 
XXII, be waived in relation to the 
cloture vote on the motion to proceed 
to H.R. 776. 

The ACTING PRESIDENT pro 
tempore. Without objection, it is so 
ordered. 

IMPROVED ENERGY EFFICIENCY 
MOTION TO PROCEED CLOTURE MOTION 

The PRESIDING OFFICER. 
Under the previous order, pursuant to 
rule XXII, the Chair lays before the 



Senate the pending cloture motion 
which the clerk will state. 
The bill clerk read as follows: 

CLOTURE MOTION 
We, tho undersigned Senators, in accordance 
with the provisions of rule XXII of the Standing 
Rules of the Senate, hereby move to bring to a 
close debate on the motion to proceed to the 
consideration of H.R. 776, an act to provide for 
improved energy efficiency: 

J. Bennett Johnston, David L. Boren, Alan 
Cranston, Fritz Hollings. Bob Kerrey, Robert 
Byrd, Howell Heflin, John Breaux. George Mitch- 
ell, Howard M. Metzenbaum, J. Lieberman, Joe 
Biden. Frank R. Lautenberg, Jim Sasser, Slade 
Gorton, Warren B. Rudman, Phil Gramm, Con- 
nie Mack. Jake Gam. Prank H. Murkowski. 

VOTE 

The PRESIDING OFFICER. The 
question is, Is it the sense of the Sen- 
ate that debate on the motion to pro- 
ceed to H.R. 776, the Comprehensive 
National Energy Act, shall be brought 
to a close? 

The yeas and nays are required. 
The clerk will call the roll. 

The assistant legislative clerk called 
the roll. 

Mr. FORD. I announce that the 
Senator from North Dakota (Mr. 
Burdick) and the Senator from Ten- 
nessee (Mr. Gore), are necessarily 
absent. 

Mr. SIMPSON. I announce that the 
Senator from Florida (Mr. Mack), is 
necessarily absent. 

I further announce that the Senator 
from North Carolina (Mr. Helms), is 
absent due to illness. 

I further announce that, if present 
and voting, the Senator from North 
Carolina (Mr. Helms), would vote 
'yea.' 

The PRESIDING OFFICER. Are 
there any other Senators in the 
Chamber who desire to vote? 

The yeas and nays resulted - yeas 



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93, nays 3, 


, as follows: 




(ROLLCALL VOTE NO. 164 LEG.) 




YEAS- 03 




Adams 


Akaka 


Baucus 


Benteen 


Biden 


Binfaman 


Bond 


Boren 


Bradley 


Breaux 


Brown 


Bryan 


Bumpers 


Burns 


Byrd 


Cha/ee 


Coats 


Cochran 


Cohen 


Conrad 


Craig 


Cranston 


D'Amato 


Danforth 


Daschle 


DeConctni 


Dixon 


Dodd 


Dole 


Domenici 


Exon 


Ford 


Fowler 


Gam 


Glenn 


Gorton 


Graham 


Gramm 


Grassley 


Harkin 


Hatch 


Hatfield 


Heflin 


Holling. 


Inouye 


Johnston 


Kassebaum 


Kasten 


Kennedy 


Kerrey 


Kerry 


Kohl 


Lautenberg 


Leahy 


Lavin 


Liebennan 


Lott 


Lugar 


McCain 


McConneU 


MeUenbaum 


Mikulski 


MitcheU 


Moynihan 


Murkowski 


Nickies 


Nunn 


Packwood 


PeU 


Pressler 


Pryor 


Raid 


Riegle 


Robb 


Rockefeller 


Roth 


Rudman 


Sanford 


Sarfaanes 


Sasser 


Seymour 


Shelby 


Simon 


Simpson 


Specter 


Stevens 


Symme 


Thurmond 


Wallop 


Warner 


Welbtone 


Wirth 

NAYS- 3 


Woflbrd 


Durenbergsr 


Jeflbrdo 


Smith 




NOT VOTING 


-4 


Burdick 


Gore 


Helme 



The PRESIDING OFFICER. On 
this question the yeas are 93 the nays 
are 3. Three-fifths of the Senators 
duly chosen and sworn having voted 
in the affirmative, the motion is 
agreed to. 

CONGRESSIONAL RECORD 

(SENATE) 

Jury ». 1M2 

PaisS10668 



COMPREHENSIVE NATIONAL ENERGY 
POLICY ACT 

The PRESIDING OFFICER. Under 
the previous order, the Senate will 
now proceed to the consideration of 
H.R. 776, which the clerk will report. 

The assistant legislative clerk read 
as follows: 

A bill (H.R. 776) to provide for improved ener- 
gy efficiency. 

The Senate proceeded to consider 
the bill (H.R. 776) to provide for im- 
proved energy efficiency, which had 
been reported from the Committee on 
Finance, with amendments; as follows: 

(Text of Bill OmittedJ 

The PRESIDING OFFICER. The 
Senator from Texas is recognized. 

Mr. BENTSEN. Mr. President, I 
have discussed this matter with the 
members of the Finance Committee, 
and after doing so, a majority of the 
members of that committee have au- 
thorized me to withdraw and modify 
the reported committee amendments. 
Therefore, on behalf of the committee, 
I withdraw the first two reported 
committee amendments which are 
amendments to the table of contents 
of H.R. 776, and I modify the third 
reported committee amendment. I 
send the modified committee amend- 
ment to the desk. 

The PRESIDING OFFICER. The 
chairman as authorized by the com- 
mittee has a right to make those ac- 
tions. The amendment is so modified. 

The third reported committee, as 
modified, is as follows: 

[Text of Committee Amendment Omitted, except 
for Title XXJ 

TITLE XX - REVENUE PROVISIONS 
SBC. 20101. AMENDMENT OF 1086 CODE. 
Eicepl ee otherwiee ezpreeerjr provided, when- 



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ever in this title an Amendment or repeal is ex* 
pre— od in terms of an amendment to, or repeal 
of, a section or other provision, the reference 
shall be considered to be made to a section or 
other provision of the Internal Revenue Code of 
1986. 

Subtitle A - Energy Conservation and Produc- 
tion Incentives 
SEC. 20111. TREATMENT OF 
EMPLOYER-PROVIDED TRANSPORTATION 
BENEFITS. 

(a) Exclusion. - Subsection (a) of section 132 
(relating to exclusion of certain fringe benefits) is 
amended by striking 'or' at the end of paragraph 
(8), by striking the period at the end of para- 
graph (4) and inserting ', or', and by adding at 
the end thereof the following new paragraph: 

'(5) qualified transportation fringe.' 

(b) Qualified Transportation Fringe. • Section 
182 is amended by redesignating subsections (0, 
(g), (h), (i), (j). end (k) as subsections (g), (h), (i), 
(j), (k), and 0). respectively, and by inserting after 
su b s ec tion (e) the following new subsection: 

'(0 Qualified Transportation Fringe. - 

'(1) In general. - For purposes of this section, 
the term 'qualified transportation fringe' means 
any of the following provided by an employer to 
an employee: 

'(A) Transportation in a commuter highway 
vehicle if such transportation is in connection 
with travel between the employee's residence and 
place of employment. 

'(B) Any transit pass. 

'(C) Qualified parking. 

'(2) Limitation on exclusion. • The amount of 
the fringe benefits which are provided by an 
employer to any employee and which may be 
excluded from gross income under subsection 
(a)(5) shall not exceed • 

'(A) $80 per month in the case of the aggregate 
of the benefits described in subparagraphs (A) 
and (B) of paragraph (1), and 

'(B) $146 per month in the case of qualified 
parking. 

*(8) Cash reimbursements. • For purposes of 
this su b se cti on, the term 'qualified transporta- 
tion fringe' includes a cash reimbursement by an 
employer to an employee for a benefit d e scri b ed 
in paragraph (1). The preceding sentence shall 
apply to a cash reimbursement for any transit 
pass onry -f* voucher or similar item which may 
be exchanged onry for a transit pass is not readily 
available for direct distribution by the employer 
to the employee. 

'(4) Benefit not in lieu of compensation. • Sub- 
section (aMo) shall not apply to any qualified 



transportation fringe unless such benefit is pro- 
vided in addition to (and not in lieu of) any com- 
pensation otherwise payable to the employee. 

'(6) Definitions. - For purposes of this subsec- 
tion • 

'(A) Transit pass. - The term 'transit pass' 
means any pass, token, farecard, voucher, or 
similar item entitling a person to transportation 
(or transportation at a reduced price) if such 
transportation is • 

*(i) on mass transit facilities (whether or not 
publicly owned), or 

'(ii) provided by sny person in the business of 
transporting persons for compensation or hire if 
such transportation is provided in s vehicle meet- 
ing the requirements of subparagraph (B)(1). 

'(B) Commuter highway vehicle. • The term 
'commuter highway vehicle' means sny highway 
vehicle • 

'(i) the seating capacity of which is st least 6 
adults (not including the driver), and 

'(ii) at least 80 percent of the mileage use of 
which can reasonably be expected to be • 

'(I) for purposes of transporting employees in 
connection with travel between their residences 
and their place of employment, and 

'(H) on trips during which the number of em- 
ployees transported for such purposes is at least 
1/2 of the adult seating capacity of such vehicle 
(not including the driver). 

'(C) Qualified parking. - The term 'qualified 
parking' means parking provided to an employee 
on or near the business premises of the employer 
or on or near a location from which the employee 
commutes to work by transportation described in 
subparagraph (A), in a commuter highway vehi- 
cle, or by carpool. Such term shsll not include 
any parking on or near property used by the 
employee for residential purposes. 

'(D) Transportation provided by employer. - 
Transportation referred to in paragraph (I)(A) 
shall be considered to be provided by an employer 
if such transportation is furnished in a commuter 
highway vehicle operated by or for the employer. 

'(E) Employee. - For purposes of this subsec- 
tion, the term 'employee' does not include an 
individual who is sn employee within the mean- 
ing of section 401(c)(1). 

'(6) Inflation adjustment. - In the esse of any 
taxable year beginning in a calendar year after 
1908, the dollar amounts contained in paragraph 
(2) (A) and (B) shsll be increased by an amount 
equal to • 

'(A) such dollar amount, multiplied by 

'(B) the cost-of-living adjustment determined 
under section 1(0(3) for the calendar year in 
which the taxable year begins, determined by 



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substituting 'calendar year 1902' for 'calendar 
year 1939' in subparagraph (B) tbaraof. If any 
ineraaaa determined undar tha praoadinf aen- 
lanoa ia not a multiple of $6, audi increase ahall 
be rounded to tha next lowaat multipla of $6. 

'(7) Coordination with other provisions. • For 
purposes of this section, tha terms 'working con- 
dition fringe' and 'da minimis fringe' ahall not 
include any qualified transportation fringe (deter- 
mined without regard to paragraph (2)).' 

(c) Conforming Amendment - Subsection (i) of 
section 182 (am redesignated by subsection (b)) is 
amended by striking paragraph (4) and redesig- 
nating the following paragraphs accordingly. 

(d) Effective Date. - The amendments made by 
this section ahall apply to benefits provided after 
December 31, 1992. 

SEC. 20112. EXCLUSION OF ENERGY CON- 
SERVATION SUBSIDIES PROVIDED BY PUB- 
LIC UTILITIES. 

(a) General Rule. • Part III of subchapter B of 
chapter 1 (relating to amounts specifics lly exclud- 
ed from gran income) ia amended by redesignat- 
ing section 196 §m section 137 snd by inserting 
after section 136 the following new section: 
'SEC. 136. ENERGY CONSERVATION SUBSI- 
DIES PROVIDED BY PUBLIC UTILITIES. 

'(a) Exclusion. - 

'( 1) In general. • Gross income ahall not include 
the value of any aubaidy provided by a public 
utility to a customer for the purchase or installa- 
tion of any energy conservation measure. 

'(2) Limitation on exclusion for nonresidential 
property. • In the case of any subsidy provided 
with respect to any energy conservation measure 
referred to in subsection (c)(1)(B), only 30 per- 
cent of such subsidy shall be excluded from gross 
income under paragraph (1). 

'(b) Denial of Double Benefit. • Notwithstanding 
any other provision of this subtitle, no deduction 
or credit ahall be allowed for, or by reason of, any 
expenditure to the extent of the amount excluded 
under subsection (a) for any subsidy which waa 
provided with respect to such expenditure. The 
adjusted basis of any property shall be reduced by 
the amount excluded under subsection (a) which 
waa provided with respect to such property. 

'(c) Energy Conservation Measure. • 

'(1) In general. • For purposes of this section, 
the term 'energy conservation measure' means 
any installation or modification primarily de- 
signed to reduce consumption of electr icity or 
natural gee or to improve the management of 
energy demand • 

'(A) with respect to a dwelling unit, and 

'(B) on or after January 1, 1994, with respect to 
property other than dwelling units. Tim purchase - 



and installation of specially defined energy prop- 
erty shall be treated as an energy conservation 
measure described in subparagraph (B). 

'(2) Other definitions snd special rules. - 

'(A) Definitions. - For purposes of this subsec- 
tion • 

'(i) Specially defined energy property. • The 
term 'apecially defined energy property' means • 

'(I) a recuperator, 

'(ID a heat wheel, 

'(IID a regenerator, 

'(IV) a heat exchanger, 

'(V) a waste hest boiler, 

'(VI) a heat pipe, 

'(VII) an automatic energy control system, 

'(VIID a turbulator, 

'(DC) a preheater, 

'(X) a combustible gas recovery system, 

'(XI) an economizer, 

'(XII) modifications to alumina electrolytic cells, 

'(XIII) modifications to chlor-slksli electrolytic 
cells, or 

'(XIV) any other property of a kind specified by 
the Secretary by regulations, the principal pur- 
pose of which is reducing the amount of energy 
consumed in any existing industrial or commer- 
cial process snd which is installed in connection 
with an existing industrial or commercial facility. 

'(H) Dwelling unit. • The term 'dwelling unit' 
has the meaning given such term by section 
230A(0(1). 

'(iii) Public utility. • The term 'public utility' 
mesne a person sngaged in the ssls of electricity 
or natural gas to residential, commercial, or in- 
duatrial customers for use by such customers. 
For purposes of ths preceding sentence, the term 
'person' includes the Federal Government, a 
State or local government or any political subdi- 
vision thereof, or any instrumentality of any of 
the foregoing. 

'(B) Special Rulea. • 

'(i) Third-party contractors. - If, in connection 
with the purchase or installation of an energy 
conservation measure for a customer of a public 
utility, such public utility provides a subsidy to s 
parson other than the customer, such subsidy 
shall be excludable under su b se cti on (a) from the 
gross income of such other person to the extent 
such subsidy would be so excludsbie from the 
gross income of the customer. 

'(ii) Stste-sponsored programs. - A payment by 
a public utility to a customer for the use of a tax 
benefit granted to the customer by s State pursu- 
ant to a State-sponsored energy conservation 
program ahall be excludable under subsection (a) 
from the gross income of the customer to the 
extent such psymsnt would be so excludable if 



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4211 



provided a* a subsidy by the public utility. 

'(d) Exception. - This section shall not apply to 
any payment to or from a qualified cogeneration 
facility or qualifying small power production 
facility pursuant to section 210 of the Public 
Utility Regulatory Policy Act of 1978.' 

(b) Clerical Amendment. - The table of sections 
for part III of subchapter B of chapter 1 is 
amended by striking the item relating to section 
136 and inserting: 

'Sec. 136. Energy conservation subsidies pro- 
vided by public utilities. 

'Sec. 137. Cross reference to other Acta.' 

(c) Effective Date. - The amendments made by 
this section shall apply to amounts received after 
December 3 1, 1992. 

SEC. 20113. TREATMENT OF CLEAN-FUEL 
VEHICLES. 

(a) Deduction for Clean-Fuel Vehicles and Cer- 
tain Refueling Property. - 

(1) In general. - Part VI of subchapter B of 
chapter 1 (relating to itemized deductions for 
individuals and corporations) is amended by add- 
ing after section 179 the following new section: 

'SEC. 179A. DEDUCTION PORCLEAN-FUEL 
VEHICLES AND CERTAIN REFUELING 
PROPERTY. 

*(a) General Rule. - There shall be allowed as a 
deduction an amount equal to the sum of • 

'(1) in the ease of any qualified dean-fuel vehi- 
cle property • 

'(A) except as provided in subparagraph (B), the 
cost of the property, or 

'(B) in the case of a vehicle described in subsec- 
tion (c)(1)(B) which may be propelled by both a 
dean-burning fuel and any other fuel, an amount 
equal to the greater of - 

'(D $1,200, or 

'(ii) the incremental cost of permitting the use 
of the dean-burning fuel, plus 

'(2) the cost of sny qualified dean-fuel vehide 
refueling property. The deduction under the 
preceding sentence with respect to any property 
shall be allowed for the taxable year in which 
such property is placed in service. 

'(b) Limitation*. - 

'(1) Qualified dean-fuel vehide property. • 

'(A) In general. • The cost which may be taken 
into account under su b s ect ion (a)( 1) with respect 
to sny motor vehicle shall not exceed - 

'(i) in the ease of a motor vehicle not described 
in clause (ii) or (iii), $2,000, 

*(i0 in the ease of any truck or van with a gross 
vehide weight rating greater than 10,000 pounds 
but not greater than 26,000 pounds, $6,000, or 

•(iii) $60,000 in the case of - 

'(D a truck or van with a gross vehicle weight 



rating greater than 26,000 pounds, or 

'(ID any bus which has a seating capacity of at 
least 20 adults (not induding the driver), 

'(B) Phaseout. • In the case of any qualified 
dean-fuel vehicle property placed in service after 
December 31, 200 1, the limit otherwise applicable 
under subparagraph (A) shall be reduced by - 

*(i) 26 percent in the case of property placed in 
service in calendar year 2002, 

'(ii) 60 percent in the case of property placed in 
service in calendar year 2003, and 

'(iii) 76 percent in the case of property placed in 
service in calendar year 2004. 

'(2) Qualified clean-fuel vehicle refueling prop- 
erty. - 

'(A) In general. • The aggregate cost which may 
be taken into account under subsection (a)(2) 
with respect to qualified clean-fuel vehicle refuel- 
ing property placed in service during the taxable 
year at a location shall not exceed the excess (if 
any) of - 

'(i) $76,000, over 

'(ii) the aggregate amount taken into account 
under subsection (a)(2) by the taxpayer (or any 
related person or predecessor) with respect to 
property placed in service at such location for all 
preceding taxable years. 

'(B) Related person. - For purposes of this para- 
graph, a person shall be treated as related to 
another person if such person bears a relation- 
ship to such other person described in section 
267(b) or 707(b)(1). 

'(C) Election. • If the limitation under subpara- 
graph (A) applies for any taxable year, the tax- 
payer shall, on the return of tax for such taxable 
year, specify the items of property (and the por- 
tion of costs of such property) which are to be 
taken into account under subsection (a)(2). 

'(c) Qualified Clean-Fuel Vehicle Property De- 
fined. • For purposes of this section - 

'(I) In general. • The term 'qualified clean-fuel 
vehicle property' means property which is ac- 
quired for use by the taxpayer and not for resale, 
the original use of which commences with the 
taxpayer, with respect to which the environmen- 
tal standards of paragraph (2) arc mot, and which 
b described in either of the following subpara- 
graphs: 

'(A) Retrofit parts and component*. • Any prop- 
erty installed on a motor vehide which ia pro- 
pelled by a fuel which is not a clean-burning fuel 
for purposes of permitting such vehide to be 
propelled by a clean -burning fuel • 

*(i) if the property b an engine (or modification 
thereof) which may use a clean-burning fuel, or 

'(ii) to the extent the property is used in the 
storage or delivery to the engine of such fuel, or 



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the exhaust of gases from combustion of such 
fuel. 

'(B) Original equipment manufacturer's vehi- 
cles. - A motor vehicle produced by an original 
equipment manufacturer and designed so that 
the vehicle may be propelled by a dean-burning 
fuel. 

'(2) Environmental standards. - Property shall 
not be treated as qualified dean-fuel vehicle 
property unless - 

'(A) the motor vehide of which it is a part 
meets sny applicable Federal or State emissions 
standards with respect to each fuel by which 
such vehide is designed to be propelled, or 

'(B) in the ease of property described in para- 
graph (1)(A), such property meets all applicable 
Federal and State emissions-related certification, 
testing, and warranty requirements. 

'(8) Exception for qualified electric vehicles. • 
The term 'qualified dean-Aid vehicle property' 
does not indude any qualified electric vehide (as 
defined in section 30(c)). 

'(d) Qualified Clean-Fuel Vehide Refueling 
Property Defined. • For pu r poses of this section, 
the term 'qualified dean-fuel vehicle refueling 
property' means any property (not induding a 
building and its structural components) if • 

'(1) such property is of a character subject to 
the allowance for depreciation, 

'(2) the original use of such property begins 
with the taxpayer, and 

'(8) such property is - 

'(A) for the storage or dispensing of a 
dean-burning fuel into the fuel tank of a motor 
vehide propelled by such fuel, but only if the 
storage or dispensing of the fuel is at the point 
where such fuel is delivered into the fuel tank of 
the motor vehicle, or 

'(B) for the recharging of motor vehides pro- 
pelled by dectridty, but only if the property b 
located at the point where the motor vehicles are 
recharged. 

'(e) Other Definitions and Special Rules. • For 
purposes of this section - 

'(1) Clean-burning fuel. The term 

'clean-burning fuel' means - 

'(A) natural gas, 

'(B) liquefied natural gas, 

'(O liquefied petroleum gas, 

'(D) hydrogen, 

'(E) electridty, and 

'(F) any other fuel at least 86 percent of which 
is 1 or more of the following: methanol, ethanoi, 
any other alcohol, or ether. 

'(2) Motor vehide. • The term 'motor vehide' 
means any vehicle which is manufactured pri- 
marily for use on public streets, roads, and high- 



ways (not induding a vehide operated exdushrety 
on s rail or rails) and which has st least 4 
wheels. 

'(8) Cost of retrofit parts indudes cost of instal- 
lation. - The cost of sny qualified dean-fud vehi- 
de property referred to in subsection (e)(1)(A) 
shall include the cost of the original installation 
of such property. 

'(4) Recapture. - The Secretary shall, by regula- 
tions, provide for recapturing the benefit of any 
deduction allowable under subsection (a) with 
respect to any property which ceases to be prop- 
erty eligible for such deduction. 

'(6) Property used outside united states, etc., 
not qualified. • No deduction shall be allowed 
under subsection (a) with respect to any property 
referred to in section 60(b) or with respect to the 
portion of the cost of sny property taken into 
account under eection 179. 

'(6) Beau reduction. • 

'(A) In general. • For purposes of this titls, the 
basis of sny property shall be reduced by the 
portion of the cost of such property taken into 
account under subsection (a). 

'(B) Ordinary income recapture. • For purposes 
of section 1246, the amount of the deduction 
allowable under subsection (a) with respect to 
sny property which is of a character subject to 
the allowance for depreciation shall be treated ss 
a dsduction allowed for depreciation under eec- 
tion 167. 

'(g) Termination • This section shall not apply 
to any property placed in service after December 
81, 2004.' 

(2) Deduction from gross income. • Section 62(a) 
is amended by ineerting after paragraph (18) the 
following new paragraph: 

'(14) Deduction for clean-fuel vehicles snd ear- 
tain refueling property. • The deduction allowed 
by section 179A.' 

(8) Conforming amendments. • 

(A) Section 10 16(a) is emended by striking 'end' 
at the end of paragraph (28), by striking the 
period at the end of paragraph (24) and inserting 
', snd', and by adding at the end thereof the 
following new paragraph: 

'(26) to the extent provided in section 
179A(e)(6)(A).» 

(B) The table of sections for part VI of subchap- 
ter B of chapter 1 b amended by ineerting after 
the item relating to eection 179 the following new 
item: 

'Sec. 179A. Deduction for dean-fud vehicles 

snd certain refueling property.' 
(b) Credit for Qualified Electric Vehides. • 
(1) In gsneral. - Subpart B of pert IV of sub- 

chapter A of chapter 1 is smsnded by inserting 



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Afar eection 29 the following new section: 

•SBC. SO. CREDIT FOR QUALIFIED ELEC- 
TRIC VEHICLES. 

*(a) Allowance of Credit. - There shell be el- 
lowed es e credit Against the tax imposed by this 
chapter for the taxable year an amount equal to 
16 percent of the cost of any qualified electric 
vehicle pieced in eervice by the taxpayer during 
the taxable year. 

'(b) Limitations. - 

'(1) Phaseout. - In the ease of any qualified 
electric vehicle placed in eervice after December 
91, 2001, the credit otherwise allowable under 
subsection (a) shall be reduced by - 

'(A) 25 percent in the ease of property placed in 
service in calendar year 2002, 

'(B) 60 percent in the ease of property placed in 
eervice in calendar year 2009, and 

*(0 76 percent in the ease of property placed in 
eervice in calendar year 2004. 

'(Z) Application with other credits. • The credit 
allowed by subsection (a) for any taxable year 
•hall not exceed the excess (if any) of • 

'(A) the regular tax for the taxable year reduced 
by the eum of the credite allowable under subpart 
A and aectione 27, 28, and 29, over - 

'(B) the tentative minimum tax for the taxable 
year. 

'(c) Qualified Electric Vehicle. • For purposes of 



'(1) In general. • The term 'qualified electric 
vehicle' mesne sny motor vehicle - 

'(A) which is powered primarily by an electric 
motor drawing current from rechargeable batter- 
ies, fuel cells, or other portable sources of electri- 
cal current, 

'(B) the original use of which commences with 
the taxpayer, and 

*(Q which is acquired for use by the taxpayer 
and not for resale. 

'(2) Motor vehicle. • For purposes of paragraph 
(1), the term 'motor vehicle' means any vehicle 
which is manufactured primarily for use on pub- 
lic streets, roads, and highways (not including a 
vehicle operated exclusively on a rail or rails) and 
which has at least 4 wheels. 

'(d) Specie! Rules. - 

'( 1) Bssis reduction. • The basis of sny proporty 
for which a credit is allowable under su b se ct ion 
(s) shall be reduced by the amount of such credit. 

'(2) Recapture. • The Secretary ahall, by regula- 
tions, provide for recapturing the benefit of sny 
credit allowable under su b s ect ion (a) with respect 
to sny property which ceases to be property eligi- 
ble for such credit. 

'(9) Property used outside united states, etc., 
not qualified. • No credit ahall be allowed under 



subsection (s) with respect to sny property re- 
ferred to in section 60(b) or with respect to the 
portion of the cost of sny property taken into 
account under eection 179. 

'(e) Termination. • Thie section shall not apply 
to any property placed in service after December 
81, 2004'. 

(2) Conforming amendments. - 

(A) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is emended by 
adding after the item relating to section 29 the 
following new item: 

'Sec. 80. Credit for qualified electric vehicles.' 

(B) Section 1016(e), es emended by subsection 
(a)(8), is amended by striking 'snd' st the end of 
paragraph (24), by striking the period at the end 
of paragraph (26) and inserting \ end', snd by 
adding st the end thereof the following new para- 
graph: 

'(26) to the extent provided in eection 80(d)(1).' 

(C) Section 63(d)(l)(B)(iii) is emended • 

(i) by striking 'section 29(b)(6)(B) or' end in- 
serting 'eection 29(b)(6)(B),', end 

(ii) by inserting ', or not allowed under eection 
80 eolely by reason of the application of eection 
30(b)(2)(B)' before the period. 

(D) Section 66(c)(2) is emended by striking 
'29(b)(6),' snd inserting '29(b)(6), 30(b)(2).'. 

(c) Effective Date. - The amendments mede by 
this eection shall spply to property pieced in 
eervice after June 30, 1993. 
SEC. 201 14. CREDIT FOR ELECTRICITY PRO- 
DUCED FROM CERTAIN RENEWABLE 
SOURCES. 

(a) In General. • Subpart D of part IV of sub- 
chapter A of chapter 1 is amended by adding at 
the end thereof the following new section: 

'SEC. 46. ELECTRICITY PRODUCED FROM 
CERTAIN RENEWABLE RESOURCES. 

'(a) General Rule. • For purposes of section 38, 
the renewable electricity production credit for 
any taxable year is an amount equal to the prod- 
uct of • 
'(1) 1.6 cento, multiplied by 
'(2) the kilowatt hours of electricity • 
'(A) produced by the taxpayer • 
'(i) from qualified energy resources, snd 
'(ii) st s quelified facility during ths 10-year 
period beginning on the date the facility was 
placed in eervice, and 

'(B) eold by the taxpayer to an unrelated person 
during ths taxable year. 
'(b) Limitations snd Adjustments. • 
'(1) Phaseout of credit. - The smount of the 
credit determined under subsection (s) shall be 
reduced by sn smount which bears the same ratio 
to the amount of the credit (determined without 



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regard to thb paragraph) as - 

'(A) the amount by which the reference price 
for the calendar year in which the aale occur* 
exceed* 8 cents, beara to 

•(B) S cento. 

'(2) Credit and phaaeout adjustment baaed on 
inflation. • The 1.6 cent amount in su b s ectio n (a) 
and the 8 cent amount in paragraph (1) shall 
each be adjusted by multiplying such amount by 
the inflation adjustment factor for the calendar 
year in which the aale occurs. If any amount as 
increased under the preceding sentence b not a 
multiple of 0. 1 cent, such amount shall be round* 
ed to the nearest multiple of 0. 1 cent. 

'(8) Credit reduced for grants, tax-exempt 
bonds, subsidized energy financing, and other 
credits. - The amount of the credit determined 
under subsection (a) with respect to any project 
for sny taxable year (determined alter the appli- 
cation of paragraphs (1) and (2)) shall be reduced 
by the amount which is the product of the 
amount so determined for such year and a frac- 
tion - 

'(A) the numerator of which b the sum, for the 
taxable yesr end all prior taxable years, of • 

Hi) granta provided by the United States, a 
State, or a political subdivision of s State for use 
in connection with the project, 

'(ii) p r o ce e ds of sn issue of State or local gov- 
ernment obligations uced to provide financing for 
the project the interest on which b exempt from 
tax under section 108, 

'(iii) the aggregate amount of subsidised energy 
financing under a Federal, State, or local pro- 
gram provided in connection with the project, 
end 

'(iv) the amount of any other credit allowable 
with respect to sny property which b part of the 
project, and 

'(B) the denominator of which b the aggregate 
amount of additions to the capital account for the 
project for the taxable year and all prior taxable 
years. The amounts under the preceding sentence 
for sny taxable year shall be determined as of the 
close of the taxable year. 

'(c) Definitions. - For purposes of thb section • 

'(1) Qualified energy resources. - The term 
'qualified energy resources' means • 

'(A) wind, and 

'(B) closed-loop biomass. 

'(2) Closed-loop btomsss. • The term 'closed-loop 
biomass' means any organic material from a 
plant which b planted exclusively for purposes of 
being used at a qualified facility to produce elec- 
tricity. 

'(8) Qualified facility. - The term 'qualified 
facility' means any facility originally placed in 



service after December 81, 1998 (December 81, 
1992, in the esse of s facility using closed-loop 
biomass to produce electricity), and before July 1, 
1999. 

'(d) Definitions and Special Rules. - For purpos- 
es of thb section • 

'(1) Only production in the united otatss taken 
into account. - Seles shall be taken into account 
under thb section only with respect to electricity 
the production of which b within • 

'(A) the United Statss (within the meaning of 
section 688(1)), or 

'(B) s possession of the United States (within 
the meaning of section 688(2)). 

'(2) Computation of inflation adjustment factor 
and reference price. - 

'(A) In general. • The Secretary shall, not later 
than April 1 of each calendar year, determine and 
publbh in the Federal Register the inflation 
adjustment factor and the reference price for 
such calendar year in accordance with thb para- 
graph. 

'(B) Inflation adjustment factor. • The term 
'inflation adjustment factor* means, with respect 
to a calendar year, a fraction the numerator of 
which b the GDP implicit price deflator for the 
preceding calendar year and the denominator of 
which b the GDP implicit price deflator for the 
calendar year 1992. The term 'GDP implicit price 
deflator* means the moot recent revision of the 
implicit price deflator for the gross domestic 
product as computed end published by the De- 
partment of Commerce before March 16 of the 
calendar year. 

'(C) Reference price. • The term 'reference 
price 1 means, with respect to s calendar year, the 
Secretary's determination of the annual average 
contract price per kilowatt hour of electricity 
generated from the same qualified energy re- 
source and sold in the previous yesr in the Unit- 
ed States. For purposes of ths preceding sen- 
tence, only contracts entered into after December 
81, 1989, shall be taken into account. 

'(8) Production attributable to the taxpayer. - In 
the case of s facility in which more than 1 person 
has sn interest, except to the extent provided in 
regulations prescribed by the Secretary, produc- 
tion from the facility shall be allocated smong 
such persons in proportion to their respective 
interests in the gross sslee from ouch facility. 

'(4) Related persons. • Persons ohsll be treated 
ss related to each other if such persons would be 
treated ss s single employer under the regula- 
tions prescribed under section 62(b). In the case 
of s corporation which b a member of an affiliat- 
ed group of corporations filing a consolidated 
return, such corporation shall be treated ss sell- 



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ing electricity to en unrelated person if such 
electricity b sold to such a person by another 
member of such group. 

'(6) Pass-thru in the case of estates and trusts. 
- Under regulations prescribed by the Secretary, 
rules similar to the rules of subsection (d) of sec- 
tion 62 shall apply.' 

(b) Credit To Be Part of General Business Cred- 
it • S ub se ct ion <b) of section 38 is amended by 
striking 'plus' at the end of paragraph (6), by 
striking the period at the end of paragraph (7) 
and inserting \ plus', and by adding at the end 
thereof the following new paragraph: 

'(8) the renewable electricity production credit 
under section 45(a).' 

(c) Limitation on Carryback. • Subsection (d) of 
section 39 is amended by redesignating the para- 
graph added by section 1 151 1(b)(2) of the Reve- 
nue Reconciliation Act of 1990 as paragraph ( 1), 
by redesignating the paragraph added by section 
11611(b)(2) of such Act as paragraph (2), and by 
adding at the end thereof the following new para- 
graph: 

'(3) No carryback of renewable electricity pro- 
duction credit before effective date. • No portion 
of the unused business credit for any taxable year 
which is attributable to the credit determined 
under section 46 (relating to electricity produced 
from certain renewable resources) may be carried 
back to any taxable year ending before January 1 , 
1993.' 

(d) Clerical Amendment. • The table of sections 
for subpart D of part IV of subchapter A of chap- 
ter 1 is amended by adding at the end thereof the 
following new item: 

'Sec 46. Electricity produced from certain 
renewable resources.' 

(e) Effective Date. - The amendments made by 
this section shall apply to taxable years ending 
after December 31, 1992. 

SBC. 20116. REPEAL OF MINIMUM TAX 
PREFERENCES FOR DEPLETION AND IN- 
TANGIBLE DRILLING COSTS OF INDEPEN- 
DENT OIL AND GAS PRODUCERS AND ROY- 
ALTY OWNERS, 
(a) Depletion. - 

(1) Paragraph (1) of section 67(a) (relating to 
depletion) is amended by adding at the end there- 
of the following new sentence: 'Effective with 
respect to taxable years beginning after December 
31, 1992, this paragraph shall not apply to any 
d eduction for depletion computed in accordance 
with section 613A(c).'. 

(2) Subparagraph (F) of section 66(g)(4) is 
■mended to read as follows: 

•(F) Depletion. - 

*G) In g en er al. - The allowance for depletion 



with respect to any property placed in service in 
a taxable year beginning after December 31, 
1989, shall be cost depletion determined under 
section 611. 

*(ii) Exception for independent oil and gas pro- 
ducers and royalty owners. - In the case of any 
taxable year beginning after December 31, 1992, 
clause (i) (and subparagraph (C)(i)) shall not 
apply to sny deduction for depletion computed in 
accordance with section 613A(c).' 

(b) Intangible Drilling Costs. • 

(1) Section 67(a)(2) is amended by adding at the 
end the following new subparagraph: 

'(E) Exception for independent producers. • In 
the esse of any oil or gas well • 

'(i) In general. - In the case of any taxable year 
beginning after December 31, 1992, this para- 
graph shall not apply to any taxpayer which is 
not an integrated oil company (as defined in 
section 291(b)(4)). 

'(ii) Limitation on benefit. - The reduction in 
alternative minimum taxable income by reason of 
clause (i) for any taxable year shall not exceed 40 
percent (30 percent in cose of taxable years begin- 
ning in 1993) of the alternative minimum taxable 
income for such year determined without regard 
to clause (i) and the alternative tax net operating 
loss deduction under section 56(a)(4).' 

(2) Clause (i) of section 66(g)(4)(D) is amended 
by adding at the end thereof the following now 
sentence: 'In the case of a taxpayer other than an 
integrated oil company (as defined in section 
291(b)(4)), in the case of any oil or gas well, this 
clause shall not apply in the case of amounts paid 
or incurred in taxable years beginning after De- 
cember 31, 1992.'. 

(c) Conforming Amendments. - 

( 1) Section 66 is amended by striking subsection 
(h). 

(2) Section 66(d)(1)(A) is amended to read as 
follows: 

'(A) the amount of such deduction shall not 
exceed 90 percent of alternate minimum taxable 
income determined without regard to such deduc- 
tion, and*. 

(3) Section 69(a)(2)(A)(ii) is amended by striking 
'and the alternative tax energy preference deduc- 
tion under section 56(h)' and inserting 'and sec- 
tion 67(a)(2)(E)'. 

(4) Section 69A(b)( 1) is amended by striking 'or 
the alternative tax energy preference deduction 
under section 66(h)'. 

(d) Effective Dale. • The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 1992. 

SEC. 20116. INCREASED BASE TAX RATE 
ON OZONE-DEPLETING CHEMICALS. 



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(a) In General. - Paragraph (1) of section 
468 1(b) (relating to amount of tax) is amended fay 
adding at the end thereof the following new sub- 
paragraph: 

'(D) Additional baae tax amount. • The baae tax 
amount for purposes of subparagraph (A) with 
respect to any sale or use of an ozone-depleting 
chemical for any calendar year (determined with- 
out regard to this subparagraph) shall be in- 
creased by the amount determined under the 
following tables for such calendar year: 

'(i) Initially listed chemicals. • 

The baae tax amount 
'For calendar year: ie increased by: 

1992 $0.18 

1993 0.10 

1994 1.00 
1996 and each calendar 

year thereafter 1.46. 

'(ii) Newly luted chemicals. - 

The baae tax amount 
Tor calends* yaaressed by: 
1992 $0.48 

1998 1.08 

1994 0.66 

1996 and each calendar 

year thereafter 1.46.' 

(b) Conforming Amendments. • 

(1) Rates retained for chemicals used in rigid 
foam insulation. - The table in subparagraph (B) 
of section 4682(g)(2) (relating to chemicals uesd 
in rigid foam insulation) is amended - 

(A) by striking ' 16* and inserting ' 18.6', and 

(B) by striking ' 10' and inserting '9.6'. 

(2) Floor stock taxes. - 

(A) Subparagraph (C) of section 4682(h)(2) (re- 
lating to other tax-increase dates) is amended by 
striking 'January 1 of 1991. 1992, 1998. and 
1994' and inserting 'January 1 of 1991 and 1992. 
October 1. 1992. and January 1 of 1998 and each 
calendar year thereafter'. 

(B) Paragraph (8) of section 4682(h) (relating to 
due date) is amended • 

(i) by inserting 'or October 1' after 'January 1'. 
and 

(ii) by inserting 'or March 81 of the suceading 
calendar year, respectively,' after 'audi year'. 

(c) Effective Date. • The amendments made by 
this section shall apply to taxable chemicals sold 
or used on or after October 1, 1992. 

SEC. 20117. TREATMENT OF CERTAIN 
OZONE DEPLETING CHEMICALS. 

(a) Treatment of Certain Halons. • The table 
contained in subparagraph (A) of section 
4682(g)(2) is amended to read as follows. 





In the case 


of 


The applicable 
percentage is: 




For sales 
or use 
during 
1992 


Forsake 
or use 
during 
1999 


1 Lion- 12 11 
Hslon-1901 
Halon-2404 






4.8 
1.4 
23 


9.0 
0.9 
1.6'. 



(b) Chemicals Used for Sterilizing Medical De- 
vices. - 

(1) In general. - Subsection (g) of section 4682 
is amended by adding at the end thereof the fol- 
lowing new paragraph: 

'(4) Chemicals used for sterilizing medical devic- 
es. • 

'(A) Rate of tax. • 

'(i) In general. - In the case of • 

'(I) any uae after September 30. 1992. and be- 
fore January 1, 1994. of any substance to steril- 
ize medical devices, or 

'(II) any qualified aale during such period by 
the manufacturer, producer, or importer of any 
substance, the tax imposed by section 4681 shall 
be the applicable percentage (determined in ac- 
cordance with the following table) of the amount 
of such tax which would (but for this subpara- 
graph be imposed): 

'In the case of sales The applicable 

or use during percentage ia: 

1992 90.3 

1993 60.7. 

'(ii) Qualified sale. • For purposes of clause (i). 
the term 'qualified sale' means any aale by the 
manufacturer, producer, or importer of any sub- 
stance • 

'(I) for use by the purchaser to sterilize medical 
devices, or 

'(II) for resale by the purchaser to s 2d purchas- 
er for auch use by the 2d purchaser. The preced- 
ing sentence shall apply only if the manufactur- 
er, producer, and importer, and the let and 2d 
purchasers (if sny) meet such registration re- 
quirements aa may be prescribed by the Secre- 
tary. 

'(B) Overpayments. • If any substance on which 
tax waa paid under thb subchapter is used after 
September 80. 1992. and before January 1, 1994. 
by any person to sterilize medical devices, credit 
or refund without interest shall be allowed to 
auch person in sn amount equal to the excess of 



'(i) the tax paid under this subchapter on such 



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substance, or 

'(H) the tax (if any) which would be imposed by 
section 4681 if such substance were used for such 
use by the manufacture, producer, or importer 
thereof on the date of its use by such person. 
Amounts payable under the preceding sentence 
with respect to uses during the taxable year shall 
be treated as described in section 34(a) for such 
year unless claim thereof has been timely filed 
under this subparagraph.' 

(c) Effective Date. - The amendments made by 
this section shall apply to sales and uses on or 
alter October 1, 1992. 

SEC. 20118. PERMANENT EXTENSION OF 
ENERGY INVESTMENT CREDIT FOR SOLAR. 
GEOTHERMAL, AND OCEAN PROPERTY. 

(a) General Rule. • Paragraph (2) of section 
48(a) (defining energy percentage) is amended - 

(1) by striking 'Except as provided in subpara- 
graph (B), the' in subparagraph (A) and inserting 
'The'. 

(2) by striking subparagraph (B), and 

(3) by redesignating subparagraph (C) as sub- 
paragraph (B). 

(b) Ocean Thermal Energy. - Subparagraph (A) 
of section 48(a)(3) is amended by striking 'or' at 
the end of clause (i), by inserting 'or' at the end 
of clause (ii), and by adding at the end the follow- 
ing new clause: 

'(Hi) equipment, placed in service after June 30, 
1992, at either of 2 locations designated by the 
Secretary after consultation with the Secretary of 
Energy, which converts ocean thermal energy to 
usable energy,'. 

(c) Effective Date. - The amendments made by 
this section shall take effect on June SO, 1992. 
SEC. 20119. NUCLEAR DECOMMISSIONING 
FUNDS. 

(a) Repeal of Investment Restrictions. • Sub- 
paragraph (O of section 468A(e)(4) (relating to 
special rules for nuclear decommissioning funds) 
is amended fay striking 'described in section 
601(c)(21)(B)(ii)'. 

(b) Effective Date. • The amendment made by 
subsection (a) shall apply to taxable years begin- 
ning after December 81, 1992. 

SEC. 20120. ALCOHOL FUELS. 

(a) Reduced Rate of Tax on Gasoline Mixed 
with Alcohol. - 

(1) In general. • Paragraph (1) of section 4081(c) 
(relating to gasoline mixed with alcohol at refin- 
ery, etc) is amended to read as follows: 

'(1) In g en er al. • Under regulations prescribed 
by the Secretary, subsection (a) shall be applied 
by multiplying the otherwise applicable rate by a 
fraction the numerator of which is 10 and the 
denominator of which is - 



'(A) 9 in the case of 10 percent gasohol, 
'(B) 9.23 in the case of 7.7 percent gasohol, and 
'(C) 9.43 in the case of 5.7 percent gasohol, in 
the case of the removal or entry of any gasoline 
for use in producing gasohol at the time of such 
removal or sale. Subject to such terms and con- 
ditions as the Secretary may prescribe (including 
the application of section 4101), the treatment 
under the preceding sentence also shall apply to 
use in producing gasohol after the time of such 
removal or entry.' 

(2) Conforming amendments. • Section 4081(c) 
is amended • 

(A) by striking '6.1 cents a gallon' in paragraph 
(2) and inserting 'an otherwise applicable rate', 
and 

(B) by striking paragraph (4) and inserting the 
following new paragraph: 

'(4) Otherwise applicable rate. - For purposes of 
this subsection • 

'(A) In general. - In the case of the Highway 
Trust Fund financing rate, the term 'otherwise 
applicable rate' means - 

'(i) 6.1 cents a gallon for 10 percent gasohol, 

'(ii) 7.342 cents s gallon for 7.7 percent gasohol, 
and 

'(in) 8.422 cents a gallon for 5.7 percent gaso- 
hol. In the case of gasohol none of the alcohol in 
which consists of cthsnol, clauses (i), (ii), snd (iii) 
shall be applied by substituting '5.5 cents' for 
'6.1 cents', '6.88 cents' for '7.342 cents', and 
'8.08 cents' for '8.422 cents'. 

'(B) 10 percent gasohol. - The term ' 10 percent 
gasohol' means any mixture of gasoline with 
alcohol if at least 10 percent of such mixture is 
alcohol. 

'(B) 7.7 percent gasohol. • The term '7.7 percent 
gasohol' means any mixture of gasoline with 
alcohol if at least 7.7 percent, but not 10 percent 
or more, of such mixture is alcohol. 

'(B) 5.7 percent gasohol. • The term '5.7 percent 
gasohol' means any mixture of gasoline with 
alcohol if at least 5.7 percent, but not 7.7 percent 
or more, of such mixture is alcohol.' 

(3) Effective date - The amendments made by 
this subsection shall apply to gasoline removed 
(as defined in section 4082 of the Internal Reve- 
nue Code of 1986) or entered after September 30, 
1992. 

(b) Alcohol Fuels Credit May Offset Minimum 
Tsx. - 

(1) In general. • Subsection (c) of section 38 
(relating to limitation based on amount of tax) is 
amended by adding at the end the following new 
paragraph: 

'(3) Alcohol fuels credit may offset minimum 



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'(A) In general - The amount determined under 
paragraph (1)(A) shall be reduead by the lesser of 

*(i) the portion of the alcohol fueb credit deter- 
mined under section 40(a) not used against the 
normal limitation, or 

*(ii) 60 percent of the taxpayer's tentative mini- 
mum tax for the taxable year. 

'(B) Portion of the alcohol fuels credit not used 
against normal limitation. - For purposes of sub- 
paragraph (A), the portion of the alcohol fuels 
credit determined under section 40(a) not used 
against the normal limitation is the excess (if 
any) of - 

'(i) the portion of the credit under subsection 
(a) which is attributable to such alcohol fuels 
credit, over 

'(ii) the limitation of paragraph (1) (without 
regard to this paragraph), reduced by the portion 
of the credit under subsection (a) which is not so 
attributable.' 

(2) Effective date. - 

(A) In general. - The amendment made by para- 
graph (1) shall apply to taxable years beginning 
after September SO, 1092. 

(B) Exception. • The amendment made by para- 
graph (1) shall not apply to • 

(i) any credit which was determined in a taxable 
year, or 

(ii) any credit which is carried back to a taxable 
year, beginning on or before September SO, 1002. 
SEC. 20121. DETERMINATION OF INDEPEN- 
DENT PRODUCERS. 

(a) Retailers. - 

(1) In general. - Section 61SA(d)(2) is amended 

(A) by inserting 'and sales of natural gas by a 
regulated public utility' after 'users', and 

(B) by inserting 'and sales of products derived 
from natural gas by a regulated public utility' 
after 'Defense'. 

(2) Definition. - Section 61SA(d)(2) is amended 
by adding at the end thereof the following new 
sentence 'For purposes of the first sentence, the 
term 'regulated public utility' means a utility 
described in section 7701(a)(SS) at least 60 per- 
cent of the gross income of which is derived from 
sources described in subparagraphs (A), (B), and 
(Oof section 7701(a)(SS).' 

(b) Refiners. - Section 61SA(d)(4) (relating to 
certain refiners excluded) is amended to read as 
follows: 

'(4) Certain refiners excluded. - If the taxpayer 
or 1 or more related persons engage in the refin- 
ing of crude oil, subsection (c) shall not apply to 
such taxpayer during any taxable year if the 
aggregate average daily refinery rune of the tax- 



payer and such persons for the taxable year ex- 
ceed 60,000 barrels.' 

(c) Effective Date. - The amendments made by 
this section apply to taxable years beginning after 
December SI, 1992. 

SEC. 20122. TAX-EXEMPT FINANCING FOR 
ENVIRONMENTAL ENHANCEMENTS OF 
HYDROELECTRIC GENERATING FACILITIES. 

(a) In General. - Subsection (a) of section 142 
(relating to exempt facility bonds) is amended - 

( 1) by striking 'or' at the end of paragraph ( 10), 

(2) by striking the period at the end of para- 
graph (11) and inserting ', or', and 

(S) by adding at the end the following new para- 
graph: 

'(12) environmental enhancements of hydroelec- 
tric generating facilities.' 

(b) Definition and Special Rules for Environ- 
mental Enhancements of Hydroelectric Generat- 
ing Facilities. - 

(1) In general. - Section 142 is amended by 
adding at tho end the following new subsection: 

'(j) Environmental Enhancements of Hydroelec- 
tric Generating Facilities. - 

'(1) In general. • For purposes of subsection 
(a)( 12), the term 'environmental enhancements of 
hydroelectric generating facilities' mean* proper- 
ty - 

'(A) the use of which is related to a federally 
licensed hydroelectric generating facility owned 
and operated by a governmental unit, and 

'(B) which - 

'(i) protects or promotes fisheries or other wild- 
life resources, including any fish by-paae facility, 
fish hatchery, or fisheries enhancement facility, 
or 

'(ii) is a recreational facility or other improve- 
ment required by the terms and conditions of any 
Federal licensing permit for the operation of such 
generating facility. 

'(2) Use of proceeds. • A bond issued as part of 
an issue described in subsection (a)(12) shall not 
be considered an exempt facility bond unless at 
least SO percent of the net proceeds of the issue 
of which it is a part are used to finance property 
described in paragraph (l)(B)(i).' 

(2) Financed property must be goveminentally 
owned. • Subparagraph (A) of section 142(b)(1) 
(relating to certain facilities must be 
governmentally owned) is amended by striking 
'(2) or (S)' and inserting '(2), (S), or ( 12)'. 

(S) Ex cl union from volume cap. • Paragraph (S) 
of section 146(g) (relating to exception for certain 
bonds) is amended - 

(A) by striking 'or (2)' and inserting ', (2), or 
(12)'. and 

(B) by striking 'and docks and wharves' and 



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inserting ', docks and wharves, end environmen- 
tal enhancements of hydroelectric generating 
facilities'. 

(c) Effective Date. - The amendments made by 
this section shall apply to bonds issued after the 
date of the enactment of this Act. 

SUBTITLE B - OTHER REVENUE PROVI- 
SIONS 
SBC. 20131. ELIMINATION OF DEDUCTION 
FOR CLUB MEMBERSHIP FEES. 

(a) In General. - Section 162 (relating to trade 
or business expenses) is amended by redesignat- 
ing subsection (m) as subsection (n) and by in- 
serting after subsection (1) the following new 
subsection: 

*(m) Club Membership Dues. - No deduction 
shall be allowed under this chapter for amounts 
paid or incurred for membership in any club 
organized for business, pleasure, recreation, or 
other social purpose.' 

(b) Effective Date. • The amendment made by 
this section shall apply to dues paid after the 
dste of the enactment of this Act. 

SBC. 20132. MODIFICATIONS TO TAX ON 
INSURANCE POLICIES ISSUED BY FOREIGN 
INSURERS. 

(a) Increase in Tax on Certain Reinsurance 
Contracts. - Paragraph (3) of section 4371 (relat- 
ing to imposition of tax) is amended to read as 
follows: 

'(3) Reinsurance. • 

'(A) 4 cents on each dollar (or fractional pert 
thereof) of the premium paid on the policy of 
reinsurance covering any of the contracts taxable 
under paragraph (1). 

'(B) 1 cent on each dollar (or fractional part 
thereof) of the premium paid on the policy of 
reinsurance covering any of the contracts taxable 
under paragraph (2).' 

(b) Retention of Existing Tax Rate in Certain 
Cases; Limitation on Treaty Benefits. • 

(1) Section 4371 is amended by adding at the 
end thereof the following new subsection: 

'(b) Special Rules. - 

'(1) Lower rate on certain reinsurance premi- 
ums. • Subparagraph (A) of eubsection (a)(3) filial! 
bs applied with respect to any premium by substi- 
tuting ' 1 cent' for '4 cento' if - 

'(A) such premium is paid to a foreign insurer 
or reinsurer which is a resident of a foreign 
country, 

'(B) the insurance income (including investment 
income) relating to the policy of reinsurance is 
subject to tax by a foreign country or countries at 
an effective rate that is substantial in relation to 
the tax imposed by chapter 1, and 

'(C) the risk with respect to which such premi- 



um is paid is not reinsured (directly or through 
a series of transactions) by a resident of another 
foreign country who does not moot the require- 
ments of subparagraph (B). 

'(2) Application of relief. • In applying para- 
graph (1) or any troaty, no person shall be re- 
lieved of the requirement to remit any tux im- 
posed by this chapter on any premium unless the 
parties to the transaction satisfy such require- 
ments as the Secretary may prescribe to ensure 
collection of tax due on any reinsurance of the 
risk with respect to which such premium was 
paid. 

'(3) Secretarial authority. • 

'(A) Enforcement procedures. - The Secretary 
may prescribe regulations setting forth such 
procedures as the Secretary may deem appropri- 
ate to ensure compliance with the requirements 
of paragraph (1). 

'(B) Waiver. - The Secretary may by regulations 
waive the requirements of puragruph (1)(C) in 
such circumstances and subject to such condi- 
tions as he may deem appropriate' 

(2) Section 4371 is amended by striking 'There 
is hereby' and inserting the following: 

'(a) General Rule. • There is hereby'. 

(c) Effective Date. - The amend men Is made by 
this section shall apply to premiums paid after 
the date of the enactment of this Act but only to 
the extent allocable to reinsurance for periods 
after December 31, 1992. 

SUBTITLE C - HEALTH CARE OF COAL 
MINERS 
SEC. 20141. SHORT TITLE. 

This subtitle may be cited as the 'Coal Industry 
Retiree Health Benefit Act or 1992'. 
SEC. 20142. FINDINGS AND DECLARATION 
OF POLICY. 

(a) Findings. • The Congress finds that - 

(1) coal provides a significant portion of the 
energy used in the United States; 

(2) the production, transportation and use of 
coal affects interstate and foreign commerce and 
the national public interest; 

(3) a significant portion of the national work 
force has been employed in the production of coal 
for interstate and foreign commerce and in the 
national interest; 

(4) the Government of the United States has 
regulated the coal industry, employment in the 
industry, and the provision of retirement benefits 
within the industry; 

(5) the continued well-being and security of 
employees, retirees and their dependents within 
the coal industry are directly affected by the 
provision of health benefits to retirees and their 
dependents; 



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<6) for many decades, the provision of adequate 
health care for retirees has been an essential 
element in maintaining a stable and strong coal 
industry as an important component in a strong 
United States economy; 

(7) an important element in the privately main- 
tained benefit plans now experiencing financial 
difficulty has been the provision of health bene- 
fits for retirees of companies no longer in busi- 
ness; and 

(8) withdrawals of contributing employers from 
privately maintained benefit plans under collec- 
tive bargaining agreements derived from an 
agreement with the United States, covering retir- 
ees within the coal industry, result in substan- 
tially increased funding burdens for employers 
that continue to contribute to such plans, ad- 
versely affect labor-management relations and 
the stability and strength of the coal industry, 
and impair the provision of health care to retir- 
ees. 

(b) Additional Findings. • The Congress further 
finds that - 

(1) it is necessary to modify and reform the 
current private benefit plan structure for retirees 
within the coal industry in order to stabilize the 
provision of health care benefits to such retirees; 
and 

(2) it is necessary to supplement the current 
private benefit plan structure with a benefit pro- 
tection program that will assure continued fund- 
ing and contain program costs. 

(c) Declaration of Policy. • It ia hereby declared 
to be the policy of this subtitle • 

(1) to remedy problems that discourage the 
provision, funding, and delivery of health care to 
coal industry retirees; 

(2) to provide reasonable protection for the 
health benefits of coal industry retirees; 

(3) to require use of state-of-the-art cost con- 
tainment and managed care measures as pert of 
the overall package of health care delivery and 
financing; and 

(4) to provide a financially self-sufficient pro- 
gram for the provision of retires health benefits 
in the coal industry. 

SEX:. 20 MS. COAL INDUSTRY HEALTH BENE- 
FITS PROGRAM. 

(a) In General. • The Internal Revenue Code of 
1986 ia amended by adding at the end thereof the 
following new subtitle: 

'SUBTITLE J - COAL INDUSTRY HEALTH 
BENEFITS 

'Chapter 99. Coal industry health benefits. 
•CHAPTER 99 - COAL INDUSTRY HEALTH 
BENEFITS 
'Subchapter A. Coal Industry Retiree Health 



Benefits Corporation. 

'Subchapter B. Eligibility for and payment of 
benefits. 'Subchapter C. Other provisions. 
'SUBCHAPTER A - COAL INDUSTRY RETIR- 
EE HEALTH BENEFIT CORPORATION 
'Sec. 9701. Establishment of the Corporation. 
'Sec. 9702. Directors of Corporation. 
'Sec. 9703. Powers; tax status. 
'Sec. 9704. Operation of Corporation. 
'SEC. 9701. ESTABLISHMENT OF THE COR- 
PORATION. 

'There is hereby created the Coal Industry Re- 
tiree Health Benefit Corporation (hereafter in 
this chapter referred to as the 'Corporation'), 
which shall be a governmental body corporate 
under the direction of a board of directors. With- 
in the limitations of law and regulation, the 
board of directors shall determine the general 
policies that govern the operations of the Corpo- 
ration. The principal office of the Corporation 
shall be in the District of Columbia or at any 
other place determined by the Corporation. 
•SEC. 9702. DIRECTORS OF CORPORATION. 

'(a) Appointment. • The board of directors of the 
Corporation shall consist of 5 persons, who shall 
be appointed by the Secretary of Labor. The 
board shall at all times have the following as 
members: 

'(1) 2 persons from employers in the 
coal-mining industry (only 1 of whom shall be 
from an ontity that is or was a settlor of a plan 
described in section 404(c)); 

'(2) 1 person from an organization that repre- 
sents coal industry employees (and that is or was 
a settlor of a plan described in section 404(c)), 

'(3) 1 person from another labor organization 
representing employees (whether or not in the 
coal industry); and 

'(4) 1 other person who shall serve ss the chair- 
man. 

'(b) Terms of Office, Successors. • Each director 
shall bo appointed for a term of 3 years, except 
for the initial term. The initial terms of the 
directors shall be as follows: 
'Coal industry employee representative 4 years 

(section 404(c) settlor) 
'Coal-mining industry employer 3 years 

(section 404(c) »eltlor) 
'Other employee representative 3 years 

'Other coal-mining industry employer 2 years 
'Chairman I year 

A vacancy on the board shall be filled in the same 
manner as the original appointment was made 
Any director appointed to fill a vacancy occurring 
prior to the expiration of tho term for which the 
predecessor was appointed shall be appointed for 
the remainder of such term. A director easy 



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■ i mn after the expiration of a tana until a suc- 
cessor has taken office. 

'(e) Quorums. • Vacancies on the board shall 
not impair the powers of the board to execute the 
functions of the Corporation so long as there srs 
8 msmhsra in office. The presence of 3 membora 
shall constitute a quorum for the transaction of 
the business of the board. 

•(d) Independent Audit - The Corporation shall 
annually employ an independent certified or 
licensed public accountant who shall examine and 
audit the books and financial transactions of the 
Corporation. The Corporation shall, not later 
than June 80 of each year, submit to the Con- 
grass a report describing the activities of the 
Corporation under this chapter. 

'(e) Adoption of Bylaws; Amendment; Alter- 
ation; Publication in the Federal Register. - As 
soon ae practicable, but not later than 180 days 
alter the dato of the enactment of this chapter, 
the board shall adopt initial bylawa and raise 
relating to the conduct of the business of the 
Corporation. Thereafter, the board may alter, 
supplement or repeal any existing bylaw or rule, 
and may adopt additional bylawa and rules from 
time to time as may be necessary. Any bylaw or 
rule relating to the conduct or business of the 
Corporation shall be adopted jn compliance with 
the Administrative Procedure Act, including the 
notice and comment provisions thereof. 
•SBC. 9708. POWERS; TAX STATUS. 

'(a) Powera of Corporation. - The Corporation 



and use s corporate seal; 
until dissolved by Act of 



'(8) to make and enforce auch bylaws, rules, and 
regulations aa may be necessary or appropriate to 
carry out the purposes or provisions of this chap- 
ter; 

'(4) to make and perform contracts, agreements, 
and commitments; 

'(8) to prescribe and impose fees and charges for 
services by the Corporation; 

'(6) to settle, adjust, and eom|»romise, and with 
or without consideration or benefit to the Corpo- 
ration, to release or waive in whole or in part, in 
advance or uth s i wi s s, any claim, demand, or 
right of, by, or against the Corporation; 

'(7) to sue and be sued, complain and defend, in 
any State, Federal, or other court; 

'(8) to acquire, take, hold, and own, and to deal 
with and dispose of any property; 

'(9) to determine its necessary expenditures and 
the manner in which the same shall be incurred, 
allowed; and paid, and to appoint, employ, and fix 
and p ro vi de for the com p ens a tion and benefits of 



'(Dto 
'(2) to neve 



officers, employees, attorneys, end agents; 

'(10) to borrow funds from ths United States 
Treasury for startup and operating costs; 

'(11) to collect delinquent accounta; and 

'( 12) to execute instruments, to incur liabilities, 
end to do any and all other sets and thinga ea 
may be necessary or incidental to the conduct of 
its business snd the exercise of all other rights 
and powers granted to the Corporation by this 
chapter. 

'(b) Exemption From Taxation. - The Corpora- 
tion, its property, its franchise, capital, reserves, 
surplus, snd its income (including but not limited 
to, any income of any fund established under 
section 9704(0), shall be exempt from all taxation 
now or hereafter imposed by the United States 
(other than taxes im p osed under chapter 21, 
relating to the Federal Insurance Contributions 
Act and chapter 28, relating to the Federal Un- 
employment Tax Act) or by any State or local tax- 
ing authority, except that any real property and 
any tangible personal property (other then cash 
snd securities) of the Corporation shall be subject 
to State and local taxation to the same extent 
according to its value as other real and tangible 
personal property is taxed. 

'(c) Corporation aa Agency. - Notwithstanding 
section 1849 of title 28 or any other provision of 
law- 

'(1) the Corporation shall be deemed to be an 
agency included in sections 1845 snd 1442 of 
such title 28; 

'(2) all civil actions to which the Corporation ia 
a party shall be deemed to arise under the laws 
of the United States, and the district courts of 
the United States shall have original jurisdiction 
of all such actions, without regard to amount or 
value; and 

'(8) any civil or other action, case or controver- 
sy in s court of a State, or any court other than 
a district court of the United States, to which the 
Corporation ia a party may at any time before the 
trial thereof be removed by the Corporation to 
the United States district court for the district 
and division embracing the place where the same 
is pending, or if there ia no such district court, to 
the diatrict court of the United States for the 
district in which the principal office of the Corpo- 
ration ia located, by following any procedure for 
removal of causes in effect st the time of such 
removal. No attachment or execution shall be 
issued against the Corporation or any of its prop- 
erty before final judgment in any State, Federal, 
or other court. 

'(d) Report to Congress. • No later than 1 year 
after the effective date of this chapter, the Corpo- 
ration shall present s report to Congress on its 



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activities, including an evaluation of the econom- 
ic impact of this chapter on email coal companies 
and an evaluation of the effectiveness of the 
Corporation in achieving its goals, and recom- 
mending any changes to this chapter as it consid- 
ers beneficial, including any recommended chang- 
es in premiums considered warranted to mini- 
mise any undue economic impact on email coal 
companies. At such tarns. Congress shall review 
the activities and operations of the Corporation. 
'SBC. 9704. OPERATION OP CORPORATION. 

'(a) Investigatory Authority. • 

'(1) The Corporation assy make such investiga- 
tions es it deems necessary to enforce any provi- 
sion of this chapter or any rule or regulation 
thereunder, and may require or permit any per- 
son to file with it a statement in writing, under 
oath or otherwise es the Corporation shall deter- 
mine, es to all the facta and circumstances con- 
cerning the matter to be investigated. 

'(Z) The Corporation shall keep strictly confi- 
dential all information received relating to • 

'(A) trade secrets or financial or commercial 
information pertaining specifically to s given 
person, the disclosure of which could cause com- 
petitive injury to such person, or 

'(B) personnel or medical data or similar data, 
the disclosure of which would constitute s clearly 
unwarranted invasion of personal privacy, unless 
the portions containing such matters, informa- 
tion, or data have been excised, but may use such 
information to the extent necessary to enforce 
the premium obligation im p osed under subsection 
(g). 

'(b) Discovery Powers Vested in Board or Desig- 
nated Officers. • For the purpose of any investi- 
gation described in subsection (a), or any other 
proceeding under this chapter, the board or any 
officer designated by the board, may administer 
oaths and affirmations, subpoena witneesss, com- 
pel their att en da n c e , take evidence end require 
the production of sny books, papers, correspon- 
dence, memoranda or other records which the 
Corporation deems relevant or material to the 
inquiry. 

'(c) Contempt. - In esse of contumacy by, or 
refusal to obey, a subpoena issued to sny person, 
the Corporation assy invoke the aid of any court 
of the United States within the jurisdiction of 
which such investigation or proceeding is carried 
on (or where such person resides or carries on 
business) in requiring the sttendanoo and testi- 
mony of witnsssss and the production of books, 
papers, eorrsspondenes, memoranda and other 
records. The court may issue an order requiring 
auch person to appear before the Corporation, 
and to produce records or to give testimony relat- 



ed to the matter under investigation or in ques- 
tion. Any failure to obey such order of the court 
msy be punished by the court am s contempt 
thereof. All process in sny such esse msy be 
served in ths judicial district in which such per- 
eon b an inhabitant or may be found. 

'(d) Cooperation With Governmental Agencies. 
• In order to avoid unneosssary expense and du- 
plication of functions among government egsn- 
dss, ths Corporation msy make auch arrangs- 
mente or sgreements for cooperation or mutual 
assistance in the performance of ita functions 
under this chapter as is practicable and consis- 
tent with lsw. The Corporation may utilize the 
facilities or services of sny department, agency or 
establishment of the United Statee or of any 
State or political subdivision of s State, including 
ths services of sny of its employees, with the 
lawful consent of such department, agency or 
establishment. The head of each department, 
agency or estsblishment of ths United States 
shall cooperate with the Corporation and, to the 
extent permitted by law, provide such informa- 
tion and facilities ss it msy requeet for its assis- 
tance in the performance of ita functions under 
this chsptsr. 

'(e) Civil Actions. • 

'(1) Civil actions may be brought by the Corpo- 
ration for appropriate relief, legal or equitable or 
both, to enforce the provisions of this chapter. 

'(2) Except ss otherwise provided in this chap- 
ter, if an action ie brought in s district court of 
ths United Statee, it msy be brought in ths dis- 
trict where the Corporation is administered, 
where the violation took place, or where a defen- 
dant resides or may be found, snd process msy be 
ssrved in sny othsr district where s defendant 
resides or may be found. 

'(8) The district courts of the United Statee 
ehall have jurisdiction of actions brought by ths 
Corporation under this chsptsr without regard to 
the amount in controversy in sny such action. 

4 (4) (A) An action under this subsection msy not 
be brought after the later of - 

'(i) 6 years after the date on which the cause of 
action arose; or 

'(ii) Syesrs siter the spplicsbls date specified in 
subparagraph (B). 

'(B) Ths applicable date specified in this sub- 
paragraph is the earliest date on which the Cor- 
poration acquired or should have acquired actual 
knowledge of the existence of auch cauae of ac- 
tion. 

'(C) For pu rp oses of this paragraph, in an ac- 
tion by the Corporation to collect premiums due 
under this chsptsr, ths cauae of action shall be 
treated ss having arisen no esrlier than ths data 



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on which the premium was due. 

'(6) In any action brought under this chapter, 
whether to collect premiums, penalties (in the 
amount determined by the Corporation, which 
•hall be no greater than the greater of interest on 
the unpaid premium or 20 percent of the amount 
of the unpaid premium), or interest (at the rate 
determined by the Corporation) or for any other 
purpose, in which a judgment in favor of the 
Corporation is awarded, the court shall award 
the Corporation ite costs and reasonable counsel 
lees. 

•(f) Establishment of Coal Industry Retiree 
Benefit Fund. - 

*(1) The Corporation ahall establish a Coal In- 
dustry Retiree Benefit Fund (hereafter in thia 
chapter referred to as the 'Fund'). Except as 
provided in paragraph (2), all amounts received 
by the Corporation ahall be deposited in the 
Fund, and all expenditures made by the Corpora- 
tion ahall be made out of the Fund. 

'(2) The Corporation ahall transfer to the Secre- 
tary of the Treasury for deposit in the general 
fund of the Treasury of the United State, any 
portion of the premiume received. under subsec- 
tion (g) which are allocable to the portion of such 
\ which are imposed to offset Federal 
losses by reason of deductions being 
allowed under chapter 1 with respect to such 



'(8) Except as otherwise provided in this chap- 
ter, the balance of the Fund ahall at any time 
consist of the aggregate at such time of the fol- 
lowing; items: 

'(A) Cash on hand or on deposit. 

'(B) Amounts invested in United States Govern- 
ment or agency securities. 

'(g) Imposition of Premium Payment Obligation. 

'(1KA) There ie hereby imposed on each person 
that produces bituminous coal for use or for sale 
the obligation to pay to the Corporation an hour- 
ly premium equal to - 

'(i) in the case of bituminoue coal produced in 
an eastern State, the rato for each hour worked 
in coal production work by euch person's employ- 



ess determined in accordance with the following: 


'In the ease 




of calendar year 


The rate ia: 


1992 


$1.18 


1993 


$1.18 


1994 


$1.19 


1996 


$1.19 


1996 or thereafter 


$1-20, 



*(ii) in the esse of bituminous coal produced in 
a western State, 16 cento on each hour worked in 



coal production work by such person's employees. 

*(B)(i) There is hereby im p osed on bituminous 
coal imported to the United States, for use or for 
sale, a per-ton premium obligation to be paid to 
the Corporation. Such premium is intended to be 
equivalent to the premium imposed on domesti- 
cally produced bituminous coal. 

'(ii) The amount of the per-ton premium shall 
be equal to 89 centa per ton. 

'(Hi) For purposes of this subparagraph, the 
term 'ton' means 2,000 pounds, and the term 
'United States' means any State of the United 
States, the District of Columbia, Puerto Rico, the 
Virgin Islands, American Samoa, Guam, Wake 
Island, the Canal Zone, and the Outer Continen- 
tal Shelf lands defined in the Outer Continental 
Shelf Lands Act (48 U.S.C. 1831-1848). 

'(CMi) In addition to the amounts specified in 
subparagraphs (A) and (B), each last signatory 
operator and each other employer referred to in 
this subparagraph shall pay to the Corporation 
an annual per beneficiary premium. The amount 
of the annual per beneficiary premium ahall be 
the product of the total number of orphan min- 
ers, spouses, surviving spouses, and dependents 
(determined under section 9711) attributable to 
such lest signatory operator or employer and the 
per beneficiary premium as calculated in clause 
(iii). 

'(ii) For purposes of thia subparagraph, an or- 
phan miner (and his spouse, surviving spouse 
and dependents) shall be attributable - 

'(D to an employer if his employment with such 
employer resulted in his eligibility under section 
9711(b)(1)(E); or 

'(II) to a laat signatory operator meeting the 
conditions described in section 9723(6) with re- 
spect to such orphan miner. 

'(iii)(I) The amount of the per beneficiary pre- 
mium ahall be determined in accordance with the 
following table: 
'In the case 

of calendar year The premium ia: 

1992 $1216 

1998 $2632 

1994 $2746 

1996 $2973 

1996 or thereafter $3479. 

'(II) As of the date any per beneficiary premium 
obligation is due under this subparagraph, the 
persona described in section 9723(6) (B) and (C) 
with respect to any laat signatory operator or 
employer ahall be treated as such laat signatory 
operator or employer, and ahall be jointly and 
severally liable for such obligation. 

'(iv) A last signatory operator shall have no 
liability under thia subparagraph if • 



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'(I) ss of November 6, 1990, and for all periods 
thereafter, euch last signatory operator, and the 
persons described in section 9723(6) (B) and (Q 
with respect to such last signatory operator, have 
ceased ail involvement in the mining, production, 
preparation, marketing, sale, distribution, trans- 
portation, leasing or licensing of coal; and 

'(ID such last signatory operator, and the per- 
sons described in section 9723(6) (B) and (C) with 
respect to such last signatory operator, were, in 
the aggregate, involved in the production of fewer 
than 60,000 tons of coal during each of the 8 
years immediately preceding the cessation of such 
involvement. The limitation of liability set forth 
in the preceding sentence shall cease to apply at 
any time that a last signatory operator, or any 
persons described in section 9723(6) (B) and (C) 
with respect to such last signatory operator, 
ceases to meet the conditions described in sub- 
clause 0). 

*(v) The annuel per beneficiary premium shall 
be payable in equal monthly installments, due by 
the tenth day of each month. In no event shall 
a last signatory operator be obligated to pay a per 
beneficiary premium for an individual for any 
month for which the last signatory operator has 
paid its required assessment for such individual 
under section 9713(d). 

*(vi) A last signatory operator shall have no 
liability under this subparagraph if as of January 
1, 1992, such last signatory operator and the per- 
sons described in section 9723(6) (B) and (C) with 
respect to such last signatory operator, have 
ceased ell involvement in the production, sale, 
distribution, transportation, or use in processss 
for producing products of the operator and such 
persons, of bituminous and sub-bituminous coal 
(other than the sale or leasing of any interest in 
coal reserves). 

'(2)(A) In the event that a person required to 
make payments under paragraph (1) fails to do 
so, the Corporation shall assess liability against 
the person, based upon the Corporation's esti- 
mate of the person's liability. 

•(B) No later than 90 days after the assessment 
of liability by the Corporation, the person may 
request administrative review of the 
Corporation's assessment, in accordance with 
procedures adopted by the Corporation. 

'(C) Notwithstanding the pendency of adminis- 
trative review of any assessment of liability, the 
person shall, no later than 30 days after the 
assessment of such liability, pay all amounts 
required by the assessment in accordance with 
any payment schedule applied by the Corpora- 
tion. In the event a person fails to make such 
payments, all amounts owed by the person shall 



become immediately due and payable. 

'(D) In the event the person that has made 
payments in accordance with subparagraph (C) is 
ultimately determined, in accordance with sub- 
paragraph (B), to have paid in excess of the 
amounts actually due, the person shall receive a 
refund of auch excess amounts, with interest. 

'(3) The Corporation shall report to the Con- 
gress before the done of any calendar year with 
respect to any adjustment in the amount of the 
premiums imposed under subparagraphs (A)(i) 
and (B) of paragraph (1) for the following calen- 
dar year which the Corporation determines nec- 
essary to enable the provision of benefits under 
section 9712. Any recommendation with respect 
to sny adjustment shall reflect the reduction in 
Federal revenues by reason of deductions being 
allowed under chapter 1 with respect to such 
premiums. 

'(4) Premiums owed under subparagraphs (A) 
and (B) of paragraph (1) shall be due on the 
tenth dsy of each calendar month immediately 
following the month in which the coal is pro- 
duced or imported, end shall be paid to the Cor- 
poration in accordance with forma and schedules 
promulgated by the Corporation. 

'(6) The premium obligation im p osed under this 
section shall take effect on July 1, 1992. Premi- 
ums paid under this section shall be deemed to be 
fully deductible under this title without regard to 
any limitation on deductibility set forth in this 
title. 

'(6) For purposes of this subsection • 

'(A) the term 'bituminous coal' means coal clas- 
sified ss bituminous coal according to the publi- 
cation of the American Society for Testing and 
Materials under the title 'Standard Classification 
of Coals by Rank' (ASTM D 336-9U), aa in effect 
on the date of the enactment of this chapter, and 

'(B) the term 'Eastern States' includes Alabama, 
Connecticut, Delaware, the District of Columbia, 
Florida, Georgia, Illinois, Indiana, Kentucky, 
Maine, Maryland, Massachusetts, Michigan, Mis- 
sissippi, New Hampshire, New Jersey, New York. 
North Carolina, Ohio, Pennsylvania, Rhode la- 
land. South Carolina, Tennessee, Vermont, Vir- 
ginia, West Virginia, and Wisconsin; and 

'(C) the term 'Western States' includes Alaska. 
Anions, Arkansas, California, Colorado, Hawaii, 
Idaho, Iowa, Kansas, Louisiana, Minnesota, Mis- 
souri, Montana, Nebraska* Nevada, New Mexico, 
North Dakota, Oklahoma, Oregon, South Dakota, 
Texas, Utah, Washington, and Wyoming. 
'SUBCHAPTER B • ELIGIBILITY FOR AND 
PAYMENT OF BENEFITS 
'Sac 9711. Eligibility; orphan miners. 
'Sec 9712. Payment of benefits. 



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•Sec 9713. Establishment of Cod Industry 1991 
Benefit Fund. 

'Sec 9714. Obligation of last signatory operator 
to provide benefits to retirees. 
'Sec 97 16. Transition benefits; premium nonpay- 
ment; transfere between 199 1 Fund and Corpora- 
tion. 
•SBC. 9711. ELIGIBILITY; ORPHAN MINERS. 

'(a) In General. - Any person who is an orphan 
miner, as defined in subsection (b), or who meete 
the conditions set forth in subsection (c), ahall be 
eligible to receive benefit* provided by the Corpo- 
ration pursuant to section 9712, except that no 
person shall be eligible to receive benefits from 
the Corporation because of a failure to receive 
benefite resulting from a temporary labor dispute. 

'(b) Orphan Miner Status. • For purposes of 



'(1) An orphan miner is any person who • 

'(AMD as of the date of enactment of this chap- 
ter, was eligible to receive benefite as a retiree 
from a plan described in section 9721(d) (or, but 
for the enactment of this chapter, would be eligi- 
ble to receive benefits as a retiree from the plan 
described in section 9721(d)(2)(A)), and 

'(ii) b not receiving benefits as a retiree from a 
plan described in section 9721(d) or from the 
plan established pursuant to section 9713; 

*(B) is not described in subparagraph (A), but 
was eligible to receive benefits ss a retiree from 
the plan established pursuant to section 9718 
and is not receiving benefits from such plan; 

'(O(i) is receiving s pension from the defined 
benefit pension plan maintained pursuant to the 
in section 9723(7) (other 
section 9721(c)), 

'(ii) but for the enactment of thia chapter, 
would be eligible to receive medical benefits ss s 
retiree ss of February 1, 1993, from ths plan de- 
scribed in section 9721(d)(2)(B), and 

'(iii) is not receiving medical benefits ss s retir- 
es from the plan described in section 
9721(dX2XB) or from sny other plan; 

'(DHi) ie receiving s pension from the defined 
benefit pension pun maintained pursuant to the 
agreement described in section 9723(7) (other 
than the plan described in section 9721(c)); 

'(ii) ss of February 1, 1993, had earned 20 years 
of credited service under such plan; 

'(iii) is st sny time after beginning to receive 
such pension not receiving retiree medical bene- 
fite equal to the benefite in effect at that time 
under the plans described in section 9712(b)(3); 



'(iv) meete the eligibility requirements for retir- 
ee medical benefite then in effect under such 



'(ED(i) wss eligible as a result of cosl production 
work performed in the bituminous, sub-bitumi- 
nous or lignite coal industry to receive retiree 
medical benefits from a health care plan that met 
the requirements of subparagraphs (D) and (E) of 
paragraph (2); 

'(ii) initially ceased to receive retiree medical 
benefits on or after the date of enactment of this 
chapter, despite continued eligibility therefore; 

'(iii) had been receiving such benefits from s 
plan that had been in existence for at least 3 
years prior to the cessation of benefits; and 

'(iv) was included in s category of retirees that 
had been eligible to receive benefits for at least 3 
years prior to the cessation of benefits. 

'(2) For purposes of paragraph (IKE), the fol- 
lowing rules shall apply: 

'(A) Eligibility ia continuing where benefits 
cossod incident to en employer's cessation of 
operations, but is not continuing where benefits 
cossod pursuant to a lawful termination or modi- 
fication of a plan (under circumstances other 
than a eessstion of operations). 

'(B) In the case of sny individual who has 20 
years of credited service under a defined benefit 
pension plan maintained pursuant to the agree- 
ment described in section 9723(7), or who wss 
otherwise eligible to receive retiree medical bene- 
fits from s single employer health care plan pur- 
euant to a coal wage agreement, all health care 
plana in which such individual was a participant 
during a period of such credited service or during 
such period of eligibility shall be taken into ac- 
count in determining whether the 3-year tests 
have been met. 

'(C) In the case of an employer that established 
a new heelth care plan as a replacement for a 
prior plan, auch prior plan shall be taken into 
account in determining whether the 3-year tests 
have been met. 

'(D) A heelth care plan meets the requirements 
of this subparagraph if the employer maintaining 
the plan, a labor organisation representing the 
employees of the employer, or en employee of the 
employer submits a copy of the plan to the Cor- 
poration within 130 days from the later of • 

'(i) the date of establishment of the plan; or 

'(ii) the date of enactment of this chapter. 

'(E) A health care plan meets the requirements 
of this subparagraph if the employer maintaining 
the plan, a labor organization representing the 
employees of the employer, or en employee of the 
employer submits s copy of sny smsndment or 
modification to the plan to the Corporation with- 
in 130 days from the later of • 

*(i) the date of auch amendment or modification; 



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'(ii) the date of enactment of this chapter. 

'(c) Eligibility of Spouses and Dependents. - 

'(1) A spouse, surviving spouse or dependent of 
an orphan miner or a deceased coal miner meets 
the conditions of this section if such individual 
was eligible to receive benefits from a plan de- 
scribed in section 9721(d) ss of the date of enact- 
ment of this chapter, and is not receiving benefits 
from that plan or from the plan established pur- 
susnt to section 9713. 

'(2) A spouse, surviving spouse or dependent of 
sn orphan miner or a deceased coal miner meets 
the conditions of this section if such individual is 
not described in paragraph (1), but was eligible to 
receive benefits from the plan established pursu- 
ant to section 97 IS and is not receiving benefits 
from such plan. 

'(8) In the case of any spouse, surviving spouse 
or dependent of sn orphan miner described in 
subsection (b)(1)(A) or (b)(1)(C) of this section, 
eligibility shall be based upon the rules aet forth 
in the plans described in section 972 1(d) ss of the 
date of enactment of this chapter. In the case of 
any spouse, surviving spouse or dependent of an 
orphan miner described in subse ct ion (b)(1)(D), 
eligibility shall be based upon the rules aet forth 
in individual employer plans maintained pursu- 
ant to ths agreement described in section 9723(7) 
on the date thet the orphan miner first became 
eligible for benefits from ths Corporation. In all 
other esses, eligibility shall be based upon ths 
rules of the plan that was or would have been 
applicable to the orphan miner or deceased coal 
miner for the 3-year period preceding eligibility 
for benefits from ths Corporation. Ths Corpora- 
tion is authorised to promulgate regulations 
consistent with this paragraph establishing ths 
eligibility of other ■p ouse s , surviving s p o us es and 
dependents of orphan miners or deceased coal 
miners for health benefits. 

'(d) ReenroUment of Orphan Miners and Benefi- 
ciaries. • Ths Corporation and the Joint board of 
trustees of ths plan established pursuant to sec- 
tion 9713 shall cooperate to review the eligibility 
of individuak under this section. Pending such 
review, any individual receiving benefits from s 
plan described in section 9721(d) ss of ths date of 
enactment of this chapter shall be presumed to 
meet the first part of the eligibility tests of sub- 
sections <bM IMA) and (cM 1). However, no individ- 
ual shall be considered eligible to receive benefits 
provided by the Corporation unless s determina- 
tion is mads that such individual in fact met or 
meets all eligibility requirements necessary to 
receive benefits ss required under subsec ti on (b) 
or (c). No individual shall be eligibls under sub- 
section (bMlHA) or (eMl) if such individual was 



finally determined to be ineligible to receive bene- 
fits from a plan described in section 9721(d) prior 
to the date of enactment of this chapter. 
'SEC. 9712. PAYMENT OF BENEFITS. 

'(s) In General. • The Corporation shall provide 
medical benefits to orphan miners, their spouses, 
surviving spouses and dependents, who meet the 
eligibility requirements of section 97 1 1, and shall 
provide coverage for death benefits to orphan 
miners eligible for such benefits. Ths board shell 
estsblish schedules of benefits applicable to class- 
es of orphan miners, their spouses, surviving 
spouses and dependents, in accordance with this 
section. All benefit obligations of the Corpora- 
tion shall be contingent upon the continued im- 
position of an hourly premium payment obliga- 
tion as specified in section 9704(g)(1)(A). 

'(b) Benefit Levels. • 

'( 1) An orphan miner eligible for benefits pursu- 
ant to soction 9711(b)(1)(A) or 971 1(b)(1)(C) shall 
be entitled to benefit coverage that is substantial- 
ly ths same ss (but not exceeding) the coverage 
provided by the plans described in section 9721(d) 
ss of the date of enactment of this chapter, and 
shall be subject to all limitations of such covcr- 
egs. Such orphan miner shsll also be eligible for 
death benefita, which shsll be equsl to ths death 
benefits provided ss of the date of enactment of 
this chapter under the plan described in section 
9721(c). 

'(2) An orphan miner eligible for benefits pursu- 
ant to section 97 1 l(b)( 1)(B) or 97 1 l(b)( IKE) shsll 
be entitled to s level of benefits and benefit cover- 
age that is substantially the asms ss (but not 
exceeding) the retiree benefit coverage applicable 
to him immediately preceding his eligibility for 
benefits from the Corporation, and shall be sub- 
ject to sll limitations of such coverage. Notwith- 
standing ths foregoing, the following rules shall 
apply: 

'(A) Ths level of benefits snd benefit coverage 
provided under this paragraph shall not exceed 
that which is provided under paragraph (1) of 
this subsection. 

'(B) In determining the retiree benefit coverage 
applicable to sn orphan miner for purposes of 
this paragraph, ths Corporation shsll disregard 
any increases or d ecreas es in benefits or benefit 
coverage thst were in effect for fewer then 3 
years preceding the orphan miner's eligibility for 
benefits from the Corporation, except thst • 

*(i) sny death benefit applicable to an orphan 
miner ss s result of 1991 amendments to the 
agreement described in section 9723(7) shall not 
be disregarded; snd 

'(ii) increases or dec re a s e e in benefits or benefit 
coverage that were ths subject of s collective 



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bargaining agreement shall not be disregarded. 

*<3) An orphan minor eligible for benefits pursu- 
ant to aaetion 9711(bMlMD) ahaU be enUUed to a 
level of benefit* and benefit coverage equivalent 
to the level of benefits and benefit coverage, if 
any, provided under individual employer plane 
maintained pursuant to the agreement described 
in section 9723(7) on the date thst the orphan 
miner first became eligible for benefits from the 
Corporation, and shall be subject to all limita- 
tions of such coverage. 

'(4) An individual eligible for benefits pursuant 
to section 9711(c) shall be entitled to medical 
benefit coverage that does not exceed the medical 
benefit coverage that is or would have been appli- 
cable to the coal miner through whom the indi- 
vidual claims eligibility, and the individual shall 
be subject to all limitations of such coverage. 

'(6) The Corporation msy make increases to its 
schedules of benefits that are desirable for effi- 
ciency of administration, except that such adjust- 
ments to benefits may not result in sn increase 
in cost to the Corporation or sn increase in sny 
premium under section 9704(g). 

'(c) Mandatory Managed Care. - The Corpora- 
tion shall develop managed care rules which shall 
be applicable to the payment of benefits under 
this eeetion. The rules shall preserve freedom of 
choice while reinforcing managed care network 
use by allowing a point of service decision es to 
whether a network medical provider will be used. 
Major elements of such rules shall include, but 
not be limited to - 

'( 1) implementing formulary for drugs and sub- 
jecting the prescription program to a rigorous 
review of appropriate use; 

'(2) obtaining a unit price discount in exchange 
for patient volume and preferred provider ststus, 
with the amount of the potential discount vsry- 
ing by geographic region; 

'(3) limiting benefit payments to physicians to 
the medicare allowable charge, while protecting 
beneficiaries from balance billing by providers; 

'(4) utilising Medicare's 'Appropriateness of 
service' protocols in the claims payment function 
where they are more stringent; 

'(6) creating mandatory utilisation review (UR) 
procedures, but placing the responsibility to fol- 
low such procedures on the physician or hospital, 
not the beneficiaries; 

'(6) selecting the most efficient physicians and 
state-of-the-art utilisation management tech- 
niques, including ambulatory care techniques, for 
medical services delivered by the managed care 



'(7) utilising a managed care network provider 
system ee practiced in the health care industry at 



the time medical services are needed (point of 
service) in order to receive maximum benefits 
available under this section. Any managed care or 
cost containment program ahall have as its pri- 
mary goal the provision of quality medical care. 
In no event ahall any such program result in the 
reduction of the quslity of care provided to par- 
ticipanta and beneficiariee consistent with sound 
medical practice. 

'(d) Effective Date. - Benefit* shsll be payable 
under this section as of July 1, 1992. Pursuant to 
section 97 15, the Corporation shsll psy the trust- 
ees of the plana described in section 9721(d) and 
the plan established pursuant to section 9713 for 
all benefit and administrative costs expended 
with respect to eligible orphan miners, spouses, 
surviving spouses and dependents, from the effec- 
tive date to the date that such individuals are 
transferred to the Corporation. 

'(e) Elective Coverage. • 

'(1) An employer may elect to provide retire- 
ment health coverage to its employees by meeting 
the following conditions: 

'(A) The employer must employ workers in the 
coal industry. 

'(B) The employer agrees to psy sn annual pre- 
mium, as determined by the Corporation, suffi- 
cient to provide retirement health coverage to all 
of ita employees who perform classified work as 
determined under the agreement described in 
section 9723(7), or any successor agreement, who 
have worked s total of 20 years, including both 
service with thst employer, service for any other 
employer described in this subsection, end service 
for sny other employer thst is credited for pur- 
poses of eligibility by a plan described in section 
404(c). 

'(C) The employer is not currently obligated by 
s collective bargaining agreement to make contri- 
butions to the plan established pursuant to sec- 
tion 9713. 

'(D) The employer's election, once made, is 
irrevocable. 

'(2) Upon the retirement of an employee of an 
employer described in paragraph (1), with 20 or 
more years of service, upon such terms snd con- 
ditions as established by the Corporation, such 
employee and his or her dependents shsll receive 
benefits, upon such terms snd conditions ss de- 
termined by the Corporation. 
•SEC. 9713. ESTABLISHMENT OF UNITED 
MINE WORKERSOP AMERICA 1991 BENEFIT 
FUND. 

'(s) Merger of Retiree Benefit Plana. • 

'( 1) As soon ss practicable slier the ensctment 
of this chapter, and in no event later than 60 
days, the settlors of the plans described in section 



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9721(d) shall cause such plana to be merged, and 
•hall appoint a joint board of trustees to manage 
the operation and administration of the merged 
plan. The merged plan shall be known as the 
United Mine Workers of America 1991 Benefit 
Fund (hereinafter referred to as the '1991 
Fund'). The 1991 Fund shall be an employee 
welfare benefit plan within the meaning of sec- 
tion 3(1) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(1)) and a 
multiemployer plan within the meaning of sec- 
tion 3(37) of such Act (29 U.S.C. 1002(37)). 

'(2) The settlors shall design the structure and 
administration of the 1991 Fund. The settlors 
may at any time and for any reason change the 
number and identity of the members comprising 
the board of trustees of the 1991 Fund. 

'(b) Eligibility. - 

'( 1) The following individuals shall be eligible to 
receive benefits from the 1991 Fund: 

'(A) Any individual who, as of the date of enact- 
ment of this chapter, was eligible to receive bene- 
fits from the plan described in section 
9721(d)(2)(A) (or who, but for the enactment of 
this chapter, would be eligible for benefit* from 
such plan), and with respect to whom the last 
signatory operator ia and remains signatory to an 
agreement that ia described in section 9723(7) or 
that contains provisions relating to pension and 
health care benefits that are the same as those 
contained in such agreement. 

'(B) Any individual who retired from classified 
employment under an agreement that is de- 
scribed in section 9723(7) or that contains provi- 
sions relating to pension and health care benefits 
that are the same as those contained in such 
agreement, and any spouse, surviving spouse or 
dependent of such retiree, with respect to whom 
the last signatory operator makes an election 
prior to February 1, 1993, to pay premiums to 
the 1991 Fund for such benefits snd is and re- 
mains signatory to an agreement that ia de- 
scribed in section 9723(7) or that contains provi- 
sions relating to pension snd health cars benefits 
that are the same ss those contained in such 
agreement. Any election made pursuant to this 
subparagraph must cover, at a minimum, all of 
the last signatory operator's retirees who retired 
from clsssified employment ss of February 1, 
1993. 

'(2) No individual shall be eligible under sub- 
paragraph (A) of paragraph (1) unless the joint 
board of trustees of the 1991 Fund determines 
that such individual in fact met all eligibility 
requirements of the plan described in section 
9721(d)(2XA) as of the date of enactment of this 
chapter. Any individual who was finally deter- 



mined to hsve been ineligible for benefits from s 
plan described in section 9721(d)(2)(A) prior to 
such date of enactment shall be ineligible under 
subparagraph (A) of paragraph (1). 

'(c) Benefits. • 

'(1) Except as otherwise provided in this subsec- 
tion, health care benefits provided under the 
1991 Fund shall be identical to the benefits pro- 
vided under the plana described in section 
9721(d). The 1991 Fund shall provide coverage 
for death benefits to retirees, equal to the death 
benefits provided under the plan described in 
section 9721(c). 

'(2) The joint board of trustees of the 1991 
Fund shsll develop managed care rules, subject to 
section 9714(b), which shall be applicable to the 
payment of benefits under this section. The 
rules shsll preserve freedom of choice while rein- 
forcing managed care network use by allowing s 
point of service decision ss to whether s network 
medical provider will be used. The board of 
trustees shall permit any last signatory operator 
subject to section 9714 to utilize the managed 
care and cost containment rules snd programs 
developed pursuant to this paragraph, at the 
election of such last signatory operator. Msjor 
elements of such rules shsll include, but not be 
limited to • 

'(A) implementing formulary for drugs and 
subjecting the prescription program to a rigorous 
reviow of appropriate use; 

'(B) obtaining a unit price discount in exchange 
for patient volume snd preferred provider status, 
with the amount of the potential discount vsry- 
ing by geographic region; 

'(C) limiting benefit payments to physicians to 
the medicare allowable charge, while protecting 
beneficiaries from balance billing by providers; 

'(D) utilizing medicare's 'appropriateness of 
service' protocol* in the claims peyment function 
where they ere more stringent; 

'(E) creating mandatory utilization review (UR) 
procedures, but plscing the responsibility to fol- 
low such procedures on the physician or hospital, 
not the beneficiaries; 

'(F) selecting the most efficient physicians snd 
state-of-the-srt utilization management tech- 
niques, including ambulatory cars techniques, for 
medical services delivered by the managed care 
network; and 

'(G) utilizing a managed care network provider 
system aa practiced in the health care industry st 
the time medical services are needed 
(point-of-service) in order to receive maximum 
benefits available under this section. Any man- 
aged care or cost containment program shall have 
as its primary goal the provision of quality modi- 



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eel ear*. In no •wot shall any such program 
result in the reduction of the quality of cars 
provided to participants and beneficiaries consis- 
tent with sound medical practice. 

'(1) As of November SO of each plan year, the 
joint board of trustees of the 1991 Fund shsll set 
a monthly assessment for each person required to 
pay assessments pursuant to paragraph (2). The 
monthly assessment for each such person shall 
be equal to 1/12 of the product of - 

'(A) the projected cost of operating the 1991 
Fund during the succeeding plan year (less any 
■seats received from a plan described in section 
9721(c) and any other surplus assets) divided by 
the number of participants and beneficiaries for 
the current plan year; and 

'(B) the projected number of the 1991 Funds' 
eligible participants and beneficiaries attributable 
to such person, determined am of the nearest 
November 1. In projecting the cost of operating 
the 1991 Fund, the board of trustees shall take 
into account the anticipated benefit experience 
and administrative expenses of the 1991 Fund am 
a whole, and amounts needed to eliminate any 
accumulated deficit. The monthly assessment 
determined under this paragraph shell be verified 
by an independent auditor, and shall continue in 
effect for each month of the succeeding plan year, 
except that the joint board of trustees shall deter- 
mine a monthly assessment for any new contrib- 
utor or other person for whom a monthly assess- 
ment hss not been established, and a revised 
monthly assessment for any last signatory opera- 
tor that makes the election described in subsec- 
tion (bMIMB) and with respect to which new 
participants and beneficiaries become eligible for 
benefits. Any new monthly assessment or revised 
monthly assessment shall be based upon the 
number of projected participants and beneficiaries 
attributable to the contributor as of the date the 
new or revised sssessment is msde. Each person 
required to pay assessments pursuant to pars- 
graph (2) shsll continue to pay to the plana de- 
scribed in section 9721(d) the contributions re- 
quired under the applicable coal wags agreement, 
until the first month for which the aseeesment 
described in this paragraph is set. In no event 
shell a person required to pay assessments pur- 
euant to paragraph (2) be required to make any 
payment to the 1991 Fund for the same period 
for which a contribution to a plan described In 
section 9721(d) is required. 

'(2) Each last signatory operator with respect to 
any person described in su b se ct ion (bM 1)(A), and 
each last signatory operator with respect to any 
I in subsection (b)( 1MB) that has 



agreed to provide benefits coverage through the 
1991 Fund, shall pay to the 1991 Fund for each 
month the assessment determined by tho joint 
board of trustees pursuant to paragraph ( 1). The 
assessments paid under this section shall be 
deemed to be fully deductible under this title 
without regard to any limitation on deductibility 
set forth in this title. 

'(3) Either of the settlors shall have the right to 
audit the accounta, books and records, and opera- 
tion of the 1991 Fund, at any time and for any 
reason, upon reasonable notice to the joint board 
of trustees. The joint board of trustees shall 
cooperate fully with the settlors in connection 
with any such audit and shall make available 
appropriate personnel and records deemed neces- 
sary by the auditors for inspection and copying at 
reasonable times and places. 

'(4) Each last signatory operator obligated to 
pay assessments to the 1991 Fund pursuant to 
paragraph (2) shall be bound by sll of the provi- 
sions of Uie plsn and trust documents establish- 
ing and governing the 1991 Fund. 

'(6) As of the date any assessment owed under 
this subsection is due. the persons described in 
section 9723(5) (B) or (C) with respect to any last 
signatory operator shsll be treated as such last 
signatory operator and shall be jointly end sever- 
ally liable for such assessment. 

'(e) Exclusive Obligation. • Except ss provided 
in this chapter, no employer that was a signatory 
to the 1978 or any subsequent coal wage agree- 
ment and that had an obligation to provide 
health care benefits to coal mine retirees shall be 
obligated to provide benefits to individuals cov- 
ered by the plans described in section 9721(d), or 
to make contributions to sny plan described in 
section 9721(d), or to the 1991 Fund, with re- 
spect to work performed or coal mined after the 
date of enactment of this chapter, or to pay with- 
drawal liability to a plan described in section 
9721(d) as s result of the change in the contribu- 
tion obligation required by this chapter. 
'SEC. 9714. OBLIGATION OF LAST SIGNA- 
TORY OPERATOR TO PROVIDE BENEFITS 
TO RETIREES. 

'(a) Duration of Obligation. • The last signatory 
operator of any individual receiving retiree 
health care benefits as of February 1. 1993 (in- 
cluding retiree, spouse, surviving spouse end 
dependent benefits) from an individual employer 
plan maintained pursuant to a coal wage agree- 
ment (or who has applied for such benefits as of 
February 1. 1993, and has met every eligibility 
requirement for such benefits as of such date) 
shall provide retiree health care benefits to such 
individual equal to the benefits required to be 



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provided by such last signatory operator's indi- 
vidual employer plan ee of January I, 1992, aa 
limited by any managed care or coat containment 
rules of the type described in sections 9712(c) 
and 9713(c)(2), and subject to subsection (b), for 
ss long ss the last signatory operator remains in 
business. The existence, level and duration of 
benefits provided to a last signatory operator's 
former employees (and their spouses, surviving 
spouses and dependents), other than those de- 
scribed in this su b se ct ion, who are or were cov- 
ered by a coal wage agreement, shall only be ss 
determined by and subject to collective bargaining 
or lawful unilateral action, except that this sub- 
section shall not be construed to impair the eligi- 
bility of any individual described in section 
9711(b)(1)(D) for the benefit coverage described 
in section 9712(b)(3). 

'(b) Managed Care Provider System Quality 
Control. • Any managed care provider system 
adopted by a last signatory operator ss permitted 
under su b s ectio n (a), or by the joint board of 
trustees of the 1991 Fund, pursuant to section 
9713(c)(2), shall be subject to the following re- 
quirements of this subse ct ion: 

'(1) The settlors shall establish a medical peer 
review panel, which shall determine standards of 
quality for managed cars provider systems. Stan- 
dards of quality shall include acc e ssibility to 
medical care, taking into account that accessibili- 
ty requirements may differ depending upon the 
nature of the medical need. Each settlor shell 
have the power to appoint and remove 2 individu- 
als who shall ssrve on the panel. A panel mem- 
ber shall be either a medical practitioner knowl- 
edgeable in managed care, or an individual who 
is expert in managed care. 

'(2) Each last signatory operator and the joint 
board of trustees of the 1991 Fund shall submit 
a description of any managed care provider sys- 
tem to the panel prior to implementation of the 
system, and shall, on the same date or prior to 
such submission, provide notice of the submis- 
sion to the participants of the affected employee 
benefit plan or plans. The last signatory employ- 
er or the joint board of trustees may implement 
the pro posed system on a provisional basis on or 
after the 120th day after the submission to the 
panel, unless the panel issues a preliminary de- 
termination thet the system has not been shown 
to meet the requieite standards. The require- 
ments of this paragraph shall not apply to a last 
signatory operator el ect ing to utilise the managed 
care provider system established by the 1991 
Fund if the panel has issued a favorable determi- 
nation lor such system. 

'(3MA) Upon receipt of a submission by a last 



signatory operator or by the joint board of trust- 
ees, the panol shall conduct s preliminary exami- 
nation of the managed care provider system. In 
the event that the preliminary review reveals a 
failure to show compliance with established stan- 
dards such thst provisional implementation by a 
last signatory operator or by the joint board of 
trustees rosy be detrimental to participants sub- 
ject to the system, the panel shall, within 120 
days of the submission, issue a preliminary deter- 
mination that the system has not been shown to 
meet the requisite standards. 

'(B) Within 240 days from the date of any sub- 
mission, the panel shall issue a final determi- 
nation of whether the system has been shown to 
meet the established standards of quality. In the 
event of a negative determination, the panel shall 
list specific steps thet may be taken by the last 
signstory operator or by the joint board of trust- 
ees to qualify the system under the eetablished 
etandarde. 

'(C) The first-named settlor in section 9723(3) 
shall have the authority to review submissions 
mads under paragraph (2), and to designate the 
order in which such submissions shall be consid- 
ered by the panel. 

*(D) In the event that the members of the panel 
deadlock on a determination to be made under 
this paragraph, they shell, by majority vote, ap- 
point a neutral person, who would be qualified to 
serve es s panel member, to break such deadlock. 

'(4) In the event of a negative determination by 
the panel, the last signatory operator shall have 
the optione described in subparagraph (A), (B), or 
(C), and the joint board of trustees shsll have the 
options described in subparagraphs (A) and (B): 

'(A) implementing the specific steps outlined by 
the panel pursuant to paragraph (3); 

'(B) consistent with the requirements of this 
su b se ct ion, establishing a new managed care 
provider system that meeta the requisite stan- 
dards; or 

'(C) electing to utilise the managed care provid- 
er system established by the 1991 Fund if the 
panel hes issued a favorable determination for 
such system. 

'(6) The panel shell develop rules for the peri- 
odic review of determinations made, except that 
reviews shall be no more frequent than once 
every 3 years; and for the reconsideration of any 
prior determination upon a showing that the 
managed care provider system does not or hes 
ceased to meet the eetablished standards. Ths 
panel may take into account written complaints 
received from affected participants and beneficia- 
ries, but the euthority of the panel shall be limit- 
ed to determining the continued qualification of 



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a managed ear* provider system under the estab- 
lished standards, and shall not extend to resolv- 
ing dsims of medical maipractice or any other 

'(6) The panel shall withhold from all persons 
not connected with the conduct of a reconsidera- 
tion or review desc rib ed in paragraph (6) (other 
than the first-named settlor in section 9728(8)) 
all information r ela tin g to the subject of any 
written complaint received by an affected partici- 
pant or beneficiary; and may not be compelled in 
any Federal, State, or local civil, criminal, admin- 
istrative, legislative, or other proceedings to iden- 
tify such information. Notwithstanding ths fore- 
going, the panel shall provide the last signatory 
operator or the Joint board of trustees of ths 1991 
Fund with a copy of any written complaint relat- 
ing to a managed care provider system main- 
tained by such last signatory operator or joint 
board of trustees. 

'(7)(A) Ths panel, any pereon acting ss s mem- 
ber or staff to the panel, any person under s 
contract or other formal agreement with the 
panel, and any pereon who partidpetes with or 
assists the panel with respect to any action taken 
pursuant to this subse ct ion, shall not be liable in 
damsges under any law of the United States or of 
any State (or political subdivision thereof) with 
respect to the action. The preceding sentence 
shall not apply to damsges under any law of the 
United States or any State relating to the civil 
rights of any person or persons, including ths 
Civil Right. Act of 1964 (42 U.S.C. 2000e et eeq.) 
end the Civil Rights Acts (42 U.S.C. 1981 et 
eeq.). Nothing in this subparagraph shall pre- 
vent the United States or sny attorney general of 
s State from bringing an action, where such sn 
action is otherwise authorised. 

'(B) Notwithstanding any other provision of 
law, no person (whether ss a witness or other- 
wise) providing information to the panel regard- 
ing the competence or pro f essional conduct of s 
physician shall be held, by reason of having pro- 
vided such information, to be liable in damages 
under any law of the United States or of any 
State (or political subdivision thereof) unless 
such information is false and the person provid- 
ing it knew that such information wss false. 

'(8) The joint board of trustees of the 1991 
Fund and each last signatory operator that 
makes s submission pursuant to su b se ct ion (b)(2) 
shall be liable for reasonable fees sssessad by the 
panel in connection with the review of managed 



'(c) Satisfaction of Obligations. - Subject to the 
provisions of sections 9711 and 9718, the obliga- 
tions of a last signatory operator under thm sec- 



tion may be satisfied for any period with respect 
to any individual by payment of the required 
assessment under section 9713(d) or the premi- 
um under section 9704(g)(1)(C), or by the provi- 
sion of the required benefits under an individual 
employer plan. 

'(d) Control Group Liability. - As of the date 
that any benefit obligation owed pursuant to this 
section is due, the persons described in section 
9728(6) (B) and (O with respect to any last sig- 
natory operator shall be treated as such last 
signatory operator, and shall be jointly and sever- 
ally liable for such benefit obligation. 
'SEC. 9715. TRANSITION BENEFITS; PRE- 
MIUM NONPAYMENT; TRANSFERS BE- 
TWEEN 1991 FUND AND CORPORATION. 

'(a) Payment of Benefita to Orphan Miners. - 
The plana described in section 9721(d) end the 
1991 Fund shall continue to provide benofits to 
orphan miners, spouses, surviving spouses end 
dependents described in section 97 1 1 (b) and (c), 
until the end of the second month beginning 
after the ofToctive date of section 9712(d). Such 
orphan miners, spouses, surviving spouses snd 
dependents shall be transferred to the Corpora- 
tion as of the first day of the third month follow- 
ing the effective date of section 9712(d). Tlie 
defined benefit pension plans maintained pursu- 
ant to the agreement described in section 9728(7) 
shell, on bohslf of the Corporation snd the 1991 
Fund, continue to provide death bonefits to or- 
plisn miners described in section 971 Kb) snd to 
retirees described in section 9713(b)(1) until the 
end of the second month beginning after the 
effective date of section 9712(d). Such pension 
plans shall have no liability for death benefita for 
the orphan miners described in section 9711(b), 
or for the retirees described in section 97 13(b)( 1), 
ss of tho first day of the third month following 
the effective date of section 9712(d). The Corpo- 
ration msy elect to pay the plana described in 
section 9721(d), the 1991 Fund, or the defined 
benefit pension plsns maintained pursuant to the 
agreement described in section 9723(7) to contin- 
ue to provide transition benefits slier the end of 
the second month beginning sfter the effective 
date of section 9712(d), and for a poriod not to 
exceed 6 months. If the Corporation so olects, it 
shall pay auch plans all amounts necessary to 
enable the provision of benefita and to cover all 
costs of administration associated with the provi- 
sion of benefits. The schedule for such payments 
shall be determined by the boards of trustees of 
the plsns, snd may require advance payments. 
Amounts paid pursuant to this subsection shall 
not be included in the amounts to bo reimbursed 
pursuant to subsection (b). 



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'(b) Reimbursement of Cost for Transition Ben- 
efits. • No later then the first dsy of the fourth 
month slier the effective dete of section 9712(d), 
the Corporation shell reimburse the plans de- 
scribed in section 9721(d) and the 1991 Fund, 
with interest, for the amounts of benefits paid 
and administrative expeness incurred pursuant to 
subsection (s). No later than the first dsy of ths 
fourth month slier the effective date of section 
9712(d), the Corporation and the 1991 Fund 
shall reimburse the defined benefit pension plans 
msintsined pursuant to ths agreement described 
in section 9723(7), with interest, for ths amount 
of death benefits paid and administrative expens- 
es incurred pursuant to subsection (s). 

'(c) Access to Records. - The joint boards of 
trustees of the plans described in section 9721(d) 
and the 1991 Fund shall share with the Corpo- 
ration all records, files end documents related to 
the orphan miners, spouses, surviving spouses 
and dependents transfsrred to the Corporation, 
to the extent necessary for the Corporation to 
sdminister the psymenl of benefits to such indi- 
viduals. 

'(d) Premium Nonpayment. • 

'(I) No individusl shsll be eligible for benefits 
from the 1991 Fund during any month for which 
the assessments required under section 9713(d) 
hsvs not been psid by such individusl's last sig- 
natory operator. Such individual shall be imme- 
diately eligible to receive benefit* from the Corpo- 
ration and the Corporation shall have a cause of 
sction sgsinst such individusl's last signatory 
operator for the per beneficiary premium imposed 
under section 9704(g)( IXC). 

'(2) Ths 1991 Fund shsll continue to treet an 
individusl described in paragraph (1) ss if he or 
she were eligible for benefits until the end of the 
third month for which sn sssessment due has not 
been psid. If the last signatory operator with 
respect to such individusl hss not paid ita assess- 
ments due by the end of such month (with such 
interest and liquidated damages imposed by the 
board of trustees in their discretion, up to the 
amounts provided in section 9722(d)(2) (B) end 
(O). the 1991 Fund snail notify ths Corporation 
that ths individusl is transferred to the Corpora- 
tion pursuant to paragraph (I), and the Corpo- 
ration shsll reimburse ths 1991 Fund, with inter- 
est, for sny benefits psid to or on behalf of such 
individual for all months for which assessments 
hsvs not been peid. 

'SUBCHAPTER C - OTHER PROVISIONS 
'Sec. 9721. Determination and disposition of ex- 

'Sec. 9722. Civil enforcement. 
'Sec. 9723. Definitions. 



'Sec. 9724. Shsm transactions. 

'SEC. 9721. DETERMINATION AND DISl*OSl- 

TION OF EXCESS PENSION ASSETS. 

'(s) Determination of Excess Pension Assets. • 

'(1) Within 30 dsys slier the enactment of this 
chapter, the joint board of truatees of the plan 
doscribed in subsection (c) shall, through the 
independent actuaries of the plan, calculate the 
amount of the excess pension assets. The truat- 
ees of the plsn described in subsection (c) shall 
recalculate the excess pension assets at any timo 
that they are directed to do so by the settlors. 

'(2) Immediately following the calculation (or 
recalculation) of the excess pension assets, the 
trustees of the plsn described in subsection (c) 
shall segregate the excess pension assets from the 
remaining sssets of such plsn. The segregated 
exceee pension sssets (including sll earnings 
thereon) shall be held in the plan until disbursed 
pursuant to subsection (b). 

'(b) Disposition of Exceee Pension Assets. • 
Not wit hats niling sny other provision of law, the 
excess pension sssets (including sll osrnings 
thereon) shsll be expended in the following order: 

'CD Fifty million dollars shall be sdded to the 
general sssets of the Corporation. 

'(2) The deficits in the plans described in sub- 
section (d) as of the date of enactment of this 
chapter shall be reduced to zero. 

'(3) Fifty million dollars shall be added to the 
general sssets of the 1991 Fund. 

'(4) The remainder of the excess pension sssets, 
if sny, shall be added to the general BMsets of the 
1991 Fund, st such times and in such amounts 
ss msy be directed by the settlors. 

'(c) Plsn Containing Excess Pension Assets. • A 
plsn is described in this subsection if it is a pen- 
aion plan and • 

'(1) it ia a plan described in section 404(c) or s 
continuation thereof; and 

'(2) participation in ths plsn is substantially 
limited to individuals who retired prior to Janu- 
ary I, 1976. 

'(d) Related Welfare Plana. - A plan is described 
in this subsection if • 

'(1) it is a plsn described in section 404(c) or s 
continuation thereof; snd 

'(2) it provides hcslth benefits to retirees snd 
beneficiaries of the industry which msintsined 
the plsn described in subsection (c); snd 

'(A) participation in the plsn is substantially 
limited to individuals who retired prior to Janu- 
ary I. 1976; or 

'(B) participation in the plan is substantially 
limited to individuals who retired on or alter 
January I. 1976. 

'(e) Tax Treatment, Validity of Transfer of Ex- 



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'(1) No deduction shall bo allowed under this 
title with respect to the expenditure of excess 
pension assets pursuant to subsection (a), but 
such transfer shall not adversely aiTsct the de- 
ductibility (under applicable provisions of this 
title) of contributions previously made by employ- 
ers or amounts hereafter contributed by employ- 
ers to the plana described in subsection (c) or (d), 
or to the 1991 Fund. 

'(2) The expenditure of excess pension assets 
pursuant to subsection (b) • 

'(A) shall not be treated as an employer rever- 
sion from a qualified plan for purposes of section 
4980. and 

'(B) shall not be includible in the cross income 
of any employer maintaining a plan described in 
su b se ct ion (c). 

'(3) Neither the segrega tion of excess pension 
assets pursuant to subsection (a)(2), the expendi- 
ture of excess pension assets pursuant to subsec- 
tion (b), nor any direction made by the settlors 
pursuant to subsection (a)(1) or (b)(4) shall be 
deemed to violate or be prohibited by any provi- 
sion of law, or to cause the settlors, joint board of 
trustees, employers or any related person to in- 
cur or be suqjsct to taxes, lines, or penalties of 
any kind whatsoever. 
'SEC. 9722. CIVIL ENFORCEMENT. 

'(a) Civil actions may be brought by the 1991 
Fund for appropriate relief, legal or equitable or 
both, to enforce the provisions of this chapter. 

'(b) Except as otherwise provided in this chap- 
ter, where such an action ia brought in a district 
court of the United States, it may be brought in 
the district where the 1991 Fund is administered, 
in the district where the violation took place, or 
where s defendant resides or may be found, and 
pro ce ss may be served in any other district where 
a defendant resides or may be found. 

'(c) The district courts of ths United States 
shall have jurisdiction of actions brought by the 
1991 Fund under this chapter without regard to 
the amount in controversy in any such action. 

'(dH 1) In sny sction brought under subsection 
(a) (other than an action described in paragraph 
(2)). the court in its discretion msy award to the 
1991 Fund all or a portion of the costs of litiga- 
tion, including reasonable attorneys' fees, in- 
curred by the 1991 Fund in connection with such 



'(2) In any action by the 1991 Fund to enforce 
section 9713(d)(2), in which a judgment in favor 
of the 1991 Fund is awarded, the court i 
award the 1991 Fund - 

'(A) the unpaid assessments; 

'(B) interest on the unpaid assessments; 



'(C) an amount equsl to the groator of - 

*(i) interest on the unpaid assessments; or 

'(ii) liquidated damages in the smount of 20 
percent of the amount determined by the court 
under subparagraph (A); 

'(D) reasonable attorneys' foes and costs of the 
action, to be paid by the defendant; and 

'(E) audi other legal or equitable relief aa the 
court deems appropriate. For purposes of this 
paragraph, interest on unpaid assessments shall 
be determined by using the rate provided under 
the rules of the 1991 Fund, or, if none, the rate 
prescribed under section 6621. 

'(e)(1) Except as provided in paragraph (2), an 
action under this subsection msy not be brought 
after the later of • 

'(A) 6 years slier the date on which the cause of 
action arose; or 

'(B) 3 years alter the earliest date on which the 
1991 Fund acquired or should have acquired 
actual knowledge of the existence of such cause 
of action. 

'(2) In the case of fraud or concealment, the 
period described in paragraph (1Kb) shall be ex- 
tended to 6 years after the applicable dute. 

'(0 Any person who is an employer, a last sig- 
natory operator, a person described in section 
9723(6) (ID or (C) with respect to an employer or 
last signatory operator, a bituminous coal indus- 
try retiree, or any spouse, surviving spouse or 
dependent of a bituminous coal industry retiree, 
and is adversely affected by any act or omission 
of any party under this chspter, or who is an 
employee organization of which such a coal in- 
dustry retiree is a member, or an employer asso- 
ciation of which such an employer is a member, 
may bring an action for appropriate equitable 
relief in the appropriate court. 

'(I) During the pendency of any proceeding 
under this subsection by an employer, employer 
association, last signatory operator, or person 
described in section 9723(6) (ID or (C) with re- 
spect to an employer or last signatory operator, 
all potentially affected retirees, spouses, surviv- 
ing spouses and dependents eligible for benefits 
from the 1991 Fund shall be transferred to the 
Corporation, which shall - 

'(A) provide such benefits as would have been 
provided from the 1991 Fund, and 

'(B) have and exercise all of the rights and obli- 
gationa of the 1991 Fund with respect to - 

'(i) the collection of assessments relating to 
audi retirees and spouses, surviving spouses and 
dependents, and 

'(ii) the defense of the proceeding. 

'(2) In the event that a laat signatory operator 
or other person pays to the 1991 Fund the as- 



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■a— menU required pursuant to Motion 9713(d) 
for any month during the pendancy of a proceed- 
ing described in paragraph (1). the 1991 Fund. 
and not the Corporation, •hail be responsible for 
providing any benefits required to be paid for 
that month to eligible individual, under section 
9713(b). 

'(g) In any action brought under subsection (0, 
the court may award all or a portion of the costs 
and expenses, including reasonable attorneys' 
fees, incurred in connection with such action to 
any party that prevails or substantially prevails 
in such action. 

'(h) This subsection shall be the exclusive 
means for bringing actions against the Corpora- 
tion or the 1991 Fund under this chapter. 

•OKI) Except as provided in paragraph (2), an 
action under this su b se ct ion may not be brought 
after the later of - 

'(A) 6 yeare after the date on which the cause of 



'(B) 3 yeara after the earliest date on which the 
plaintiff acquired or should have acquired actual 
knowledge of the existence of such cause of ac- 
tion. 

'(2) In the case of fraud or concealment, the 
period described in paragraph (1KB) shall be 
extended to 6 yeara after the applicable date. 

'(j) The district courts of Che United States have 
jurisdiction of actions brought under this subsec- 
tion without regard to the amount in controver- 
*(k) In any suit, action or p r o c eeding in which 
the 1991 Fund Is a party, in any State court, the 
1991 Fund msy, without bond or security, re- 
move such suit, action, or proceeding from the 
State court to the United States district court for 
ths district or division in which such suit, action 
or p r o c eeding Is pending by following any proce- 
dure for removal now or hereafter in effect. 
'SBC. 9723. DEFINITIONS. 
'For purpos e s of this chapter • 
'( 1) The term 'coal production work' shall mean 
work in which an individual engages in physical 
operations consisting of the mining, preparation, 
handling, processing, cleaning and loading of 
coal, including removal of overburden and coal 
waste, the transportation of coal (except by wa- 
terway or rail not owned by an employer engaged 
in the production of coal), repair and mainte- 
nance work normally performed at a mine eite or 
central shop of an employer engaged in the pro- 
duction of coal, maintenance of gob piles and 
mine roads, construction of mine or mine-related 
facilities including the erection of mine tipples 
and sinking of mine shafts or slopes performed 
by employee s of the employer engaged in the 



production of coal, and work of the type custom- 
arily related to the foregoing; except that the 
term shall not mean managerial, supervisory, 
warehouse, clerical or technical work, unless 
such work is performed subject to a coal wage 
agreement binding the employer engaged in the 
production of coal. 
'(2) The term 'coal wage i 



'(A) the National Bituminous Coal Wage Agree- 



'(B) any agreement substantially identical or 
substantially similar to such agreement, but only 
if, ss of the date of enactment of this chapter, 
such agreement provided for contributions to be 
msde to the plans described in section 9721(d); or 

'(C) any othsr agreement entered into between 
en employer in the bituminous coal industry and 
the United Mine Workers of America that re- 
quires the provision of health benefits to retirees 
of such employer, eligibility for which is based on 
yeara of service credited under a plan established 
by the settlors and described in eection 404(c) or 
a continuation of such plan. 

'(3) The term 'credited service' shall have the 
same meaning as determined under the applica- 
ble defined benefit pension plan, but only if such 
service wss of the type used to determine eligibil- 
ity under the plan described in eection 
9721(d)(2)(B). 

'(4) The term 'excess pension assets' shall mean 
the excess of the current value of plan eessts (ss 
defined in eection 3(26) of the Employee Retire- 
ment Income Security Act of 1974 (29 U.S.C. 
1002(26)) of the plan deecribed in section 9721(c) 
ovsr the actuarial present value of all benefits for 
all plan perticipanta under such plan, determined 
ss of the date of enactment, in accordance with 
the actuarial assumptions and methods which 
reflect the plan actuary's best estimate of antici- 
pated experience under such plan, except that 
where excess pension assets are recalculated as 
required under section 9721(a)(1), the amount of 
excess pension assets shall be determined as of 
the July 1 next preceding the date of the recalcu- 
lation. 

'(6) A last signatory operator shall be consid- 
ered to be in business for purpos e s of this chap- 
ter if any of the following conducts or derives 
revenue from any business, whether or not with- 
in the coal industry • 

'(A) such lsst signatory operator, 

'(B) any member of the controlled group of 
corporations (within the meaning of eection 
414(b)) of auch last eignatory operator, or 

'(C) any trade or business which is under com- 
mon control (as determined under section 4 14(c)) 



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with Mich last signatory operator. If a laat signa- 
tory operator is no longer in buaineaa and there 
is no eucceeeor, the relationahipe described in 
paragraphs (2) and (3) ahall be determined at the 
time it ceased to be in business. 

'(SKA) The term 'last signatory operator' shall 
mean, with respect to any orphan miner or other 
coal industry retiree eligible for medical benefits, 
a person that meets or at one time met the fol- 
lowing condition*: 

*(i) A person meets the conditions of this clause 



*(D an owner, lessee or other person who oper- 
ates, controls or supervises a coal mine; 

'AD an independent contractor who operates, 
controls or supervisee a coal mine; or 

'(TO) in the event a parson described in (I) or 
(D) is no longer in business, any successor to 
such person, except that a purchaser shall not be 
considered to be a successor with respect to any 
orphan miner or other coal industry retiree eligi- 
ble for medical benefits, if responsibility for the 
medical benefits of such orphan miner or other 
coal industry retiree wss retained by the seller in 
the purchase and sale transection. 

'(ii) A person meets the conditions of this clause 
if euch person or, in the cess of s person ds- 
ecribsd in dauss (i)uH), such person's predo 



'(D wss s signatory to a 1978 coal wage agree- 
ment, or any subsequent coal wage agreement; 
end 

'(II) wee the last coal industry employer of such 
orphan miner or other retiree. 

'(B) Notwithstanding subparagraph (A), if, as of 
the date of enactment of this chapter, a person 
has assumed or retained responsibility for retiree 
medical benefit obligations for individuals who 
retired from employment under s coal wage 
agreement, then such person shall be treated es 
the last signatory operator with respect to such 
individuals for purposes of this chapter, and any 
person from whom such responsibility wss as- 
sumed ahall not be treated as the last signatory 
operator. 

'(C) For purposes of this chapter, the last signa- 
tory operator of any orphan miner or other coal 
industry retiree shsll be considered to be the lest 
signatory operator with respect to such orphan 
miner's or other coal industry retiree's spouse, 
surviving spouss end dependents, if any. 

'(7) The term 'National Bituminous Coal Wags 
Agreement' shall mean the collective bargaining 
agreement negotiated by the eeltlors. 

'(S) The term 'settlors' means the United Mine 
Workers of America and the Bituminous Cosl 
Operators' Association, Inc. (hereinafter referred 



to es ths 'BCOA'), except that if the BCOA cesses 
to exist, members of ths BCOA representing more 
than 60 percent of the tonnage membership of 
BCOA on the date of enactment of this Act ehsll 
collectively be considered s settlor. 
'SEC. 9724. SHAM TRANSACTIONS. 

'If s principal purpose of sny transaction is to 
evade or avoid liability under this chapter, this 
chapter shall be applied (and liability shall be im- 
poeed) without regard to auch transaction. A 
bona fide, arm's-length sale of an entity subject 
to liability under this chapter to an unrelated 
party (within the meaning of section 4204(d) of 
the Employee Retirement Income Security Act of 
1974, es amended), shall not by itself be suffi- 
cient to establish a principal purpose to evsde or 
svoid liability within the meaning of this section.' 

(b) Conforming Amendment. • The table of sub- 
titles for the Internal Revenue Code of 1986 is 
emended by sdding at the end thereof the follow- 
ing new subtitle: 'Subtitle J. Coal Industry 
health benefits.' 

(c) Effective Date. - The amendments made by 
this section ehsll apply on and after the date of 
the enactment of this Act. 

Mr. BENTSEN. Mr. President, I 
have just sent that modified Finance 
Committee amendment to H.R. 776 to 
the desk. The modified amendment is 
a complete substitute for H.R. 776. It 
contains the Finance Committee ener- 
gy related revenue title. That replac- 
es title XIX of H.R. 776. In addition, 
the substitute strikes all remaining 
language in that particular piece of 
legislation and replaces it with the 
text of S. 2166, the energy bill as 
passed by the Senate in February. 

This substitute abides by all Budget 
Act rules and is now the pending busi- 
ness before the Senate. 

Mr. President, as the Senate turns 
to consideration of this substitute, we 
revisit a subject of great importance 
to our country, the vital task of devel- 
oping an effective energy policy for 
this country. 

The Senate has already spoken once 
on the subject, voted 94 to 4 in Febru- 
ary, to pass S. 2166, an energy bill 
without tax provisions. Now we are 



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taking up the energy legislation that 
includes the provisions of the bill as 
well as energy tax provisions approved 
by the Finance Committee which I 
believe furthers the energy policy 
objectives of S. 2166. The Senate's 
overwhelming approval of energy leg- 
islation in February indicates that we 
are aware of the need for moving 
responsibly in devising a meaningful 
national energy policy. 

We learned some important lessons 
from the Persian Gulf. We understood 
the need for greater energy efficiency, 
development of alternative energy 
sources, and a solid base of domestic 
production. All of those are a part of 
the solution, trying to get them to fit 
together effectively. 

We just cannot continue down the 
road of increasing reliance on foreign 
energy production in this country. We 
now import almost half the oil we are 
consuming, some 46 percent of it. 
Within 3 years, it is estimated it will 
go over 50 percent. Without action by 
the Congress, this picture is not going 
to get any better. We can expect a 
continued increase in the reliance on 
imports. Even in an optimistic view, 
you are going to see imports reach 
almost 70 percent by the year 2010 - 
70 percent. 

Let me see if I can give you an ex- 
ample of what that means. That 
means 36 supertankers a day - 36 
supertankers a day coming in, with all 
that does to our trade imbalance, all 
that does to our environmental con- 
cerns, about possible accidents with 
those tankers. 

The Finance Committee tax title 
complements the energy bill we have 
already passed. It addresses our 
country's energy needs and I think in 
doing so benefits our environment. 
These provisions follow to a signifi- 



cant extent the so-called grain tax 
package developed in the House ener- 
gy bill that roughly breaks down into 
three components: energy conserva- 
tion, renewable, and alternative ener- 
gy sources, and domestic oil and gas 
production. 

First, the Finance Committee 
amendment includes several provi- 
sions that encourage energy conserva- 
tion. For example, the bill increases 
the current $21 per month exclusion 
for employer-provided subsidies for 
mass transit by $56 per month. It 
also caps the current unlimited exclu- 
sion for employer-provided partner 
subsidies at $145 per month. 

The combination of those two provi- 
sions tilt the tax treatment of 
employer-provided transportation 
benefits toward mass transit and less 
toward parking provided by the em- 
ployer for their employees. Increases 
in the use of mass transit in this way 
will not only reduce the energy con- 
sumption in the transportation sector, 
but should also help reduce traffic 
congestion and environmental degra- 
dation. 

In addition, the Finance Committee 
amendment includes a provision that 
promotes energy conservation in our 
residential, commercial, industrial 
sectors. That is done by providing an 
exclusion from customers' income for 
rebates that are provided by the utili- 
ties for the purchase and the installa- 
tion of energy conservation compli- 
ance system measures. 

The Finance Committee amend- 
ment also offers a number of provi- 
sions designed to bolster the develop- 
ment of environmentally sound renew- 
able energy sources and alternative 
fuels. It permanently extends the 
10-percent investment tax credit for 
solar and geothermal energy problems 



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that expired on June 30 and expands 
that credit to include ocean, thermal 
energy properties. It also provides a 
production-based tax credit for elec- 
tricity generated from qualifying wind 
or renewable biomass facilities. 

In addition, the Finance Committee 
amendment includes provisions that 
will facilitate the growth of alterna- 
tive fuel vehicles on our Nation's 
streets and highways, vehicles that 
run on domestically abundant clean 
burning fuels such as natural gas, 
methanol, ethanol, and electricity. It 
provides a deduction of up to $2,000 
for the purchase of these vehicles - 
more for trucks and buses; provides a 
15-percent tax credit for electric-pow- 
ered vehicles as well as tax incentives 
for clean vehicle refueling facilities. 

The Finance Committee amend- 
ment also includes provisions that 
encourage and provide for flexibility 
for the use of blended fuels such as 
ethanol-gasoline blends. It does this 
by providing a proportional excise tax 
exemption for gasoline that is mixed 
with ethanol and other alcohol at 
levels lower than the 10-percent 
blends as current law allows and pro- 
viding some limited minimum tax 
relief in connection with the alcohol 
fuels credit. 

These provisions will help our ener- 
gy sector provide the country with the 
oxygenated fuels it needs to comply 
with air quality rules such as called 
for by the Clean Air Act. 

In developing a meaningful national 
energy policy, we also have to address 
the decline in domestic production. 
This decline has contributed mightily 
to our growing dependence on foreign 
oils, and in the last 6 years, domestic 
oil production has plunged nearly 15 
percent, and as a result, production is 
at its lowest level in over 30 years. 



The future does not look much better. 

The count recently fell to the lowest 
level in 50 years. Our domestic pro- 
duction capacity is further deteriorat- 
ed with the loss of thousands of jobs 
with the domestic oil and gas indus- 
try. We heard a lot about that in the 
automobile industry but for some 
reason we do not talk about it in the 
oil and gas industry and yet this has 
been dramatic and far reaching, not a 
question of just protecting Texas or 
Wyoming. It affects our entire coun- 
try. 

The Finance Committee amend- 
ment provides incentives for the do- 
mestic production of oil and gas by 
providing limited relief in the mini- 
mum tax which has a substantial 
dampening effect on the exploration 
and development of our domestic re- 
serves. 

The Finance Committee amend- 
ment like the House bill repeals the 
minimum tax preferences for percent- 
age depletion and intangible growing 
cost for independent producers. How- 
ever, it does not for the limitation 
regarding searching out tax liability 
for these producers to ensure that the 
tax is still paid. 

To pay for these provisions, the 
Finance Committee amendment looks 
to several sources. 

First, it increases the tax on ozone 
depleting chemicals to foster their 
productions in their use and to speed 
the search for environmentally safe 
alternates. 

Second, it disallows the deduction, 
including those in business, for social, 
athletic, luncheon, and sporting goods. 

Third, it increases the excise tax on 
certain reinsurance policies issued by 
foreign companies relating to U.S. 
risk. 

Let me conclude by making some 



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comments regarding our consideration 
ofH.R. 776. 

First, in the President's interest of 
moving quickly on this bill, I strongly 
urge Senators to limit any tax amend- 
ments on this bill to thoughts that are 
related to energy policy. 

I will oppose ail tax amendments 
that are not related to energy policy 
as well as any amendments not relat- 
ed to taxes. We simply do not have 
the time to have a broad-ranging tax 
debate on nonenergy matters in the 
context of this energy bill. Doing so 
will certainly not improve prospects 
for enactment of this important legis- 
lation, and I also might add that the 
energy bill is not a particularly good 
vehicle for moving tax amendments 
unrelated to energy given that the 
House will undoubtedly insist when 
getting to conference with them on 
cropping such unrelated amendments 
to conference, and I may be somewhat 
sympathetic to that approach on their 
part. 

A second point concerning amend- 
ments: The Finance Committee has 
structured its amendment to comply 
with the budget rules. I will oppose 
any amendments that bring the bill 
out of compliance with the budget 
rules, and that means that amend- 
ments should not only be paid for over 
the 5-year budget horizon but must 
also leave the bill in compliance with 
fiscal year 1992 and fiscal year 1993. 

I urge my colleagues to move as 
expeditiously as possible to pass this 
energy bill. 

I know the distinguished Senator, 
the chairman of the Energy Commit- 
tee, the Senator from Louisiana, the 
ranking member from Wyoming have 
worked long and hard on that bill and 
it deserves your immediate consider- 
ation and passage. We have a lot of 



work to do in conference in trying to 
settle the differences between the 
House and the Senate bill. We have a 
short time to do it. 

Mr. President, thank you very 
much. I look forward to my col- 
leagues passing this important piece of 
legislation. 

Mr. WALLOP addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Wyoming. 

Mr. WALLOP. Mr. President, let me 
echo the prayer and the plea of the 
chairman of the Finance Committee, 
that we try to limit our exercise of 
senatorial privilege to amend on this 
to thingB that are directly related to 



I look down the list of proposed 
amendments on both sides. I see 
some that would like to make this 
vehicle a tax horse for all the day- 
dreams of this Congress, and it simply 
will not be able to carry and provide 
us at the end with an energy policy 
which I believe to be a nonpartisan 
goal or a bipartisan goal. 

I see some who would like to turn it 
into an agricultural bill, some who 
would like to turn it into an environ- 
ment and public works bill, some who 
would like to turn it into a Finance 
Committee wearing its Social Security 
hat bill, some who would turn it into 
a Commerce Committee bill dealing 
with financing. What that has to do 
with energy policy, I cannot tell. And 
some who would turn it into a Labor- 
HHS bill, and some who would turn it 
into a transportation bill. 

Mr. President, this Senate spoke 
and spoke well on the energy bill 
when we passed it. We spoke 94 to 4 
and we resisted all attempts to change 
its purpose from energy policy to oth- 
er kinds of policies with maybe admi- 
rable social goals. But trying to main- 



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tain its integrity as energy policy was 
not an easy chore, but it was a very 
successful chore, and the Senate spoke 
time and time and time again reject- 
ing policies, rejecting amendments 
that changed the thrust of the bill. 

When the Senator from Texas made 
his comments about the American oil 
industry, I really and genuinely hope 
that our colleagues heard what he 
said, and I hope that Americans heard 
what he said. 

There are those who believe that if 
we strangle our oil industry, then we 
will somehow or other stop using oil. 
But in fact what we will be doing, Mr. 
President, is intensifying America's 
vulnerability to foreign source supply 
operations. America's oil production 
capability is No. 1 in the world. It is 
hands down the world's best, and is 
rapidly becoming America's No. 1 
export. 

This bill passed with the Finance 
Committee amendments, and the few 
production incentives contained in the 
Energy Policy Act will not provide the 
sole means of survival for America's 
oil industry. But what we tried to do 
from the very beginning, Mr. Presi- 
dent, in ail of this was to put in play 
America's energy resources, without 
choosing amongst them, and to have 
failed to address the very significant 
self-imposed problems of oil produc- 
tion, would have been to move away 
from that idea that ail of America's 
energy resources should be in play, 
without prejudice from the Congress. 

So we will have, should we be able 
to pass this bill more or less intact, an 
oil and gas industry, a coal industry, a 
uranium industry, a renewables indus- 
try, an alternative fuels industry - we 
will have all of those - and the Con- 
gress will have spoken to this need for 
America's energy future. To the ex- 



tent that we can maintain the integri- 
ty of the vehicle that underlies it - the 
Finance Committee amendments - 
and the underlying S. 1220, it would 
be in the interest of both parties, and 
certainly of America, that we get to 
conference, and that we present at 
long last, out of several decades of 
trying, an energy policy worthy of its 
name to guide America into the fu- 
ture. 
Mr. President, I yield the floor. 

UNDER SECTION 9 OF THE CONCURRENT 
RESOLUTION ON THE BUDGET 

Mr. SASSER. Mr. President, I here- 
by submit revised budget authority 
and outlay allocations to the Senate 
Committee on Finance and aggregates 
under section 9 of the concurrent 
resolution on the budget for fiscal 
year 1992, House Concurrent Resolu- 
tion 121, and section 9 of the concur- 
rent resolution on the budget for fis- 
cal year 1993, House Concurrent Res- 
olution 287. 

Section 9(c) of the 1992 budget reso- 
lution states: 

SEC. 9. DEFICIT-NEUTRAL RESERVE FUND 
FOR FAMILY AND ECONOMIC SECURITY 

INITIATIVES IN ACCORDANCE WITH PRO- 
VISIONS OF THE SUMMIT AGREEMENT. 

• • • • • 

(c) Continuing Improvements in Ongoing 
Heelth Cere Programs end Pheeing in of Health 
Insurance Coverage for All Americana. - 

(1) In general. - Budget authority end outlays 
may be allocated to e committee or commit lees 
for legislation that increases funding to make 
continuing improvements in ongoing health care 
programs or to begin phasing-in health insurance 
coverage for ell Americans within such a 
committee's jurisdiction if such a committee or 
the committee of conference on such legislation 
reports such legislation, if, to the extent that the 
costs of such legislation are not included in this 
concurrent resolution on the budget, the enact- 
ment of such legislation will not increase the 
deficit (by virtue of either contemporaneous or 
previously passed deficit reduction) in this reso- 



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lution for fiscal year 1992, and will not increase 
the total deficit for the period of fiscal yeara 1992 
through 1996. 

(2) Revised allocations. - Upon the reporting of 
legislation pursuant to paragraph (1), and again 
upon the submission of s conference report on 
such legislation (if a conference report is submit- 
ted), the Chairman of the Committee on the Bud- 
get of the Senate may file with the Senate appro- 
priately revised allocations under sections 802(a) 
and 602(a) and revised functions! levels end 
aggregates to carry out this su b se ct ion. Such 
revised allocations, functional levels, and sggre- 
gatee shall be considered for the purpos e s of the 
Congressional Budget Act of 1974 as allocations, 
functions! levels, end aggregates contained in 
this concurrent resolution on ths budget. 

(S) Reporting revised allocations. • Ths appro- 
priate committee may report appropriately re- 
vised allocations pursuant to sections 302(b) end 
602(b) to carry out this subsection. 

Similarly, section 9(c) of the 1993 
budget resolutions states: 

SEC. 9. DEHCIT-NEUTRAL RESERVE FUND 

IN THE SENATE FOR FAMILY AND 

ECONOMIC SECURITY INITIATIVES IN 

ACCORDANCE WITH PROVISIONS OF THE 

SUMMIT AGREEMENT. 

e e e • • 

(c) Continuing Improvements in Ongoing 
Health Care Programs snd Phasing in of Health 
Insurance Coverage for All Americans. • 

(1) In general. - Budget authority and outlays 
may be allocated to a committee or committees 
for legislation that increases funding to make 
continuing improvements in ongoing health cars 
programs or to begin phssing in health insurance 
coverage for all Americans within such a 
committee's jurisdiction if such s committee or 
the committee of conference on such legislation 
reports such legislation, if, to the extent that the 
costs of such legislation are not included in this 
concurrent resolution on the budget, the enact- 
ment of such legislation will not increase the 
deficit (by virtue of either contemporaneous or 
previously passed deficit reduction) in this reso- 
lution for fiscal year 1993, and will not incresss 
the total deficit for the period of fiscal years 1999 
through 1997. 

(2) Rsvissd allocations. • Upon the reporting of 
legislation pursuant to paragraph (1), and again 
upon ths submission of s conference report on 
such legislation (if a conference report is submit- 
ted), the Chairman of the Committee on the 
Budget of the Senate may file with the Senate 



appropriately revised allocations under sections 
302(a) and 602(a) of ths Congressional Budget 
Act of 1974 snd rsvissd functional levels and 
aggregates to carry out this subsection. Such 
revised allocations, functional levels, snd aggre- 
gates shall be considered for the purposes of the 
Congressional Budget Act of 1974 ss ailocationa, 
functional levels, and aggregates contained in 
this concurrent resolution on ths budget. 

(3) Reporting revised ailocationa. • The appro- 
priate committee may report appropriately rs- 
vissd ailocationa pursuant to sections 302(b) snd 
602(b) of the Congressional Budget Act of 1974 to 
carry out this subsection. 

On June 18, 1992, the Finance 
Committee reported H.R. 776, the en- 
ergy bill, together with a committee 
amendment. Chairman Bentsen, on 
behalf of the Finance Committee, has 
just submitted a modification of that 
committee amendment. 

H.R. 776 as reported and modified 
includes provisions that would create 
two new entities - the Coal Industry 
Retiree Health Benefits Corp. and the 

1991 benefit fund - to replace two coal 
industry health funds that are experi- 
encing financial difficulties. These 
provisions will ensure that retired coal 
miners, their widows, and their depen- 
dents continue to receive the health 
benefits for which they contracted. In 
the words of section 9(c) of both the 

1992 and 1993 budget resolutions, 
these two provisions 'increase funding 
to make continuing improvements in 
ongoing health care programs.' 

H.R. 776 as reported and modified 
meets the other requirement of sec- 
tion 9 of the 1992 budget resolution 
that 'to the extent that the costs of 
such legislation are not included in 
this concurrent resolution on the bud- 
get, the enactment of such legislation 
will not increase the deficit • • • in 
this resolution for fiscal year 1992, 
and will not increase the total deficit 
for the period of fiscal years 1992 
through 1996.' 



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H.R. 776 as reported and modified 
also meets the other requirement of 
section 9 of the 1993 budget resolution 
that 'to the extent that the costs of 
such legislation are not included in 
this concurrent resolution on the 
budget, the enactment of such legisla- 
tion will not increase the deficit * * * 
in this resolution for fiscal year 1993, 
and will not increase the total deficit 
for the period of fiscal years 1993 
through 1997.' 

Both the 1992 and 1993 budget 
resolutions created rules for the Sen- 
ate embodied in these provisions. The 
later-adopted 1993 budget resolution 
covers the fiscal years 1993 through 
1997 and supersedes the 1992 budget 
resolution with regard to those fiscal 
years. Nonetheless, the 1992 budget 
resolution continues to have validity 
with regard to fiscal year 1992, as the 
1993 budget resolution did nothing to 
modify that resolution's provisions 
with regard to that fiscal year. 

Note that the health provisions 
covered by this filing are the same as 
provisions included in S. 2325 earlier 
this year. On the day that the Senate 
began consideration of S. 2325, 1 filed 
revised allocations and aggregates for 
those provisions. Those revised alloca- 
tions and aggregates appear at page 
S2951 of the Congressional Record for 
March 10, 1992. Similarly, I filed re- 
vised allocations and aggregates when 
the committee of conference on H.R. 
4210, the House companion measure, 
submitted the conference report on 
that bill. Those revised allocations 
and aggregates appear at pages S4055 
and S4056 of the Congressional Re- 
cord for March 20, 1992. The Presi- 
dent vetoed that bill the same day and 
the House sustained the President's 
veto on March 25, 1992. 

The budget resolution provision 



under which I filed the revised alloca- 
tions and aggregates earlier this year, 
section 9 of House Concurrent Resolu- 
tion 121, is, except for fiscal years, 
identical to the sections under which 
I make this filing today. For legisla- 
tive history of the 1993 budget resolu- 
tion provision, see pages 61 and 62 of 
conference report 102-529. As the 
Senator responsible for the drafting of 
this section of the budget resolutions, 
let me make clear that I used the 
language from the previous budget 
resolution with the exception that it 
would continue to apply in the case 
before us today. 

As H.R. 776 as reported and modi- 
fied complies with the conditions set 
forth in the budget resolutions, under 
the authority of section 9(c)(2) of the 
1992 and 1993 budget resolutions, I 
hereby file with the Senate appropri- 
ately revised budget authority and 
outlay allocations under sections 
302(a) and 602(a) of the Congressional 
Budget Act of 1974, 2 U.S.C. sections 
633 and 665a • 1988 and supplement 
II 1990 • and revised functional levels 
and aggregates to carry out section 9 
of the budget resolutions. 

There being no objection, the table 
was ordered to be printed in the Re- 
cord, as follows: 



••• TABLE DATA UNAVAILABLE ••• 

Mr. JOHNSTON. Mr. President, at 
long last, it appears that we are going 
to finish this energy bill today and get 
to conference where we have some 
1,500 pages of bill to work out in con- 
ference. 

It is essential, Mr. President, that 
we get this bill completed early today 
so that we can get to conference. So 
we want to put all Senators on notice 



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that if they do have amendments - in 
the first place, if they are not energy 
amendments, they are likely to be 
opposed. But, in any event, we urge 
Senators to come and quickly deal 
with their amendments. 

Mr. President, as I understand it, 
the amendment from the Finance 
Committee is at the desk; is that cor- 
rect? 

The PRESIDING OFFICER. The 
modified amendment of the chairman 
is the pending question. 

Mr. JOHNSTON. Does that include 
the text of S. 2166, as passed by the 
Senate? 

The PRESIDING OFFICER. The 
chair does not have knowledge of the 
substance of the amendment; that 
inquiry would be better made of the 
chairman. 

Mr. JOHNSTON. Well, Mr. Presi- 
dent, I ask my colleague, the chair- 
man of the Finance Committee, if this 
amendment does include the text of S. 
2166, and if the amendment at the 
desk is adopted, would it be subject to 
further amendment? 

Mr. BENTSEN. Yes; that is correct. 

The PRESIDING OFFICER. The 
chair informs the Senator from Loui- 
siana that the amendment at the desk 
is a complete substitute and, there- 
fore, would not be amendable after its 
adoption. 

Mr. JOHNSTON. Well, Mr. Presi- 
dent, I ask unanimous consent that 
the amendment at the desk, if adopt- 
ed as a substitute, be regarded as 
original text for the purpose of fur- 
ther amendment. 

The PRESIDING OFFICER. Is 
there objection? 

Mr. WALLOP. Reserving the right 
to object, Mr. President. I suggest the 
absence of a quorum. 

The PRESIDING OFFICER. The 



derk will call the rolL 

The bill derk proceeded to call the 
roll 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, I 
am advised that it would not be neces- 
sary to seek unanimous consent; that 
the amendment is now at the desk, 
and it is amendable in two degrees, 
and we will not call for its adoption at 
this time. 

The PRESIDING OFFICER. The 
Senator is correct. The Senator asked 
the chair whether it is subject to 
amendment after adoption. It is 
amendable prior to adoption and, 
therefore, the Senator is correct. 
There was no requirement for unani- 
mous consent. 

Mr. JOHNSTON. But it includes 
the text of the Energy Bill, as adopted 
by the Senate, and the text of the 
Finance Committee reported provi- 
sions. 

Mr. President, I withdraw the 
unanimous consent request. 

Mr. President, I think we are then 
ready for amendments to be offered at 
this time. 

Mr. FOWLER addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Georgia. 

Mr. FOWLER. Mr. President, if we 
are going to have an extended quorum 
call, I ask the chairman if I may speak 
out of order. But if the Chair is ready 
to conduct business, I will certainly 
yield to him. 

Mr. BENTSEN. I say to the distin- 
guished Senator, my good friend, that 
we are prepared to move on. I am 
about to ask unanimous consent for a 
time limitation on the amendment of 



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4243 



the Senator from New Jersey. 

Mr. FOWLER. The business of the 
Senator from Georgia can wait. 

UNANIMOUS-CONSENT AGREEMENT 

Mr. BENTSEN. Mr. President, I 
ask unanimous consent that we have 
a time agreement of not to exceed 2 
hours on the amendment about to be 
offered by the Senator from New Jer- 
sey; that the time be equally divided 
between the proponents and oppo- 
nents of the amendment, to be con- 
trolled by the manager of the tax 
portion of this legislation and the 
Senator from New Jersey, and that 
there be no second-degree amend- 
ments. 

The PRESIDING OFFICER. Is 
there objection? 

Without objection, it is so ordered. 

AMENDMENT NO. 2782 
(Purpose: Striking repeal of minimum Ui prefer- 
ences for depletion end intangible drilling costs) 

Mr. BRADLEY. Mr. President, I 
send an amendment to the desk and 
ask for its immediate consideration. 

The PRESIDING OFFICER. The 
amendment will be stated. 

The assistant legislative clerk read 
as follows: 

The Senator from New Jersey (Mr. Bradley) 
propos e s an amendment numbered 2782. 
Strike section 20115. 

Mr. BRADLEY. Mr. President, this 
amendment strikes the provision in 
the bill which provides $1 billion in 
tax relief to independent oil and gas 
producers. The bill currently elimi- 
nates the alternative minimum tax 
preferences for intangible drilling 
costs and percentage depletion. 

Mr. BENTSEN. Mr. President, will 
my colleague yield a minute so I might 
amend the unanimous consent re- 
quest? 

Mr. BRADLEY. I yield. 



Mr. BENTSEN. Mr. President, I 
also ask unanimous consent that 
there be no amendments to the lan- 
guage to be stricken. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The Senator from New Jersey is 
recognized. 

Mr. BRADLEY. Mr. President, as I 
was saying, the amendment that I 
have sent to the desk eliminates the 
provision of the bill which provides $1 
billion in tax relief to independent oil 
and gas producers. The bill that we 
are considering provides that tax re- 
lief by eliminating the alternative 
minimum tax preference for intangi- 
ble drilling costs and percentage deple- 
tion. 

It does so even though the ordinary 
tax treatment of intangible drilling 
costs and percentage depletion gives 
producers a leg up on other industries 
and over integrated oil and gas pro- 
ducers. We are making more gener- 
ous a provision of the Tax Code that 
is already very generous, and is al- 
ready much more generous than that 
provided other similarly situated in- 
dustries. 

Like others, I feel we need to take a 
harder look at how the alternative 
minimum tax is affecting national 
investment. I think that this is a 
legitimate inquiry. It is also impor- 
tant to recognize why the alternative 
minimum tax was instituted. We 
wanted to make sure that corpora- 
tions could not zero out their tax 
liability by taking advantage of the 
loopholes which were left untouched 
in the 1986 Tax Reform Act. 

In other words, it made no sense if 
we eliminated some loopholes and left 
others in, then put in the alternative 
minimum tax to assure that all tax- 
payers would pay some tax, and then 



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removed preferences from the alterna- 
tive minimum tax calculation. 

As you recall, we were in a situation 
prior to 1986 where there were very 
high tax rates. There were very high 
tax rates. The only problem was, 
nobody paid the tax rates because the 
tax base was riddled with loopholes. 
So for those who were interested in 
equity, they could argue: Well, we 
have a 70-percent or a 50-percent tax 
rate. Therefore, we are really hitting 
the rich; even though the rich did not 
pay anywhere close to a 50-percent 
tax rate. It was more like a 19- or 
20-percent tax rate, because they had 
loopholes that allowed them to lower 
their tax liability. So in 1986, we 
eliminated the loopholes and lowered 
the rate, a victory for both growth 
and equity. 

Since that time, of course, there 
have been attempts to put back in 
various tax loopholes. This is another 
attempt to do that. 

While I continue to think that the 
best solution would be not to put 
these loopholes in the Tax Code in the 
first place, I do not think that we 
should get in the habit of practices of 
selectively taking them out of the 
alternative minimum tax whenever an 
industry is temporarily in trouble. 
There are, in effect, many industries 
which face tougher times in this peri- 
od of sluggish growth. It is not clear 
to me why independent oil and gas 
producers should be treated better 
than a lot of other industries. 

For example, with the independent 
oil and gas producers, you have the 
immediate expense of intangible drill- 
ing costs. Up to 70 percent is expend- 
able. While in virtually every other 
industry, what you have is capitaliza- 
tion, what you have is depreciation of 
up to 20 years. The oil and gas indus- 



try already has some very strong pref- 
erences in the Tax Code. 

This would simply increase those 
preferences for only the oil and gas 
industry - not for automobiles; not for 
airlines; not for any other industry. 

Mr. President, just a few weeks ago, 
we were debating the balanced budget 
amendment on this floor. During that 
debate, there was a lot of tough talk 
about the need to curb spending and 
to make tougher choices. Nearly ev- 
ery supporter of the balanced budget 
amendment decried the runaway Fed- 
eral spending. It is important to re- 
member, however, that we spend mon- 
ey not only through the appropria- 
tions process, but we also spend mon- 
ey by giving tax breaks to various 
special-interest groups. 

If you do something - invest in this 
equipment or drill wells • then you do 
not have to pay taxes for a specific 
amount. Your taxes are reduced. 
That also increases the deficit. 

But unlike the appropriations pro- 
cess, which is subject to annual re- 
view, our tax expenditures become, in 
essence, quasi-entitlements which 
remain until, in those rare moments, 
we can muster the courage to take on 
the narrow group that benefits from 
the special tax break. Remember: The 
cost of the narrow group benefiting 
from the special tax break is that all 
of us pay higher tax rates than we 
otherwise would have to pay, and we 
increase the Federal budget deficit. 

So this amendment that I am offer- 
ing would attempt to retain some 
equity. The provision strikes $1 bil- 
lion over the next 5 years, $1 billion 
that would be tax relief to a very nar- 
row group of taxpayers: Independent 
oil and gas producers. 

This $1 billion cost, over the next 5 
years, would continue over the next 5 



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years, and even more over the next 5 
years. If a $400 billion budget deficit 
should do anything, I think it should 
make us think twice about creating 
yet another leak in our tax base. 

We can talk about tax rates, but 
then you have to consider loopholes. 
Those tax rates are just not paid. You 
can talk about putting an alternative 
minimum tax in to assure that people 
will pay their taxes; and then, of 
course, you put loopholes into the 
alternative minimum tax. This is a 
giant leak in the alternative minimum 
tax base. The result will be that inde- 
pendent oil and gas producers will pay 
much less tax - $1 billion less tax. 

Mr. President, during that balanced 
budget debate, there was also a lot of 
talk about the need to set national 
priorities. That means ensuring that 
each dollar of new investment goes to 
our most pressing national problems. 
Just a month ago, for example, in this 
body, we agonized over whether we 
could afford to spend $1 billion to 
respond to the crisis in our cities. But 
today, we seem quite willing to spend 
$1 billion on oil and gas interests 
without thinking twice about it. 

Before we do, we should pause to 
consider where the $1 billion that we 
are now prepared to give to oil and 
gas interests will not be spent. 

It will not be spent to rebuild 
burnt-out buildings in Los Angeles. It 
will not be spent to fund Head Start 
and provide thousands of children 
with the start in life that should be 
their right. It will not be spent on the 
infrastructure our Nation needs to 
build economic growth in the future. 
It will not be spent on child care, on 
AIDS, on research, on education, on 
police. It will not be spent to reduce 
the deficit, which is strangling the 
credit markets and crippling our com- 



petitiveness. 

So when we spend $1 billion for the 
oil and gas interests, we have to take 
into consideration what we are not 
spending the money on. All of those 
other interests are competing for a 
very limited amount of money. 

We have big budget deficits. The 
question is, Is there any principle that 
we can follow to cut those budget 
deficits? One principle might well be 
equity. It is a fact that if you earn 
more than $100,000 in America, your 
average spending benefit is $9,280. 

It is a fact that, if you earn $10,000 
in America, your average Federal 
spending benefit is $5,690. If you talk 
about the tax benefits, people who 
make more than $100,000 in America 
get an average tax benefit, a benefit 
from loopholes that have been put in 
the code to avoid that individual pay- 
ing taxes of about $9,280. While all of 
us are paying more, the average Fed- 
eral tax benefit to people making 
more than $100,000 is about $9,280. 
The average Federal tax spending 
benefit for people earning under 
$10,000 is about $5,690. 

So, clearly, if we were approaching 
this issue of the deficit, one principle 
we might apply is, well, who needs 
taxpayer help? People over $100,000 
or people under $10,000? 

Another principle might be, well, 
where does the money go 
generationally? The bulk of it, about 
$400 billion, goes to people who are 
over 62 years of age, while three pro- 
grams, Head Start, child-maternal 
health, the Women, Infants and Chil- 
dren Feeding Program, get $5 billion. 
That might be another way to look at 
how we go about cutting the deficit, 
maybe a generational adjustment. 

A third might be, well, what do we 
want the Federal Government to 



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spend its money on to do things that 
only the public representatives, gov- 
ernment, can do - like police or educa- 
tion or roads? Or do we really, at this 
time of $400 billion budget deficits, 
want the Federal Government to con- 
tinue, as this provision envisions, to 
expand specific subsidies to specific 
industries? 

It is my hope that people, when 
they look at the deficit and what it is 
doing to us in terms of crowding out 
the financing in the credit markets 
and what it is doing to us in terms of 
things we are not able to spend money 
on, would look very carefully at how 
we spend money. We need to consider 
both how we spend money through 
the appropriations process and 
through the Tax Code, by subsidizing 
specific industries. 

This is a classic amendment of sub- 
sidizing specific industries, by provid- 
ing $1 billion for the oil and gas indus- 
try; not for automobiles, not for air- 
lines, not for magazines or television, 
not for anything but one industry. 
We have a $400 billion budget deficit. 
Is that the way we should proceed, 
without recognition that times have 
changed? I do not think so. 

Mr. President, I am not arguing 
here that our independent drillers are 
not having tough times. I know the 
rig count is down. I do not believe 
that the alternative minimum tax, 
however, is the primary cause of the 
industry's problems. 

Under the regular Tax Code, these 
companies are allowed to immediately 
write off costs which other taxpayers 
have to capitalize and depreciate over 
their useful lives. What does that 
mean? That means, if you invest $1 
million in a machine, you write off 
that $1 million over 20 years or over 
15 years. If you spend $1 million 



making an investment under intangi- 
ble drilling costs, you write off $1 
million in that first year. This 
amounts to a tremendous subsidy for 
the oil and gas industry. 

In addition, under the regular Tax 
Code, these companies can knock off 
15 percent of their income as a deple- 
tion allowance, even after they have 
fully recovered their capitalized cost. 
In other words, they just continue to 
write off 15 percent of their income 
off the top, off the top. 

All the alternative minimum tax 
does is to ask them to give back a 
portion of these breaks. It says, if you 
have managed, through your intangi- 
ble drilling costs or your depletion 
allowances, essentially to zero out, to 
pay no taxes because you have these 
special benefits, then the alternative 
minimum tax would ensure that you 
pay some tax. That is all the alterna- 
tive minimum tax does. 

This amendment would allow, when 
you combine the intangible drilling 
costs and the depletion allowance, a 
near zeroing out of liability. Now, if 
you only had percentage depletion 
allowances, you might end up having 
to pay some taxes. Because there still 
will be restrictions in the code, you 
cannot take more than a 50-percent 
credit. But, if you combine intangible 
drilling costs and depletion, you are 
still in that rare position of being able 
to zero out, or, if not zero out, let me 
say, get very close to zeroing out tax 
liability. 

But we have been down this path 
before. In 1990, we gave the oil and 
gas industry $1.1 billion of alternative 
minimum gas relief under the guise of 
a special energy deduction. In 1990, 
we gave $1.1 billion. The deficit, as I 
recall, was around $340 billion in 
1990. And now, when the deficit is 



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$400 billion, we give another $1 billion 
in relief to one industry. 

Given the very real fiscal crises our 
country is facing, we simply cannot go 
on with business as usual. We simply 
cannot provide tax breaks to every 
industry which is facing the bottom of 
a business cycle. 

Does anyone believe drillers are in 
bad shape because they are not al- 
lowed to fully write off their intangi- 
ble drilling costs? Does anybody in 
here believe that? Drillers are in bad 
shape because oil and gas prices are 
low. If natural gas was selling at $2 
or $2.50 per mcf or oil was selling at 
|30 per barrel, we would not be debat- 
ing this provision today. 

But this bill does not say that these 
tax breaks will be taken back when 
the industry recovers. If you were 
just providing relief to an industry, 
you could say these are tough times, 
we will give it a little help, but when 
the industry gets flush again we will 
take it back. That is not what this 
provision says. This provision does 
not acknowledge that we are at the 
bottom of the business cycle. Let us 
give them some help and it will stay 
in the Tax Code forever. 

So when oil prices go up to $30 or 
$25, the oil industry will still have the 
benefit of these tax breaks because 
these tax breaks are permanent. 
Prices are low today, so we are sup- 
posed to react by throwing $1 billion 
to the independent oil and gas produc- 
ers. 

I am a Senator from a consumer 
State. When prices go back up for 
New Jerseyites, who are struggling to 
pay higher prices for oil and gas, or 
when the residents of distinguished 
Presiding Officer's State of Massachu- 
setts are paying higher prices for their 
heating oil, are we going to step in 



and give those consumers a tax break 
for their higher heating oil bills? No 
way. The tax break will be perma- 
nent for the oil and gas industry and 
the consumer will get nothing in ex- 
change. 

Mr. President, I opposed the bal- 
anced budget amendment because I 
saw it as a substitute for real leader- 
ship and making tough choices. We 
are all elected to make tough tradeoffs 
and choices. That comes with the 
office. The question I would like the 
Members to think about today is, 
given the $1 billion - $1 billion - we 
have here, should we spend it to rein- 
state tax breaks for the independent 
oil and gas industry or should we 
spend it on children, on deficit reduc- 
tion, and on our future? This amend- 
ment is offered to make that point: 
That we cannot, with $400 billion 
budget deficits, proceed with business 
as usual. 

Business as usual has always im- 
plied that whoever can exert the 
greatest power and influence on the 
process always takes home more than 
those who do not exert power in the 
process. It is not a mystery why the 
oil and gas industry has managed to 
recoup better than any other industry 
from the efforts in 1986 to remove 
special interest tax provisions. They 
are big and they are powerful. 

In 1990, they got $1.1 billion. This 
is an amendment to give them anoth- 
er $1 billion. But that billion dollars 
will be money that will be taken away 
from deficit reduction, from invest- 
ment in education, from the cleanup 
of the environment and all the other 
purposes which, if Government does 
not do them, will not get done. It is 
that simple choice that I pose today 
for the Senate in this amendment. 

I reserve the remainder of my time. 



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The PRESIDING OFFICER. Who 
yields time? 

Mr. BENTSEN. Mr. President, I 
yield myself 10 minutes. 

I listened with great interest to my 
friend from New Jersey talking about 
tax expenditures, subsidies to specific 
industries, interest groups. New Jer- 
sey is the home of great pharmaceuti- 
cal companies, major companies, pow- 
erful companies with great influence. 
Today they get a tax break of a mini- 
mum of $70,000 per employee they 
hire in Puerto Rico; up to $150,000 
per employee. The Joint Tax Commit- 
tee says that is $3 to $3.5 billion a 
year - $3.5 billion a year cost to the 
Treasury - cost to the taxpayers, cost 
to dependent children, cost to Medic- 
aid. All of those people my friend from 
New Jersey discussed. 

Are we to turn our backs on the 
fact that 75 percent of the merchan- 
dise deficit that we have today in 
trade is attributable to oil imports? 
That is how much more money we 
owe to the people of the world. That 
is how much more we are going back 
into debt. 

Powerful interests? What we are 
talking about here is not the big oil 
companies. They are headed overseas, 
that is where they have gone for their 
exploration and their development. 
We are talking about the independent 
producer. We are talking about the 
fellow who has some marginal wells 
that may be producing 5 to 6 barrels 
a day with substantial costs in keep- 
ing them open. If he does not get 
some relief he caps them. You cannot 
blame him for that. We are trying to 
keep them working at it, keeping 
them open. 

This is an industry that is going to 
be restored to great prominence? I do 
not know anybody who really believes 



that We are talking about slowing 
the decline, that is what it amounts 
to. We are talking about some 
400,000 jobs lost in the domestic oil 
and gas industry in just the last de- 
cade. We are talking about those 
independent producers being thinned 
by at least 50 percent in the last de- 
cade. The rest gave up, went broke, 
out of the business. Domestic oil and 
gas production has been reduced by 15 
percent in the last 6 years; production 
is at the lowest rate it has been in 30 
years. And I sure do not see much of 
a bump coming out of this piece of 
legislation. But I do think it can slow 
the decline and it can help. 

What we have also put in this legis- 
lation is other things to urge conser- 
vation and to put in incentives for 
conservation and alternative fuels - 
that is a Senator from Texas talking 
- alternative fuels to try to cut down 
the dependence on oil and gas in this 
country. That is what we are talking 
about, concern for the future of our 
country. This is not something 
dreamed up in the last minute. This 
was in the February tax bill, this is in 
the House bill - a deep concern. And 
we made sure they could not zero out 
on it, even so, insofar as paying for 
those taxes. 

It is a significant problem we are 
facing and it is important that we 
address it. We have been down this 
road before. What we are talking 
about is trying to help stem the de- 
cline in the production in this coun- 
try, help reduce the amount of depen- 
dence on foreign interests, help en- 
courage the use of alternative fuels. 
So I urge my colleagues to oppose this 
amendment by my distinguished 
friend and see if we can make some 
headway on this problem. 

Mr. JOHNSTON. Will the Senator 



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yield 7 minutes? 

Mr. BENTSEN. I would be pleased 
to yield 7 minutes to the distinguished 
chairman of the Energy Committee. 

Mr. JOHNSTON. Mr. President, I 
wonder if Americans understand just 
how bad the situation is in this coun- 
try with respect to oil and gas. I won- 
der how much the Congress knows 
about it. Mr. President, the Congress 
could not know how bad the situation 
is and still offer up this kind of 
amendment to strike the AMT. 

The house is on fire. It is time for 
people to wake up and to take action. 
In the last 10 years we have lost more 
oil and gas jobs in this country than 
we have in steel, than we have in 
textiles, or than we have in automo- 
biles. We lost 50,000 jobs last year. 

Mr. President, we are due to lose 
another 50,000 it is estimated by 
PWA, this year - this year. We have 
the lowest rig count in over 50 years, 
the lowest rig count in history. In the 
last 5 months we have had the lowest 
production rate in this country in 40 
years. Oil and gas people are bailing 
out of this country, at least the ma- 
jors are, just as fast as they can get 
out of the country. 

Their attitude is, Mr. President, 
they are subject to environmental 
terrorism, to use their phrase. Maybe 
that is the wrong phrase. Maybe it is 
environmental sensitivity. They re- 
gard it as environmental terrorism. 
In any event they are leaving. Any- 
body who thinks the majors still want 
to drill in America, you better wake 
up and smell the coffee. 

Mr. President, as we speak there is 
an Interior Appropriations markup 
going on downstairs, and I understand 
an amendment may be offered to can- 
cel all the leases in Bristol Bay in 
Alaska, cancel outright, which would 



be a taking under the fifth amend- 
ment and would subject us to one-half 
billion dollars in payments. Who does 
this come from? From the majors. 
They want to sell out and get out. 
They want to leave. 

Down in the Gulf of Mexico in the 
last lease sale, there were fewer acres 
offered, there were less dollars paid 
than in the last four decades. Mr. 
President, they are bailing out. They 
are leaving. And what is the trend? 
Mr. President, this is it - here is con- 
sumption and here is production. And 
everybody knows those figures. 

So what do we want to do? In this 
country do you know what the effec- 
tive tax rate on independents is? The 
effective tax rate? It is 72.5 percent; 
72.5 percent. 

We are sending the majors out of 
the country. We are inviting them 
out because every time they make a 
discovery here, we will not let them 
drill, we will not let them produce. 

They have production off the State 
of California now that has been dis- 
covered and ready to go. But they 
will not let them produce that for 
various environmental reasons. OK, 
that is our decision. We have now 
provisions pending in this energy bill 
and the House provisions that would 
say with respect to a trillion cubic feet 
of gas discovered off Florida that you 
cannot produce it. OK, if that is the 
way the House wants to play. But do 
we want to run the independents out 
of this country, as well as the majors? 
That is what the tax policy of the 
United States now says because the 
effective tax rate is 72.5 percent. The 
foreign tax rate, the effective tax rate, 
for the same oil produced elsewhere 
averages 42.9 percent, or almost it is 
a little more than half as much the 
effective tax rate. 



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Mr. President, it strikes very dose 
to my home State where the predic- 
tion is that we will lose 2,500 addition- 
al jobs this year. Bankruptcies are at 
an all-time high, and they have been 
for these last 3 or 4 years. There are 
closures of all the people in the drill- 
ing industry and the service industry, 
who produce muds, who make pipe, 
who produce drill bits, who have off- 
shore boats. They are leaving in 
droves and, Mr. President, it is the 
biggest economic bombshell that this 
country has seen this decade in terms 
of jobs, exceeding automobiles. Oh, we 
hear our friends from the automobile 
producing areas come in and talk 
about automobiles and we agree with 
them. But, Mr. President, it is not as 
bad as oil and gas. 

So what did the Finance Committee 
do, Mr. President? It said that these 
two items, intangible drilling costs and 
depletion, would no longer be prefer- 
ence items for the purpose of the al- 
ternative minimum tax. Why is this 
so important? It is so important now 
because the independents who are 
subjected to this alternative minimum 
tax are basically not making any mon- 
ey because the price of crude oil is 
down. In real terms, the price of 
crude oil is selling for less than a 
third of what it was at its peak. So 
they are not making any money now. 

My friend from New Jersey says 
that this alternative minimum tax 
would remain a preference item - that 
if we pass this, it would remain a 
preference for the independents even 
when the price of oil goes up. Mr. 
President, when the price of oil goes 
up, then the alternative minimum tax 
doss not have its bite because they 
would be making money and would be 
subjected to the ordinary tax rates. 

So this is a problem, Mr. President, 



that is brought shout by the relatively 
low price of crude oil and by the fact 
that independents are, therefore, go- 
ing bankrupt in record numbers and 
are not making any money. 

If we are to avoid the problem with 
the low rig count, the only way to do 
that is to have some incentive. I have 
here, Mr. President, a chart that 
shows the rotary rigB in operation. At 
their peak, they were at 4,000 in 1981. 
The latest count, which is the lowest 
count since 1942 when they began to 
keep these records, is 667 rigB. 

The PRESIDING OFFICER. The 
Senator's 7 minutes have expired. 

Mr. BENTSEN. I yield an addition- 
al 2 minutes to the Senator. 

Mr. JOHNSTON. I thank the Sena- 
tor. Mr. President, the only way to 
reverse this trend and to keep what 
few remaining rigB there are is to do 
away with this 72.5 percent effective 
tax on independents and put them in 
a position where they pay the same 
tax rates, effectively, as other Ameri- 
cans. That was the reason that the 
Senator from New Jersey was behind 
tax relief, a uniform tax rate. 

As it happens, as it effectively 
works, Mr. President, the indepen- 
dents are subject to this effective rate 
of 72.5 percent making it not worth- 
while to drill for oil and gas. 

I cannot think of anything more 
opposite from sound energy policy 
than to adopt the Bradley motion to 
strike. I commend the Senator from 
Texas, the chairman of the Finance 
Committee, and what they have done 
in putting in this alternative mini- 
mum tax provision. It may not save 
the independents by itself, but it will 
go a long way toward reversing that 
trend of bankruptcies, toward revers- 
ing that trend of rotary rigB which 
continue to drop and toward bringing 



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some degree of equity to the Tax 
Code, as far as independent drilling 
operators in this country are con- 
cerned. I stronger support the posi- 
tion of the Finance Committee and 
strongly oppose the Bradley amend- 
ment. I thank my colleague. 

The PRESIDING OFFICER. The 
Senator from Texas. 

Mr. BENTSEN. Mr. President, I 
appreciate the comments of the distin- 
guished chairman of the Energy Com- 
mittee who is well versed in this sub- 
ject 

I yield 5 minutes to my friend, the 
Senator from Oklahoma, whose State 
has an imminent knowledge, concern, 
and problem with the state of decline 
in the oil industry. 

Mr. BOREN. I thank the chairman 
of the Finance Committee, my col- 
league from Texas. 

Mr. President, I want to associate 
myself with the remarks that have 
already been made by the chairman of 
the Energy Committee, my colleague 
from Louisiana Both the Senator 
from Texas and the Senator from 
Louisiana have made an enormous 
contribution to the energy policy of 
this country. 

For some reason, Mr. President, 
when you mention the word 'oil' as 
opposed to some other industry or 
some other commodity, it seems to 
bias the debate about economic terms 
and economic policy. It should not. 
We should step back and look at the 
facts as they are, without putting on 
blinders because oil happens to be the 
industry involved. 

If there was some other industry, 
the kind of rhetoric would be totally 
different. If we were talking about 
the steel industry, or the textile indus- 
try, or the auto industry, we would 
not have the same kind of attempt 



made to put an unfair tax burden on 
those segments of the economy until 
we drive them into virtual extinction. 
But for some reason, there is some 
kind of emotional baggage associated 
with the word 'oil* that makes it very 
difficult for us to discuss it in an ob- 
jective way. I hope we can suspend 
that bias for a moment and look at 
the facts as they are. 

The U.S. oil and gas extraction 
industry has lost more than 400,000 
jobs since its peak employment in 
1962. More jobs were lost than in the 
automobile, textile, steel, and electron- 
ics industries. So when we talk about 
a significant, a critical part of our 
economy being devastated, we are all 
familiar with what has happened in 
the steel industry, we are all familiar 
with what has happened in electron- 
ics. We know what has happened 
with automobiles. But when you look 
at the domestic energy extraction 
industry, the domestic energy produc- 
tion industry in this country, it has 
been harder hit than any of these 
other industries, losing 400,000 jobs. 
Indeed, 45,000 more jobs have been 
lost in just the last 10 months. 

The rig count for the first week of 
July stood at 689, a startlingly high 
level. During 1992, in this year alone, 
the all-time record for the lowest rig 
count in history has been broken five 
times. What has this done in terms of 
our national economy? It has caused 
the importation of foreign oil to go sky 
high. This affects our balance of 
trade deficit. Last year, crude oil and 
petroleum product imports accounted 
for more than 50 percent of the 
Nation's trade deficit, and in the first 
quarter of this year, nearly 75 percent 
of the trade deficit was from oil and 
petroleum product imports. 

Mr. President, we hear people talk 



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about the trade imbalance. We hear 
talk about needing to rebuild the eco- 
nomic strength of this country. We 
hear talk on this floor day after day 
about the effect on the economic inde- 
pendence of this country of continuing 
to build up external debt held by 
those in other countries. This situa- 
tion really strikes at the heart of the 
national economic sovereignty of this 
country. And, yet, some Senators 
want to put one more nail into the 
coffin of a domestic industry whose 
collapse has led to the greatest in- 
crease in the trade deficit of any sin- 
gle industrial decline in this country. 
This is a clear example of why we 
need to look at the facts as they are, 
put out of our minds for a moment 
that we are talking about 'oil' with all 
its political history, and look at eco- 
nomic facts and look at the national 
interests. 

I am not speaking as a Senator 
from Oklahoma, which happens to 
have an ever-dwindling amount of oil 
and gas production because of the tax 
climate and other factors. I am talk- 
ing about what is good for the United 
States of America. It is not good for 
the United States of America to con- 
tinue to have this kind of decline in 
our domestic petroleum industry. 
One has only to look at what it has 
done to the trade deficit to know that 
is true. 

In the second place, out tax policy is 
absolutely restructuring this industry. 
It is very hard for this Senator to 
understand why those who have come 
to the floor in the past to denounce 
the Trig international oil companies' - 
that is the term they have used - have 
supported tax policies which are virtu- 
ally destroying the independent sector 
of this industry, the small domestic 
sector. Independent producers, on the 



average, employ about five full-time 
employees other than the drilling 
crews which they from time to time 
send out, or used to send out, before 
the rig count dropped so low. 

Why do they want to restructure 
the industry by completely removing 
the domestic independent producers 
from the industry, driving them into 
extinction and leaving only a few, 
large international companies which 
conduct more and more of their pro- 
duction and other activities offshore, 
and have moved more and more of 
their jobs outside the United States? 

We have had a 50-percent decline in 
the number of independent producers 
just since 1986 in this country, falling 
from about 15,000 down to 8,000 com- 
panies, and that number continues to 
drop. And yet it is the independent 
producers who bring some balance to 
this industry. It is the independent 
producers who are active inside the 
boundaries of the United States. It is 
the independent producers who drill 
85 percent of U.S. exploratory wells. 

And so we have a tax policy that is 
driving these people out of business. 
As the Senator from Louisiana just 
said, they pay an effective tax rate of 
over 72 percent, according to a recent 
study by the University of Arizona. 
Here we have a chance to finally do 
something positive, after all of these 
years of decline, to try to put some 
balance back into the industry, to try 
to bring some vitality back, to try to 
put some of these people back to 
work, to try to do something to re- 
verse the trend in terms of our trade 
deficit We have a chance to do some- 
thing positive. According to recent 
surveys of independent producers, if 
the alternative minimum tax can be 
amended in this way, it will result in 
the drilling of 17 to 25 percent more 



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domestic wells in the next year. 

Let us do it. Let us take that 
chance. Let us turn around the situa- 
tion. Let us begin to move in a posi- 
tive direction. 

Now, Mr. President, no one will 
escape tax liability. 

I might ask the Senator for 2 addi- 
tional minutes. 

The PRESIDING OFFICER. The 
Senator's time has expired. 

Mr. BENTSEN. I yield 2 additional 
minutes to the Senator from Oklaho- 
ma. 

Mr. BOREN. I thank my colleague 
from Texas and I thank the Chair. 

The way this provision is drawn, a 
taxpayer cannot, through the use of 
deductions for excess intangible drill- 
ing costs, reduce its income more than 
40 percent. There are three other 
provisions currently in the tax laws 
that would make it impossible for any 
producer to avoid paying some tax 
liability as a result of the change af- 
fecting percentage depletion that is 
proposed in this bill. 

So it is simply not true that there 
are going to be people completely 
avoiding a tax liability. What they 
will have is a little breathing room. 
What they will have is a little relief 
from a 70-percent effective rate. 
What they will have is a chance to 
keep some wells in production that 
are now at the break-even point and 
that are otherwise going to be 
plugged, marginal wells by the thou- 
sands in this country that are going 
out of business every year. These oil 
and gas resources are lost forever, and 
the resources are ones on which the 
environmental costs have already been 
paid. 

What a mistake it is for us to do 
that. What it is going to do is cause 
some producers who are now actually 



losing money, who have no net in- 
come, still having to pay the alterna- 
tive minimum tax. We had specific 
and concrete testimony in the Taxa- 
tion Subcommittee of the Finance 
Committee hearings on this point. 
People testified who have no net in- 
come, who are losing money, but be- 
cause they are doing what we told 
them we wanted them to do in the 
national interest - drill wells, try to 
put some reserves back in place in 
terms of our national energy security 
- they are being penalized under the 
alternative minimum tax. 

Mr. President, when we had to 
make the very difficult and trying 
decision to put young Americans at 
risk in the Persian Gulf, in conflict, 
their very lives at risk, we said never 
again are we going to be without an 
energy policy in this country that can 
begin to chip away at this total depen- 
dence on foreign sources of energy. 

Finally, we have a chance to take 
one small step, not a big step, a tiny 
step, toward an energy policy that will 
encourage that. And here we have an 
amendment that says 'No, we do not 
want any progress. For goodness 
sakes, let us not do anything that 
might help the trade balance. For 
goodness sakes, let us not do anything 
to preserve the independent sector; let 
the big oil companies move all their 
jobs, all their production, all their 
activity offshore.' 

How long are we going to wait, Mr. 
President, before we wake up? How 
many more times will we have to face 
an international emergency of the 
kind we faced before? How many 
times will we have to look the Ameri- 
can people in the eye and say we have 
no energy policy; we have nothing to 
stop the death of independent produc- 
ers in this country, we have nothing 



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to increase production of domestic 
reserves? 

We have a chance to do something. 
Let us do it now. 

Let us turn down this amendment. 
Let us take a small step in the right 
direction. 

The PRESIDING OFFICER. The 
Senator's time has expired. 

Who yields time? 

Mr. BRADLEY addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from New Jersey. 

Mr. BRADLEY. I yield 10 minutes 
to the distinguished Senator from 
Oregon. 

Mr. PACKWOOD. Ten minutes. 

The PRESIDING OFFICER. The 
Senator from Oregon is recognized. 

Mr. PACKWOOD. I thank the 
Chair. 

First, let me agree in part with 
what the distinguished Senator from 
Oklahoma just said about having no 
energy policy in this country, and, 
indeed, we do not have a very good 
energy policy. It is understandable 
how we initially got hooked on oil - 
and I will use that expression 'hooked 
on oil/ and I do not mean it malevo- 
lently in any sense of the word. 

Oil was plentiful earlier in our his- 
tory. It was cheap, comparatively 
speaking, and fungible. It was easily 
changeable from one form or another 
in terms of its uses. And so we used it 
not just for gasoline in cars, we used 
it to generate electricity, we used it 
for all kinds of things because we did 
not think we had to save it or con- 
serve it. 

Gradually, oil is running out in this 
country, and what oil there might be 
able to be found, we pass all kinds of 
restrictions that prohibit the drilling 
for it. 

So it is no wonder we do not find 



some oil when we say this is off limits 
and this is off limits and this is off 
limits and this is off limits. Now the 
oil production is going down. 

It is amazing how that happens. 
But there is no reason why this coun- 
try could not be independent in ener- 
gy if it wants to, although it would 
probably not be on an oil base; it 
would be probably on a natural gas, 
North American free trade base or on 
coal, of which we have a 400-year 
supply. We can produce all the energy 
we need in this country from coal and 
use oil for what you have to use oil 
for, but that is neither here nor there 
from the standpoint of this tax. 

But we are not short of energy. 
Japan is short of energy. We are not. 
It is the issue of the minimum tax 
itself that bothers me and not because 
it is the oil industry. 

I do not want my good friend from 
Oklahoma or the chairman of the 
committee to think I am picking on 
the oil industry when I support the 
amendment of the Senator from New 
Jersey. 

I want to go back before we passed 
the tax reform bill in 1986 and re- 
member what the situation was. Ev- 
ery one of us faces this when we go 
home. You go home. You go to the 
coffee shack, in my State it would be 
of the lumber mill. Maybe in South 
Carolina, North Carolina it is the 
textile mill. The people, if they were 
lucky then, were making $19,000, 
$20,000 a year in 1985 and 1986. And 
just as you would get to the mill out 
would come some story from the Trea- 
sury Department about the Treasury 
Department announced today that 
800 people made over $500,000 last 
year and paid no taxes, no taxes. And 
this poor devil who is working in the 
mill and making $20,000 a year paid 



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$1,500 or $2,000 in Federal income 
taxes last year and cannot understand 
how somebody could make $500,000 
and pay no taxes. And you would say 
to him, well, it is because of preferenc- 
es. He bought municipal bonds, 
school bonds. You do not have to pay 
any taxes on them, and it lowers your 
taxes. He gave a great painting to the 
Metropolitan Museum of Art. 

We had all kinds of devices, dodges, 
call them what you want, that allowed 
people to have immense gross income, 
and by the time they figured their 
preferences and deductions, they had 
zero taxable income. And it was un- 
fair. You cannot explain to somebody 
making $20,000 a year how somebody 
can make a half a million or more and 
pay nothing. 

So in 1986 we changed the Tax 
Code. We passed a very stiff minimum 
tax which was intended to make sure 
that all taxpayers would pay a mini- 
mum level of tax on their economic 
income, no matter what kind of de- 
ductions they had. And we did not 
try to really go through and say all 
right, this is a good deduction, this is 
a good deduction, this is a good one, 
this is a bad one, because we knew if 
we said that, the ones we left as good 
deductions, people would use and they 
would pay no tax. 

We thought it important that every- 
body of wealth pay some tax in this 
country, no matter how justified their 
deductions, so that the public would 
conceive that the code had some fair- 
ness. Now we are being asked to 
carve out a segment of the oil and gas 
industry for paying the minimum tax. 

Here is my quarrel. I am not berat- 
ing the oil and gas industry. It is this 
particular industry we are now going 
to carve out, because the energy bill 
before us today basically guts the 



minimum tax rules for a segment of 
the oil and gas industry. 

The bill permanently repeals the 
minimum preference for intangible 
drilling costs - IDC's as we say in 
Washington • and percentage deple- 
tion of independent producers. As a 
practical matter, these changes will 
exempt most oil and gas producers 
from the minimum tax. 

The argument is we need to do that 
in order to encourage the production 
of oil. I am not sure that is right, but 
that is the argument that is made. 

Although this is not the first time 
the oil and gas industry has received 
minimum tax relief, just 2 years ago 
in the 1990 budget bill the oil and gas 
industry got almost $800 million of 
relief from the minimum tax. Now, 
not even 2 years later, if this passes, 
they will get another $1 billion of 
relief. 

My quarrel is not with the oil and 
gas industry. It is what is going to 
happen to all other industries when 
they see this, because if you are in the 
oil and gas industry you see the world 
through the oil and gas industry eyes 
and you think this is the be all and 
end all of civilization. But if you hap- 
pen to be in the banking business or 
president of the university, or in the 
maritime industries, here is what they 
are going to want. 

We will go right down the line. In 
taking care of it in the tax bill we are 
going to consider something for educa- 
tional institutions. It is called what is 
known as donation of appreciated 
property. 

Prior to 1986, if you had a painting 
you bought for $100,000, you are rich, 
you keep it 10 years, worth $1 million, 
you donate it to a university, took a 
$1 million tax deduction, and you 
found many people were escaping the 



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minimum tax in this way, partially. 

So we said henceforth you can only 
deduct the value of it when you got it: 
$100,000. There were tremendous 
objections from universities and art 
museums. It turns out they were 
concerned with not the painting; they 
are concerned with the value of stock 
from $100,000 to $1 million. You give 
them the stock, they do not keep it. 
They sell it to get the money. But 
they do not get as many donations if 
you can only deduct your basis, 
$100,000. So they want an exemption 
from the minimum tax. 

The geothermal industry now has a 
tax credit for the production of geo- 
thermal energy. They, however, can- 
not use the credit against the mini- 
mum tax. They would like an exemp- 
tion to use it against the minimum 
tax. 

Companies with overseas opera- 
tions, with foreign tax credit, can now 
be offset. They would like it offset. 

The maritime industry has what is 
known as the capital construction 
fund. They can put aside funds in the 
capital construction and pay no taxes. 
They can invest in the construction, 
but they would like it to operate in 
conjunction with the minimum tax 
and be given an offset against it. 

Banking: bad debts. A bank has 
bad debts. They try to get the debts 
down. They cannot offset them 
against the minimum tax. And then 
all capital intensive industries - steel 
and autoe - that have immense capital 
investments want a dramatic change 
in the minimum tax so they are not as 
adversely affected as they had imag- 
ined in their mind about it. 

So as we start down this road you 
are hard pressed to say to the auto 
industry, to the steam industry, to the 
shipbuilding industry, charities, mari- 



time industry, well, the oil and gas 
industry is unique. Yes indeed. Ev- 
ery industry is unique. Oil and gas is 
different from shipbuilding. Ship- 
building is different from auto con- 
struction. They are all different from 
running universities. 

Each of the industries that wants 
an exemption from the minimum tax 
says we are unique and the merit for 
us is greater than for any other indus- 
try, and if you gave it to the oil and 
gas industry how in good conscience 
can you not give it to us? 

There is no way you can explain it 
to them. If you are a university presi- 
dent, or a bank president that has bad 
debts from your predecessor through 
no fault of your own, you are trying to 
get the bank into some kind of liquid 
position, the bank president comes 
and looks you in the eye, says it is not 
fair that you give this to the oil and 
gas industry and not give to the bank- 
ing industry, which is the very heart- 
beat of America, that finances all the 
small businesses in the country. How 
can you deny it to us? 

The university president comes in 
and says we have needs for buildings 
and educating people, and the Govern- 
ment is not giving us enough money 
for education, and you are taking it 
away. They are raising money for the 
oil and gas industry, and how can you 
say no in good conscience? 

So that is my quarrel. It is not a 
quarrel with the oil and gas compa- 
nies. 

I can see what is going to happen. 
We will start to grant these exemp- 
tions from the minimum tax, and it 
will eat away at our tax base. And 
then we will raise the tax rates to 
make up for the money that we have 
lost - exemptions from the minimum 
tax, and becaus e we raised the tax 



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rate it makes it more difficult for 
industries to amass profits. They will 
want more exemptions from the high- 
er tax rate, which will diminish the 
amount of money. We raise the rates 
maybe in 10 or 15 or 20 years when 
the rates are going up, 45, 50 percent 
on corp or ations, and 60 or 70 percent 
on individuals. We will go through 
the whole thing we went through in 
1986, and we will say this is ridicu- 
lous. 

We raise the rates and give exemp- 
tions from the rates because the rates 
are so high that we cannot get the 
people to do the economic activities we 
want. We will give them exemptions, 
and we will be right back to what we 
found in the millions when we will 
have the IRS and Treasury Depart- 
ment saying, how many people last 
year made $1 million and paid no tax? 

So that is my quarrel, Mr. Presi- 
dent. I hate to see us start down that 
road. But it is so easy at this time to 
say yes, your case is justified, Mr. 
College President; your case is justi- 
fied, Madam Bank President; your 
case is justified, entrepreneurs. For 
geothermal energy, I will make an 
exemption for you. But it becomes a 
'for you and you and you.' 

That is why I very strongly support 
the amendment of the Senator from 
New Jersey. 

Mr. DOLE addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Kansas. 

Mr. DOLE. Mr. President, there is 
only one good reason for including the 
alternate minimum tax proposal in 
this bill - it is the single most impor- 
tant provision in this legislation to 
stimulate the exploration and produc- 
tion of oil and natural gas in the Unit- 
ed States. 

And I want to remind my colleagues 



what oil and gas means to us as a 
nation. I have heard speech after 
speech on this floor, in political cam- 
paigns and in the media that our 
foreign trade deficit is too high, that 
America is not competitive, that our 
trading partners are simply leaving us 
in their dust. But, fully two-thirds - 
that is two-thirds - of our foreign 
trade deficit is due to imported oil. 
The only trading partners leaving us 
in their dust are the foreign oil pro- 
ducers. No one in this body, no one in 
any other forum, should be allowed to 
utter the word 'competitiveness 1 with- 
out suggesting a way to reduce the oil 
deficit. 

The AMT provision addresses the 
trade deficit, the oil deficit. It will 
help draw necessary capital to the oil 
drilling business in our own country. 
It is unfortunate that my colleagues 
do not support the other big key to 
reducing the foreign trade deficit - 
allowing the environmentally responsi- 
ble development of the Outer Conti- 
nental Shelf and Arctic National Wild- 
life Refuge. We have handcuffed our 
Nation and our economy. We have 
said, Let us start our competitiveness 
at a disadvantage, let us agree to step 
up to the plate with two strikes al- 
ready against us. 

The Finance Committee recognized 
these facts in our markup, we had a 
vote on the Bradley amendment, and 
the committee voted we simply could 
not, as a country, afford to let this 
trend continue. 

We have heard about the rig count, 
the key figure to our energy future. 
The rig count is down all right, right 
down to the lowest levels of all time. 
As a matter of fact, just this year we 
have set six all-time low rig count 
records - six all-time low level records. 

This is no give away to the oil in- 



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dustry. The oil industry is unique in 
its need for huge amounts of up front 
capital. So unique that under current 
tax law has the highest effective tax 
rates of any industry in the country. 

I ask unanimous consent that a 
copy of a table from Tax Notes of May 
4, 1992, be printed in the Record at 
this point. 

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

••• TABLE DATA UNAVAILABLE ••• 



Mr. DOLE. Mr. President, let me 
tell you one thing the chart shows. 
The oil industry has an effective tax 
rate of 72.5 percent. That compares 
to a national average of 31.5 percent. 

The chairman of the Finance Com- 
mittee mentioned the pharmaceutical 
industry in New Jersey. That industry 
has a tax rate of 30.6 percent, less 
than half the effective tax rate on the 
oil industry. 

How can somebody say we are pro- 
posing a big giveaway when we are 
just trying to level the playing field? 
Once again, Mr. President, the only 
way we can make a big dent in the 
foreign trade deficit is to decrease oil 
imports by increasing energy produc- 
tion in this country. 

The measure before us is the most 
effective way to do that. I urge my 
colleagues to reject the Bradley 
amendment and to make the United 
States competitive again. 

Let me add one other thing. We 
had the big gulf crisis, and it was all 
about oil. So we spent billions and 
billions of dollars, going to the gulf, 
and most of it we got back from our 
allies. We were only there for three 
letters • o-i-1. We have had war after 



war, and crisis after crisis, because of 
oil. We are becoming more and more 
dependent. 

If we want additional gulf crises, or 
other crises about oil, we can continue 
to shut down the oil industry. I might 
also say we are talking about, primari- 
ly, the small producers - independents. 
There are not many left; do not bury 
this industry. We may need oil again 
in a future crisis in America. 

Mr. BENTSEN. I yield 5 minutes to 
the distinguished Senator from Colo- 
rado. 

Mr. WIRTH. Mr. President, I thank 
the chairman for yielding. I wanted 
to take a few minutes to once again 
remind my colleagues of what it is 
that we are about here on the Senate 
floor today, and what we are about in 
the Congress over the next few weeks. 

We are about passing the first ma- 
jor energy bill that we have done, 
probably ever. This is an enormously 
important endeavor, at a time when 
the country is looking with some skep- 
ticism at Congress and what it does; 
and can we deliver, and can we do 
this and that. 

We are on the edge of a major 
achievement. We should all feel very 
good about that set of accomplish- 
ments. We are coming down the line, 
and we have to go through conference. 
But this is a singular achievement for 
this Congress. 

Central to this energy bill is a major 
change in our national thinking. For 
the first time, we have an energy bill 
saying that we are not going to con- 
tinue the same course. We are going 
toward a course on energy that has a 
number of other alternatives to it - 
not just traditional oil; not just tradi- 
tional dependence on fossil fuels. But 
we are going to change our way of 
thinking. We are going to put a much 



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greater emphasis on conservation. We 
have done that, and the House has 
done it, and we have the strongest 
conservation measures we can develop 
and get passed. 

We are also - and this is very impor- 
tant to this amendment - changing 
fundamentally our view of the fossil 
fuel mix. For the first time, we have 
said that natural gas, as an industry 
- that this enormously promising 
American industry - has the opportu- 
nity now to come fully into its own. 
And that by increasing our depen- 
dence on natural gas - which is a fuel 
right here at home; which is a fuel 
that is clean, environmentally benign; 
which is a fuel that is going to gener- 
ate more American jobs; it is going to 
cause less export of scarce American 
capital; it is going to be good for our 
national security; natural gas is this 
win, win, win fuel • that by encourag- 
ing natural gas, with respect to how 
utilities are operating, we are moving 
away from this terrible dependence on 
imported oil. This is a major accom- 
plishment and change in this legisla- 
tion. 

One of the keys to this is taking 
advantage of the reserves of natural 
gas that are available to us. In Loui- 
siana, in the San Juan Basin, and in 
New Mexico, going up into Colorado, 
in the overthrust bill, we have im- 
mense reserves of natural gas, and 
they are finding them all the time. 

If this amendment passes, what we 
are going to do is take a great deal of 
the work we have done on this bill 
and say we were not really serious 
about it. We are not going to say to 
this industry, which - as the Senator 
from Oklahoma pointed out and the 
Senator from Louisiana pointed out - 
has been decimated over the years: 
We are going to further decimate this 



industry. We are not serious about 
the energy bill. We are not serious 
about taking advantage of this domes- 
tic resource. We are not serious about 
going out and finding new reserves. 
We are not serious about developing 
new technologies to develop the re- 
serves we already have. 

Rather, what we are going to do is 
go around and once again punish this 
industry that we have said, on the 
other hand, we wanted to encourage 
and support. 

This does not make any sense at all. 
If we are serious about this as a com- 
prehensive energy bill and a bill that 
is making a major transition - and a 
lot of my friends who view the world 
in something of a similar way, the way 
that I do, in terms of our need to 
make a change; in terms of skepticism 
of the old ways of doing business in 
energy; of moving toward conservation 
and natural gas; and moving toward 
domestic fuels - we are doing that in 
this bill. And one of the ways that we 
can continue to do that is to encour- 
age exploration of the natural gas 
industry. 

This amendment would have exact- 
ly the opposite effect. If we are seri- 
ous about this bill, let us be consistent 
in this legislation. Let us be consistent 
in the transition to natural gas and 
consistent in our support and encour- 
agement of that key domestic indus- 
try. 

If you vote for the Bradley amend- 
ment, what you are doing is saying: 
That rhetoric was all very nice about 
what we were going to do in the ener- 
gy bill, but we were not really serious 
about it. 

I think we ought to be serious about 
the energy bill. We ought to pass the 
bill as rapidly as possible. I think we 
ought to turn down this amendment, 



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and most of the other amendments, as 
well, and get to conference and get 
this bill in front of the President, who 
is going to sign it and make it part of 
national law. It is very important for 
us to do. 

I thank the chairman for yielding 
time. 

Mr. BRADLEY. Mr. President, I 
yield 10 minutes to the Senator from 
Minnesota. 

Mr. WELLSTONE. Mr. President, 
first of all, let me just respond to a 
couple of statements that have been 
made on the floor. I consider myself 
to be a Senator that is very serious 
about energy policy: one that is re- 
spectful of the environment that 
makes us more independent and en- 
hances national security. 

I think we have a transition we 
have to make, with an emphasis on 
renewables and safe energy. We have 
yet to even reach the potential of 
domestically produced clean fuels, like 
ethanol and all of the rest. 

But I reach a different conclusion 
about this particular proposal. It is 
much like the Statement of the Sena- 
tor from Oregon. This $1 billion in tax 
breaks is a tax expenditure, and ex- 
penditure of money - money that we 
do not have. It is a loss of revenue. 

The oil industry asks for relief. 
They already have some relief from 
the alternative minimum tax, and 
now they want more. I just do not 
think this proposal meets the stan- 
dard of equity. 

The auto industry is in trouble. 
Senator Packwood said it well. The 
steel industry is in trouble. Bankers 
are in trouble. A lot of business peo- 
ple are in trouble who do not get relief 
in this bill. There does not seem to 
me to be equity to this. I do not see 
how we explain this proposal. 



Moreover, a lot of people in our 
country, regular people, are really 
feeling the strain. They really feel the 
strain, and they do not see the relief 
coming. 

Mr. President, I wanted to take a 
somewhat different cut, and explain 
my opposition to this proposal, since 
there are Senators who support it 
that I certainly respect. 

Last week, before the Subcommittee 
on Families and Children, Senator 
Dodd's subcommittee, a woman 
named Bernice Price testified. 
Bernice Price is 13 years old. She 
lives here in Washington, DC, and she 
testified before our Subcommittee on 
Families and Children. She lives in a 
housing project. She told us: 

We did not know that being s poor child in the 
United States was going to be so very hard. 

We weren't born to do poorly in school! 

Or to suffer bad health! 

Or to take drugs! 

Or to catch sexually transmitted diseases! 

Or to kill or be killed on the streets of Ameri- 
ca! 

When we were born, we were beautiful, happy, 
smart and good! We were just like your own 
babies. In God's eyes, poor babies and rich babies 
are equal. They can be anything they want to be 
- including the President of the United States! 

But God is no politician. He doesn't make 
social policies that can harm poor children. 

So . . . those babies who are equal in the hospi- 
tal are unequal when it comes time to go home. 

Then she goes on: 

When you were s child, you were sble to play 
outside, right? Today, millions of American 
children can't play outside anymore. We're afraid 
of what might happen to us out there! 

In this testimony, I bring a message from 
Bullions of American children. We are not asking 
for special privileges. We are asking for the 
chance to be healthy like other kids. We are 
asking for safety against druge and violence. We 
are asking the people who are paid to help us to 
do their jobs. We are asking to play outside like 
you did when you were young. We are asking for 
safe schools and for teachers who urge us to 
'reach for the stars.' We are asking for laeee to be 
changed so our fsthers can come home to us. 

We're only kids. 



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We're i 

We're sad. 

Sometimes we fesl like America has forgotten 
us just like it did our mothers and fathers. The 
drug pusher knows that. And ha'a waiting just 
around the corner for us with his drup and his 



Senators, and other honored guests • • • I 
challenge you to look deep into the eyes of a poor 
American child. In the eyes of that child, you 
will And America's greatest tragedy. 

If you won't help us today, you are going to 



The day before yesterday Arthur 
Ashe came in and testified before our 
subcommittee. He made reference to 
some facts having to do with Ameri- 
can youth in crisis. I will not read 
them all but just a few. 

Today, 6 million students will carry a weapon 
to school, 136,000 will have a gun. 

Today, 16,000 crimes will take place on or near 
a school campus - one every 6 seconds. 

Today, 22 16-24 year olds will be murdered. 

Today, 8 million American adolescents live in 
poor or near poor families. 

Today, half of all black, Hispanic, and Native 
American Indian adolescents are poor or near 
poor. 

Today 6 million adolescents who need mental 
health services do not receive them. 

Today, 2,739 adolescents will run away from 



Mr. President, my point is simple: 
This tax break to the oil companies 
does not meet the test of equity. It is 
not fair to other businesses. It is a 
tax expenditure. It is erosion of our 
revenue base. We talk about the defi- 
cit all the time, the budget deficit. 
You can argue why are we eroding the 
revenue base as well as talk about 
reducing the deficit. There is an in- 
vestment deficit, and I am talking to- 
day about where the money is not 
spent. 

Mr. JOHNSTON. Will the Senator 
yield for a question? 

Mr. WELLSTONE. If I could just 
finish the statement. I want to make 
myself perfectly clear. As long as we 



are saying to Bernice Price and other 
children in this country, we do not 
have the money to feed you, we do not 
have the money for health care, we do 
not have the money to support educa- 
tion, we do not have the money to 
fully fund Head Start, we do not have 
the money for any of these programs, 
I am certainly unwilling to support a 
$1 billion further erosion in the reve- 
nue base of our country. 

Mr. JOHNSTON. Mr. President, 
will the Senator yield for a question? 

Mr. WELLSTONE. I certainly will. 

Mr. JOHNSTON. The Senator said 
there is a tax break for the oil compa- 
nies. He understands this is not for 
major oil companies; these are for 
independents. 

Mr. WELLSTONE. I understand 
that full well. 

Mr. JOHNSTON. The Senator also 
understands we had this tremendous 
erosion of jobs in the oil industry, 
upwards of 400,000 in the last 10 
years, which is more than automo- 
biles, more than textiles, more than 
any other industry in America, and we 
are due to lose another 50,000 by 
some estimates this year. Does the 
Senator have anything he might sug- 
gest to the children of those who are 
likely to lose their jobs, for whom I 
also feel, as I do for this person who 
testified before that committee and 
talked about poverty? Does he have 
anything to suggest for those who are 
likely to lose their jobs and for, in- 
deed, the American economy, which 
will have to import that oil if it does 
not produce it? 

Mr. WELLSTONE. I have a lot to 
suggest. First of all, I say to the Sen- 
ator from Louisiana that I do not see 
the oil industry in trouble because it 
has not received exemption from this 
minimum tax. I see the oil industry 



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in trouble because the prices are down 
for oil. I see the oil industry in trou- 
ble because our economy is in a reces- 
sion. I see the oil industry in trouble 
and other industries in trouble, I say 
to the Senator from Louisiana, be- 
cause we have failed to be involved in 
serious strategic investment in our 
own economy. I see the oil industry in 
trouble because, essentially, we have 
not been minding our own store here 
in our own country. 

And my second point, if I could just 
go on, is, I say to the Senator from 
Louisiana, that when I talk about 
children in this country and not being 
able to come up with $1 billion and 
more to respond to the needs and 
circumstances of children, of course, I 
am talking about children in all fami- 
lies, in all States in the country, in- 
cluding Louisiana. But I simply do not 
believe that the oil industry is in trou- 
ble because of this minimum tax. I 
have heard other people argue that on 
the floor as well. 

Mr. JOHNSTON. Does the Senator 
see any connection between an effec- 
tive tax rate of 72.5 percent, which 
you have with the alternative mini- 
mum tax now with some indepen- 
dents, but does he see no connection 
between that and the fact that we are 
losing up to 50,000 jobs this year in 
the oil industry in America? 

Mr. WELLSTONE. Again, a lot of 
industries can talk about the strain 
they are under. My understanding - 
and the Senator from New Jersey may 
want to add to this - is that the oil 
industry, the domestic producers, 
have already received some exemp- 
tion. Now the industry wants more. 
Once again, I do not believe that the 
evidence, if you want to look at the 
economy of this country, is that there 
is a 1-to-l correlation between what 



you are asking for and a dramatic 
improvement in this industry. I think 
we can talk about other, more pro- 
found problems in the economy of this 
country. 

Moreover - let me just say one other 
thing to the Senator from Louisiana, 
which is there are a lot of people that 
can come before us right now from 
the business community and say the 
same kind of things in terms of tax 
relief that they seek. The point is we 
are not talking about tax relief for 
these other industries. We are not 
talking about this kind of tax relief 
for those other businesses. I do not 
think, if we look at whole economic 
picture, there is any equity. 

Finally, I say one more time, it is 
interesting to me that the Bernice 
Prices of this world do not really get 
heard so clearly on the floor of the 
Senate. What they would like to say is 
they need some relief, but we do not 
give them the relief. 

The PRESIDING OFFICER. The 
Senator from Texas. 

Mr. BENTSEN. Mr. President, I 
yield 5 minutes to the distinguished 
Senator from New Mexico who has 
knowledge in this matter. 

The PRESIDING OFFICER. The 
Senator from New Mexico is recog- 
nized for 5 minutes. 

Mr. DOMENICI. Mr. President, I 
rise not only because my State is a 
large producer of natural gas and 
crude oil, but because, for the first 
time in about 10 years, we are doing 
something about America's energy 
dependence. We are doing something 
about jobs that we do not have to lose. 
We are finally cutting the noose which 
has been around the necks of 
America's independent oil and gas 
producers ever since the 1986 AMT 
was enacted. 



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Mr. President, for an America that 
has announced over the last 7 years 
hundreds of thousands of working 
men and women have been laid off in 
the Oil and Gas Patch of America, for 
an America that is growing day by day 
in dependence upon foreign oil, send- 
ing billions of our dollars to Saudi 
Arabia every year, and we sit by with 
one of the most punitive tax systems, 
the AMT on the books, and we say to 
America's investors, to America's 
independent oil and gas risktakers, we 
say to them, 'We want you to produce 
oil and gas, but we want you to run 
uphill. We want you to run up a wa- 
terfall, because we want to tax you at 
an average effective rate of 72 per- 
cent.' Just think of it. If we came to 
the floor and said we have a new poli- 
cy for America's competitiveness, we 
are going to tax America's industry at 
72 percent, would that not be a mar- 
velous policy for jobs, economic 
growth, and competitiveness? I make 
that statement to emphasize how 
ludicrous the AMT tax policy is. 

Now, Mr. President, there is no 
mystery about what an AMT is. We 
have said to the independent oil pro- 
ducers, other businesses can deduct 
depreciation but you cannot deduct 
depletion, because you put it back into 
your minimum tax return. 

Other businesses deduct trucks, 
hauling, supplies, and fuels. They 
deduct all the labor expenses of doing 
their work. We say to the oil and gas 
industry where these expenses are 
incurred in your industry, they get a 
different name. They get called intan- 
gible drilling costs and they receive a 
very unfavorable AMT tax treatment. 
I say to my friend from Louisiana, you 
cannot deduct them. You put them 
back into the AMT tax base and we 
tax them. 



Now, Mr. President, it is absurd to 
throw away jobs and to sit back for no 
reason and say, we would rather the 
Saudi Arabians get our money; we do 
not want independent oil and gas 
producers to get out of bankruptcy 
and get back in the field; we do not 
want the rigs that are idle all over 
America back in the field producing 
oil and jobs. Instead, we want to tax 
the independent oil producers as a 
confiscatory rate. Confiscatory rate is 
the term they use when I go to oil 
patch and have a meeting. They 
stand up and say, Senator do you 
know my company went out of busi- 
ness because on the last AMT tax 
return I filed I had to pay an effective 
tax rate of 70 percent. We quit. 

Is that not absurd that, in the name 
of some ridiculous concept, the inde- 
pendent oil and gas producers were 
making too much money, we are going 
to fix them, we are going to fix Ameri- 
ca, we are going to fix thousands of 
people that would have jobs in oil 
patch and good jobs. 

So I say the Bradley amendment is 
an antyobs bill. The Bradley amend- 
ment is an amendment encouraging 
us to send our hard-earned American 
dollars and net savings to foreign 
countries instead of wanting to spend 
it in America. Very interesting. Send 
it overseas. It is not enough to have 
had a war to defend that oil in the 
Middle East. Now just keep on send- 
ing them our money because we want 
to put a 72 percent effective tax rate, 
a rate that is substantially higher on 
the independent oil producers. 

My last thought. For those who do 
not think they ought to deduct intan- 
gible drilling costs, who do not think 
they ought to deduct ordinary busi- 
ness expenses and depletion which are 
no different than ordinary business 



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expenses and depreciation for other 
types of businesses. Remember, oil 
and gas producers do not find oil ev- 
ery time they drill for oil. Do you 
want them to quit taking the risk, or 
do you want them to say the risk is 
worth taking because when we strike 
oil and get some money coming in we 
are going to get back what reasonable 
businessmen get and deduct what 
they deduct, or do you want them to 
say, 'we quit!' 

This energy bill, for the first time, 
has a rational energy policy. It will 
not solve America's oil needs but it 
will cause more millions of barrels, 
barrels of ours, to be produced rather 
than foreign. It will put thousands of 
people to work here in the United 
States rather than taxing them out of 
work. It will bring investment into oil 
patch, and I do not know why we 
should not all want that. 

The tax title of the energy strategy 
is an important part of the overall 
energy strategy. It includes provisions 
to increase exploration, development 
and production of oil and gas; the 
conservation of energy; and tax cred- 
its for renewable energy among oth- 
ers. It is a balanced strategy designed 
to give us flexibility in the future to 
meet our energy needs. 

I want to begin my remarks with a 
discussion about oil and gas produc- 
tion because I represent one of the big 
oil- and gas-producing States. While 
rigs sit idle in my State, and while 
wells are shut-in throughout the Na- 
tion, we are importing almost half of 
the oil we consume on a gross basis. 
That represents an increase by almost 
one-half over our import dependence 
in 1985. 

The Office of Technology Assess- 
ment has predicted that oil imports 
could reach almost 70 percent by the 



year 2010. Leaving his scenario unad- 
dressed would not be an energy strate- 
gy, it would be a national tragedy. 

The tax title contains some of the 
most important energy provisions for 
independent producers. Right now, 
they are being taxed out of business 
by the alternative minimum tax. 

Independent producers have been 
stuck in the alternative minimum tax 
(AMT) since it was enacted in 1986. 
Under the AMT, there are four big 
penalties imposed upon investments 
made by U.S.-based taxpayers who 
explore for, and produce U.S. oil and 
gas reserves. These penalties hit the 
independent oil and gas producers 
who drill 85 percent of all domestic 
wells. There are two tax penalties on 
drilling investments and two penalties 
on asset depletion. Without the inde- 
pendent oil and gas producer's explo- 
ration and development activities the 
options for an energy strategy would 
be greatly limited. The President 
recognized this, and fully supports 
AMT relief for independent oil and 
gas producers. 

The simplest explanation of the 
AMT exploration and production pen- 
alties is this: Current law requires 
U.S.-based taxpayers to add back to 
regular taxable income a portion of 
both drilling costs and asset depletion 
when computing alternative minimum 
tax liability. 

The practical impact on the oil and 
gas producers is that production in- 
centives are on the books, but can't be 
used because of the AMT. In essence, 
it is a nonrepeal repeal of ordinary 
business expenses that other business- 
es are allowed to deduct. I call it a 
nonrepeal repeal because the provi- 
sions are as unusable as if they had 
been repealed. The tax writing com- 
mittees have included $1 billion in 



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alternative minimum tax relief. 

The alternative minimum tax is one 
of the worst enemy's of the oil inde- 
pendence and an effective energy 
strategy. The alternative minimum 
tax is driving oil producers out of 
business because its provisions dis- 
courage domestic exploration and 
production. The alternative minimum 
tax is pushing independent producers 
into bankruptcy. It worsens our trade 
deficit. It weakens our energy securi- 
ty. And its punitive tax treatment 
has wrecked almost half our domestic 
oil production. 

In February 1992 I had a meeting 
with some of the independent produc- 
ers in New Mexico. I want to quote a 
few of the oil and gas producers who 
attended the meeting. I think they 
speak eloquently about the problem. 
Theirs is the voice of experience. 

Ted McVay, of McVay Drilling told 
me the following: 

I know how a dinosaur fell when even though 
ho was making hia bast effort to survive, the 
environment in which he waa working ultimately 
caused hia extinction. We are in an adversarial 
relationahip with Government. • • • The alterna- 
tive minimum tax (AMT) haa had a devastating 
impact upon investment resources available to 
these different companies from not onty within 
the industry but from outside investors thus 
drying up one of our primary sources of funding 
for development and exploration. 

I did some research myself, and 
found that the AMT is the only tax 
imposed any government which re- 
sults in a higher effective tax rate as 
income declines. 

Another independent oil and gas 
producer struggling to survive, AJ. 
Brune, of Wagner & Brown, head- 
quartered in Midland, TX, with explo- 
ration and production operations in 
the Permian Basin, the Rocky Moun- 
tains, Oklahoma, New Mexico, and 
Michigan said: 

The alternative minimum tax, despite its well 



intended purposes, hss become a noose around 
the neck of independents diverting money from 
drilling and exploration into the Federal treasury 
at a time when the domestic oil and gaa industry 
needs every available dollar. The alternative 
minimum tax increases the effective rate, elimi- 
nates incentives and discourages investment, all 
at a time when oil and gaa prices and production 
are declining, the national economy is in a reces- 
sion, traditional financing sources have dried up 
and foreign import of oil are approaching 60 
percent. 

Another constituent, the general 
partners from Parker & Parsley Pe- 
troleum Co. told me that the biggest 
problem is alternative minimum tax 
(AMT) including the ACE adjustment. 

It serves se a deterrent to drilling, se the price 
of oil goes down, so does the net income from oil 
and gaa making the preference intangibles high- 
er, resulting in a larger tax bill. This is exsctly 
the opposite of whst should happen when trying 
to have a viable economy. 

Unlike other small businesses, inde- 
pendent oil and gas producers are not 
allowed to deduct ordinary business 
expenses incurred in their line of busi- 
ness. These expenses are intangible 
drilling costs and percentage deple- 
tion. This results in effective tax 
rates of 70 percent for some oil and 
gas producers as compared to regular 
34 percent for nonpetroleum business- 
es. 

By adopting the Finance 
Committee's AMT provisions we can 
begin to reverse this trend and begin 
to put back to work the thousands of 
individuals who have been forced to 
leave this industry. Studies show that 
if these AMT penalties were removed, 
the industry could mobilize 1,200 rigs 
- compared to the recent record low of 
653. 

Without AMT relief the only 
self-help available to the independent 
producer is to stop drilling. When an 
independent stops drilling he goes out 
of business. Let me repeat this: The 
AMT is driving the independent oil 



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and gas producers out of business. It 
is impossible to have an energy strate- 
gy without an oil and gas exploration, 
development and production industry. 
Yet we have a tax system that is a 
modern day example of the power to 
tax being the power to destroy an 
industry. 

The AMT is not just a little bit bad 
for the oil and gas industry, it is very, 
very bad because oil and gas produc- 
tion is one of the most capital inten- 
sive industries in the United States. 
Capital intensive industries bear the 
heaviest burden of the alternative 
minimum tax due to the many adjust- 
ments required of capital outlays. 

For my colleagues who are not from 
oil patch, you might ask, 'Well, Pete, 
just how bad is it?' 

The statistics are dry but stark: 
192,000 jobs lost in the extraction 
portion of the oil and gas industry, 
from the 583,000 level in 1985 to 
391,000 in 1991, a 33-percent decline. 

That is, on the average 32,000 jobs 
per year; 2,667 jobs per month; 615 
jobs per week; or SS jobs per day. 

This trend has continued into 1992. 
Nearly 17,000 jobs were lost in the oil 
and gas industry in just three States 
• New Mexico, Texas, and Louisiana 
between March 1991 and March 1992. 

Some 380 drilling companies have 
gone out of business; from 778 in 1985 
to 398 in 1991; a 49-percent decline. 

That averages more than five com- 
panies per month going out of busi- 
ness for the last 6 years. 

There are 1,120 active drilling rigs 
lost; from 1,980 in 1985 to 860 in 
1991; a 57-percent decline. 

That is the equivalent to 15.6 active 
rigs each month over the last 6 years 
being shut down. 

We are seeing a deliberate and rapid 
shift away from domestic oil explora- 



tion in the United States among the 
major oil companies. ARCO Chevron, 
Mobil, Marathon, and Phillips are all 
companies that have recently an- 
nounced sales of domestic reserves or 
large cutbacks in their domestic explo- 
ration and production staffs. 

Some erroneously believe that the 
United States is drilled out. But the 
University of Texas has done an ex- 
tensive analysis that shows that there 
is in excess of 100,000 intermediate 
fields to be found in this country. The 
Colorado School of Mines has quanti- 
fied the remaining gas to be found in 
this country, and it far exceeds that 
which has already been produced 
throughout history. 

The plight of the oil and gas indus- 
try even made it into the 'Talk of the 
Town' section of the February 10, 
1992, New Yorker. 

Looking up at the silent, rusting rigs from the 
riverbank, we felt aa if we had wandered into a 
graveyard for sci-fi monsters. The rig* were 
gargantuan. They also are fantastically expen- 
sive . . . and when there was no immediate pros- 
pect of them operating profitably , thoir owners 
often had them cut up for scrap • * * which ia 
what a lot of them are doing right now. 

The tax title of the energy strategy 
bill includes some important provi- 
sions to reverse this trend: 

Repeals the excess IDC preference 
and the excess percentage depletion 
preference for oil and gas for taxpay- 
ers other than integrated oil compa- 
nies. Repeal of the excess IDC prefer- 
ence may not result in more than a 30 
percent reduction in AMT tax liability 
for tax year 1993, and 40 percent for 
taxable years after 1993. This should 
reduce independent producers' taxes 
by $1 billion between 1992 and 1997. 

For corporations other that inte- 
grated oil companies, the bill would 
repeal the accumulated current earn- 
ings adjustment (ACE) for: First, 



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IDC's paid or incurred in taxable 
years beginning after December 31, 
1992; and second, percentage deple- 
tion for oil and gas. The bill also re- 
peals the AMT energy deduction. 

Other important energy tax provi- 
sions include: 

Providing favorable tax treatment 
of public utility rebates. Customers 
would not have to report as taxable 
income and consequently pay taxes on 
the value of any rebate provided by a 
utility for residential energy conserva- 
tion equipment. Beginning in 1993, 
the exclusion would be available for 80 
percent of the value of any rebate 
provided to a commercial or industrial 
customer. It is an equitable provision 
because the conservation promoting 
provisions apply to both electric and 
gas utilities. Rural electric co-opts, 
State and municipality owned utilities 
are also eligible. 

This provision accomplishes many of 
the same objectives as a bill I intro- 
duced earlier this session, S. 1305, the 
Conservation and Energy Efficient 
Investment Act. My approach would 
have conditioned the favorable tax 
treatment upon the customer pur- 
chasing the most energy efficient 
equipment available in the market- 
place. I think this is a better ap- 
proach, but I am nonetheless pleased 
that natural gas utilities' rebate pro- 
grams are eligible for the tax incen- 
tive. 

The bill includes a tax deduction for 
the purchase of alternative fuel vehi- 
cles; a lesser deduction for flexible fuel 
vehicles that can use both convention- 
al fuel; and alternative fuels and a tax 
credit for electric cars. 

My State is a tremendous natural 
gas producer and I am looking for- 
ward to the day I can buy my first 
natural gas powered car. Natural gas 



is an environmentally preferable fuel. 
These incentives are an important 
component of an energy strategy. 

The bill also makes the 10-percent 
solar and geothermal credit perma- 
nent. 

The two national laboratories in my 
State and many New Mexico compa- 
nies have been at the forefront of 
developing solar energy technology. I 
am please that this credit is becoming 
permanent. 

I think that the tax title of the 
energy strategy is an important con- 
tribution to America's energy policy 
and I am pleased that the Senate is 
including the tax title in this compre- 
hensive package. 

I thank the Senator for yielding. 

Mr. NICKLES addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Oklahoma. 

Mr. NICKLES. I ask the Senator 
from Texas if he would yield me 5 
minutes. 

Mr. BENTSEN. I yield 5 minutes to 
the distinguished Senator from Okla- 
homa. 

The PRESIDING OFFICER. The 
Senator from Oklahoma is recognized 
for 5 minutes. 

Mr. NICKLES. I thank my friend 
and colleague, Senator Bentsen from 
Texas, and also Senator Wallop for his 
leadership, in addition to Senator 
Domenici for his excellent statement, 
as well as the statement made by my 
friend and colleague, Senator Boren 
from Oklahoma. 

I rise in very strong opposition to 
the Bradley amendment which would 
strike out the provisions in the pend- 
ing bill dealing with the alternative 
minimum tax. 

Mr. President, I would just like to 
say that I think a lot of my colleagues 
do not really understand the provi- 



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sions of alternative minimum tax as it 
pertains to the oil and gas industry. 
Because this industry, is unlike any 
other industry, when you are talking 
about intangible drilling costs - and 
most people do not know what intan- 
gible drilling costs are. Intangible 
drilling costs are the costs you incur 
when you drill a well. When you drill 
a well, sink a hole in the ground, you 
have nonrecoverable expenses. And in 
any other business in America - and I 
happen to know a little bit about that 
because I ran and operated a manu- 
facturing company - we expense ex- 
penses. But not in the drilling indus- 
try today because of the tax change 
that we made in 1986. 

A serious mistake was made. It 
placed a tax surcharge on drilling 
expenses. Now that makes no eco- 
nomic sense whatsoever. You are sup- 
posed to tax net income. You are not 
supposed to have a tax surcharge on 
an expense item. And if you have a 
tax surcharge on an expense item, you 
are going to drill a lot less. You are 
going to have a lot less of that ex- 
pense item. 

It was ridiculous tax policy, a seri- 
ous mistake that was made in 1986 
and it needs to be reversed. 

The bill does not reverse it totally, 
but it is a step in the right direction. 
It minimizes the damage, and I wish 
we could go further. We should de- 
duct 100 percent of expense items on 
intangible drilling costs. They should 
not be subjected to the alternative 
minimum tax in any way, shape or 
form, the committee bill did not go 
that far. So to some extent I am dis- 
appointed. We really did not go far 
enough toward sound economics and 
allow business people to deduct their 
expenses. 

But if we pass the Bradley amend- 



ment, we will be doing great damage 
and continued harm to our country; 
not just to the oil and gas industry, 
but to our country as well. 

Last year, we spent $44 billion im- 
porting oil; 66 percent of our negative 
trade imbalance was the cost of im- 
ported oil, not to mention the impact 
in the oil patch. Not to mention the 
fact, as my colleague, Senator 
Johnston mentioned earlier, 400,000 
jobs have been lost in the last 10 
years, not to mention the fact that we 
are hardly drilling anything in this 
country. 

Today we have an active number of 
drilling rigB of 688. We actually dipped 
below 600 earlier year this year. Let 
me put that in perspective. 

I will tell my colleagues, we were 
right at 4,000 rigs about 10 years ago. 
Today, we are at 600-something. We 
are at the lowest number of active 
rigs that we have had since we kept 
records, going all the way back to the 
late thirties. 

We are in a depression in the drill- 
ing industry. And you might say, 
why? One of the reasons is because we 
have a tax surcharge in drilling. It 
makes no sense. It needs to be re- 
pealed. Not to mention the jobs, not 
to mention the economic activity, not 
to mention the fact that we want to 
reduce our dependence on imported 
oil. 

I just fear for the fact that a lot of 
our colleagues, I think, have very little 
understanding of the Tax Code, and 
particularly when it comes to busi- 
ness. And for crying out loud, we 
should make a common-sense ruling 
that we do not place tax surcharges 
on out-of-pocket, nonrecoverable, busi- 
ness expenses. 

This amendment that we have in 
this bill will go a long way toward 



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doing that. If we adopt the Bradley 
amendment we are going to say, no, 
we want higher AMT even on expense 
items. We are going to keep a tax 
surcharge on drilling expenses. 

That does not make sense. If we 
allow that to happen, we are going to 
devastate this industry and continue 
to import more and more oil. That 
makes no sense whatsoever. It makes 
no economic sense. And I would just 
hope that my colleagues would show 
great wisdom and defeat the Bradley 
amendment and, I hope, defeat it 
overwhelmingly, because it does not 
make sense. 

We have several provisions in this 
energy bill that will help. Certainly, if 
we pass the Bradley amendment we 
will be doing great harm. 

Mr. President, I strongly oppose this 
motion to strike on several grounds; 
not the least being that our domestic 
oil and gas industry is bleeding to 
death increasing our Nation's contin- 
ued dependence on foreign oil. Mr. 
President, we are debating a national 
energy bill that is intended to help 
reverse this trend of increasing depen- 
dence. The Bradley amendment, if 
adopted, would eliminate one of the 
most necessary provisions in this bill 
that would have direct impacts on 
increasing domestic exploration and 
help decrease the need for foreign 
imports. 

Independents drill 85 percent of the 
oil and gas wells in the United States. 
Over two-thirds of these independents 
are small, often family-run, businesses 
with less than 20 employees. The 
AMT in its current form has an espe- 
cially punitive impact on these small 
producers, denying them the deduc- 
tion of their most fundamental ordi- 
nary and necessary business expenses. 
Because the amount of IDC allowed 



under the AMT is tied to the 
producer's net income from oil and 
gas, the lower the amount of produc-, 
tion, the lower the deduction for drill- 
ing costs. In addition, the percentage 
depletion deduction, which allows 
smaller producers to replace increas- 
ingly costly reserves and prevents the 
premature abandonment of many 
properties, is disallowed under the 
AMT. 

If the AMT provisions in this bill 
are passed, drilling would increase 
between 17 and 24 percent and would 
result in almost 7,000 new wells 
drilled each year. This would increase 
the rig count by at least 200. On aver- 
age, each rig operating full time di- 
rectly creates 150 to 200 new jobs. 
Therefore, between 30,000 and 45,000 
additional jobs could be created in the 
United States in the first year alone 
as a direct result of eliminating the 
nondeductibility of drilling costs and 
percentage depletion under the AMT. 

As you know, current provisions in 
the Tax Code treat intangible drilling 
costs and percentage depletion as 
preference items for purposes of calcu- 
lating a taxpayer's alternative mini- 
mum tax obligation. These provisions 
are causing irreparable harm to an 
industry that is vital to our national 
security. 

A rig count of 688 indicates that the 
industry has entered a period of accel- 
erated decline. The Nation's domestic 
oil production is falling at annual rate 
of 300,000 barrels a day, and foreign 
imports are rapidly approaching 50 
percent of our domestic needs. We 
have lost nearly 400,000 jobs, almost 
half of the oilfield worker jobs since 
1981 when the rig count reached 
4,000. 

Independent producers have been 
devastated by a combination of low oil 



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and gas prices and high taxes. Every 
rig that shuts down means jobs that 
are lost and increased dependency 
upon foreign oil for our energy needs. 
I strongly believe that tax relief is 
needed to save the domestic industry 
from collapse. 

The time to act is now. The inde- 
pendent procedures say that unless 
tax relief is provided, the industry will 
collapse. With the energy bill on the 
floor of the Senate it is time to act 
and act decisively. 

I am convinced that the alternative 
minimum tax relief is the single most 
important agenda item for the oil and 
gas industry. It does little good to 
talk about extending incentives unless 
we remove alternative minimum tax 
impediments. 

When a recession coincides with 
sustained low oil and gas prices, the 
alternative minimum tax works like 
severe penalty that gets progressively 
worse the longer the taxpayer fails 
under it. The longer prices are low 
and profits thin, the harsher is the 
alternative minimum tax's impact. 

Under current law, when percent- 
age depletion and intangible drilling 
costs are added back to income in 
calculating alternative minimum tax 
tax liability, it can result in a 70- to 
80-percent effective tax rate for some 
producers. The result is indisputedly 
punitive, if not confiscatory. 

Including intangible drilling costs 
and percentage depletion as prefer- 
ence items in 1986 was a mistake. It 
has been referred to by some Ameri- 
cans trying to increase oil production 
here in the United States as a drilling 
penalty tax for independents. In the 
fall of 1990, Congress made a change 
to these provisions by reducing the 
amount of intangible drilling costs 
that independents must include in the 



alternative minimum tax by 75 per- 
cent for exploratory wells and 15 per- 
cent for nonexploratory wells. But 
the penalty is still 25 percent for ex- 
ploratory wells, including all develop- 
mental wells, We need to eliminate 
IDC's entirely from the alternative 
minimum tax. 

IDC's are the only out-of-pocket 
business expense in any industry or 
profession that are treated as a pref- 
erence item in the alternative mini- 
mum tax. Inclusion of IDC's was 
unfair, and another example of treat- 
ing the domestic industry as a cash 
cow to be milked every time revenue 
is needed. 

Taking IDC's and percentage deple- 
tion out of the alternative minimum 
tax is appropriate not simply because 
they are a unique penalty on oil and 
gas producers, but because in practice 
these provisions have been both 
anticimpetitive and regressive and 
have had the effect of significantly 
reducing drilling activity in the Unit- 
ed States. 

It is imperative that the Bradley 
amendment be defeated. The inde- 
pendent oil and gas producers are 
being unfairly penalized by the 1986 
tax amendments. If the AMT tax 
provisions contained in this bill are 
not adopted the results will be a con- 
tinued decapitalization of a strategic 
sector of our industrial economic base, 
a continued loss of jobs and a contin- 
ued risk to our Nation's ability to 
respond to requirements for domestic 
oil and gas production. The AMT tax 
provisions of this bill must be enacted 
now if this industry is to survive and 
the national security of this Nation be 
preserved from further reliance on 
foreign energy sources. 

I thank my friend and colleague 
from Texas. 



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The PRESIDING OFFICER. Who 
yields time? 

Mr. WALLOP. Mr. President, I ask 
the Senator from Texas if I could 
have my 2 minutes. 

Mr. BENTSEN. I yield that time to 
the distinguished Senator from Wyo- 
ming; the ranking member of the 
committee. 

The PRESIDING OFFICER. The 
Senator from Wyoming. 

Mr. WALLOP. Mr. President, I 
thank the Senator from Texas. 

I was amused by the arguments of 
the Senator from Oregon (Mr. 
Packwood) and indeed those of the 
Senator from New Jersey (Mr. 
Bradley) for eliminating the whole of 
the alternative minimum tax. I was 
on the exalted Finance Committee at 
the time that concept arrived on the 
Tax Code in 19S6. 1 characterized it at 
that time as an admission of 
tax-writing incompetence. It was 
done to satisfy the needs that every- 
body should pay tax, literally, whether 
they made any money or not during 
the course of the year. They did not 
want to have a taxpayer with zero 
income. 

Now I warned of the consequence 
late at night on this floor of what it 
would do to the oil and gas industry, 
and it has. One of the thingB that 
just seems to be lost in the argument 
of the Senator from New Jersey, the 
Senator from Minnesota, and the 
Senator from Oregon, is that there 
are occasions when people in the oil 
and gas industry are obliged to pay 
taxes when they have made no in- 
come, because of the peculiar quirks 
of tax treatment of the oil and gas 
industry. 

I have friends in Wyoming. I have 
letters, which I will happily supply to 
the Senator from New Jersey, of peo- 



ple who go through in detail how they 
owed taxes, having made no money. 
That is ridiculous and it is one of the 
reasons why we are driving people out 
of the industry. 

Last, Mr. President, Senator 
Johnston and I and others, when we 
started trying to craft this bill, tried 
to pay equal attention, equal heed to 
both the production of and the conser- 
vation of energy. This is one of the 
critical points in the production of 
energy and it is also a critical point in 
a whole lot of other things that have 
been described - jobs, balance of pay- 
ments, and other kinds of things. But 
it makes environmental sense that 
America uses the resources that it 
has, that it produces well and under 
much more environmental stricture 
than anywhere else in the world. So 
there is no more important section of 
this bill for the domestic oil produc- 
tion side and it will help us seek the 
balance that we have tried to achieve 
from the beginning. 

The PRESIDING OFFICER. The 
time of the Senator from Wyoming 
has expired. Who yields time? 

The Senator from New Jersey. 

Mr. BRADLEY. Mr. President, how 
much time is left on the side of the 
proponents of the amendment? 

The PRESIDING OFFICER. The 
Senator from New Jersey has 16 1/2 
minutes. 

Mr. BRADLEY. Mr. President, let 
me see if I cannot deal with some of 
the issues that have been raised in 
this debate and then close off our side 
of the debate. 

Let me begin by saying that I think 
the Senators who have spoken on this 
issue are very strong advocates of the 
interests of their States. There is no 
question about that. In the States of 
all the speakers - from Texas, Louisi- 



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ana, Oklahoma, Colorado, Kansas, and 
New Mexico • there is an influential 
oil and gas industry. It is understand- 
able that those Senators would be 
defending their States' industry. And 
they do a very able job of it. So let me 
begin by telling the full Senate that I 
respect their advocacy for their 
States 1 positions. 

I also think other States have other 
concerns, and it is those that I want 
to try to address. 

First, the point was made that we 
should provide this benefit to the oil 
and gas industry and if I seek to pre- 
vent this benefit from being provided, 
that somehow or other because we 
have not eliminated all benefits pro- 
vided to all industries, that there is 
something questionable about this 
activity. 

Let me say frankly, I would like to 
eliminate more than these benefits for 
the oil and gas industry. I would like 
to eliminate many more of the loop- 
holes that remain in the tax base. I 
would like to go further than in 1986, 
as long as the money is used to either 
reduce the deficit or to reduce tax 
rates. 

So let me be very clear about that. 
But we do not have the whole Tax 
Code before us now. We only have 
this provision before us. 

The second point: The distinguished 
Senator from Louisiana made a point 
about environmental terrorism in the 
Appropriations Committee. I am not 
on the Appropriations Committee and 
this amendment does not deal with 
matters that relate to the Appropria- 
tions Committee. This amendment 
deals with whether we should provide 
over $1 billion in tax benefits to one 
industry, pure and simple. 

Third, the distinguished Senator 
from Colorado raised the question 



that, would this be inconsistent be- 
cause the bill is trying to promote 
natural gas? Somehow or other, this 
amendment would run counter to 
attempting to promote natural gas. 
He made the environmental argu- 
ment. 

I think natural gas has to be a ma- 
jor part of our future. I think natural 
gas is clean; it is efficient; it is abun- 
dant; it should be developed. But this 
provision is not directed only at natu- 
ral gas, it is also directed at oil. So, 
while natural gas may be the clean 
lady at the dance, the partner is not 
so clean when it comes to environ- 
mental purity. That point should be 
made. If we were only dealing with 
natural gas maybe we would have 
another dynamic here. 

Fourth, what about the price? What 
is the problem in the oil industry? Is it 
that they do not have special tax ben- 
efits, or is it that the price has 
dropped? The proponents of our 
amendment asserted it is that price 
has dropped. I believe if the oppo- 
nents of this amendment were serious, 
they would propose this limited tax 
relief until the price of oil reached a 
certain level. At some level, why does 
the industry need that tax relief? 
Because they are making more and 
more money? That is not what is pro- 
posed here. This is a permanent bene- 
fit for the oil and gas industry. It is 
not temporary. It is not price contin- 
gent. It is permanent. 

Fifth, the argument was that, if we 
simply had this tax benefit, we would 
not have had a war in the Persian 
Gulf. If we simply had this tax benefit, 
there would have been no war in the 
Persian Gulf. 

I think that argument on its face is 
ludicrous and I hope it is not made 
seriously. Do we have a problem with 



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foreign oil? Absolutely. Insecure sourc- 
es of foreign oil? Absolutely. Is it more 
secure to get the oil in the United 
States than the Persian Gulf; from 
the United States than from Venezue- 
la; from the United States than from 
Mexico? Yes. But this tax provision is 
not the difference between the United 
States going to war in the Persian 
Gulf and the United States not going 
to war in the Persian Gulf. 

Sixth, there was a great case made 
for those who have lost their jobs in 
the oil industry. Let me tell you I 
have a personal feeling for people who 
lose their jobs in the oil industry, just 
as I have a personal feeling for resi- 
dents of my State over the last several 
years who have lost their jobs. Many 
people thought they had lifetime em- 
ployment with some of the major com- 
panies of America: IBM, AT&T. And 
they lose their jobs. If we simply put 
back in $1 billion in special tax relief, 
that is not going to save their jobs. 
The industry's fate is a function of 
price, not tax subsidies. 

Next there was the argument made 
about trade; our trade partners are 
fully competitive; bur trade partners 
are more competitive than we are. 
And we are burdened because we do 
not get enough oil domestically. 

A lot of those trade partners of 
course get no oil domestically. They 
get no oil domestically. 

Mr. President, another argument 
has been built, of course, around the 
famous 72 percent effective tax rate. 
Not that anybody is going to under- 
stand this, totally. Sometimes when I 
go through it, I do not know if you 
can make it dear. That is a part of 
the tax pr ocess, I think. 

But, if you consider the effective tax 
rate, using the alternative minimum 
tax beae, you discover that the rate is 



not 70 percent. It is 24 percent. Not 
70 percent, 24 percent. So let us not 
parade the 70-percent effective tax 
rate on the regular tax base as if that 
is the answer. No, it is economic in- 
come that we are measuring under 
the alternative minimum tax, econom- 
ic benefit. And the effective tax rate 
there is 24 percent, not 70 percent 
that we have heard on this floor for 
the last 2 hours. 

But, Mr. President, all of these 
issues are somewhat secondary to the 
real question here, and that is what 
do you want a billion dollars to be 
spent for? We have a $400 billion bud- 
get deficit; this will increase it to $401 
billion. We have pressing needs in 
this country, pressing needs that will 
remain unaddressed. 

The billion dollars that we give to 
the oil and gas industry over 5 years 
is the billion dollars that we do not 
have for education, the billion dollars 
we do not have for cleaning up the 
environment, the billion dollars we do 
not have to reduce the deficit. These 
are not small questions. 

The distinguished Senator from 
Minnesota, I thought, made several 
very important points about the cry- 
ing needs of this country that remain 
unaddressed because we cannot find 
the money. But we can certainly find 
the money when it comes to a particu- 
lar industry that petitions Congress 
very effectively. 

Mr. President, let me share just a 
brief story with the Senate. I am a 
member of a commission called the 
Commission on the African-American 
Male, with Kurt Schmoke, the mayor 
of Baltimore. 

We had one of our first meetinp 
since we have taken over 
co chairman ship of that commission 
net so lonf s^p at Moffsn State/ One 



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of the witnesses was * young 
15-year-old African-American male; he 
was strong and handsome. And he 
was asked by the commission to tell us 
what his hopes were and what his 
fears were. 

He came before the commission that 
morning and said: Well, I hope I can 
become a player in the NBA, but, you 
know, not many people can make the 
NBA. So if I cannot make the NBA, 
what I want to do is work for the CIA. 
And if not the CIA, the FBI. That is 
my aspiration. 

What about fears? 

He said: I have four fears. The first 
fear I have is when I walk out of my 
house I might be killed because three 
or four people have been killed in my 
neighborhood in the last month. Ify 
second fear is that my parents would 
be killed and I would have to go live 
with another family member who 
would not love me so much, or maybe 
a foster parent who would not create 
the environment where I could study 
and advance. My third fear is HIV. 
He said, I do not fool around, but look 
at the great Magic Johnson. It oiuy 
takes once. He said, my fourth fear is 
if I was good enough, I know I could 
make the NBA. I know I could if I was 
good enough. He said, if I am good 
enough, I do not know if I could get 
into the CIA or the FBI. He said, I did 
not bring drugs into this country. I 
did not make money off the sale of 
guns. I do not close the schools on 
the weekends in the summertime. I 
do not fail to fund programs that help 
our neighborhood. I am just trying to 
do the best I can under difficult cir- 
cumstances. 

Point: What are we going to say to 
that young man about the billion 
dollars we have just given to the oil 
and gas industry as opposed to the 



billion dollars that might have made 
some difference in his life? 

Choice, that is what this amend- 
ment is about. We can debate the 
narrow aspects of it, the effective tax 
rates of it, the trade balance, et cet- 
era. The basic question is: How do 
you want a billion dollars of your tax 
money spent? Do you want that billion 
dollars going to one industry, a nar- 
row element of that industry, the 
independent oil and gas producers, or 
do you want it for some other pur- 
pose, from deficit reduction to trying 
to change the circumstances under 
which this young man at Morgan 
State was growing up? That is the 
basic question. 

We are going to face this. This is 
not a moment that is going to pass. 
We are going to have to respond to 
some basic questions in the next cou- 
ple of years if we are serious about the 
deficit, and all the rhetoric actually 
means something. 

How are we going to go about cut- 
ting that deficit? Are we going to cut 
it on the basis of equity and need? 
Does it really make sense to have a 
tax system where people who make 
more than $100,000 get a benefit 
greater than people who make under 
$10,000? 

Generational issues are going to be 
another way to look at this. Does it 
make sense to continue to funnel 
money to people who are older or for 
people who are young? 

Do we want the market to allocate 
resources in this country? Do we beat 
our chest and say, yes, we think that 
is the most efficient way to allocate 
resources in this country except when 
I can get a little favorable benefit 
through a subsidy in the Tax Code or 
a subsidy through the spending pro- 
cess? Then I will take that. I will still 



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talk about markets, but I will want 
the step ahead that my subsidy gives 
me. 

We are going to face this question 
because if you look at the Tax Code, 
there are billions of dollars in subsi- 
dies to this industry or that industry 
or another industry. These all distort 
the functioning of the market and 
take money away from other pressing 
public needs. 

So, Mr. President, I look at this 
amendment as really the opening bell 
on what over the next few years I 
hope we are going to be able to do to 
focus on in getting control of this 
deficit. I hope that we will not decide 
to follow business as usual, and keep 
putting money in the pockets of this 
industry or that industry under the 
guise that this billion dollars will pre- 
vent the Persian Gulf war or make us 
immediately trade competitive or 
whatever. This is a moment for can- 
dor. I believe it is a moment for de- 
ciding. The time has now come to 
decide not to provide this billion dol- 
lars for the independent oil and gas 
industry. 

The PRESIDING OFFICER (Mr. 
Robb). Who yields time? 

Mr. BENTSEN. Mr. President, I 
yield 5 minutes to my distinguished 
colleague, Senator Gramm. 

The PRESIDING OFFICER. The 
Chair recognizes the Senator from 
Texas (Mr. Gramm). 

Mr. GRAMM. I thank the distin- 
guished chairman of the Finance 
Committee. 

Mr. President, I always enjoy listen- 
ing to our colleague from New Jersey. 
I have to say the last time I looked we 
were not short of NBA players and 
since the candidate of the party of our 
colleague from New Jersey wants to 
cut defense intelligence by a billion 



dollars, I submit we are not short of 
people who can or would work at the 
CIA. But the provision that we are 
debating today is about the fact that 
we are short of oil and gas in America 
produced at home at a price consum- 
ers, industry and farmers can afford 
to pay. 

Second, I want to correct one point, 
and that is, we are not adding a bil- 
lion dollars to the deficit. There is a 
corresponding revenue increase to pay 
for this tax change. The bill before us 
would be subject to a 60-vote point of 
order if it were not revenue neutral, 
and while we are talking about chang- 
ing tax policy, we are not talking 
about raising the deficit. 

Let me say a little bit about the 
alternative minimum tax because our 
dear colleague from New Jersey and I 
are 180 degrees apart on this issue. 

I do not believe that we ought to 
have an AMT. I agree with our col- 
league that our Tax Code contains 
preferential treatment. I think we 
give people tax benefits for a lot of 
thingB we ought not to give it to them 
for. I would very much like to see us 
change some of these thingB and lower 
rates. But the problem with AMT is 
that we provide incentives with one 
hand and then we come back in under 
the table and take them back. We say 
the Federal Government ought not to 
tax cities by taxing interest paid on 
municipal bonds and, therefore, mu- 
nicipal bonds sell at a discount be- 
cause their interest is tax free. But 
then we come in through the 
backdoor with AMT and try to seize 
some of the benefits we have given the 
cities. If we are going to give them 
the benefit, let them have it, and let it 
encourage people to buy municipal 
bonds. But we ought not to be coming 
in through the backdoor. I submit 



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that while AMT may be good political 
policy, it is not good tax policy. 

I wish the day would come when we 
could debate tax policy in terms of 
encouraging people to pull the wagon 
rather than lamenting the fact that if 
America is saved it is going to be 
saved at a profit. 

Quite frankly, I do not think Ameri- 
ca is going to be saved unless it is at a 
profit, and I do not understand people 
who love investment but - to para- 
phrase a Democratic candidate for 
President - hate the people who en- 
gage in investing. 

I do not hate poor people. I do not 
hate rich people. I want more people 
to be rich, and I want the people who 
have money to put it to work, and 
that is what the debate is about. 

Let me talk about energy. If we 
were talking about a program - and 
we have thousands of them - to spend 
taxpayers' money to help some indus- 
try, very few people would be talking 
about unfairness. But somehow the 
concept of incentives, a concept that is 
accepted in all the world • is rejected 
only in Cuba and North Korea and 
here in Washington • is somehow 
wrong. 

Here is the problem in a nutshell. 
If you look at this chart, you see what 
has happened to exploration expendi- 
tures on discovery and development of 
new natural gas and oil by our inde- 
pendent producers. 

Well, what has happened is that in 
the last 10 years our expenditures 
have fallen by three-fourths. 

•If you look at what has happened to 
drilling for oil and for natural gas is 
that both have fallen through the 
floor. 

What we are trying to do is very 
simply this: We want more energy 
from reliable domestic sources to turn 



the wheels of industry and agricul- 
ture. We can provide a very strong 
incentive for a very modest change in 
the Tax Code by exempting a portion 
of the expenditures for drilling from 
the alternative minimum tax. We do 
it only for independent producers with 
a very minor benefit for the larger 
companies. Quite frankly, I wish we 
could do it across the board. This is a 
change that needs to be made because 
America needs more oil and gas pro- 
duced at home. 

The PRESIDING OFFICER. The 5 
minutes allocated to the junior Sena- 
tor from Texas have expired. Who 
yields time? 

Mr. BENTSEN. I yield 2 minutes to 
the distinguished Senator from Missis- 
sippi. 

The PRESIDING OFFICER. The 
Senator from Mississippi is recognized. 

Mr. COCHRAN. Mr. President, I 
thank the distinguished chairman of 
the Finance Committee for yielding 
me this time. 

I want to add my voice to those who 
are saying today that this amendment 
would continue to undermine the 
ability of a very important industry in 
the United States to produce oil and 
gas in an effort to help reduce our 
unnecessarily large dependence upon 
imported oil and other foreign energy 
sources. 

The bill has a number of provisions 
in it that seek to help reduce our 
dependence on imported energy. 
Some of the provisions relate to in- 
creasing energy efficiency, encourag- 
ing the use of alternative fuels, and 
trying to develop electricity from 
nonfossil fuel sources. These are all 
very important provisions to be con- 
sidered by the Senate. But the most 
important and the most helpful provi- 
sion in this energy legislation is the 



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repeal of the alternative minimum 
tax. This would do more, Mr. Presi- 
dent, than any other provision in the 
bill, according to what I am told by 
people who are experts and under- 
stand the economic impact of that 
provision, to help stimulate the oil 
and gas industry so that it can pro- 
duce again. 

We are seeing more people go out of 
business in the oil and gas industry 
than almost any other industry I 
know of, except the defense industry 
maybe. Numerous layoffs have oc- 
curred in my State. One oil and gas 
producer, who is a small independent 
businessman, told me the other day he 
is having to cut back. He even had to 
lay off his own son. He has just a 
small number of employees, but the 
fact is they are not able to stay in 
business under the tax treatment, the 
regulations, the climate that exists for 
the industry in our country today. 
They are having to look to offshore 
opportunities, go to foreign countries, 
train workers there. 

Driving American oil and gas pro- 
ducers out of business is not in our 
national interest because that will 
surely increase our dependency on 
imported energy. It is completely 
inconsistent with our efforts to reduce 
our dependence on foreign oil for the 
Senate to approve this amendment. 

The amendment would impose a tax 
burden on independent oil and gas 
producers that will increase the likeli- 
hood that this important industry will 
continue to suffer. Relief from the 
alternative minimum tax for the small 
businesses who do 85 percent of the 
oil and gas exploration in the United 
States must be enacted to help resur- 
rect this sector of our economy. 

This industry has been devastated 
by the AMT treatment of their ex- 



penses. The practical effect of the tax 
treatment of intangible drilling costs 
and percentage depletion is that the 
ordinary business expenses of these 
producers are not deductible. This is 
different from the treatment of other 
businesses, which are allowed to de- 
duct from their taxable income their 
ordinary business expenses. 

When combined with the dramatic 
drop in gas prices since 1986; the wild 
fluctuation of oil prices during that 
time; and the increase in regulation of 
the oil and gas business, this tax has 
helped to eliminate an estimated 
398,000 jobs that were once provided 
by this industry, including the produc- 
ers themselves as well as those who 
contract with producers to do the 
actual drilling work. What that 
means is that half the jobs that exist- 
ed 10 years ago in oil and gas and 
related industries do not exist today. 

Another indication of the dismal 
health of this industry is the rig count 
- the number of rigs being used in oil 
or gas exploration in the United 
States. In 1982 there were 3,105 drill- 
ing rigs in operation; today there are 
less than 700. 

The few independent producers that 
can afford to explore overseas are 
entering into what in many cases are 
high-risk ventures to produce oil in 
developing countries. This means two 
thingB: First, more oil will be coming 
to our country from foreign sources 
and less from domestic sources; and 
second, jobs that would exist in the 
United States are going overseas. In 
an April 20 article in the Wall Street 
Journal, a Pakistani employee of an 
American independent oil producer is 
quoted as saying, 'We'll be hiring 
workers, and the contract will proba- 
bly call for building a small colony of 
schools and public facilities. ' Those 



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are benefits, Mr. President, that we 
used to enjoy in this country as a 
result of a vibrant oil and gas sector. 

Relieving the burden of the alterna- 
tive minimum tax on independent 
producers will certainly not solve all 
of the problems in the industry. But 
it will remove an artificial, counter- 
productive, government-imposed im- 
pediment to domestic production. The 
Office of Technology Assessment has 
recommended AMT relief as one way 
to help stabilize this industry. 

Mr. President, the amendment be- 
fore us is shortsighted and runs coun- 
ter to the purpose of the underlying 
bill, and I urge the Senate to maintain 
the provision in the bill as reported by 
the Finance Committee. 

The PRESIDING OFFICER. The 
time allocated to the Senator from 
Mississippi has expired. 

Who yields time? 

Mr. BENTSEN. Mr. President, I 
yield 2 minutes to the distinguished 
Senator from Alaska. 

The PRESIDING OFFICER. The 
Senator from Alaska is recognized for 
up to 2 minutes. 

Mr. MURKOWSKI. Mr. President, 
I thank my colleague, the floor man- 
ager. 

I rise in support of the continuation 
of the alternative minimum tax. lam 
not going to speak at length about the 
merits of the tax; they have been 
addressed by my colleagues. But real- 
ism dictates that this body recognize 
oil imports are at their highest level 
since 1978. That is a fact. Domestic 
production is decreasing steadily. 
That is a fact. Imports again are over 
50 percent. That is a fact. The num- 
ber of active oil and gas drill rigp hit 
its lowest level ever recorded. That is 
a fact. Offshore drilling in this coun- 
try fell by 47 percent this year alone. 



That is a fact. 

Mr. President, the American oil 
industry and gas industry is moving 
overseas before our very eyes. Ameri- 
can jobs are being filled in other coun- 
tries, and Congress' inability to make 
tough decisions is allowing this to 
happen. 

Mr. President, other countries en- 
courage oil and gas development and 
exploration, and in the United States 
we are shutting off the most promis- 
ing areas. Endless Federal regulatory 
hurdles prevent oil and gas explora- 
tion and development both offshore 
and on shore. 

Mr. President, I could go on and on 
and on, but time is limited. I think it 
is time to reflect on the reality that 
we need to bring this industry back to 
America where it was initially found- 
ed. We need to reduce our depen- 
dence on imported oil. We need to 
recognize that half our trade deficit is 
the cost of imported oil. We do not 
have to put up with that, Mr. Presi- 
dent. 

I do not intend to pursue it now, 
but I will later in the day propose an 
amendment to study the future of gas 
potential and economic impact on our 
society. 

The PRESIDING OFFICER The 
Senator's 2 minutes have expired. 

Who yields time? 

Mr. BENTSEN. Mr. President, how 
much time do I have? 

The PRESIDING OFFICER The 
Senator from Texas controls 6 min- 
utes and 23 seconds. 

Mr. BENTSEN. The alternative? 

The PRESIDING OFFICER The 
alternative is 49 seconds controlled by 
the Senator from New Jersey. 

Mr. BENTSEN. Mr. President, I 
have listened to my friend from New 
Jersey, his eloquent statement con- 



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cerning individual concerns, plights, 
problems in the country, and how we 
devote $1 billion to try to assist in 
that regard. They are valid points. 

But I also look at the situation 
where the principal industry in his 
State under section 936 gets from $3 
to $3.5 billion a year in subsidies - 
three times as much as we are talking 
about in the amendment he is attack- 
ing. They are different industries. 
The pharmaceutical industry is a 
booming industry, doing a marvelous 
job - growth, helping the economy. 

But we are looking at an industry 
that is in trouble and has lost over 
400,000 jobs. We must realize that oil 
is a depleting resource in this country. 

Look at situations like the automo- 
bile industry, which is in trouble. And 
what have we done? We entered into 
an agreement with Japan on just how 
many cars can come in. We are not 
talking about entering into an agree- 
ment with Saudi Arabia as to how 
much oil can come in. 

Those are the kinds of concerns we 
are currently facing and trying to 
address. 

We are looking at something where 
75 percent of the merchandise deficit 
last year in this country was oil, and 
we have a bill where we are talking 
about alternative sources and conser- 
vation and trying to not depend so 
much on foreign oil. That is what we 
are talking about. It is supported by 
people from oil States, because we 
know the dependence is dangerous for 
us, and it is terribly important we 
keep that domestic production going. 

I know we need to sustain the jobs. 
It is important that we have someone 
left who still understands geology and 
petroleum engineering and who is able 
to bring about some of the alternative 
sources, whether we are talking about 



coal seam gas or we are talking about 
natural gas, a relatively clean-burning 
fuel. 

That is what we are talking about. 
We are talking about increasing the 
foreign debt of our country, and we 
are trying to do what we can to not 
increase that dangerous dependence 
on oil. 

Mr. President, I hope my colleagues 
will do as we did in the Finance Com- 
mittee and defeat this amendment by 
a substantial margin. 

The PRESIDING OFFICER. All 
time controlled by the Senator from 
Texas has expired. Who yields time? 

Mr. BRADLEY. Mr. President, how 
much time do I have? 

The PRESIDING OFFICER. The 
Senator from New Jersey controls 45 
seconds. 

Mr. BRADLEY. Mr. President, 45 
seconds; let me make one final point 
to the distinguished Senator from 
Texas (Mr. Gramm). Allow me to 
make it by using this chart that he 
used. The number of oil wells drilled 
in this country dropped from about 
65,000 in 1981, to about 26,000 in 
1986. 

And then it went down a little bit, 
by about 4,000, from 1986 to 1989. 
And lo and behold, it increased after 
1989. 

So, to those who say that the tax 
benefit is the thing that will stimulate 
this drilling back to 65,000, or any- 
where close, it just does not bear re- 
semblance to reality. 

The fact is, it was the price drop; it 
was not the tax benefit lost. And 
there it is, in black and white. 

Mr. SIMPSON. Mr. President, I 
want to express my strong personal 
admiration for the distinguished floor 
managers of this legislation. My old 
friend senior Senator from Wyoming, 



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Malcolm Wallop, the ranking member 
of the Energy Committee, and the 
able Senator from Louisiana, Senator 
Johnston, have worked doggedly on 
this legislation. 

What the Senate has before it today 
is the culmination of years of hard 
work by all the members of the Ener- 
gy Committee and their fine stalls. 

I would like to say a few words 
about the revenue provisions that are 
contained in this bill. These provi- 
sions represent the sort of bipartisan, 
thoughtful, productive effort that is 
becoming increasingly rare in this 
election year. 

The debate on this issue smacks of 
election year politics, however. 

This is not a debate about tax bene- 
fits to a single industry as my fine and 
respected friend, the distinguished 
Senator from New Jersey suggests. 

This is a debate about whether or 
not, as the distinguished Senator from 
Louisiana so succinctly and forcefully 
pointed out - whether or not we as a 
nation are going to keep American 
companies working and producing oil 
and gas in America and not overseas. 

Who will benefit when the decline in 
domestic exploration and production 
reaches zero? 

Certainly not the U.S. economy and 
certainly not the consumer. 

This energy bill is about charting 
the course for national energy inde- 
pendence. This amendment will do 
exactly the opposite: It will encourage 
dependence on foreign production. 

I especially commend my distin- 
guished senior colleague, Senator 
Wallop, who while working vigorously 
on all of the issues surrounding ener- 
gy security, did one excellent job of 
focusing his eye on the most helpful 
and important changes in the tax law. 

We are faced with real difficulties 



throughout the oil and gas industry. 
This body hears a lot of contradictory 
messages regarding what needs to be 
done • this amendment is just an ex- 
ample. 

Senators Bennett Johnston, Lloyd 
Bentsen, and Malcolm Wallop have 
kept their eye on the rabbit through- 
out this process and have been most 
careful to make sure that the tax 
writing has taken our real energy 
problems into account. 

The AMT was intended to prevent 
people from bucking the system dur- 
ing good times, but it has proved to be 
a dangerous double whammy during 
these most difficult times. 

I am pleased that this has been 
correctly noted as the single most 
important tax issue pertaining to our 
energy self-sufficiency. 

I would strongly encourage my col- 
leagues in the Senate to reject the 
Bradley amendment. 

Mr. BINGAMAN. Mr. President, I 
rise today to oppose the amendment 
by my colleague from New Jersey to 
delete language in the Comprehensive 
National Energy Policy Act which 
provides tax relief to our Nation's 
independent oil and gas producers. 

The energy bill we consider today 
minimizes the damage inflicted on 
producers by the current Tax Code 
and recognizes the importance of 
items such as intangible drilling ex- 
penses to those producers as a legiti- 
mate cost of doing business. We need 
to produce more oil and gas here at 
home and reduce our growing depen- 
dency on foreign oil. That dependency 
now exceeds 50 percent. 

A total of 400,000 jobs in this sector 
have been lost in the last decade. 
Additionally, spending on exploration 
and production has decreased dramat- 
ically in the past 10 years by almost 



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4281 



75 percent. Active drilling rigs in the 
United States have decreased from 
4,000 to approximately 688 rigs today, 
the lowest number since records have 
been kept. In New Mexico this num- 
ber has dropped from 135 in 1981 to 
34 as of July 24 of this year. 

Adopting the Bradley amendment 
will drive even more independent oil 
and gas producers out of business and 
further reduce our ability to meet our 
domestic energy needs. I encourage 
my colleagues to join me in opposing 
the amendment. 

The PRESIDING OFFICER. All 
time on the amendment has expired. 
The question occurs on amendment 
2782. 

Mr. BENTSEN. Mr. President, I 
move to table the amendment. I ask 
for the yeas and nays. 

The PRESIDING OFFICER. Is 
there a sufficient second? There is a 
sufficient second. 

The yeas and nays were ordered. 

The PRESIDING OFFICER. The 
question is on agreeing to the motion 
of the Senator from Texas (Mr. 
Bentsen) to lay on the table the 
amendment of the Senator from New 
Jersey (Mr. Bradley). 

On this question, the yeas and nays 
have been ordered, and the clerk will 
call the roll. 

The assistant legislative clerk called 
the roll. 

Mr. FORD. I announce that the 
Senator from Louisiana (Mr. Breaux), 
the Senator from North Dakota (Mr. 
Burdick), the Senator from California 
(Mr. Cranston), and the Senator from 
Tennessee (Mr. Gore) are necessarily 
absent. 

Mr. SIMPSON. I announce that the 
Senator from North Carolina (Mr. 
Helms) is absent due to illness. 

I further announce that, if present 



and voting, the Senator from North 
Carolina (Mr. Helms) would vote 'yea.' 

The PRESIDING OFFICER (Mr. 
Robb). Are there any other Senators 
in the Chamber who desire to vote? 

The result was announced • yeas 63, 
nays 32, as follows: 

(ROLLCALL VOTE NO. 169 LEG.) 





YEAS-63 




Akaka 


Bsucus 


Bentsen 


Bingaman 


Bond 


Boren 


Brown 


Bumpers 


Burns 


Byrd 


Chafee 


Coats 


Cochran 


Conrad 


Craig 


D'Amato 


Danforth 


Daschle 


Dixon 


Dole 


Domenid 


Exon 


Ford 


Gam 


Glenn 


Gorton 


Graham 


G run in 


Grassley 


Hatch 


Hatfield 


Heflin 


Inouye 


Johnston 


Kassebaum 


Kerrey 


Lott 


Lugar 


Mack 


McCain 


McConnell 


Moynihan 


Murkowski 


Nickles 


Nunn 


Preealer 


Pryor 


Riegle 


Robb 


Rockefeller 


Sanford 


Seymour 


Shelby 


Simon 


Simpson 


Smith 


Specter 


Stevens 


Symms 


Thurmond 


Wallop 


Warner 

NAYS • 32 


Wirth 


Adams 


Biden 


Bradley 


Bryan 


Cohen 


DeConcini 


Dodd 


Durenberger 


Fowler 


Harfcin 


Hollings 


Jeffords 


Hasten 


Kennedy 


Kerry 


Kohl 


Lautenberg 


Leahy 


Levin 


Lieberman 


Metxenbaum 


Mikulski 


Mitchell 


Packwood 


Pell 


Reid 


Roth 


Rudman 


Sarbanes 


Sasser 


Wellstone 


Woflbrd 





NOT VOTING - 6 
Breaux Burdick Cranston 

Gore Helms 

So the motion to lay on the table 
the amendment (No. 2782) was 
agreed to. 

Mr. BOREN. Mr. President, I 
move to reconsider the vote. 

Mr. BENTSEN. I move to lay that 



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motion on the table. 

The motion to lay on the table was 
agreed to. 

The PRESIDING OFFICER The 
Chair recognizee the Senator from 
Pennsylvania (Mr. Specter). 

AMENDMENT NO. 27S3 

Mr. SPECTER. Mr. President, I 
send an amendment to the desk and 
ask for its immediate consideration. 

The PRESIDING OFFICER The 
amendment will be stated. 

The assistant legislative clerk read 
as follows: 

Th« Senator from Pennsylvania (Mr. Specter) 
proposes an amendment numbered 27SS. 

Mr. SPECTER. Mr. President, I ask 
unanimous consent that the reading 
of the amendment be dispensed with. 

The PRESIDING OFFICER With- 
out objection, it is so ordered. 

(The text of the amendment is 
printed in today's Record under 
'Amendments Submitted.') 

The PRESIDING OFFICER The 
Senator from Pennsylvania is recog- 
nized. 

Mr. SPECTER Mr. President, this 
amendment essentially contains the 
provisions of two bills introduced 
many months ago, last November, 
Senate bill 1936 and Senate bill 1995. 

Senate bill 1936 is a bill which was 
cosponsored by 17 Senators with the 
principal sponsor being Senator 
Chafee. I have discussed with my 
distinguished colleague from Rhode 
Island, Senator Chafee, my intent to 
offer most of his bill for which I was 
an original cosponsor, and adding to it 
the provisions of S. 1995, a bill which 
I introduced, captioned the Health 
Care Access and Affordability Act. 

Mr. President, the problems of 
health care are well known in this 
country. There is an urgent need to 



provide affordable health care to all 
Americans. There are many bills 
which are pending and precisely how 
we get there is a very, very difficult 
matter. 

After extensively studying the mat- 
ter and after working on the Labor, 
Health and Human Services, Educa- 
tion Subcommittee of Appropriations 
for the 11 1/2 years that I have been 
in the Senate, it is my sense that we 
can provide affordable health care for 
all Americans within the range of 
expenditures which are currently 
being made. 

The best estimate which I have seen 
for last year puts the total cost of 
health care in the United States at 
$738 billion. It is my sense, that we 
can extend affordable health care to 
the 37 million Americans now not 
covered and, in fact, reduce health 
costs as well within that range by 
undertaking a number of lines of ac- 
tivity. 

One line of activity is managed 
health care, which has the potential 
for savingB in the range of 20 percent 
or perhaps even more. 

Another line of health care savings 
lays in preventive care on a program 
now incorporated in Healthy Start. I 
was amazed to find several years ago 
that Pittsburgh, PA, had the highest 
infant mortality rate of any major city 
in the United States for 
African-American babies. I was 
amazed the first time I saw a 1-pound 
baby, a baby about the size of a 
person's hand. It is a human tragedy 
for a child to come into this world 
weighing, 16, 18, 20 ounces, and that 
is something which can be prevented 
by proper nutrition, by proper diet, 
really informing the many teenage 
young women who give birth to 
1-pound babies about what they have 



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to do to take care of their bodies and 
to take care properly of their child to 
be. 

I am working, as a matter of fact, 
on some supplemental legislation on 
this subject in an effort to quantify 
what the savings would be or will be 
through Healthy Start, and I think it 
will range into the high billions. 

In conjunction with Dr. Louis 
Sullivan, Secretary of Health and 
Human Services, a program has been 
introduced called Healthy- Start to 
give adequate nutrition to the moth- 
ers so that children will not be born 
weighing 16, 18, 20 ounces. I am 
pleased to note that two of those 
Healthy Start units are in Pennsyl- 
vania. 

Mr. President, beyond managed 
health care and the Healthy Start 
Program there are enormous saving? 
which can be achieved through 
cracking down on fraud which is esti- 
mated to range into the $60 billion 
and upward category. There is anoth- 
er range of savingB which may be 
possible with so much of the cost of 
medical care being occasioned in the 
last few days, few weeks, or few 
months of a person's life, and that is 
also legislation which I am working on 
at the present time. 

The amendment which I have pro- 
posed moves to some very, very impor- 
tant items which will make material 
benefits in our health care delivery 
system in the United States today. 

The major provision of S. 1936, 
which is incorporated into this 
amendment, provides for full deduct- 
ibility of insurance for self-employed 
individuals. Currently small 

self-employed individuals can deduct 
oiuy 25 percent of their health insur- 
ance costs, while employers may de- 
duct 100 percent of what they pay for 



the health insurance costs of their 
employees. 

It is hard to fmd a provision in the 
Internal Revenue Code which is more 
discriminatory than this one. There 
have been many proposals to try to 
make this modification. I am pushing 
it today because I think it is high time 
action was taken on this very impor- 
tant and fundamental inequity. 

S. 1936 had some other provisions 
which have not been included in the 
amendment which I have submitted 
because of the impossibility of getting 
a precise fix on how much the cost 
would be. We have a precise item on 
the cost providing full deductibility for 
individuals for self-insured individuals 
of $8.7 billion, and it is covered with 
offsets which were provided within 
the text of this bill, offsets on this 
item, as well as offsets on other items. 

Other provisions, Mr. President, of 
S. 1936 provide for small business 
purchasing groups, which would au- 
thorize the Secretary of Health and 
Human Services to make grants to 
approved groups which have been 
certified by the State where these 
nonprofit groups would help enhance 
the purchasing power and consolidate 
administrative costs for small busi- 
to pool resources for the pur- 



chase of group health insurance. This 
would, through the pooling approach, 
involve very considerable savingB for 
small businesses. 

Another key part of S. 1936, which 
is incorporated into my pending 
amendment, is important insurance 
regulation reform. The bill would 
establish a small business insurance 
market to accomplish quite a number 
of improvements. 

First of all, to preempt 
State-mandated benefits for small 
To qualify for the preemp- 



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4284 



tion, the insurance policy would have 
to meet a minimum health package 
which would be established by the 
Secretary of Health and Human Ser- 
vices. 

Next, there would be a provision for 
the guaranteed availability and renew- 
al of a basic health package for viable 
small businesses that wish to pur- 
chase them. 

There also would be a limited 
insurer's coverage restriction, such as 
exempting individuals with known 
health risk from coverage under a 
group plan. 

That is one of the exclusions, Mr. 
President, which has cost more in 
litigation and travail than it is really 
worth. This is part of an evolving 
system where the question of preexist- 
ing conditions will be ruled out as a 
matter of some State laws and this 
advances that general public policy to 
some extent at the Federal level. 

Another provision under the insur- 
ance regulation reform would be to 
limit rates for new policies to between 
80 and 120 percent of the average 
rate of the class. 

Next, limit the annual rate of 
changes to the level of rates charged 
to new businesses with adjustments 
for changes in a group's coverage. 

Another provision from S. 1936 
would relate to State barriers to man- 
aged health care plans by providing 
for an insurance to require the Insti- 
tute of Medicine of the National Acad- 
emy of Sciences to develop standards 
for managed health care plans. Plans 
which then meet these standards 
would be exempt from State laws 
which impede the development and 
cost-effective operation of managed 
health care insurance plans. 

Mr. President, I compliment my 
distinguished colleague from Rhode 



Island, Senator Chafee. and the other 
cosponsor3 of S. 1936 for all the con- 
structive work which they have done. 
My amendment does not take all of 
the provisions of S. 1936 but takes key 
provisions which should materially 
enhance the delivery of health care 
services in this country. 

Other provisions in the pending 
amendment, Mr. President, are taken 
from the legislation which I intro- 
duced last November captioned 
'Health Care Access and Affordability 
Act,' S. 1995. 

This proposal builds upon existing 
Federal programs to reduce the need 
for treatment of disease, expand the 
availability of federally supported 
primary care clinics, and reduce the 
cost of care. 

It includes the following items: An 
expansion of federally supported pri- 
mary care clinics by $380 million to 
improve access to care in medically 
underserved areas to reduce costly 
emergency room care. 

Next, an expansion of federally 
supported health promotion and pre- 
vention services by some $720 million, 
with programs being focused upon 
reducing health risk through changing 
the behavior of both providers and 
consumers, and encouraging greater 
responsibility for healthy behavior. 

Another provision would encourage 
the modification of provider practice 
styles by changing provider behavior 
through medical effectiveness research 
and direct modification of medical 
practices. 

Next, the establishment of an initia- 
tive on drug development, with the 
focus on the diseases that have high 
mortality and societal costs, with an 
authorization of some $120 million. 

In addition, this bill directs the 
Secretary of Health and Human Ser- 



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vices to issue a report to the Congress 
regarding the feasibility of establish- 
ing national spending targets for 
health care and health care services 
as a means of controlling health care 
costs. 

This would focus attention in a very 
constructive way, on cost contain- 
ment. 

Those are the essentials of the 
amendment, Mr. President. 

I thank the Chair and yield the 
floor. 

The PRESIDING OFFICER. Is 
there further debate? 

Mr. BENTSEN addressed the 
Chair. 

The PRESIDING OFFICER. The 
Senator from Texas (Mr. Bentsen). 

Mr. BENTSEN. Mr. President, I 
would like to see if we can arrive at 
an agreed time limitation. I have 
discussed this with the distinguished 
Senator from Pennsylvania. Would an 
hour and 20 minutes, equally divided, 
suffice? 

Mr. SPECTER. That would be ac- 
ceptable. 

Mr. BENTSEN. All right. If there 
is no objection, I ask unanimous con- 
sent that we limit the debate on this 
amendment by the Senator from 
Pennsylvania, and that there be no 
amendments thereto to the amend- 
ment, to an hour and 20 minutes, 
equally divided, under the control of 
the manager of this particular piece of 
legislation on this side of the aisle, 
and the Senator from Pennsylvania 
managing the other side of it. 

The PRESIDING OFFICER. Is 
there objection to the unanimous 
consent request propounded by the 
senior Senator from Texas? 

If not, that will be the order of the 
Senate. 

Who yields time? 



Mr. BENTSEN. Mr. President, we 
have just received the amendment, 
which makes it very difficult to fully 
debate it, so we are perusing it now, 
studying it, to see the application of it. 
What I have seen thus far, part of it, 
four points of it look like they have 
been taken out of S. 1872, a piece of 
legislation sponsored by the Finance 
Committee's chairman of the subcom- 
mittee on health care. 

As I have seen the amendment thus 
far, it has nothing to do with the en- 
ergy bill. It is not a part of the energy 
bill and really should not be the sub- 
ject of debate during our study and 
our debate on the energy bill and the 
tax portions of it. 

The other point is, I looked for the 
revenue sources by which he would 
pay for this piece of legislation. It 
appears that much of that comes from 
revenue sources we have discussed in 
previous bills from the Finance Com- 
mittee - one that we are considering 
at the present time on enterprise 
zones, which hopefully will be a bipar- 
tisan piece of legislation that I will be 
bringing before the Finance Commit- 
tee this afternoon for determination 
as to its final form. 

If we were to lose those revenue 
sources by an amendment to be 
agreed to this afternoon here, it would 
throw us totally out of compliance on 
the Finance Committee bill for enter- 
prise zones, for the extenders, for the 
repeal of the luxury tax, for the appli- 
cation of the IRA's - expansion of the 
IRA's. Frankly, I do not know where 
we would turn in order to accomplish 
that objective. 

So I strongly urge the Members of 
this body to deny this amendment. It 
really should not be on the energy bill, 
and it gives us serious problems inso- 
far as addressing the President's re- 



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quest for enterprise zones and the 
other things we have put in that piece 
of legislation to encourage savings in 
our country so we can have more 
capital so we can do things about the 
productivity and international com- 
petitiveness of our country. Those 
things are in that piece of legislation. 

In addition to that, we have legisla- 
tion, S.4, which will help us in some of 
these areas insofar as substance 
abuse, pregnant mothers on drugs, 
trying to assist in that regard, trying 
to bring families back together and 
trying to do something to help chil- 
dren who end up with no parents at 
all - trying to see that we do some- 
thing about the incredible increase in 
children being forced into foster 
homes because of lack of parental 
supervision or attention or care or 
love. 

Those are all in this piece of legisla- 
tion before the Finance Committee 
this afternoon and, frankly, if this 
amendment would be agreed to and 
deny us the sources of revenues to 
comply with the Budget Act, we would 
be running aground. I do not know of 
any way we could accomplish our 
objectives here. So I strongly urge my 
colleagues to turn down this amend- 
ment, as well-intentioned as I am sure 
it happens to be. 

Mr. President, I suggest the absence 
of a quorum. I ask that time be 
charged equally to both sides. 

The PRESIDING OFFICER (Mr. 
Graham). Without objection, the time 
of the quorum call will be charged to 
each side equally. 

The clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 



The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. WALLOP. Mr. President, there 
is about this amendment, as there will 
be about other amendments that are 
offered to the energy package, a good 
deal of what might best be called po- 
litical sex appeal. 

The topic is popular. The need 
exists. The solution is, at best, awk- 
ward. The chairman of the Finance 
Committee will have more to say 
about that later. But these are signif- 
icant actions that are proposed by the 
Senator from Pennsylvania, the most 
significant of which will be paying for 
it. 

I will allow that argument to be 
developed to its greatest extent by the 
chairman of the Finance Committee. 
But where I come in is that this, Mr. 
President, is an energy bill. It is a tax 
bill only insofar as the energy portions 
of it require certain tax treatment, as 
in the alternative minimum tax that 
has just been adopted. 

We have struggled mightily since 
the initial introduction of this legisla- 
tion to keep it from being anything 
but an energy bill for a lot of reasons, 
Mr. President. One is that this Con- 
gress has never politically been able to 
restrain itself when it came to energy 
policy, and it used the pack mule 
called energy policy to take out all the 
other daydreams of Congress. What 
has happened time after time after 
time is that it has been energy policy 
that was sacrificed in conference. 

This is not an environmental bill. 
This is not a health and human ser- 
vices bill. It is not a farm bill. It is 
not a transportation bill. It is - and 
must remain - an energy bill. 

So I register my opposition to the 
amendment of the Senator from 
Pennsylvania. Not that it is a wrong 



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thing to do to provide these deduc- 
tions, but the forum is the wrong 
place to do it. These complicated 
issues over how payment under the 
Budget Act is satisfied, revenue neu- 
trality, cannot be done on the floor of 
the Senate. 

We can propose, as has been, a 
means of payment. But we, on the 
floor of the Senate, will not be able to 
weigh all the things the Finance Com- 
mittee must weigh before entering 
into these thingB, balancing this need 
against other needs within the con- 
fines of the Budget Act and the bud- 
get agreement. 

So what we have is a very politically 
attractive attempt to use the very 
politically attractive pack mule called 
energy policy to haul out extraneous 
matter from this Chamber. If experi- 
ence has any validity, this amend- 
ment, and others like it allowed to 
proceed, will ultimately break the 
back of this mule we call energy poli- 
cy. 

And, once again, Congress, in its 
politically motivated self-interest, will 
have sacrificed energy policy, through 
the motivation of very sexy political 
bullets that are attractive, that are 
useful, that have a place in the dialog, 
but not just rained from on high, but 
having been seriously and carefully 
considered by the committees of juris- 
diction. 

So as much as I am in sympathy 
with the ultimate goal of the Senator 
from Pennsylvania, I must say, Mr. 
President, that I will do whatever it is 
that I possibly can to see to it that it 
does not become a part of this energy 
bill. We have come too far. We find 
ourselves now too close to lapse into 
the traditional behavior and indulge 
ourselves at the expense of finally 
getting a coherent, balanced national 



energy strategy for America. 

Mr. President, I yield the floor, and 
I suggest the absence of a quorum, 
with the time to be charged equally. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. SPECTER. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The Senator from Pennsylvania. 

Mr. SPECTER. Mr. President, rath- 
er than allowing the time to elapse on 
a quorum call, there are a few re- 
sponses I think are worth making at 
this time. 

When my distinguished colleague 
from Wyoming, Senator Wallop, com- 
ments about this amendment having, 
as he puts it, political sex appeal, I 
think a more accurate characteriza- 
tion would be that it has great nation- 
al importance. It has great national 
importance because there is an urgent 
need for Congress to act to provide 
affordable health care for all Ameri- 
cans. 

There are many bills which are 
pending, but this issue has not been 
taken up by the Senate of the United 
States. In offering this amendment at 
this time, it is an effort to bring cer- 
tain important aspects of health care 
to the floor for decision. This will not 
solve all the problems, but it will be a 
very significant step forward by en- 
couraging self-employed individuals to 
become insured, because the deduct- 
ibility will be 100 percent, which is the 
same as it is for their counterparts 
who are employees of corporations, for 
example, or employees of other em- 
ployers. I 

It is a very important matter to be j 



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taken up. That is why I am pressing 
it at this time. 

I hope that this amendment might 
bring other amendments to the floor 
on this issue, because while energy is 
a matter of enormous importance for 
America, it is no more important than 
national health coverage. 

When the distinguished Senator 
from Wyoming (Mr. Wallop) as well as 
the distinguished chairman of the 
Finance Committee (Senator Bentsen) 
say that this amendment has nothing 
to do with energy, this amendment is 
being offered because there is a tax 
component to the pending legislation. 
Under the rules of the Senate, it is 
not possible to bring up this amend- 
ment unless there is a tax component. 
The legislative measures, the so-called 
vehicles which come to this floor with 
a tax component, are very few and far 
between. 

This is an occasion to put on the 
floor of this Senate the tax issue, to 
make fully deductible the insurance 
premiums paid by self-employed indi- 
viduals. It is a travesty, Mr. Presi- 
dent, that self-employed individuals 
can only deduct 25 percent of their 
health insurance costs, where employ- 
ees in other standing have a 
100-percent deduction. 

So the matter is being brought at 
this time because it is possible under 
the rules. It could not be done on the 
Agriculture appropriations bill, which 
was on the floor yesterday, or the 
appropriations bill for State, Com- 
merce, and Justice, which was on the 
floor the day before. There is a very 
definite reason and purpose for why 
this amendment is being offered on 
this bill. 

When my distinguished colleague 
from Wyoming, Senator Wallop, says 
that it is too much to do on the Sen- 



ate floor, I have to disagree with him 
categorically. The measures compre- 
hended here have been pending in the 
Senate for months. 

Senator Bentsen had made a com- 
ment that a good bit of this was taken 
from S. 1872. 

Well, it is not taken from S. 1872. 
As outlined initially, it has been taken 
from S. 1936, where this Senator was 
an original cosponsor, with Senator 
Chafee's task force, and from S. 1995, 
which this Senator authored. 

Now, it may be that some of the 
provisions overlap with S. 1872. S. 
1872 was passed by the Senate and 
was not ultimately enacted into law. 
So to the extent that some of these 
provisions have been considered be- 
fore, it negates the argument Senator 
Wallop has made that there is too 
much to do on the floor. 

These issues are not too complicat- 
ed. They have been with us for some 
time. They are well known, and we 
could act upon them today. We could 
act, for that matter, Mr. President, on 
a broader range of issues. I think 
back to the Clean Air Act of 1990, 
which was passed by this body, a very 
complicated piece of legislation 
brought to the floor of the Senate. 
There were groups which worked on 
the legislation off the floor and ulti- 
mately crafted a very comprehensive 
Clean Air Act, taking 10 million tons 
of sulfur dioxide out of the air every 
year, important provisions on tailpipe 
emissions, important provisions on 
industrial pollution. When health 
care comes to the floor of this Senate, 
Mr. President, it is going to be very 
complicated, but it is not going to be 
solved until it comes to the floor of 
the Senate. This is a start, I think a 
significant start and an important 
start. 



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One final issue which was raised by 
the distinguished Senator from Texas 
was about the offsets being used in 
some other bills. 

Well, no one owns offsets, Mr. Presi- 
dent. There are possible ways of sav- 
ing money on other tax changes to 
finance a new bill. The offsets which 
are set forth here, Mr. President, were 
taken from S. 2612 where Senator 
Domenici and I had cosponsored an 
economic recovery program. WhenS. 
2612 was put on the Senate floor and 
there was a need for some $12.6 bil- 
lion in offsets, Senator Domenici and 
I took a close look at the possible off- 
sets. Every time there is an offset, 
somebody will be hurt, to some extent. 

My analysis, when S. 2612 was in- 
troduced, was that these were the best 
offsets to make. This needed more 
than $8 billion, and that is why I uti- 
lized that prior work of S. 2612 to put 
it on this bill, so that this would satis- 
fy the provisions of the Budget Act, 
since we cannot increase spending 
without an appropriate offset. 

I offer these words of rebuttal very 
briefly, Mr. President, since no one 
else is seeking the floor, but that sum- 
marizes or takes care of the conten- 
tions which have been advanced by 
the distinguished Senators from Wyo- 
ming and Texas. That concludes my 
argument for the moment, Mr. Presi- 
dent, so I suggest the absence of a 
quorum. 

The PRESIDING OFFICER. The 
absence of a quorum having been 
suggested, the clerk will call the roll. 

Mr. SPECTER. With time charged, 
Mr. President, equally to both sides. 

The PRESIDING OFFICER. Time 
will be charged equally to each side. 

The legislative clerk proceeded to 
call the roll. 

Mr. MITCHELL. Mr. President, I 



ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. MITCHELL. Mr. President, I 
yield myself such time as I may use. 

Mr. President, over a year ago I 
joined with other Senators in intro- 
ducing the legislation to provide com- 
prehensive reform of our health care 
system. Having served as chairman of 
the Senate Finance Committee's Sub- 
committee on Health, I have been and 
continue to be aware of the need for 
comprehensive reform of our system 
of health care. I strongly favor such 
reform. 

I give that background to urge my 
colleagues not to support the pending 
amendment. I hope that if and when 
a motion is made to table the amend- 
ment that our colleagues will join with 
us in tabling this amendment. 

First, as has been stated by the 
distinguished chairman of the Finance 
Committee - and I believe the distin- 
guished Republican manager of the 
bill - it has nothing to do with the 
subject of the energy bill which is 
comprehensive in nature, important 
to our Nation's future, and is a bill 
that we have been struggling with 
over a very long period of time trying 
to advance. 

Adoption of this amendment will 
greatly complicate and retard, perhaps 
fatally, the prospects of trying to get 
action on energy legislation. 

Second, I think Senators should be 
aware that the provisions in this 
amendment to pay for the costs in- 
curred by the amendment are already 
used to help pay for other pending 
legislation, including some aspects of 
the energy bill itself, but most notably 
they are intended to be used to pay 
for the provisions in the urban aid 



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4290 



package which has now been expand- 
ed to an economic growth program 
that the Finance Committee by previ- 
ous scheduling is to mark up at 5 
o'clock this afternoon. 

So that this amendment with the 
payment provisions in it in effect pre- 
empts the ability of the committee to 
act on the measure which includes 
enterprise zones, the repeal of luxury 
excise taxes, extension of expiring 
provisions of law such as the 
low-income housing tax credit, the 
research and development tax credit, 
and other measures such as the ex- 
pansion of individual retirement ac- 
counts. 

In effect, Senators would be pre- 
cluding action on those measures at 
least to the extent that the financing 
mechanisms which were to be utilized 
for those measures will have been 
consumed in paying for this amend- 
ment. 

In addition, I am advised by staff 
that one of the payment provisions in 
this amendment takes money in from 
legislation now pending in the 
Veterans' Committee, which has been 
intended there to pay for reform of 
the veterans' disability program; that 
again we would either have to not act 
on reform of the veterans' disability 
program or would have to find some 
other revenue source different from 
that which has previously been identi- 
fied and intended to be allocated for 
that purpose. 

So I hope that Senators will realize 
that adoption of this amendment 
would first seriously impair the possi- 
bility of getting action on the energy 
bill, which in and of itself in my view 
is a sufficient reason to oppose the 
amendment because I believe that we 
need a comprehensive energy bill. 
And it is for that reason that I am so 



committed to moving this energy legis- 
lation forward. 

Second, it will have the same effect 
with respect to the tax urban aid and 
economic growth legislation that is 
being developed in the Finance Com- 
mittee, and is to be marked up today 
in the Finance Committee. 

Again, if these tax provisions are 
utilized with respect to this amend- 
ment, they will be unavailable for use 
by the committee in the other legisla- 
tion, and therefore, will seriously jeop- 
ardize any prospect of enterprise 
zones being adopted, the luxury excise 
tax being repealed, the extension of 
expiring provisions of law such as I 
previously identified, the research and 
development tax credit, the 
low-income housing tax credit, and 
others. 

So, Mr. President, while I believe 
that the objective of changes in health 
care is an appropriate one, I do not 
think this to be the appropriate legis- 
lation on which to attempt to do that, 
nor do I believe this to be the proper 
amendment by which to do that. 

I urge and encourage all of our 
colleagues to join the distinguished 
managers of the bill, the chairman of 
the Finance Committee and others, 
who have spoken in opposition to the 
amendment, to defeat the amend- 
ment, and permit us to complete ac- 
tion on the energy bill so that that bill 
can go to conference and we can hope- 
fully have a comprehensive energy bill 
passed during this Congress. 

Mr. President, I yield the floor. 

Mr. SPECTER addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Pennsylvania (Mr. Spec- 
ter) is recognized. 

Mr. SPECTER. Mr. President, 
would the distinguished majority lead- 
er be willing to answer a question? 



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Mr. MITCHELL. Yes. Certainly. 

Mr. SPECTER. Mr. President, I can 
understand the concerns about these 
offsets being used, although I must 
say that when it comes to a matter of 
repealing the luxury excise tax, I 
would think that those offsets would 
better be used on programs for ex- 
panding health coverage in this coun- 
try. When the distinguished majority 
leader talks about enterprise zones, 
and a variety of other legislative pro- 
posals, I do not disagree with their 
importance; but I do not think they 
supersede the importance of health 
care. 

My question is whether the distin- 
guished majority leader, on the sched- 
uling, has in mind a timetable for 
taking up the issue of extension of 
health care in America. 

Mr. MITCHELL. As I have stated 
many times publicly, from the very 
place that I am standing now, as well 
as others, comprehensive health care 
reform is one of my highest legislative 
priorities, and it is my hope and inten- 
tion to bring to the Senate this year, 
if at all possible, such legislation. 

Mr. SPECTER. Well, Mr. President, 
if the majority leader would be in a 
position to make a commitment - 1 am 
not saying he should be, because I 
understand the complications of his 
work, and I am on the floor a great 
deal, but I have never heard the state- 
ment made that the majority leader 
just made. 

But if the majority leader is in a 
position to make a commitment to 
bring health care legislation to the 
floor this year, this Senator would be 
willing to withdraw this amendment. 

Mr. MITCHELL. Mr. President, I 
am not able to make a commitment, 
as the Senator full well knows, be- 
cause under the rules of the Senate, I 



do not have control over how long it 
takes to consider legislation. A bill 
comes up one day, and it may take a 
day, a week or a month. 

Therefore, since certain actions are 
required by law - particularly the 13 
appropriations bills - and since, as we 
all know, many Senators regularly use 
the delaying tactics permitted by the 
rules to delay action, I cannot foresee 
how long it is going to take to do vari- 
ous bills. 

It is a high priority of mine. I have 
made the statement many, many 
times, and I repeat it. I hope very 
much, and I expect to, and it is my 
intention to bring a bill to the floor, if 
we can. But to make an absolute com- 
mitment is really beyond my authority 
or beyond my ability at this time. 

I do not want to make a commit- 
ment that I am not certain I can com- 
ply with, because of so many other 
factors - primarily, the limited legisla- 
tive time, the large amount of busi- 
ness that we have to do, and my in- 
ability, because of the rules of the 
Senate, to control the length of time 
which the Senate takes to consider 
any measure. 

Mr. SPECTER. I appreciate what 
the distinguished majority leader has 
said, and I note the complexities of 
scheduling and the responsibilities 
which he has, and only he has. 

I just say in passing that, as I un- 
derstand it, there has been a date set 
for product liability legislation, a date 
fixed immediately after we come back 
in September. I know, from what I 
have heard the majority leader say 
publicly and on television, that he 
regards extending health coverage to 
be second to none among the priori- 
ties. 

It would just be my hope that the 
distinguished majority leader would 



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bring this issue to the floor at the 
earliest possible time, which is what 
he has said. This Senator would cer- 
tainly like to see it done this year, as 
the majority leader said he would like 
to see it done. But if it is not possible 
to make a commitment, I repeat that 
I understand the distinguished majori- 
ty leader's situation, and I am under 
no illusion that when the majority 
leader makes a request, Senators from 
a majority side of the aisle are gather- 
ing. I do believe firmly that this is an 
important amendment, and that the 
offsets are better used for this amend- 
ment than they are for items like the 
repeal of luxury taxes. 

I thank the Chair and yield the 
floor. 

The PRESIDING OFFICER. Who 
yields time? 

Mr. MITCHELL. Mr. President, I 
yield 3 minutes to the Senator from 
Oregon. 

Mr. PACKWOOD. Mr. President, I 
will echo everything the majority lead- 
er said, and this is indeed kind of a 
'race to the courthouse' as to who 
uses up which money first. 

Tonight, at 5 o'clock, the Finance 
Committee is meeting on what will be, 
I think, the only major tax package of 
this session, and it has to be revenue 
neutral. It has been structured in 
such a way that it raises as much 
money as it spends. 

I will give one example of the tax 
that is being used. It is the excise tax 
on ozone depleting chemicals. Those 
are chemicals that go into the air and 
deplete the ozone, and it is bad for the 
health of humans and the health of 
the Earth. It raises about $1.4 billion. 

That is part of the tax package to 
achieve the balance - one of the taxes 
that the Senator from Pennsylvania 
takes to pay for his health bill. I am 



not in any way critical of him. He 
uses a number of other taxes also, but 
it means, therefore, in that case that 
there will be no tax bill tonight, and 
probably no tax bill at all, including a 
great variety of provisions that 95 
percent of the Senate is going to sup- 
port. 

So I think we have no choice in this 
case but to defer to the committee 
that has to balance this and has juris- 
diction over health care; I might add, 
it has to balance all of the equities, 
revenues, and expenses. I project, if 
not in this Congress, by the end of the 
next Congress, we will have passed a 
health plan that will cover everyone 
in America, with few exceptions; and 
we will have taken care of the prob- 
lem that the Senator from Pennsylva- 
nia now is talking about. 

I have to encourage all Senators on 
both sides of the aisle to vote against 
this amendment, or else assume that 
anything they might have wanted in a 
tax package, which will come out of 
the committee tonight, simply will not 
come out. 

I thank the Chair. 

The PRESIDING OFFICER Who 
yields time? 

Mr. SPECTER. Mr. President, I 
yield 5 minutes to the distinguished 
Senator from Minnesota. 

Mr. DURENBERGER. Mr. Presi- 
dent, I came to the floor somewhat 
ambivalent on this issue, because 
many of the people you see standing 
here on the floor speaking today are 
members of the Finance Committee, 
and we are all going in our usual bi- 
partisan or nonpartisan fashion to 
markup a tax bill that some of us 
believe in and some of us do not be- 
lieve in. 

When I got here and listened to the 
debate, I must say I have a great deal 



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of - not sympathy for my colleague 
from Pennsylvania, but I think it is 
important that those of us who are 
here in the last few weeks of this 
session recognize the fact that, back 
in Pennsylvania, in November of last 
year, the whole country was awakened 
to what many of us knew was a major 
problem facing the people in this 
country, and that is that we are de- 
priving a lot of people in this country 
of access to health care, because we 
cannot do anything about containing 
its costs or reorganizing the way 
health care is delivered. 

As I say, the public woke up to the 
problem, and a lot of the people in the 
electoral process woke up to the prob- 
lem. I must say that my colleague 
from Pennsylvania did not have to 
have an election on the other part of 
the representation from the State to 
wake him up. He has been the chair- 
man of the appropriations subcommit- 
tee, and the ranking member of the 
appropriations subcommittee on Labor 
and HHS, for much of the time that I 
have known him in this body. 

He is not putting before us a 
so-called comprehensive health care 
reform bill. It is a relatively elemen- 
tal, but very, very critical, and very 
important beginning to deal with the 
problems that we face. 

In fact, the first part would be re- 
form - small business reform - and the 
full deductibility for self insured. 

We have been debating that in the 
Finance Committee for 10 years. We 
can never get the money to take it 
100 percent. There is a consensus in 
the country that we ought to give the 
self-employed the same financial crack 
at Federal subsidies that the people 
working in big companies get. 

Then he gets to insurance regula- 
tion reform, and I introduced the first 



bill on that a year and a half ago - S. 
700. The distinguished chairman of 
the Finance Committee and I are the 
coauthors of the bill to do it. All of 
those measures, including State barri- 
ers to managed care plans, have al- 
ready been passed out of the Finance 
Committee, and on the floor of the 
Senate, where they got tossed out, 
because they were tied to a tax bill 
that we did not prefer earlier in the 
year. 

So this is nothing new. This has 
been around. It is something that 
some of the States are working on. 
They are working on small group 
insurance reform. 

I have a lot of sympathy for the fact 
the Senator would like to see this 
passed. The remainder of the money 
goes to primary care, clinics, and pre- 
ventive services. These are the things 
the Senator from Pennsylvania has 
been trying to work on in the subcom- 
mittee for a long time. So the issue is, 
one, is this the right place to do it 
and, two, are you using somebody 
else's money. 

I am in the minority. I cannot deal 
with the first of these. I raised this 
same argument in the Finance Com- 
mittee markup. I said why cannot we 
do S. 1872, the small group insurance 
reform and State barriers to managed 
care plan; why cannot we do what the 
Senator from Pennsylvania asked us 
to do on this tax bill this afternoon? I 
was told by the majority this is not 
the time to do this sort of thing; may- 
be we will do it in September. 

Mr. President, I do not think it is 
our party and I do not think it is our 
representatives in this body that are 
keeping tax reform bottled up in this 
country. It looks to me as though 
some vague plan either coming out of 
the House or the Senate, both of them 



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controlled by the other party, is going 
to produce some form of comprehen- 
sive tax reform. But nobody will tell 
us when. 

The majority leader talks about the 
busy schedule and this is not the vehi- 
cle using somebody else's money. 
When do we do it? When do we pass 
the Democratic reform plan? When do 
we pass the plan of the chairman of 
the Senate Finance Committee, S. 
1872? 

I think there is not a consensus on 
comprehensive reform. There is not a 
consensus on the Democratic side. 
There is not a consensus on our side. 
That is because there is not a consen- 
sus in America. 

But we have something right here 
that most of us agree on and it is 
presented to us by our colleague from 
Pennsylvania. 

I just rise to urge the majority to 
think about the difficult position that 
this statement puts us all in. If, in 
fact, we cannot do it on this bill, then 
what bill can we do it on? 

I rise to send that same message to 
my colleague from Oregon, who is my 
ranking member on the Finance Com- 
mittee. I we cannot do it on this bill 
and we cannot use the money from 
the tax bill, because at 5 o'clock we 
are going to use it for something else, 
at least tell us what money can we use 
and when can we use it? 

Mr. President, if I cannot get an- 
swers to those two questions I intend 
to support my colleague in his amend- 
ment. 

I yield the floor. 

The PRESIDING OFFICER The 
time of the Senator has expired. 

Who yields time? 

Mr. SPECTER Mr. President, how 
much time remains on this side? 

The PRESIDING OFFICER The 



Senator from Pennsylvania controls 
14 minutes and 14 seconds; the man- 
agers control 13 minutes and 30 sec- 
onds. 

Mr. SPECTER. Mr. President, I 
yield 5 minutes to Senator Chafee. 

The PRESIDING OFFICER The 
Senator from Rhode Island is recog- 
nized for 5 minutes. 

Mr. CHAFEE. Mr. President, I com- 
mend the Senator from Pennsylvania 
for his concern in connection with 
these health care matters. It is some- 
thing that he has been involved with. 
As he mentioned earlier, he was an 
original cosponsor of the measure 
which I introduced last November, 
which has more cosponsors than any 
other single health measure before the 
Senate. That is S. 1936. 

Mr. President, I share the concern 
that the Senator from Pennsylvania 
has voiced, and it seems to me it co- 
mes down to this: Should we do some- 
thing or should we wait for the great 
supermea8ure that might someday 
come through here? I very strongly 
believe that we ought to take those 
steps that we can agree upon and take 
them now. 

I think it is critical that we move 
forward. I think now is the time to 
act. 

This measure that the Senator from 
Pennsylvania has brought before the 
Senate is helpful to low- and 
middle-income families, it is helpful to 
small businesses, and I think he has 
done a good job. 

Now the argument is that it soaks 
up money that is involved with other 
programs. I might say some mention 
was made of the luxury tax - and I did 
look over the items that the Senator 
provides for his source of revenues, 
and it does not involve those moneys 
that were to pay for the elimination of 



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the luxury tax. 

I will say this, that these issues that 
come before us now, as has been men- 
tioned before, are not new issues; they 
are issues that are common to all the 
various health care measures that are 
put before the Senate currently. 

What are some of the measures we 
are talking about? There are the small 
business purchasing groups. The 
distinguished majority leader has 
legislation in and it involves the small 
business purchasing groups. So does 
the legislation that I have, S. 1936. So 
do a series of other measures. 

There are insurance regulation 
reform, the preempting of 
State-mandated benefits, the guaran- 
teed availability and renewal of basic 
health packages for small businesses. 

And, so these measures, State barri- 
ers to managed care plans, we all have 
that. We all recognize that in certain 
States there are barriers to managed 
care plans. 

So, Mr. President, this is not new 
territory that is being plowed here. 
What the Senator from Pennsylvania 
has done is very carefully selected to 
those measures that are pertinent to 
many others that we have before us. 
So I commend him for his concern 
and urge that the Senate adopt the 
amendment which the Senator from 
Pennsylvania has proposed. 

The PRESIDING OFFICER. Who 
yields time? 

Mr. BENTSEN. I yield 4 minutes to 
the distinguished Senator from Ar- 
kansas. 

The PRESIDING OFFICER. The 
Senator from Arkansas is recognized 
for 4 minutes. 

Mr. PRYOR. Mr. President, I thank 
the distinguished chairman for giving 
me this opportunity to talk on the 
Specter amendment just for a mo- 



ment. 

Mr. President, the Specter amend- 
ment has embodied within it many, 
many of the proposals that many of us 
on the floor this afternoon have 
worked very hard for and have dili- 
gently strived to have enacted into 
law. 

One of those, and I think it is cer- 
tainly one that the Senator from 
Pennsylvania will certainly recognize 
that the distinguished chairman of 
the Finance Committee, Senator 
Bentsen, and the distinguished Sena- 
tor from Minnesota, Senator 
Durenberger, have long fought for, is 
the 100-percent deduction for the 
self-employed for insurance premiums. 
This is, of course, embodied in the 
amendment of the Senator from 
Pennsylvania and this is one of the 
very, very attractive features, and it is 
for this reason that this amendment, 
that includes the 100-percent deduc- 
tion and many other items, I might 
add, I find very difficult to oppose on 
the floor at this time. 

Mr. President, I applaud the Sena- 
tor from Pennsylvania for attempting 
to do this. The bottom line is this: We 
have only a very few minutes remain- 
ing on this amendment. This amend- 
ment consists of 120 pages. None of 
us have really had an opportunity to 
see what is in this amendment. None 
of us have had an opportunity to real- 
ly sit in a hearing and listen to the 
pros and cons of what this amend- 
ment entails. 

Mr. President, I think it is very, 
very necessary at this point to point 
this out, and we just asked if it would 
be permissible to quote him, and I am 
going to quote John Motley, who is 
with the NFIB, the National Federa- 
tion of Independent Business. We 
called him. We said, 'Mr. Motley, are 



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you supportive of Senator Specter's 
amendment on the 100-percent deduc- 
tion?' He said, 'Of course I support 
the substance of this. This has been 
one of NFIB's goals; however, we did 
not seek for this proposal to be includ- 
ed in the Specter amendment. We did 
not encourage it. In fact, you may 
quote me by saying we feel that it will 
damage future efforts to bring 
100-percent deductibility for the 
self-employed for health insurance 
premiums.' 

I think, too, Mr. President, it is very 
necessary to note that we do not know 
where the revenues are coming from. 
We do not know which of these reve- 
nues are real revenues. We do not 
know which of these might be classi- 
fied somewhere down he line as 
'funny money.' I do not want to imply 
in any way that the Senator from 
Pennsylvania would engage in trying 
to pay for a serious program like this 
or a series of programs with funny 
money. 

Mr. President, there is a time for 
everything, there is a place for every- 
thing, but this is not the time nor is 
this the place to have a major health 
care bill where we do now know what 
is in the legislation, we do not know 
how we are going to pay for it, we do 
not have time to debate as we speak, 
and I urge my colleagues to vote 
against the Specter amendment. 

The PRESIDING OFFICER. The 
Senator from Texas. 

Mr. BENTSEN. Mr. President, the 
pending amendment would increase 
and extend deductions for 
self-employed individuals. That provi- 
sion, thus, would reduce Federal reve- 
nues. The Senator seeks to offset 
that revenue loss with both revenue 
increases and outlay reductions. The 
Congressional Budget Act distinguish- 



es between revenues and outlays. In 
the absence of a budget resolution 
provision, called a reserve fund, the 
Budget Act does not allow legislation 
to pay for tax cuts with outlays reduc- 
tions. 

The pending amendment would 
reduce revenues on a net basis by in 
excess of $4 billion over 5 years. The 
adoption of the amendment would, 
cause the current level of revenues to 
fall below the revenue floor in the 
most recent budget resolution. It, 
thus, violates section 311(a) of the 
Congressional Budget Act. It takes the 
affirmative vote of 60 Senators to 
waive section 311(a). 

At the appropriate time, Mr. Presi- 
dent, after all time has been yielded 
back on the amendment, I shall raise 
rf point of order against the amend- 
ment. 

Mr. President, how much time do 
we have remaining? 

The PRESIDING OFFICER. The 
Senator from Texas controls 8 min- 
utes and 41 seconds. The Senator 
from Pennsylvania, 10 minutes and 45 
seconds. 

Mr. BENTSEN. Mr. President, this 
amendment is not germane to the 
energy bill. We sure do not need to 
open up this debate to unlimited tax 
amendments. I understand the desire 
of the Senator from Pennsylvania to 
promote his agenda; much of it comes 
in a bill that I have introduced myself, 
and that we have passed before 
through the Senate. So I am sympa- 
thetic to those objectives. 

But, frankly, we have been working 
on the enterprise zone bill; and with 
that, a restoration of the IRA, and 
with that the utilization of S. 4, which 
addresses some of the problems of 
drugs and substance abuse, and moth- 
ers and parents, and trying to help 



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those children see that they have care 
and love and are not forced into foster 
homes. Those are parts of the legisla- 
tion we are talking about. 

We are addressing the problem of 
the 58 people who were killed in the 
riots in Los Angeles, and trying to 
respond to the President's request 
insofar as enterprise zones. We are 
seeing to it in that legislation that we 
put money in there to train those 
young people, to find jobs for them, to 
give a wage credit for them. We put 
incentives in there to encourage in- 
vestments in that enterprise zone; to 
bring back that neighborhood; to turn 
it around. That is a part of the legis- 
lation that we will be considering in 
the Finance Committee this after- 
noon. 

We also have to pay for it, to be in 
budget compliance. If this amend- 
ment is adopted, we would not be in 
budget compliance, and you can forget 
it. There is no way we can pay for it 
and bring it about. The problem you 
have is you can only spend that mon- 
ey once. 

So a vote for this amendment is 
against the low-income housing credit 
that we have in that piece of legisla- 
tion. It is against the extension of the 
Research and Development Act. It is 
against the repeal of the luxury tax 
on boats and aircraft. Frankly, it is 
against the President's own initiatives 
insofar as economic growth. 

So I am deeply concerned about the 
Senator's offering it. I urge very 
strongly that my colleagues defeat this 
amendment. 

I withhold the remainder of my 
time. 

The PRESIDING OFFICER (Mr. 
Sanford). Who yields time? 

Mr. BENTSEN. Mr. President, I am 
prepared to yield back the remainder 



of my time, if we have no further 
speakers on my side. 

Mr. SPECTER addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Pennsylvania. 

Mr. SPECTER. Mr. President, how 
much time remains on my amend- 
ment? 

The PRESIDING OFFICER. Ten 
minutes and forty-three seconds. 

Mr. SPECTER. Mr. President, I 
think this has been a very illuminat- 
ing debate. 

Let me deal first with the issue of 
funny money. The budget offsets 
which are contained in my amend- 
ment were a part of the S. 2612, 
where Senator Domenici • the ranking 
member of the Budget Committee, 
and formerly chairman of the Budget 
Committee • and I had surveyed ap- 
propriate offsets on an economic re- 
covery package which Senator 
Domenici and I introduced. 

I am sure that, given the thorough- 
ness and competency of Senator 
Domenici in his long practice in the 
Budget Committee, and his staff, that 
these are accurate. 

I am a little perplexed at the refer- 
ence by the Senator from Arkansas to 
funny money. Although he says he is 
not suggesting there is funny money, 
I do not know what he is doing when 
he talks about funny money, that this 
is funny money. I do not think it is 
very funny. This is a very serious 
matter, and this itemization is very 
carefully crafted. 

I ask unanimous consent that, at 
the conclusion of my remarks, this 
schedule be printed in the Record. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

(See exhibit 1.) 

Mr. SPECTER Mr. President, if 
the Senator from Arkansas wants to 



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categorize it as funny money, let him 
be specific. I consider that a pretty 
serious charge. Let him say what is 
incorrect about this. 

The Senator from Texas plans to 
raise a point of order. I have no illu- 
sions about how that is going to come 
out, either. But I would be interested 
to know, from a ruling from the 
Chair, what is incorrect about these 
figures. 

These figures were not drawn out of 
the air. These figures have been 
pending before the Senator for a long 
time in S. 2612, which has been pend- 
ing for weeks and months. As I say, 
they were crafted by the Senator from 
New Mexico, who had been chairman 
of the Budget Committee, and is now 
the ranking member. They are accu- 
rate. 

Now, the most revealing part of this 
debate, Mr. President, and the reveal- 
ing part about the vote will be where 
Members place health care on the 
range of national priorities. That is 
what this vote is going to be about. 

The Senator from Texas, on a ta- 
bling motion, or the Senator from 
Texas, on a point of order, does not 
need 60 votes to defeat this amend- 
ment. We all know that. There are 
57 Members on the other side. And 
the balance of power is clearly on the 
side of the aisle controlled by the 
Democratic Party. So I do not really 
care whether the Senator is looking 
for 51 votes or 60 votes on this partic- 
ular item. 

But when Senators vote, they are 
going to be voting on what their prior- 
ities are, because the people of Ameri- 
ca look behind the procedural facade. 

Whether it is a point of order, or a 
tabling motion, or whatever, they will 
say that if someone votes to sustain 
the ruling of the Chair, about which I 



have no doubt will be adverse to this 
Senator - if people vote to sustain the 
ruling of the Chair, they are voting 
against putting this issue on the bill: 
Significant steps for health care, as 
identified by two long-standing mem- 
bers of the Finance Committee who 
have taken up these issues in great 
detail - Senator Chafee and Senator 
Durenberger - pointing out how it is 
for small business, regardless of what 
representation there may be about the 
president of some association, and 
how it helps small business and how it 
helps middle-income Americans. 

When there is an objection raised by 
Senators repeatedly on the floor that 
if we pass this amendment, we will 
not be able to repeal the excise tax on 
luxury items, I wonder where I am. Is 
a repeal of the luxury tax more impor- 
tant than extending health care in 
America? That is the quintessential 
rhetorical question. Of course, repeal- 
ing the luxury tax is not more impor- 
tant then extending health care in 
America. 

I would say to you, Mr. President, 
that even when it comes to enterprise 
zones, as important as enterprise 
zones are • and there is no reason why 
we should be, in 1992, with the enter- 
prise zone legislation pending for more 
than a decade, there is no reason that 
we have not passed it long since. I 
think it has potential. 

This Senator has been an avid sup- 
porter of it. But I do not think any- 
one would say that it is a higher pri- 
ority than extending health care in 
America. We all know if an effort is 
made by the chairman of the Finance 
Committee and by the majority leader 
and by the expert staffers, we can find 
the money or offsets to pay for it. 

So I think it has been a very reveal- 
ing debate. I made the flat offer to 



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withdraw the amendment if there 
would be a time certain fixed for legis- 
lation to come to the Senate floor, and 
there has been a commitment on some 
legislation to come to the Senate floor 
by the distinguished majority leader. 
I do not think any commitment on 
any legislation is more important then 
extending health coverage for Ameri- 
ca. 

So I want to see how the Senators 
vote on this issue because the inter- 
pretation is clear; if you vote to sus- 
tain the ruling of the Chair on the 
point of order, you are voting for the 
luxury tax over health care. 

How much time remains on my 
side, Mr. President? 

The PRESIDING OFFICER. Four 
minutes. 

Mr. SPECTER. I thank the Chair 
and reserve the remainder of my time. 

EXHIBIT f 

••• TABLE DATA UNAVAILABLE ••• 



Several Senators addressed the 
Chair. 

The PRESIDING OFFICER. Who 
yields time? 

Mr. BENTSEN. I yield 2 minutes to 
the distinguished Senator from Min- 
nesota. 

The PRESIDING OFFICER The 
Senator from Minnesota. 

Mr. WELLSTONE. Mr. President, 
it is very difficult in 2 minutes to dis- 
cuss health care policy, but I do want 
to respond to the point that the Sena- 
tor from Pennsylvania made. He said 
this is a vote about whether or not we 
make health care reform a priority. I 
say, for those of us who make health 
care reform a priority, we want to 
make sure there is a package of bene- 



fits for citizens in this country that is 
tilted toward preventive health care, 
and this proposal introduced by the 
Senator from Pennsylvania, as far as 
I can tell, fails that test. For those of 
us who are concerned about health 
care as a priority, we do not want to 
be just talking about an advisory com- 
mittee to deal with the question of 
cost control. Businesses and people 
throughout this country want to have 
assurance that there will be real cost 
control, but that does not seem to be 
in this proposal. 

So, from the point of view of those 
of us who make health care a priority, 
we will not be able to vote for this 
amendment. 

Finally, for those of us who care 
about health care as a priority, we 
want to make sure there are 
long-term care provisions to deal with 
the problem of costs for older Ameri- 
cans and other people with disabili- 
ties. This particular proposal seems 
to be very ambiguous on that count. 
So, I think, if it is a priority for us, we 
would have a difficult time. 

My point is that we should not be 
fooling people in this country. We 
should be talking about public policy 
that will make a huge difference, re- 
sponding to these major concerns 
about making sure that health care is 
available for citizens, it is affordable, 
it is dignified care, and, yes, there is 
effective cost control. I do not see 
that in this proposal. We have not 
even had a chance to debate it. For 
that reason alone, it would be irre- 
sponsible for Senators to support this. 

The PRESIDING OFFICER. Who 
yields time? 

Mr. BENTSEN. Mr. President, how 
much time have I left? 

The PRESIDING OFFICER. One 
minute - four minutes. 



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Mr. BENTSEN. I will take the i 
ond ruling. I yield 2 minutes to the 
distinguished Senator from Montana. 

Mr. BAUCUS. Mr. President, essen- 
tially this is not the right time for this 
amendment. I think we all know 
that. We all know health care policy 
is probably, if not the most important, 
one of the most important issues this 
Congress must face. We know that. 
We are grappling with it. 

We also know this is the first time 
we have seen this quite comprehen- 
sive amendment. We have not debat- 
ed it. It was not debated in commit- 
tee. It has not been debated in any 
form whatsoever. Here it is now 
thrust upon us. 

We also know - at least I have been 
told - that we will be considering 
health care legislation this fall, in 
September. The House will be sending 
over a Medicare bill. We will be deal- 
ing in this Senate with Medicare. 
That will be the appropriate place to 
deal with health care legislation, on a 
Medicare bill, not out of the blue, 
sprung upon us suddenly on a tax 
provision in an energy bill. 

One of the reasons I think the coun- 
try is a bit disappointed with the Con- 
gress and thinks it is too gridlocked is 
because, under our rules, any amend- 
ment generally can be offered on any 
subject at any time. And it causes all 
kinds of problems here. I do believe, 
if we are going to restore the faith of 
the American people, we have to be a 
bit more orderly. We have to deal 
with the most important issues, but 
we have to deal with them in an or- 
derly way. 

We will be dealing in an orderly way 
with health care legislation this fall. 
We should not be taking up this 
amendment at this time. For that 
reason I urge Senators to vote to sus- 



tain the Chair on the point of order 
which will be made shortly. 

The PRESIDING OFFICER. The 
Senator from Pennsylvania. 

Mr. SPECTER. Mr. President, in 
response to the Senator from Mon- 
tana, if he was correct that we would 
be taking it up in the fall, this amend- 
ment would have been withdrawn. 
He is not the majority leader. The 
majority leader refused to give a com- 
mitment to take it up in the fall in 
the face of my unequivocal offer to 
withdraw the amendment if that com- 
mitment were to be given. 

When the Senator from Minnesota 
argues against the pending amend- 
ment, Senator Wellstone - distin- 
guished from Senator Durenberger 
who spoke in favor of it - 1 outlined 
during the course of the presentation 
that there are programs here for pre- 
vention and health promotion. When 
the Senator from Minnesota criticizes 
the idea of having a committee work 
on the targeting of health care costs, 
I will say to him and the rest of my 
colleagues, that is a more profound 
step than no step at all. What ought 
to be happening here is the Senator 
from Minnesota (Mr. Wellstone) who 
has legislation pending, ought to be 
pressing to have a commitment to 
have his legislation brought up. Or, I 
suggest to him, he ought to seek to 
have his legislation brought up. 

Mr. BIDEN. Mr. President, there is 
very little debate in our country or in 
Congress on the need for comprehen- 
sive health care reform. But there is 
much debate over how to go about 
that reform. While we need to reform 
the health care system - and I believe 
it will be reformed and will be re- 
formed soon - this bill is neither the 
time nor the place. 

The various proposals - be they 



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play-or-pay, national health insurance, 
a voucher system, or the solution 
offered in the amendment fay Senator 
Specter - should be subject to due 
deliberation, thorough consideration, 
and a full debate. The Senate and the 
American people must understand 
what the reforms will achieve and 
how they will be achieved. That is not 
happening - and cannot happen - with 
this amendment on this bill. 

The debate is taking place in other 
venues in Congress and has been for 
several months. The Finance Com- 
mittee and the Labor and Human 
Resources Committee have been ex- 
amining the range of health care pro- 
posals that have been offered. Just 
yesterday, I chaired a hearing before 
the Judiciary Committee on health 
care fraud - an important component 
of whatever health care reform is 
adopted. The Majority Leader has 
made it clear that health care reform 
will be debated in the Senate - on its 
own, not as a last minute, poorly un- 
derstood amendment to this impor- 
tant bill to establish a national energy 
policy. 

The Senate's leadership is strongly 
committed to health care reform. 
While President Bush has given one 
speech and sent Congress only parts 
of his proposal, the Senate majority 
has been working to find a solution to 
provide affordable health care to all 
Americans. 

I support those efforts, and I sup- 
port reform of the health care system. 
But, I also support undertaking that 
reform in a logical, deliberate, and 
responsible fashion. Otherwise - if it 
is hurried and poorly developed - it 
could prove to be more harmful to the 
health of America than our current 
situation. For that reason, I cannot 
support this amendment, and I urge 



my colleagues to reject it. 

Mr. WELLSTONE. Will the Senator 
yield? 

Mr. SPECTER. Yes. On your time. 

Mr. WELLSTONE. That may not 
be possible. 

Mr. SPECTER. How much time do 
I have left, Mr. President? 

The PRESIDING OFFICER. The 
Senator has 2 minutes and 18 sec- 
onds. 

Mr. SPECTER. I will yield for a 
question within 30 seconds. I do not 
want to yield all my time and have 
none left for reply. 

Mr. WELLSTONE. Let me just 
provide the Senator from Pennsylva- 
nia • and I appreciate his courtesy - 
with a clarification. My argument 
was not that an advisory committee in 
and of itself was a bad thing. I just 
simply said we are at the point in 
time right now where we need to be 
introducing legislation that has the 
cost control built into it. We do not 
need to study it any longer. People are 
telling us, 'Do not give us legislation 
unless you have the teeth to control 
the costs.' That was the point I meant 
to make. 

Mr. SPECTER. Mr. President, if 
that was the point, I say I would be 
delighted to see that legislation on the 
floor and I would be delighted to vote 
on it. That is what I would like to 
vote on. 

Mr. President, in a nutshell, in the 
minute and a half remaining, this 
debate really may come down to what 
is more important, moving ahead on 
health care or standing by procedural 
niceties of the Senate. What is more 
important, allocating some budget 
resources and some money for health 
care or repealing the luxury tax? 

Mr. President, I move to waive the 
Budget Act for consideration of 



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amendment 2783. 

Mr. President, I ask for the yeas 
and nays. 

The PRESIDING OFFICER. Is 
there a sufficient second? There is not 
a sufficient second at this time. 

Mr. BENTSEN. It has not been 
raised. I will raise it at the appropri- 
ate time. 

The PRESIDING OFFICER The 
motion is in order prior to the point of 
order. 

Mr. BENTSEN. Well, Mr. Presi- 
dent, then I raise the point of order 
that the pending amendment violates 
section 311(a) of the Congressional 
Budget Act of 1974. 

Mr. SPECTER. Mr. President, I 
again move to waive the Budget Act, 
which I believe was in order before. 
Mr. President, I ask for the yeas and 
nays. 

The PRESIDING OFFICER Is 
there a sufficient second? 

There is a sufficient second. 

The yeas and nays were ordered. 

Mr. BENTSEN. Point of order. 
Has the Chair ruled? Has the Chair 
ruled on the point of order? 

The PRESIDING OFFICER The 
Chair did rule because of the motion, 
but the waiver preempts a ruling of 
the Chair. All time has expired. 

The question is on agreeing to the 
motion of the Senator from Pennsyl- 
vania to waive section 311(a) of the 
Budget Act for the consideration of 
amendment No. 2783 to the commit- 
tee substitute for H.R 776. 

The clerk will call the roll. 

The bill clerk called the roll. 

Mr. FORD. I announce that the 
Senator from Louisiana (Mr. Breaux), 
the Senator from North Dakota (Mr. 
Burdick), the Senator from California 
(Mr. Cranston), and the Senator from 
Tennessee (Mr. Gore) are necessarily 



absent. 

Mr. SIMPSON. I announce that the 
Senator from North Carolina (Mr. 
Helms) is absent due to illness. 

I further announce that, if present 
and voting, the Senator from North 
Carolina (Mr. Helms) would vote 'yea.' 

The PRESIDING OFFICER Are 
there any other Senators in the 
Chamber who desire to vote? 

The yeas and nays resulted - yeas 
35, nays 60, as follows: 

(ROLLCALL VOTE NO. 160 LEG.) 





YEAS -36 




Bond 


Brown 


Chares 


Costa 


Cohen 


Craig 


D'Amato 


Danforth 


Dole 


Domenici 


Durenberger 


Garn 


Gorton 


Gramm 


Graasley 


Hatch 


Hatfield 


Jeffords 


KnUn 


Lott 


Lugar 


Mack 


McCain 


McConnell 


Murkowski 


Nickles 


Pressler 


Roth 


Rudman 


Seymour 


Spoctor 


Stevens 


Symms 


Thurmond 


Wsrner 

NAYS -60 




Adams 


Akaka 


Baucus 


Bantaan 


Biden 


Bingaman 


Boran 


Bradley 


Bryan 


Bumper* 


Burns 


Byrd 


Cochran 


Conrad 


Daschle 


DaConcini 


Dixon 


Dodd 


Eson 


Ford 


Fowler 


Glenn 


Graham 


Hsrkin 


Heflln 


Holllnsa 


Inouye 


Johnston 


Kasaebaum 


Kennedy 


Kerrey 


Kerry 


Kohl 


Lautenberg 


Leahy 


Levin 


Iieberman 


Metsenbaum 


Mikubki 


Mitchell 


Moynihan 


Nunn 


Packwood 


Pell 


Pryor 


Raid 


Ricgfte 


Robb 


Rockefeller 


Sanford 


Sarbanea 


Seaeer 


Shelby 


Simon 


Simpson 


Smith 


Wsllop 


Wellatone 


Wirth 


Woflbrd 




NOT VOTING 


-6 


Breaux 


Burdick 


Cranston 


Gore 


Helms 





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The PRESIDING OFFICER. On 
this vote, the yeas are 35, the nays are 
60; three-fifths of the Senators duly 
chosen and sworn not having voted in 
the affirmative, the motion is rejected. 

The motion to waive having failed, 
the Chair responds to the request for 
a ruling. The amendment of the Sen- 
ator from Pennsylvania would result 
in a loss of revenues for the time peri- 
od covered by the budget resolution, 
causing those revenues to fall below 
the revenue floor set out in that reso- 
lution. This violates section 311(a) of 
the Budget Act. The point of order is 
sustained. The amendment falls. 

Several Senators addressed the 
Chair. 

The PRESIDING OFFICER The 
Senator from Massachusetts. 

CHANGE OF VOTE 

Mr. KENNEDY. Mr. President, I 
ask unanimous consent that I be per- 
mitted to change my vote on Vote No. 
157. 1 did not realize it was a tabling 
motion. I wish to be recorded as hav- 
ing voted 'no/ This will not change 
the outcome of that vote. 

Mr. JOHNSTON. Mr. President, I 
think it is now becoming clear to Sen- 
ators that this bill is not to be a grab 
bag for all kinds of different unrelated 
matters. It is certainly my intention 
- 1 think that is shared by the Senator 
from Wyoming; the distinguished 
ranking minority member, and I know 
the chairman of the Finance Commit- 
tee has spoken out here about not 
bringing up all of these matters which 
have not been considered by commit- 
tee here. 

So I hope Senators will be coopera- 
tive and let us move this bill quickly. 
I personally have received many, 
many requests from Senators who do 
not want another late night i 



So I will strongly urge Senators not to 
bring up matters that are going to go 
down to inevitable defeat, and simply 
delay the Senate. 

I yield the floor. 

Mr. WALLOP addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Wyoming. 

Mr. WALLOP. Mr. President, before 
the Senator from Louisiana takes his 
seat, it would be my hope that at 
some moment, perhaps soon after the 
Symms amendment, which I under- 
stand is going to be offered next, that 
we might begin to propound some sort 
of unanimous consent that would 
contain the array of amendments so 
that we could begin to get some idea 
of what it was that we had to accom- 
plish. 

So I hope that we might begin to 
work on such a thing as 
unanimous-consent requests to limit 
amendments, not necessarily to get 
time agreements now, but just to get 
them in terms of amendments. 

So I would say to colleagues on my 
side, if there are amendments, bring 
them to me, and do not bring me ones 
that have nothing to do with energy. 

Mr. JOHNSTON. Mr. President, if 
the Senator will yield, I certainly en- 
dorse the idea of the Senator from 
Wyoming. I would also state that I do 
not know whether my distinguished 
colleague from Texas is anxious to 
hear me say this or not, but I would 
invite the Senator's attention to the 
fact that the Finance Committee is 
having a markup at 5 p.m. today, as I 
understand it. Matters such as the 
high-speed rail tax are to be consid- 
ered in the Finance Committee. It 
would certainly be my intention to 
move to table without debate the ma- 
jor matters, such as the high-speed 
rail tax, which have not been consid- 



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©red there simply because I think they 
have no chance of passage here unless 
we have the advice of the Finance 
Committee on those matters. 

I know the Senator has plenty to 
do, our colleague from Texas, in the 5 
o'clock markup. But Senators ought 
to know that this is not the only op- 
portunity Senators have to bring up 
major matters of a financial nature. 

This is basically an energy bill in 
which we have a few tax provisions, 
which are good tax provisions. But 
there is another major tax bill that is 
going to be moving through. 

I wish that they would direct their 
attention to the committee of jurisdic- 
tion rather than to come in with 
amendments of first impressions to 
the floor of the Senate. 

Mr. BENTSEN. I say to my distin- 
guished colleagues, the chairman of 
the Energy Committee, and the rank- 
ing member, that I would also be con- 
cerned that we have tax measures 
introduced as amendments to this 
that do not pertain to the energy 
business at all. I really do not think 
they are relevant to the debate. We 
just disposed of such a matter just a 
few minutes ago. 

I regret to see them presented. 

Mr. SYMMS addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Idaho. 

Mr. SYMMS. Mr. President, I ap- 
preciate and I have great respect for 
the Senator from Louisiana - he 
knows that - and the chairman of the 
committee, the Senator from Texas; 
Senator Wallop; Senator Packwood. 
But I would just point out that the 
reason that this amendment was not 
offered to the Finance Committee 
energy portion of this - this is clearly 
an energy-related amendment that I 
plan to offer here in a few moments. 



I want to say why. 

Trains require one-third as much 
energy as cars and one-fourth as 
much energy as airplanes. That is 
high-speed transportation technology 
that we are talking about here. So it 
is clearly energy related. It was not 
offered in the Finance Committee due 
to the deference and the respect I 
have for the chairman. 

For every Senator in this Chamber, 
this is a national issue. It just hap- 
pens that the first project of this na- 
ture is prepared to be built in Texas. 
So it becomes more than a national 
issue in Texas. It becomes an issue of 
local politics in Texas. 

I respect the chairman for that. I 
understand that. That is why I did 
not offer the amendment at the op- 
portunity in the committee. But it will 
be my intention to offer this amend- 
ment at this markup later in commit- 
tee because this is an amendment that 
must become law. 

My experience in this body is that 
you have to catch every train that 
leaves the station if you are going to 
make it. That is why I think we 
should offer this today. I am willing 
to expedite the debate. It is an issue 
that the majority leader is well aware 
of. The minority leader is well aware 
of the issue. It is a very simple up or 
down issue that will not take a long; 
complicated debate. But it is related 
to energy policy, and I think it is ap- 
propriate. 

Having said that, Mr. President, I 
have an amendment on behalf of my- 
self and Senator Bob Graham from 
Florida. 

AMENDMENT NO 2784 
(Purpose: To amend the Internal Revenue Coda 
of 1986 to remove certain high-speed intercity 
rail facility bonds from the State volume cap for 
tax-exempt I 



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Mr. SYMMS. Mr. President, I send 
an amendment to the desk and ask 
for its immediate consideration. 

The PRESIDING OFFICER. The 
clerk will report. 

The legislative clerk read as follows: 

The Senator from Idaho (Mr. Symma), for 
him— If and Mr. Graham, proposal an amend- 
ment numbered 2784. 

Mr. SYMMS. Mr. President, I ask 
unanimous consent that reading of 
the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

At the appropriate place insert the following 



SECTION l.REMOVALOFVOLUMECAPPOR 
CERTAIN HIGH-SPEED RAIL FACILITY 
BONDS. 

(a) In General. - Paragraph (4) of section 
146(g) (relating to exception for certain bonds) is 
amended by inserting \ other than any such bond 
described in subsection (h)(1)* after 'rail 
facilities'. 

(b) Conforming Amendment. - Su b s ect ion (h) of 
section section 146 (relating to exception for 
Government-owned solid waste disposal facilities) 
is amended - 

(1) by striking 'section 142(a)(6)* in paragraph 
(1) and inserting 'paragraph (6) or (1 1) of section 
142(a)*. and 

(2) by inserting 'and high-speed rail' before 
'Facilities* in the heading thereof. 

(c) Effective Date. - The amendments made by 
lall apply to bonds issued after 

r 31, 1993. 

SBC. 2. DEDUCTION FOR MOVING EX- 
PENSE. 

(a) In General. - Paragraph (1) of section 
217(c) of the Internal Revenue Code of 1986 
(relating to Conditions for allowance) is amended 
by striking every occurrence of the phrase '36 
miles' and replacing it with the phrase '66 miles'. 

(b) Effective Date. - The amendment made by 
subsection (a) shall apply to expenses incurred 
after January 1, 1993. 

Mr. SYMMS. Mr. President, I offer 
this amendment with Senator Gra- 
ham to make a minor modification to 
the Tax Code which will have a sub- 
stantial positive impact on the 
Nation's future transportation envi- 



ronmental and energy policies. 

This amendment is good economic 
policy. It is good transportation poli- 
cy. It is good energy policy. And it is 
good environmental policy. It is good 
tax policy. I urge my colleagues to 
support it. 

The amendment would simply re- 
move the requirement that 25 percent 
of each tax-exempt bond issue to fi- 
nance inner city high-speed rail facili- 
ties be counted toward the State pri- 
vate facilities activity bond cap for 
publicly-owned facilities. 

As many of you are aware, this is a 
slight change from the way the 
amendment was when it was brought 
forward last year, and not actually 
offered - it was taken back down • 
that I spoke about here on the floor. 
But in talking with many of you, lis- 
tening to the concerns of Members, 
the amendment has been changed to 
require public ownership, just like 
airports, seaports, and waste facilities. 
This amendment has support from 
both sides of the aisle. The adminis- 
tration has spoken out in favor of 
high-speed rail numerous times. 

Governor Clinton, the Democratic 
Presidential nominee says, '* * * new 
high-speed rail and maglev technolo- 
gies offer ways to improve competi- 
tiveness, create jobs, reduce pollution, 
combat gridlock, and provide access 
for disabled citizens and save energy * 
* *. Only with strong leadership in 
Washington can we encourage the 
kinds of innovative public-private 
partnerships necessary for success in 
such large infrastructure projects.' 

Currently, high-speed rail facilities 
can be financed with tax-exempt 
bonds. I will repeat that to my col- 
leagues. Under current law, you may 
now finance high-speed rail facilities 
with tax-exempt bonds. However, 



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there are two conditions that first 
must be met: First, the private owner 
must waive any claim to depreciation. 
Second, 25 percent of each bond is- 
sued must receive an allocation under 
a State's private activity cap. That is 
why this is necessary. These projects 
cost enough money that it crowds out 
the other public tax-free bonds that 
the State would like to sell under the 
cap. That is why it is necessary. 

Most airports and seaports are paid 
for and financed with these kinds of 
bonds. In this instance, the project 
that has heralded so much controver- 
sy in Texas is a $7 billion project, and 
it is projected that $5.1 billion of the 
financing will be equity and taxable 
bonds, private financing, and $1.9 
billion will be tax-free bonds. So it is 
not going to be a project that is en- 
tirely financed with tax-free revenue 
bonds. 

This amendment is simply a perfect- 
ing amendment to existing policy. It 
is not a debate on whether high-speed 
rail facilities should be financed 
through tax-exempt bonds. The issue 
has been decided. High-speed rail 
facilities can be financed through 
tax-exempt bonds. Currently, airports 
and seaports are exempted from the 
State activity bond cap, simply be- 
cause they are too expensive to fit 
under the State cap for precisely the 
same reason. Mr. President, 

high-speed rail tax-exempt bonds must 
be exempt from the cap. 

Some will argue that this exemption 
from State bond caps for inner city 
high-speed rail is not comparable to 
the exemption provided under current 
law for airports and seaports. Let us 
look at the facts. The last major air- 
port built in the United States was 
the $1 billion Dallas-Fort Worth Air- 
port. That, like most airports before, 



was financed primarily with 
tax-exempt bonds. The next major 
airport is being built in Denver, for 
which nearly $3 billion is tax-exempt 
revenue bonds have already been sold. 
Neither of these projects • both vital 
to the Nation's modern transportation 
system - would have been possible had 
the tax-exempt revenue bonds been 
limited by State bond caps. Further, 
airports are eligible to receive direct 
Federal support through the Federal 
Aid Construction Grant Program. 
These grants are an important source 
of the construction funds. 

The infrastructure for high-speed 
rail - the rights-of-way, the rail bed 
materials, the bridges, and other 
structures • can be built with 
tax-exempt revenue bonds. But un- 
like airports, there is no program 
providing direct Federal subsidies for 
high-speed rail construction, and the 
tax-exempt revenue bonds sold for 
high-speed rail projects must be 
counted against the State's bond cap. 

In other words, the current law 
creates an uneven playing field among 
differing modes of high-speed trans- 
portation. The amendment I offer 
simply treats high-speed rail construc- 
tion the same as airport construction, 
or Government waste facilities. This 
is not a tax subsidy. 

Mr. President, I also want to re- 
mind my colleagues that this amend- 
ment does not change current law 
with respect to the applicability of 
tax-exempt revenue bond financing 
for high-speed rail. These bonds can 
only be issued for high-speed rail in- 
frastructure, which does not include 
the rolling stock. Our amendment 
does not change the law with respect 
to that provision. 

What is at issue is whether 25 per- 
cent of those bonds must remain 



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4307 



stuck under the State cap. Sixty per- 
cent of the bonds to be issued for the 
Texas project are taxable. I am afraid 
those opposed to high-speed rail just 
want to keep out the competition. I 
understand that, Mr. President, and I 
cannot blame anyone for trying, if 
they are going to be in direct competi- 
tion with the high-speed rail train. 

If is true that high-speed rail offers 
an alternative to flying for relatively 
short distances. But competition 
leads to innovation, which is vital to 
our domestic and international eco- 
nomic health. Protection will lead 
only to stagnation, which will ulti- 
mately put us at a disadvantage. 

I also understand that there is a 
concern about removing caps from 
privately owned facilities, because 
under current law, only publicly 
owned facilities are exempted. My 
amendment would require public own- 
ership similar to airports and Govern- 
ment waste facilities. 

Mr. President, you can see from my 
first chart that high-speed rail pro- 
jects create tens of thousands of jobs. 
This chart represents an example of 
the potential range of employment 
generated by the Philadelphia Pitts- 
burgh line. 

The small revenue loss of $178 mil- 
lion will actually be buying a 
multibillion-dollar investment which 
would create a tremendous amount of 
taxable income. With a small amount 
of Federal participation, billions of 
dollars of private capital will be un- 
leashed to finance the much-needed 
high-speed rail infrastructure. 

This is undoubtedly the most cost 
effective method of expanding our 
transportation system. The revenue 
loss caused by this amendment is 
because the interest generated by 
those bonds is not taxable. There will 



be no Federal money used to buy the 
bonds or back the bonds. All of the 
tax-exempt bonds will be backed by 
private entities. Private citizens will 
be able to buy the bonds and then 
take a deduction for the interest gain 
on the bonds. They actually will not 
take a deduction. They simply will 
not pay taxes on the revenue that 
they generate from the bonds. 

Although the Joint Tax Committee 
scores the bonds as a revenue loss, I 
must once again point out that these 
are static revenue losses, static esti- 
mates, and I challenge the very prem- 
ise of these estimates. These static 
revenue estimates do not include the 
taxable bonds which will be issued 
along with the tax exempt bonds and 
will generate revenues. 

It also does not take into consider- 
ation all of the revenue created by the 
FICA and payroll taxes resulting from 
the jobs created. This is not a time, 
however, Mr. President, to get into a 
debate over static versus dynamic 
revenue estimates. It is important to 
understand where the revenue loss 
comes from, and that it is in no way a 
Government subsidy. 

In any case, we are left with the 
current system, and we are required 
by the 1990 budget agreement to pay 
for the amendment. So Senator Gra- 
ham and I have this method to pay 
for this amendment. To offset the cost 
of this proposal, the amendment will 
increase the mileage required for the 
moving expense deduction from the 
current 35 miles to 55 miles. The 
50-mile requirement was the law prior 
to 1978. 

According to the Joint Tax Commit- 
tee estimates, this change in the mov- 
ing expense deduction will raise the 
adequate amount of revenue to offset 
this. So that makes it a revenue neu- 



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tral amendment. 

I want to make it clear to all of my 
colleagues that I do have a constituent 
interest in this. Morrison-Knudsen is 
an Idaho-based company, who won the 
contract to build the Texas high-speed 
rail system. I want you to note the 
substantial number of jobs for the 
project, which I have just mentioned. 
These jobs are not going to be in Ida- 
ho. The job potential in Texas for this 
project will be substantial. It is going 
to be a $7 billion investment, creating 
12,500 jobs initially, and then 2,500 
jobs once the system is operating, to 
operate the trains themselves. 
High-speed rail will play a major role 
in our future transportation policy. It 
is safe and efficient. The United 
States, is the only industrialized coun- 
try in the world that has not devel- 
oped a high-speed rail system. 

Right now, the British are working 
to connect themselves to the conti- 
nent with high-speed rail, and to con- 
nect that to an expanding European 
rail system. 

We are always talking about the 
importance of the United States inter- 
national competitiveness. Japan has 
its bullet train and the entire Europe- 
an Community is covered with 
high-speed rail lines and working on 
more. Is this yet another develop- 
ment that the United States wants to 
ignore - so that in 10 years we can say 
we should have pursued high-speed 
rail? 

All we are doing here is giving the 
United States an opportunity, if pri- 
vate entrepreneurs want to invest in 
high-speed rail, that there will be a 
method that they can do it. 

I would like to refer to the second 
chart, Mr. President, and that is a 
chart that will demonstrate why I 
think this is an important 



energy-related amendment. 

Passenger energy efficiencies, Btu to 
move the passenger one mile. Inter- 
city bus is the most efficient, .939. 
The TGV technologies that will be out 
with this dispersed high-speed train 
project in Texas, 1.147. And it comes 
on down way to the end, air commer- 
cial, 4.7 Btu's to move people, per 
person per mile. So I think that this 
is clearly energy related. 

It is efficiency related. The trains 
run on time. They do not have to 
wait for the weather. They do not 
have to wait for the FAA to decide 
whether or not they can take off and 
go. They can run the trains on time 
and clearly improve efficiencies for 
people. 

The other thing that is happening 
with population growth in this coun- 
try, one study showed that a 44-lane 
highway from Miami to Orlando will 
be necessary to meet the needs of local 
population. I am sure my good friend 
from Florida will have more to say 
about that. We need to address how 
we are going to move the people be- 
tween cities during the next century. 
Building 44-lane highways is not going 
to be the answer. 

High-speed rail is one of the an- 
swers, and it is one of the keys to our 
future transportation infrastructure. 
High-speed rail offers a safer, energy 
efficient, and environmentally sound 
way to move people. These systems 
conserve space: A 600-mile high-speed 
rail system requires less space - 1 want 
my colleagues to get this point • than 
the most recently built major airport 
When you talk about taking up 
ground to be used, the space used for 
a 600-mile high-speed rail system is 
less space than a major metropolitan 
airport the size of the Dallas/Fort 
Worth Airport. This is a significant 



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reason why we need this amendment. 

We simply cannot continue -and, as 
a matter of met, Mr. President, I men- 
tioned the project that is being built 
in Denver, CO, right today, the air- 
port that is being built in Denver. It 
will make Stapleton obsolete. It is 
further out of town. And I say that, 
probably with respect to Denver and 
the West, it will be a long, long time 
before anyone will not want to fly by 
air or travel by air because of the 
magnitude of the distances. But it is 
questionable to me, when I look at 
what the United States is doing with 
our transportation infrastructure 
dollars, how could we be spending all 
these billions of dollars to further 
consolidate airport hubs in major 
cities such as Denver when, in fact, 
we could be spending money efficient- 
ly to make it possible for people to 
travel intercity on very fuel-efficient, 
time-efficient, on-time, comfortable 
schedules. I say to any of my col- 
leagues, if they have not had the op- 
portunity to do so, I urge them, if 
they are in France, to ride the TGV 
train in France. I have had that op- 
portunity and have done that, and it 
is a very highly efficient, comfortable 
way to move people, very safe and 
certainly very comfortable for the 
passengers and a very attractive, I 
think, method of transportation for 
people. 

Mr. President, as I said, airports are 
almost entirely funded by tax-exempt 
bonds, Federal aid, and airport con- 
struction grants. Highways are built 
with substantial Federal support in 
the form of fuel taxes and other user 
fees. Highways traditionally have 
been built almost entirely with public 
funding. 

We are talking about allowing peo- 
ple to sell a percentage of the cost of 



a project in tax-free bonds, which will 
then generate huge, enormous invest- 
ments of private capital into the over- 
all running and operating of the pro- 
ject, for the rolling stock, for the in- 
frastructure that goes with it, and it 
will make a very, very positive invest- 
ment and a very positive, competitive 
way to move people. 

I know that some of my colleagues 
think that this amendment will only 
benefit Texas. This is simply not the 
case. This is not, I repeat not, just a 
Texas amendment. It is important to 
remember that we have to start some- 
where. It just happens that the Texas 
project is the one on the starting 
blocks. 

I would like to refer you, Mr. Presi- 
dent, to the chart showing the many 
proposed high-speed rail projects 
across the country. Right now, there 
are groups studying the feasibility of 
at least 10 high-speed rail systems in 
the United States. These include - 

A Chicago, Minneapolis, St. Louis 
and Detroit hub; 

A Florida hub; 

A Pacific Northwest hub; 

A Pittsburgh to Philadelphia hub; 
and 

A Las Vegas to Los Angeles hub, 
just to mention a few. 

But access to capital is the problem, 
and the simple fact is, if the Congress 
does not pass this amendment and 
remove high-speed rail from the State 
caps, there will be no high-speed rail 
systems in the United States for the 
rest of this century. I do not know 
who long it will take for another 
American corporation to take the risk 
that has been taken by the groups 
that have put together this coalition 
in Texas to build this system, Mr. 
President, if we refuse them the op- 
portunity now. 



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So I think what we are saying is 
that there is a lot at stake in this, and 
I hope my colleagues will vote for it. 
For those of you that I know have 
concern - and I hate to be in here 
asking you to go against my own com- 
mittee chairman, Senator Packwood, 
Senator Wallop, and Senator Johnston 
on what it is they wish. They have 
their mission, I understand that. In 
my opinion, this amendment in no 
way, absolutely in no way, should in 
any way stop the energy bill from 
becoming the law. I am a strong sup- 
porter of this energy bill that is before 
the Senate. 

But for those Senators who vote for 
it, it will be a very positive vote with 
many of our constituents, and I see 
my good friend from Ohio on the 
floor, and he will start laughing when 
I tell him this, Mr. President, because 
Friends of the Earth is for this legisla- 
tion, as well as the National Audubon 
Society, the Sierra Club, the National 
Wildlife Federation, the Environmen- 
tal Defense Fund, and so on and so 
forth. 

I can see that my colleague from 
Ohio is saying, Symms is offering this 
amendment. This is a very positive 
amendment for this bill. It is good for 
America's energy policy. The reason 
that these people are supporting this 
is because high-speed rail will give 
people a choice of rides in transporta- 
tion, these trains will require 
one-third as much energy as cars, 
one-fourth as much energy as air- 
planes, and for every person traveling 
by high-speed rail rather than by car, 
there will be an enormous reduction 
in carbon monoxide hydrocarbons and 
nitrogen oxide. 

This amendment, as I said at the 
outset, is good economic policy, good 
transportation policy, it is good energy 



policy, it is good environmental policy, 
and it is good tax policy. I urge my 
colleagues to vote for it. I say to my 
colleagues, if you get in your car and 
start driving from the Nation's Capi- 
tal, say, to Atlanta, you will be 
amazed at the kind of traffic on 1-95 
day and night around the clock. If 
you can think down the road 25 years, 
if we make this possible for the pri- 
vate sector to develop and operate 
these systems and people can ride the 
trains, there will be a lot more room 
on the roads then, and, as population 
grows, it may not seem like there is 
more room, but it will make those 
roads more adequate for what is need- 
ed to be done. 

Second, it is very important in this 
country that we have a good, integrat- 
ed intermodal transportation system 
so that trucks can run and automo- 
biles can run and other systems. And 
this will make more room on those 
interstates for other transportation 
vehicles. So I urge my colleagues to 
support Senator Graham and myself 
on this amendment. 

I yield the floor, Mr. President. 

The PRESIDING OFFICER (Mr. 
Lieberman). Who seeks recognition? 

The Chair recognizes the Senator 
from Ohio (Mr. Metzenbaum). 

Mr. METZENBAUM. Mr. President, 
this is deja vu. This is a matter of 
now going back to industrial revenue 
bonds. This body spent a considerable 
amount of time some years ago trying 
to get rid of industrial revenue bonds, 
because they were eating up the Fed- 
eral budget. Here we have a new one. 
Now we have one for intercity 
high-speed rail. 

I do not have any problem about 
the concept. I do have a problem 
about digging into the Federal Trea- 
sury to ask all the people of the coun- 



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try to subsidize this proposition. That 
is not right. The American people 
have been burdened with sufficient 
amount of taxes without calling upon 
them to pay additional taxes in order 
to pay for this subsidy now. 

What we are talking about is 
whether or not one area or several 
areas that are interested in high-speed 
intercity rail, whether or not they are 
going to be able to issue revenue 
bonds, tax-exempt bonds, in order to 
pay for that facility. Well, if they 
issue tax-exempt bonds, then they are 
going to have some impact upon the 
Federal Treasury. And so you are 
going to cost the American people a 
certain number of dollars by the per- 
mission to issue revenue bonds. 

We used to have a situation in this 
country where you could issue reve- 
nue bonds for almost everything un- 
der the Sun. I remember debating 
that subject many a night here on the 
floor of the U.S. Senate. And I remem- 
ber that finally we were able to elimi- 
nate some and keep in just a few, but 
we eliminated most of them. And we 
got rid of that concept. 

Now this is the first foot in the door 
to open the door again to industrial 
revenue bonds. And so the argument 
is made, 'Well, wait a minute, Sena- 
tor. This is not going to cost all the 
people of this country this money.' 

No, it is just going to cost the work- 
ing people. It is not going to be a tax 
on the corporations to make up the 
money. It is not going to be a surtax 
on the rich people of the country to 
make up the money. No, it is not 
going to be a special tax on the biggest 
States to make up the money. No, it 
is going to be a tax on the blue-collar 
worker. 

And once again we see my col- 
leagues on the other side of the aisle, 



an aisle that seems more disposed to 
levy taxes upon the average Joe and 
Joanna working in the job to pay for 
the special projects they are interested 
in. 

Let us look at how the money is 
going to be made up. Right now, if 
you travel, if you move to a distance 
more than 35 miles from your home, 
your moving expenses are deductible. 
Under this amendment, they change 
the 35 miles to 55 miles. So if you 
move to a distance that is more than 
55 miles from your home instead of 35 
miles it is deductible. But if it is 
somewhere in between, what will hap- 
pen is, if you make that move under 
the proposal of the Senator from Ida- 
ho, you are going to be stuck in 1993 
with $5 million, $46 million in 1994, 
$50 million in 1995, $53 million in 
1996, and $57 million in 1997. So this 
is a new way of taxing blue-collar 
workers in this country. 

And if this body is prepared to say 
to the blue-collar workers in this 
country who are moving from one job 
to another, and certainly they are 
trying to find a place of employment, 
certainly it is not easy to find a job, 
but they are saying, your moving ex- 
penses are deducted if you only go so 
far, but we change the limits. We 
change the limits. 

It is unfair. It comes in the dead of 
the night. Nobody is paying much 
attention to it. We slide an amend- 
ment like this through. The Ameri- 
can people are not aware of what is 
happening, and so we say: 'One of 
those things.' Joe working-collar guy, 
or gal, is stuck with the bill. 

This amendment should not be 
considered as an amendment on the 
floor of the Senate. We are dealing 
with an energy bill. 

Now we have, as part of that energy 



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bill, some portions having to do with 
Internal Revenue, with the Finance 
Committee. And what we now have is 
an amendment that belongs directly 
in the lap of the Finance Committee. 
Hearings should be held, consideration 
should be given to both aides. The 
question of where the money should 
come from should be determined by 
the Finance Committee and by all the 
Members of the U.S. Senate. 

But, no, we get an amendment here 
on the floor in the middle of the after- 
noon. Nobody knows it is coming. 
And, as a consequence, working people 
in this country are going to be asked 
to pay for one high-speed railroad in, 
I think it is supposed to be, Texas; 
maybe there is one going from Texas 
to Florida, I am not sure what the 
story is. 

But whatever the case, it is not 
right if there is a high-speed railroad 
in Ohio, it is not rijght if there is a 
high-speed railroad in Florida, it is 
not right if there is a high-speed rail- 
road in Idaho, it is not right to come 
to this floor and propose this new tax 
exemption and then to shift the bur- 
den of paying for that tax exemption 
on the average working people. This 
amendment should be defeated. 

Mr. WOFFORD. Mr. President, I 
support the amendment to remove 
State caps from tax-exempt bond 
funding for high-speed rail and mag- 
netic levitation projects. Bringing 
down this tax barrier will encourage 
investment in magnetic levitation and 
other high-speed rail projects. 

This amendment is especially impor- 
tant to my State of Pennsylvania, a 
leader in the development of maglev 
technology. MAGLEV, Inc., a unique 
public/private/labor partnership, has 
been working to develop a regional 
maglev system with a planned demon- 



stration line running from downtown 
Pittsburgh to the new airport. Share- 
holders and members in MAGLEV, 
Inc. include the Commonwealth of 
Pennsylvania, Allegheny County, Car- 
negie Mellon University, the United 
Steelworkers of America, and other 
labor, industry and Government 
groups. 

Maglev and high-speed rail would 
update our outdated transportation 
infrastructure, giving our citizens a 
convenient and affordable travel op- 
tion. Technology development, plan- 
ning and construction would bring 
thousands of much-needed jobs to 
Pennsylvania and other States. And 
the trains would do much to ease 
urban and suburban grid-lock and 
pollution, improving our citizens' 
quality of life. 

France, Germany, and Japan have 
been quick to capitalize on maglev 
and high-speed rail technology. We 
can't afford to ait idly by. Projects 
such as MAGLEVs show what can be 
accomplished when business, govern- 
ment, academia and labor work to- 
gether toward a common goal. We 
should be encouraging this type of 
project and I believe this amendment 
would be a significant step in the 
right direction. I hope my colleagues 
will join me in supporting this amend- 
ment. 

Mr. KERRY. Mr. President, the 
pending amendment offered by the 
Senators from Florida and Idaho per- 
tains to a matter I believe is critical to 
meeting the Nation's transportation, 
environmental, and energy needs. 
The enactment of this amendment 
will facilitate the development of 
high-speed rail and maglev systems in 
the United States. 

The objective of the amendment is 
to eliminate the requirement that an 



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allocation from State volume limita- 
tions must be obtained for 25 percent 
of all tax-exempt bonds issued to fi- 
nance intercity high-speed facilities. 
Eliminating this requirement is a 
necessary step if such projects are to 
secure the enormous amounts of pri- 
vate investment capital they need to 
cover the costs in the high density 
corridors where they are most needed 
and which they can service most effi- 
ciently. 

Importantly, and responding to 
some of the points made by my friend 
the Senator from Ohio, making this 
Tax Code alteration would provide 
high-speed rail and magiev with the 
same access to tax-exempt bonds cur- 
rently afforded to airports and other 
transportation systems. It levels the 
playing field. This amendment does 
not offer an unequal tax preference to 
high-speed ground transportation, 
although some of us might argue that 
it would be in the best interests of the 
Nation to do so. It would provide for 
equal treatment. 

Further, this amendment is not 
about providing a cushy tax benefit to 
moneyed special interests; it is de- 
signed to make financially feasible 
publicly approved efforts with sub- 
stantial if not preponderant public 
involvement to establish functioning 
high-speed ground transportation 
systems for the public's benefit. 

Support is growing in this country, 
Mr. President, for developing an 
up-to-date national transportation 
system by bringing high-speed rail and 
magiev into a revitalized intermodal 
travel network. High-speed rail is a 
proven technology with years of very 
succ essfu l operating experience in 
Europe and Japan. Magiev is a new, 
cutting-edge technology nearing de- 
ployment overseas and in intensive 



development in the United States. 

Plagued by years of disinterest, 
miscalculation and footdragging by 
Federal officials, high-speed ground 
transportation won a strong endorse- 
ment from Congress in the Intermodal 
Surface Transportation Efficiency Act 
last year. The environmental commu- 
nity has provided its support, because 
high-speed ground transportation 
offers the promise of a safe, 
energy-efficient, and environmentally 
sound way of moving passengers be- 
tween cities. 

Eliminating the applicability of a 
State's tax-exempt bond ceiling to 
high-speed ground transportation 
projects will facilitate the formation of 
the creative public-private partner- 
ships required to successfully pursue 
these large infrastructure projects 
which I believe will make tremendous 
contributions to a strong, competitive 
economy. 

Mr. President, this is an energy 
issue. That's why it is appropriate 
that it has been offered to this bill. It 
is an environmental issue. It is a tax 
policy fairness issue. It is a transpor- 
tation issue. It is a lifestyle issue. It 
is a technology development issue, and 
it is a competitiveness issue. 

On all of these grounds, the calcu- 
lus suggests the wisdom of approving 
this amendment. I enthusiastically 
support the amendment, and I urge 
all Senators to join in supporting it. 

Mr. GLENN. Mr. President, I rise 
today in support of the goals of the 
Symms-Graham amendment. But I 
am constrained to vote against this 
amendment based upon the revenue 
offset that has been chosen by its 
authors. I am committed to work 
with the authors so that in the future 
we can develop a more appropriate 
offset for this worthy proposal. 



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Recent studies show that our 
Nation'stxansportationinfrastructure 
is not adequate to meet America's 
future needs. It is estimated that 
increased highway congestion of 300 
to 400 percent fay the year 2010 will 
result in annual costs from delays of 
$30 billion. High-speed rail technolo- 
gy will not only alleviate these costs, 
but will reduce costs associated with 
transportation-related pollution and 
accidents. 

Given Ohio's global leadership in 
science and innovation, it is not sur- 
prising that the Ohio Legislature had 
the foresight to create the Ohio 
High-Speed Rail Authority (OHSRA) 
in 1986. The authority has adopted 
plans for a high-speed rail system that 
will link Cleveland, Columbus, and 
Cincinnati. A bullet train traveling 
between these cities at speeds of up to 
186 mph will take passengers from 
Cleveland to Columbus in just 69 
minutes. And passengers can travel 
from Columbus to Cincinnati in only 
72 minutes. 

The system will not only offer con- 
venience and accessibility to Ohioans, 
it will foster a new industry for Ohio. 
This industry will create 16,000 con- 
struction jobs over 5 years and pro- 
vide almost 4,000 permanent jobs for 
Ohioans. It will help to revitalize 
Ohio's steel industry. And high-speed 
rail in Ohio will reduce travel time 
and congestion, save fuel, improve air 
quality, and promote travel safety. 

But none of this is possible unless 
the authority can attain the financing 
necessary to undertake its ambitious 
project. Competition for allocations 
under the State of Ohio's private 
activity bond cap is heated. Many 
worthy projects involving critical pub- 
lic purposes such as housing and envi- 
ronmental cleanup are unable to ob- 



tain adequate financing under the 
volume cap restrictions. This volume 
cap is now more strained than ever 
because the recently enacted Clean 
Air Act has resulted in more solid 
waste cleanup from coal scrubbing 
which is competing under the cap. 

If the current 25 percent allocation 
under the cap for high-speed rail re- 
mains, it will hamper the ability of 
the Ohio High-Speed Rail Authority to 
attain the necessary $3 billion in fi- 
nancing for its system. And it will 
similarly hold back other high-speed 
rail systems throughout the Nation. 

Mr. President, I commend the dis- 
tinguished Senators from Idaho and 
Florida for their efforts on behalf of 
high-speed rail development and look 
forward to working with them in the 
future to obtain a viable offset. 

Mr. LAUTENBERG. Mr. President, 
I am going to reluctantly support the 
motion to table the amendment by the 
distinguished Senator from Idaho. 

Mr. President, I stand second to no 
one in my support of high-speed rail 
development in the United States. It 
should be a central element of our 
Nation's transportation infrastruc- 
ture. In fact, in my view, the Federal 
Government should develop a compre- 
hensive policy on the development of 
high-speed rail. That policy should 
address a range of related issues, in- 
cluding project financing, technology 
selection, location, and regulatory 
mechanisms. 

While I support the goals of the 
Senator from Idaho, his amendment, 
in my view, is premature. The Con- 
gress has not thought through the 
proper manner by which high-speed 
rail should be financed, or any of 
these other issues. And there is no 
comprehensive policy in place. 

Mr. President, high-speed rail is too 



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4315 



important for us to deal with in a 
piecemeal manner. It may well be 
that federally tax-exempt financing is 
an appropriate element of such a poli- 
cy. However, Mr. President, there is 
no pressing need to enact this propos- 
al at this time. Few high-speed pro- 
jects are close to realization. In fact, 
most of the benefits of this amend- 
ment in the immediate future are 
likely to flow only to the State of Tex- 
as. That project may well be worthy. 
But if we want to support that pro- 
ject, we should do so only after care- 
fully examining its merits. To adopt 
a national policy on the financing of 
high-speed rail only so that this one 
project can move forward, is short- 
sighted and unnecessary. 

Again, Mr. President, as chairman 
of the Transportation Appropriations 
Subcommittee, I want to emphasize 
that I believe strongly in the value of 
high-speed rail. In fact, as chairman 
of the Transportation Appropriations 
Subcommittee, I've fought to keep 
passenger rail service alive in this 
country. And, I'm working to expand 
and improve that rail service, includ- 
ing thorough electrification of the 
Northeast corridor from New Haven, 
CT, to Boston. This afternoon, as 
chairman, I pr e s en ted the subcommit- 
tee with the fiscal year 1993 transpor- 
tation appropriations bill, which I am 
pleased to say was app ro v e d by the 
subcommittee. The bill contained 
$204.1 million for the Northeast Cor- 
ridor Improvement Program, which 
includes not only safety and efficiency 
upgrades, but also the electrification 
project. I note for my colleagues that 
neither the House nor the Bush ad- 
ministration would provide one dune 
for this high- sp e ed -rail program. 

But it's because I feel so strongly 
about this that I cannot support 1 



amendment. High-speed rail is too 
important for piecemeal policymaking, 
Mr. President. 

Mr. JOHNSTON addressed the 
Chair. 

The PRESIDING OFFICER. The 
Senator from Louisiana (Mr. 
Johnston) is recognized. 

Mr. JOHNSTON. Mr. President, in 
exactly 1 hour and 35 minutes the 
Senate Finance Committee is going to 
meet in markup. The distinguished 
Senator from Idaho is a member of 
that committee. I urge him - 1 believe 
he said he was going to bring up this 
amendment at that time. The matter 
to be considered by them, as I under- 
stand it, is the tax extender bill in the 
Senate Finance Committee. And that 
is exactly what this should be a part 
of. There he can make the arguments, 
and those who feel strongly on both 
sides can be heard in the committee of 
jurisdiction. 

Mr. President, on a matter this 
far-reaching, this important, it ought 
to be considered by the committee of 
jurisdiction. And so I am therefore 
ready to make a motion to table. 

Does the distinguished Senator 
from Florida wish to make some com- 
ments? 

Mr. GRAHAM. Yes. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that I be rec- 
ognized to make a motion to table 
immediately after the presentation of 
the Senator from Florida, 

Mr. SYMMS Would the Senator 
allow me 2 minutes right now before 
he pom to the Senator from Florida? 
If I could just have the floor for 2 



Mr. JOHNOTON Mr President, I 
ask unanimous consent that the Sena- 
tor from Idaho be recognized for 2 
minyta s , fol low e d by the Senator from 



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Florida, and then I be recognized to 
make a motion to table. 

The PRESIDING OFFICER With- 
out objection, it is so ordered. 

Mr. SYMMS. Mr. President, first 
off, the Senate has been well aware of 
this amendment. I hear the Senator 
from Ohio. But this bill itself has 
transportation energy items in the 
finance part of the bill. Deductions 
for employee-provider parking, allow- 
able employer-provided transit passes, 
provides a deduction for a portion of 
the cost of clean burning motor vehi- 
cles. So it has transportation taxes in 
it. 

The Senator was not on the floor, 
but I said earlier the reason it was not 
offered in the committee is the chair- 
man asked me not to offer it in the 
committee. The Senate has been 
blanketed with 'Dear Colleague' let- 
ters. This is no surprise and no secret 
to the Senate. This is an issue that 
has been well ventilated in the Senate. 
So Senators do not need to think this 
is some surprise attack. 

Second, the Senator says that we 
are trying to subsidize some project 
somewhere. That is simply not the 
case, Mr. President. The decision is 
already made in the United States 
that tax exempt bonds may be sold for 
high-speed rail. 

The problem is that in the dark of 
the night once before, 25 percent of 
that part was put into the State cap 
to generate a little revenue on our 
static bookkeeping here, which now 
has dislocated the level of the playing 
field of the competitiveness between 
building airports and building 
high-speed rail. 

The way it is right now, you may 
end up - and I want the Senators to 
hear this - you may end up building 
airports that you really do not need 



because they can build them with 
tax-free revenue bonds. 

We are talking about projects that 
will be probably 20 percent financed 
by tax-free revenue bonds, 80 percent 
financed by private equity, and then 
you have competition in it. 

So, I really think that the Senator 
from Ohio, if he examined this a little 
more carefully, would be on the side of 
allowing this cap to make it even. We 
make the playing field level between 
airports and seaports and high-speed 
rail beds. The way it is now, they are 
going to be building airports that they 
do not need because they can sell 
revenue bonds outside the State cap, 
and they will not be building 
high-speed rail beds that they do need 
because they cannot get them outside 
the State revenue cap and they can- 
not get the bonds sold that way. So 
this is clearly a competitive issue. It 
is clearly a transportation issue. 

I urge my colleagues to vote against 
the tabling motion. 

The PRESIDING OFFICER Under 
the previous order, the Chair recog- 
nizes the Senator from Florida. 

Mr. GRAHAM. Thank you, Mr. 
President. 

Mr. President, it was about 100 
years ago that a question was asked of 
the American railroad industry. 

The question that was asked is, 
what business are you in? The indus- 
try thought that was a fairly simple 
question to answer. We are in the 
railroad business. 

That answer to that question con- 
signed the railroad industry to bank- 
ruptcy, bankruptcy because they were 
committing themselves to a form of 
technology which would, over this 
century, be increasingly competed 
with and technologically overtaken for 
many of the railroads' historic tunc* 



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dons. 

Could there have been a different 
answer to that question, what busi- 
ness are you in? Of course. And what 
should the answer have been? The 
answer should have been, we, the 
American railroads, are in the trans- 
portation business. And, has they 
answered it in that manner, they then 
would have broadened their concept of 
their future and their potential, to the 
substantial change of their own 
well-being and probably the nature of 
the American transportation system 
as we near the end of the 20th centu- 
ry. We would have had a different 
transportation system had the rail- 
road seen their role as a broader one 
than operating a railroad. 

I think in many ways we face that 
same question today. What is the 
character of the American transporta- 
tion system? Essentially, we are chal- 
lenged by the issue, are we going to 
take the same approach that was 
taken 100 years ago, and that is de- 
fine it in static - status quo terms? Or 
are we going to see the kind of chal- 
lenges and opportunities that exist in, 
not revolutionary forms of transporta- 
tion, but the application in America of 
the highest forms of technology to 
ground transportation which are be- 
ing utilized today in most of our major 
economic competitor nations - in the 
European Community and in Japan 
specifically? 

I think there are many reasons why 
we should take a broader view of what 
our transportation future should be 
and to incorporate within that view 
the opportunities for the United 
States taking a leading position in the 
21st century in the development of 
high-speed rail. Is this an energy 
issue? I have had some questions, and 
the chairman of the Energy Commit- 



tee knows this because we have dis- 
cussed it, as to how we should diag- 
nose America's energy problem. What 
is it that challenges us in terms of 
energy policy for America? 

I will define what I think the chal- 
lenge is. I think the challenge is to 
conserve the rapidly diminishing 
storehouse of energy resources and 
particularly petroleum that we have 
within the United States of America. 
Here are the statistics. The United 
States is currently consuming some- 
thing over 6 billion barrels of petro- 
leum per year. We are importing 
about half of that. Half of it is com- 
ing from domestic sources. 

The United States, by the most 
liberal estimates, has approximately 
75 billion barrels of reserves and re- 
sources within the continental United 
States, including Alaska. That in- 
cludes all the offshore petroleum re- 
sources and resources throughout 
Alaska - 75 billion barrels. 

It does not take much of a mathe- 
matician to divide half of 6, or 3, into 
75 and say that we have approximate- 
ly 25 years of domestic petroleum left 
at pur current level of total consump- 
tion and the proportion of that con- 
sumption coming from domestic re- 
sources. 

One of the stated goals of the ener- 
gy bill is to reduce our level of depen- 
dence on foreign energy sources in- 
cluding petroleum. If we do that and 
make no other changes, what we are 
doing is, instead of having 25 years of 
domestic petroleum remaining, we will 
be down to 20 or 15 years or less. 

So I believe fundamental to a na- 
tional energy strategy is a strategy to 
conserve that 75 billion barrels that 
stands between the United States and 
total dependence on non-U.S. sources 
for petroleum. One of the keys to do 



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that is to develop within our economy 
means by which we can be lees depen- 
dent on petroleum. We know 
petroleum's principal use in the Un- 
tied States is for transportation. 
Therefore, if we are going to attack 
the challenge of reducing our level of 
dependence on petroleum, we must 
find alternative forms of transporta- 
tion that will be less petroleum de- 
manding. High speed rail for those 
persons who would find it as an op- 
tion to the use of their automobile 
requires one-third of the energy that 
would be required to propel those 
people from their place of origin to 
destination than would the use of an 
automobile. For those who are using 
an airplane, it uses one-quarter of the 
energy that would be utilized in an 
airplane. 

But beyond the fact it is more ener- 
gy efficient, we would also have a 
chance to be using alternatives to 
petroleum as the means of providing 
that energy. Many of these 
high-speed trains will be electrified. 
They will be operating on energy 
sources such as coal, an important 
new market for that very available 
domestic source of energy. They will 
be operating on electricity generated 
by natural gas, an increasingly impor- 
tant area for the electric energy pro- 
duction of America and a resource of 
which we believe there is considerable 
domestic abundance. We will be oper- 
ating these trains on electrified sys- 
tems where the source of power is 
nuclear, an item which this bill in- 
tends to encourage by making it more 
feasible for utility companies to con- 
struct nuclear facilities. 

I believe rather than question 
whether this is an energy proposal, 
this goes directly to the core issue 
that any American energy policy must 



address, and that is how to reduce our 
overall utilization of petroleum in 
order to conserve the 75 billion barrels 
remaining petroleum within the conti- 
nental United States. 

Is this a transportation issue? We 
cannot, as a nation, continue our level 
of reliance on the automobile and on 
the airplane for intercity - particularly 
relatively closely related intercity 
areas. We have reached almost grid- 
lock on our highway system. 

In 1991, the Senate passed a Sur- 
face Transportation Act. As one of the 
provisions of that act, we have put 
severe limitations on the expansion of 
the Interstate System to meet capaci- 
ty purposes. We came close to adopt- 
ing a policy that said the only expen- 
ditures on the Interstate System will 
be for maintenance purposes and safe- 
ty purposes but not to add lanes for 
capacity. 

As was indicated, if we continue in 
my State to add the population that 
we are doing; which is about 1,000 
people a day, we are going to be up to 
30 and 40 lanes of traffic to gat people 
between south Florida and central 
Florida; between Orlando and Tampa. 
Clearly, that is contrary to national 
policy. Clearly, it is even more con- 
trary to any sense of logic 

We also know that many of our 
close intercity air routes are reaching 
capacity. How many planes can you 
fly between Los Angeles and San 
Francisco? How many planes can you 
fly between Washington and New 
York? How many planes can you fly 
between New York and Chicago, be- 
fore you reach a level of congestion 
that becomes a daily threat to the 
safety and well-being of the commer- 
cial aviation passengers and communi- 
ty? 

I believe it is critical we begin to 



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provide, today, for the complimentary 
transportation system that we must 
have, a system which virtually very 
other nation that is facing the same 
challenges that the United States is 
facing has found to be that comple- 
mentary system, which has been 
high-speed rail. 

The Senator from Ohio raises a 
question of subsidization. The Sena- 
tor from Ohio understands who is 
going to be paying for those 40 lanes 
of interstate, if that is the way we 
move people between Orlando and 
Tampa. That is not going to come 
from Santa Glaus. That is going to be 
subsidized by the taxpayers through 
the form of all of the taxes that will 
be paid directly and all of the public 
expenses that will come indirectly to 
build that kind of massive highway 
system. 

Mr. METZENBAUM. Will the Sena- 
tor from Florida yield for a question? 

Mr. GRAHAM. I will be pleased to 
yield. 

Mr. METZENBAUM. Mr. President, 
is there not a distinction that the 
Senator recognizes that when you 
subsidize, for example, the highways, 
and getting the money from the high- 
way trust fund, and it gets its money 
directly from the sale of gasoline, that 
so much a gallon goes into the high- 
way trust fund? In this instance, it is 
not like that at all. What you are 
doing is reaching out to the working 
people in the State of Ohio, the State 
of Washington, or the State of Penn- 
sylvania, and saying to them, if you 
move, we normally would have per- 
mitted you to deduct your expenses up 
to 35 miles, and we now change it to 
55 miles. So blue collar workers of 
America come along and subsidize this 
railroad project. 

Mr. GRAHAM. I am going to dis- 



cuss the financing of this in a mo- 
ment. The fact is we have already the 
principle that this is an appropriate 
method of financing high-speed rail. 
We have fallen short of the principle 
by requiring a portion of the 
high-speed rail, unlike what we have 
required of airports, sea ports, and 
other forms of transportation. 

The purpose of this amendment is 
to achieve parity. But I would like to 
reserve the opportunity to discuss 
that when I can put it into a fuller 
context. But the fact is we are going 
to move people, we are going to move 
goods. The question is, Are we going 
to do it by what is a much greater 
public cost of enormous interstate 
systems and enormously expanded 
commercial aviation capacity, or are 
we going to provide it in a system that 
virtually every other nation of the 
world, which is of comparable develop- 
ment to the United States, has found 
to be the appropriate complement to 
automobiles, other vehicles and avia- 
tion? 

Third, this is an appropriate policy 
for America in 1992. We are facing the 
prospects of hundreds of thousands of 
very skilled Americans who have 
spent their lives building the strength 
of America militarily facing unemploy- 
ment. Many of those are in the State 
of the Senator from Ohio, the Senator 
from Louisiana, the Senator from 
Wyoming, Idaho. All of our States are 
going to be affected by this. 

While I am not an advocate of an 
industrial policy, I am an advocate of 
the United States having an intelli- 
gent program to try to see how we can 
continue as a nation to take advan- 
tage of this great resource that we 
have spent the last half century or 
more developing. How do we transi- 
tion the technological capability to 



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conceptualize, to design, to produce 
military technology of the highest 
order of sophistication, how do we, 
Mr. President, give those people from 
Connecticut who have been engaged 
in that activity some alternatives for 
the use of their skills. 

I am proud of the fact that Gover- 
nor Clinton has seen, as one part of 
that conversion process, that the 
United States ought to be using this 
time as a time of opportunity to begin 
to develop high technology areas for 
civilian application that can utilize 
the skills of those individuals and 
firms which have been so successful in 
the military applications of technolo- 
gy. 

What better area for us to be doing 
this in than the field of modern Amer- 
ican transportation systems. 

I go back to my introductory story 
about the railroad industry being 
asked, what business are you in? 

And, answering it in a way that 
virtually assured their bankruptcy. 

I think the same question could be 
asked today of many of our aerospace 
and aviation industries. What busi- 
ness are you in? Because I see the 
proper answer to that question not 
being we are in the production of 
airplanes but, rather, we are in the 
production of the highest 
state-of-the-art transportation. The 
people who ought to be building these 
systems are the people who today are 
building F-15's and F-18's and other 
military aircraft. They are the people 
who today are contributing to our 
aerospace program. 

Frankly, the people who probably 
ought to be running these systems are 
the airlines. Their skills in terms of 
the organization of technology for 
transportation, of marketing; of man- 
agement, of computerization, are ex- 



actly the kinds of skills that are going 
to be called upon to operate these new 
forms of transportation. 

So I believe we have a tremendous 
opportunity and challenge to use this 
as one of the core areas of new tech- 
nology for a new post-cold war Ameri- 
ca. If this is not the kind of area in 
which we want to provide new tech- 
nology and opportunities for our peo- 
ple, what are the areas that we want? 
What imaginative ideas we are going 
to come forward with if this is not the 
kind of challenge we should be seeking 
and accepting with enthusiasm? 

Finally, Mr. President, this is a 
proposal which makes eminent envi- 
ronmental sense. We are concerned, 
as we have demonstrated in the Clean 
Air Act, with the reduction of emis- 
sions which will adversely affect our 
environment. We know that the 
greatest single source of those emis- 
sions is motor vehicles. That is why 
we have had such a focus on those 
areas of the country with high concen- 
trations of automobiles and other 
motor vehicles. 

This offers a partial, not only safe 
but environmentally sensitive, alter- 
native to those large numbers of mo- 
tor vehicles. It has proven that in 
Japan, where Japan's bullet train has 
for 40 years had a fatality-free record. 
I do not know if there is a transporta- 
tion system in the history of the world 
that has ever carried so many people 
over such an extended period of time 
at such high rates of speed with such 
a safety record. And the same is true 
of the systems which have been devel- 
oped in Europe. 

The major environmental organiza- 
tions of America are supporting this 
amendment. These include the Na- 
tional Wildlife Federation, the Nation- 
al Audubon Society, the Natural Re- 



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sources Defense Council, Friends of 
the Earth, the Environmental Defense 
Fund, and more. They have seen this 
as not only good energy policy, good 
transportation policy, good policy in 
terms of conversion of military to 
civilian applications, but sound envi- 
ronmental policy. 

If all of these reasons commend a 
strong American initiative to create 
the atmosphere, the environment for 
the development of high-speed rail, 
what are the barriers? We have dealt 
with some of those barriers, Mr. Presi- 
dent, in the 1991 Surface Transporta- 
tion Act. We took some major initia- 
tives, particularly in the area of en- 
couraging the most advanced form of 
high-speed rail, in magnetic levitation. 
We have appropriated $750 million to 
fund major research, development and 
experimentation on magnetic levita- 
tion which many feel will be the domi- 
nant transportation system by the 
midpoint of the next century, if not 
earlier. 

We also did some things that will 
make current high-speed rail technol- 
ogy more accessible such as making 
interstate corridors available for 
high-speed rail. So this Congress, led 
by the Senate, particularly by the 
Senator from New York, has taken 
leadership in this area and recognized 
its importance. 

There continues to be another sig- 
nificant barrier, and that is the lack 
of parity in terms of financing the 
system. 

At this point I would like to return 
to the comments and the questions of 
the Senator from Ohio. The current 
law is as follows: In the area of trans- 
portation, virtually all of the tradi- 
tional means of transportation are 100 
percent available for tax-free financ- 
ing. If you want to build an airport, 



you get 100 percent tax-free financing. 
If you want to build a wharf at a cur- 
rent seaport, 100 percent tax-free 
financing; highway systems, 100 per- 
cent tax-free financing. All of those 
are currently covered. High-speed rail 
is covered. 

You can do tax-free financing, but it 
is the only category in which there is 
a restriction on the amount of tax-free 
financing which is available, and that 
restriction is that 25 percent of the 
tax-free financing has to be within the 
revenue cap applicable to the State or 
States in which the high-speed rail 
system is constructed. 

That may not seem like much of a 
constraint but let me put some num- 
bers behind that limitation. Let us 
assume that you are in a State of 10 
million people. I think that is more or 
less the size of the State of Ohio. The 
cap is based on the population of the 
State, and it is $50 per person. So the 
State of Ohio each year would have 
available to it $500 million for every- 
thing from housing to water and sew- 
er systems to all of the ways in which 
the State and local communities uti- 
lize tax-free financing. 

Because of the scale of these 
high-speed rail systems, and the inten- 
sity, the focused nature in which they 
are constructed and financed, they 
tend to be heavy capital demands for 
short periods of time. For instance, 
the high-speed rail system which has 
been suggested in my State that 
would run from Miami to Orlan- 
do/Tampa has a cost of in the range of 
$4 to $5 billion. That is a lot of mon- 
ey, but that is for a system of over 300 
miles. If you calculate what 300 miles 
of Interstate System would cost, it is 
not such a prohibitive expenditure. 

But let us assume that it was $4 
billion to be financed and it was going 



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to be constructed over a 4-year period 
at $1 billion a year. If you had to 
take 25 percent of that $1 billion, or 
$250 million, and apply it against your 
$500-million-a-year cap, that would 
mean that for 4 years the State of 
Ohio, if that were the State in which 
this were occurring, would have half 
of the funds that would otherwise 
have been available for all that other 
range of activities financed by tax-free 
financing. That is why this provision 
has been such a barrier to States mov- 
ing forward aggressively with consid- 
ering high-speed rail as an alternative 
to highways or airports or other more 
conventional forms of transportation. 

Now, to the Senator from Ohio 
again, I am not terribly enthusiastic 
about the specific form of financing 
that we have found. I might say to 
the Senator from Ohio that that exact 
provision has been suggested in the 
past for a variety of other items. The 
fact is that money is going to flow into 
the national Treasury not earmarked 
to finance high-speed rail. It is just 
going to add to the total aggregate of 
resources in the national Treasury. 
The estimate is that over a 5-year 
period it will produce approximately 
$190 to $200 million. That is the 
estimated cost over the 5-year period 
of making tax-free financing available 
to ail 100 percent of high-speed rail as 
opposed to the 75 percent which is 
currently authorized. 

I underscore that that difference is 
more than just the difference between 
75 and 100 percent. It is the differ- 
ence between zero and 100 percent, 
because unless high-speed rail has 
access on a parity basis with other 
forms of transportation to tax-free 
financing, these systems simply are 
largely not going to be built. 

Therefore, we are going to go into 



the 21st century with largely a 19th 
century transportation system. We 
are going to have missed the opportu- 
nities for enormous energy efficiency 
as we approach the time we are going 
to be exhausting our domestic petro- 
leum reserves. We are going to have 
missed this window of opportunity of 
using this modern, challenging tech- 
nology as a means of assisting in the 
transition from a military to a civilian 
economy. And our environment will 
have lost the benefits of the additional 
benign qualities that are associated 
with high-speed rail. 

So, Mr. President, I believe as a 
legislative body we do not get faced 
with large, dramatic statements of 
ultimate destination for America. We 
get faced with incremental opportuni- 
ties. Today we have one of those in- 
cremental opportunities. I would say 
with a high level of certainty that if 
we adopt this proposal and it becomes 
law, we will see, before this decade is 
out, the commencement of a new form 
of transportation in America which 
over the 21st century will serve our 
children and grandchildren and great 
grandchildren very well. 

If we turn our backs on this oppor- 
tunity today, I think that we are go- 
ing to be consigning those same future 
generations of America to greater 
energy dependence, to a less pure 
environment, and to a transportation 
system that will be systemically con- 
strained in terms of its ability to serve 
our Nation's needs and to contribute 
to an economically competitive Ameri- 
ca. 

Mr. METZENBAUM. Will the Sena- 
tor yield? 

Mr. GRAHAM. Yes. 

Mr. METZENBAUM. I very much 
question who is going to pay for this if 
the amendment of the Senator from 



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Idaho would prevail. It is going to be 
working people. My question to the 
Senator from Florida is, no matter 
how strongly he feels about these 
projects, does the Senator really be- 
lieve that there should not be estate 
taxes, should not be a surtax on the 
wealthy, a special tax on those with 
incomes over $200,000 or $1 million a 
year, there should not be a tax on 
corporations, they should not bear a 
part of the burden? 

Why is it that you come before us 
with this proposal to stick it to the 
average Joe, the working Joe? 

Mr. GRAHAM. First, Senator, what 
we are doing, current law as I under- 
stand it is that if you move more than 
35 miles that you can deduct the cost 
of that move. This amendment would 
say you now have to move 55 miles in 
order to take advantage of this. 
Whatever you think about that as a 
matter of tax policy, it is not an over- 
whelming issue to say that you have 
to have moved an additional 20 miles 
in order to have been able to take 
advantage of the ability to deduct 
your moving expenses from your Fed- 
eral income tax return. 

Mr. METZENBAUM. It is not over- 
whelming unless you happen to be the 
guy who is paying it, and the working 
guy who is moving a little bit further 
down the road. 

Mr. GRAHAM. I am concerned 
about the working guy who is current- 
ly working for a defense facility in 
Connecticut who may have a job if 
this Nation commits itself to develop- 
ing modern forms of technology in- 
cluding high-speed rail. 

Mr. METZENBAUM. I do not have 
any quarrel about the high-speed rail. 

Mr. GRAHAM. I am concerned 
about the position that working man 
is going to be in 25 years from now 



when the last of the American petro- 
leum comes up out of the ground 
probably at ANWR because we had 
drilled that last remaining reserve of 
American petroleum. I am concerned 
about what that is going to mean to 
the national security of that working 
man and woman and every other 
American. 

Mr. METZENBAUM. I would say to 
my colleague, first of all my friend 
from Idaho is one of those who is 
strongest against increasing taxes. 
Every time we talk about increasing 
taxes, they blame that all on Demo- 
crats. This is an increase in taxes, no 
argument about it. This is an in- 
crease in taxes. 

I think that there may be a need for 
some increase in taxes on those who 
are able to pay. So I say to my friend 
from Florida, my friend from Idaho, if 
you think this amendment is so great, 
why do not you provide for a surtax 
on millionaires, or a tax upon those 
who have an income over a particular 
amount, or on estates that are beyond 
a certain amount? Why do not you do 
that? Instead of that, no, the faceless, 
nameless, working people in this coun- 
try are being called upon to pay the 
bill. 

Mr. SYMMS. If the Senator will 
yield. 

First off, I would just say to my 
colleagues that the reason we do this 
is because of the 1990 Budget Act. As 
far as I am concerned, I think I could 
empirically prove to the Senator from 
Ohio that we should not have an off- 
set in it because this is going to make 
money for the Federal Treasury. The 
Texas project is going to have $1.9 
billion in tax-exempt bonds, $3.4 bil- 
lion in taxable bonds, $1.7 billion in 
equity financing. They are going to 
hire 12,000 people, pay them $15 an 



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hour, and they are all going to be 
paying taxes. 

We are sitting in here arguing about 
some Mickey Mouse thing. I agree 
with the Senator. I do not like to do 
it, but I am trying to go by the rules 
and the law. I think we ought to fire 
ail the people that work for the 
tax-writing committees that use static 
financing. We ought to go back and 
do this on growth-oriented models. 
But that is not what we are debating 
here today. 

So my colleagues in the Senate, do 
not let the Senator from Ohio get this 
distorted from what the fact is. This 
is the least painful way we can find to 
make this thing fit in the budget. 

I did not vote for the 1990 Budget 
Act. I do not know how the Senator 
from Ohio voted. That is why we are 
doing it. 

Mr. GRAHAM. I would like to also 
point out to the Senator from Ohio 
that I believe yesterday he supported 
a series of amendments that the Sena- 
tor from Arkansas and I introduced 
which held the overhead constant in 
just three Federal agencies: Com- 
merce, Justice, and State. If those 
provisions are sustained throughout 
the appropriations process and then 
carried forward in future years, those 
will produce about three times more 
revenue savingB than this proposal 
will entail in terms of a tax loss. 

So I appreciate the Senator's con- 
cern for fairness in taxation, a con- 
cern that I share. I wish we had a 
different and more perfect world in 
which to operate. But we deal with 
the world as we find it. I believe that 
the world as we find it will be better 
served by making this minimal Feder- 
al commitment toward the accom- 
plishment of a very significant nation- 
al goal. 



The PRESIDING OFFICER (Mr. 
Conrad). Under the previous order the 
Senator from Louisiana is recognized. 

Mr. JOHNSTON. Mr. President, as 
I had stated earlier, the Finance Com- 
mittee is going to meet in a little less 
than 1 hour, at 5 p.m. This tax ex- 
tender measure will be the measure to 
be considered at that time. 

Mr. President, Senators are simply 
going to have to be cooperative with 
us and let us get on with this bill. If 
this becomes a grab bag, we are not 
only going to be here all night, but we 
are not going to be able to get an en- 
ergy bill. 

I wanted to be considerate to Sena- 
tors in their ability to speak. I believe 
the Senator from Pennsylvania want- 
ed 2 minutes. 

Mr. President, I ask unanimous 
consent that the Senator from Penn- 
sylvania be recognized for 2 minutes 
after which I be recognized to make a 
motion to table. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. SPECTER. Mr. President, I 
sought the floor for a brief period to 
lend my support to the pending 
amendment because I believe 
high-speed ground transportation is 
very, very important to the develop- 
ment of this country. 

This is a subject that I have been 
working on for the better part of a 
decade, in conjunction with State 
Representative Richard Geist from 
Altoona, PA. There are very elaborate 
plans in Pennsylvania for the develop- 
ment of a high-speed train system, 
with Pittsburgh as the center for the 
development of maglev technologies. 

It is a marvelous projection to think 
of a train running from Philadelphia 
to Pittsburgh in 2 hours and 7 min- 
utes with intermediate stops at 



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Lancaster, Harrisburg, State College, 
Altoona, Johnstown, Greensburg, and 
Pittsburgh. Such a system would be 
very development for this country. It 
is high time we move ahead with real 
development of our Nation's infra- 
structure on capital investments 
which will yield great fruits to this 
country. 

I commend my colleague from Ida- 
ho, and my colleague from Florida, for 
advancing this proposal. I have no 
illusions about this being adopted 
here. I think the debate has been 
very constructive. I do hope that it 
will be adopted one day soon. 

I thank my colleague from Louisi- 
ana. I thank the Chair. 

The PRESIDING OFFICER. Under 
the previous order the Senator from 
Louisiana is recognized. 

Mr. JOHNSTON. Mr. President, 
this is a very far-reaching amend- 
ment. If my motion to table fails, 
frankly we are here for a long time 
just on this amendment. 

I know the Senator from Ohio has 
second-degree amendments. They will 
be very long, and it is a weighty issue, 
Mr. President. 

In 55 minutes the Finance Commit- 
tee is going to be open for business. 
The Senator from Idaho, the chief 
sponsor of this amendment, is a mem- 
ber of that committee and he can 
bring this up. If it is a good idea, let 
him at least get the advice of the Fi- 
nance Committee. At least give them 
a bite, if they want to do it, at decid- 
ing how they are going to finance it, 
whether they finance it with increas- 
ing the number of miles with the 
move from 35 to 55, as the Senator 
from Idaho as he suggested, or maybe 
some kind of alternative kind of tax 
that he would propose. 

In any event, Mr. President, on 



behalf of the distinguished Senator 
from Wyoming (Mr. Wallop) and my- 
self, I move to table the amendment. 
I ask for the yeas and nays. 

The PRESIDING OFFICER. Is 
there a sufficient second? There is a 
sufficient second. 

The yeas and nays were ordered. 

The PRESIDING OFFICER. The 
question is on agreeing to the motion 
of the Senator from Louisiana (Mr. 
Johnston) to lay on the table the 
amendment of the Senator from Idaho 
(Mr. Symms). On this question, the 
yeas and nays have been ordered, and 
the clerk wul call the roll. 

The assistant legislative clerk called 
the roll. 

Mr. FORD. I announce that the 
Senator from Louisiana (Mr. Breaux), 
the Senator from North Dakota (Mr. 
Burdick), the Senator from California 
(Mr. Cranston), and the Senator from 
Tennessee (Mr. Gore) are necessarily 
absent. 

Mr. SIMPSON. I announce that the 
Senator from North Carolina (Mr. 
Helms) is absent due to illness. 

I further announce that, if present 
and voting, the Senator from North 
Carolina (Mr. Helms) would vote 
'nay.' 

The PRESIDING OFFICER. Are 
there any other Senators in the 
Chamber who desire to vote? 

The result was announced • yeas 40, 
nays 55, as follows: 

(ROLLCALL VOTE NO. 161 LEG.) 

YEAS -40 

Akaka Baueus Benton 

Baden Bond Boren 

Bradley Bumpers Byrd 

DeConcini Dixon Dodd 

Ford Glenn Gramtn 

Hatfield Heflin Hollinp 

Inouye Johnston Kennedy 

Lautenberg Leahy Levin 



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IJoberman 


Lugar 


McCain 


Motsonbeui 


Packwood 


Pryor 


Rockefeller 


Sanford 


8arbanes 


Shut 


Seymour 


Shelby 


Simpson 


Smith 


Wallop 


WeUstone 


NAYS- 66 




Adams 


Bingsjnen 


Brown 


Bryan 


Burns 


Chafes 


Coats 


Cochran 


Cohen 


Conrad 


Craig 


D'Amato 


Danforih 


Daschle 


Dole 


Domenid 


Durenberger 


Exon 


Fowler 


Garn 


Gorton 


Graham 


Grassloy 


Harkin 


Hatch 


Jaflbrds 


Kassshaui 


Kaatsn 


Karray 


Kerry 


Kohl 


Lott 


Mack 


MeConnaU 


Mikulski 


Mitchell 


Moynihan 


MurkowskJ 


Nickles 


Nunn 


Pell 


Praemler 


Raid 


Riagla 


Robb 


Roth 


Rudman 


Simon 


gptHtr 


Stavans 


Symms 


Thurmond 


Warner 


Wirth 


WoUora 








NOT VOTING - 6 


Breaux 


Burdick 


Cranston 



Gore 

So the motion to lay on the table 
the amendment (No. 2784) was reject- 
ed. 

Several Senators add ressed the 
Chair. 

The PRESIDING OFFICER. The 
Senator from Louisiana. 

Mr. JOHNSTON. Mr. President, 
the motion to table was not accepted. 
I think the Senate has spoken on this. 
I hope the Senator from Ohio will be 
willing to go ahead and let us voice 
vote the amendment. 

Mr. METZENBAUM. Not at this 
point. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll 

The bill dark proceeded to call the 
roll. 



Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that we tem- 
porarily lay aside the instant measure 
in order to consider a Pressler amend- 
ment on pepeline safety. 

The PRESIDING OFFICER. Is 
there objection?. 

Mr. METZENBAUM. Is there any 
time limit? 

Mr. JOHNSTON. Mr. President, we 
intend to accept the amendment, real- 
ly, without debate. 

The PRESIDING OFFICER Is 
there objection to the request of the 
Senator from Louisiana? 

Without objection, it is so ordered. 

The Senator from South Dakota is 
recognized. 

AMENDMENT NO. 27*6 
(Purpose: To amend the Hazardous liquid Pipe- 
line Safety Act of 1979) 

Mr. PRESSLER. Mr. President, I 
send an amendment to the desk and 
ask for its immediate consideration. 

The PRESIDING OFFICER. The 
clerk will report. 

The bill clerk read as follows: 

The Senator from South Dskota (Mr. Pressler) 
proposes an amendment numbered 27M. 

Mr. PRESSLER. Mr. President, I 
ask unanimous consent that reading 
of the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

At the appropriate piece, insert the following: 
SBC. . AMENDMENT. 

Ths Haiardoue Liquid Pipeline 8cfoty Act of 
1979 (49 App, U.S.C. 2001 ot eeq.) m ■ wended ay 
adding at the end thereof the following new eeo- 
tion: 
•8BC. 220. FIELD PERSONNEL. 

'(a) In General. - To the aslant and in sush 



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i as are provided in advance in appropria- 
tion Ada, the Secretary of Transportation, in 
fiscal year IMS, ahall employ end maintain 
thereafter an additional 12 pipoline field person- 
nel above the number of field personnel autho- 
rised for fiaeal year 1992 for the Research and 
Special Programs Administration. These person- 
nel will work primarily on public water supply 
protection and other environmental public health 
and safety aspects of pipeline regulations. The 
Secretary ahall take such action aa may be neces- 
sary to assure that the activities of such addition- 
al field personnel focus on - 

'(1) inspecting intrastate hazardous liquid 
pipeline facilities in those States that do not have 
a hazardous liquid pipeline safety program that 
meets the requiremente of subsection (a) or (b) of 
section 206 of this title; 

'(2) assisting the States identified under para- 
graphs (1) and (3) in developing hazardous liquid 
pipeline safety programs that meet the require- 
mente of su b s ect ion (a) or (b) of section 206 of 
this title; 

'(3) inspecting interstate hazardous liquid 
pipeline facilities constructed prior to 1971; and 

'(4) providing technical assistance and training 
to State pipeline inspectors and assisting in the 
review and management of pipeline safety granta. 

'(b) Assignment of Field Personnel. • The addi- 
tional field personnel provided under subsection 
(a) ahall be assigned by the Secretary to the Re- 
search and Special Programs Administration 
pipeline safety regional offices on the basis of the 
extent to which - 

'(1) hazardous liquid pipelines constructed 
prior to 1971 exist in s region; 

'(2) there are in e region States having intra- 
state hazardous liquid pipeline facilities that do 
not have a hazardous liquid pipeline safety pro- 
gram meeting the requiremente of subsection (a) 
or (b) of section 206 of this title; and 

'(3) there are other factors, including those 
baaed on public water eupply protection and oth- 
er environmental public health and safety con- 
cerns, which the Secretary deems relevant to 
improving the extent and quality of Federal and 
State hazardous liquid pipeline safety programs. 

'(c) Funding. - Ths Secretary of Transportation 
may use such sums as may be necessary of funds 
appropriated pursuant to section 17(e) of the 
Natural Gaa Pipeline Safety Act of 1968, aa 
amended, and section 214(a) of the Hazardous 
Liquid Pipeline Safety Act of 1979, aa amended, 
to carry out this section/. 

Mr. PRESSLER. Mr. President, I 
introduced this amendment as a free 



standing bill, S. 2375, on March 20, 
1992, because I am deeply committed 
to helping prevent any further envi- 
ronmental disasters like the one that 
recently occurred in my home State of 
South Dakota. 

We need pipelines throughout our 
Nation to move energy resources, 
including a variety of fuels and natu- 
ral gas. These pipelines are vital • 
both for economic and national securi- 
ty reasons. However, they also repre- 
sent a potential environmental haz- 
ard. When they leak, the consequenc- 
es can be devastating. I am offering 
this amendment because this risk can 
be mitigated best by increasing the 
number of Federal inspectors for haz- 
ardous liquid pipelines. 

Now, let me share with you some of 
the facts surrounding a recent inci- 
dent in South Dakota. On January 13, 
1992, the Williams Pipeline Co. report- 
ed a fuel leak near Sioux Falls, SD, to 
the Office of Pipeline Safety at the 
Department of Transportation. 

I was alarmed to learn of this leak, 
as were many of my constituents. 
Any leak is of concern, but this one 
was most disconcerting. First, the 
lead went undetected for nearly 6 
months. Second, it occurred only 
three-fourths of a mile from a major 
aquifer in eastern South Dakota 
which serves as the primary water 
supply for our State's largest popula- 
tion center. Third, the original esti- 
mated size of the leak was literally 
only bucketfuls. However, further 
examination resulted in estimates of 
some 400,000 gallons, making it the 
largest lead in the history of South 
Dakota. Revised estimates are now 
closer to 200,000 gallons. To date, 
over 160,000 gallons have been recov- 
ered and pumps are still recovering 
product. A leak of this magnitude 



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certainly should have been detected 
earlier. 

So, Mr. President, to paint the pic- 
ture of what happened at that major 
pipeline leak; it was detected 6 
months late; it was first reported as a 
very small leak. Then it was realized 
that it was huge - the largest leak in 
a pipeline in our State's history; and, 
fortunately, it did not reach the aqui- 
fer but it was only a half or 
three-quarters of a mile away. The 
point I am making is that we had a 
major leak that almost went undetect- 
ed until it was too late. It was the 
worst, but it was not the first. I fear 
it will not be the last. My amendment 
is designed to reduce the risk. 

Mr. President, I feel very strongly 
that everything possible must be done 
to prevent such leaks from occurring 
in the future. They are too costly to 
the environment and to everyone 
involved. Therefore, I carefully studied 
what happened in this case. South 
Dakota and other States that have 
this type of pipeline ought to be con- 
cerned over the possibility of future 
leaks. However, the number of such 
leaks can be reduced through a coordi- 
nated effort by Federal, State, and 
local government officials, and private 
industry leaders. 

I serve on the Commerce Subcom- 
mittee on Surface Transportation. 
Last year, the Senate passed, by voice 
vote, S. 15S3, the Pipeline Safety Im- 
provement Act of 1991. This legisla- 
tion will help address the safety of 
pipelines in a number of important 
ways. But it is not enough. 

Since this leak was reported, I have 
carefully revisited this issue. First, I 
was briefed in detail by Mr. George 
Tenly, Associate Administrator for 
Pipeline Safety, head of the Office of 
Pipeline Safety. I learned many specif- 



ics regarding safety and inspection 
procedures on the section of pipeline 
in question, as well as the pipeline 
inspection program in general. 

The enormous task of inspecting 1.8 
million miles of pipeline in this coun- 
try under Federal inspection jurisdic- 
tion falls on only 24 Federal inspec- 
tors. So, for our entire nation with 
1.8 million miles of pipeline, we have 
only 24 Federal inspectors. 

Mr. Steve Cropper, president of 
Williams Pipeline, met with me to 
explain the industry aide of this criti- 
cal issue. I was pleased to learn sever- 
al new technological advances were 
being applied to assist the industry in 
deterring future leaks. As I continued 
to study this matter, I worked closely 
with officials in my home State that 
deal with pipeline safety, learning the 
problems they face. 

Currently, hazardous gas and liq- 
uids are transported via pipelines 
throughout the United States. Of the 
approximately 1.8 million miles of 
pipeline, roughly 1.6 million miles are 
natural gas pipelines and 155,000 
miles of pipeline transport hazardous 
liquids. The leak in South Dakota 
falls in the latter category. 

Mr. President, 48 States have their 
own natural gas pipeline safety inspec- 
tion programs. However, only 10 
States have a similar program for the 
inspection of hazardous liquid pipe- 
lines. 

The Federal Government retains 
primary inspection responsibilities for 
pipelines in those States without their 
own programs, but the Federal office 
is understaffed. States need greater 
assistance from the Federal Govern- 
ment in implementing their own in- 
spection program. 

This problem must be corrected. 
My amendment would do the follow- 



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4329 



ing: First it adds 12 new Federal pipe- 
line safety inspectors above the num- 
ber authorized for fiscal year 1992 - a 
50-percent increase. Second, these 
inspectors will focus specifically on 
inspections in States that do not have 
their own hazardous liquid pipeline 
safety programs in place. 

Third, inspectors would provide 
technical assistance and training to 
these States to help them develop 
their own pipeline safety programs. 
These personnel will focus primarily 
on public water supply protection and 
other environmental public health and 
safety aspects of pipeline regulations. 

They will pay particular attention 
to pipelines constructed prior to 1971 
which are more likely to develop prob- 
lems. They will assist States in the 
review and management of pipeline 
safety grants. These provisions, to- 
gether with others, offer a good first 
step in improving overall pipeline 
safety. 

South Dakota Department of Envi- 
ronment and Natural Resources Sec- 
retary Robert Roberts fully supports 
this amendment. The fact of the 
matter is that States are usually in a 
much better position to handle these 
inspections than is the Federal Gov- 
ernment. They best understand the 
intricacies of their own State. In addi- 
tion, the local citizens are in closer 
contact with State officials than re- 
gional Federal offices. 

The bottom line, Mr. President, is 
that local, State, and Federal govern- 
ments, as well as the pipeline indus- 
try, must cooperate in improving pipe- 
line safety. By providing greater as- 
sistance to those States that need it 
most, my amendment will provide a 
first step to improving overall pipeline 
safety. 

So, Mr. President, to conclude, let 



me say I think that our entire Nation 
can look to the spill that occurred 
near Sioux Falls, SD, as an example of 
the dangers to which the public and 
the environment can be subjected if a 
pipeline leaks. We certainly need 
pipelines throughout our Nation to 
move energy, to move gas, to move 
natural gas. We certainly need to 
improve the technology of pipeline 
safety. But we also must have prompt 
pipeline inspection and notification so 
that any problems can be corrected. 

My amendment would be a step 
forward. It would add 12 additional 
Federal pipeline inspectors. It would 
improve the cooperation between Fed- 
eral, State, and local governments. 

I think we can learn from the near 
disaster that took place near Sioux 
Falls, SD. I think we can improve 
pipeline safety throughout our Nation. 
It is a subject to which we need to pay 
attention because the transportation 
of energy is so important to our citi- 
zens. But that transportation must 
be safe. 

Mr. President, finally I would point 
out that the Office of Pipeline Safety 
is funded through user fees and is 
authorized to increase those fees to 
cover amounts needed for this type of 
program. Therefore, this amendment 
costs the taxpayer nothing. Indeed, it 
is cost effective for the pipeline indus- 
try as the cost of the expanded pro- 
gram would be less than the cost asso- 
ciated with the cleanup of many indi- 
vidual fuel spills. I urge the adoption 
of my amendment. This additional 
State oversight is very desperately 
needed. 

Mr. JOHNSTON. Will the Senator 
yield? 

Mr. PRESSLER. Yes. 

Mr. JOHNSTON. Mr. President, I 
am advised that the Senator from 



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Sooth Dakota has dmcvmti this with 
the CoaanorceCVifnmtttoo, which does 
ban* jurisdktaon over this matter. 

Mr. PKE8SLER Mr. President, I 
cannot say the Commerce Committee 
hat daarad it; 1 do net know. I have 
disnissirt it. 1 am a rnomhtr of tha 
Commarea Committaa. Wa had hoped 
for a hearing on it, hut it did not ma- 
terialize. It waa not denied, either. 

Mr. JOHNSTON. Mr. President, I 
behove tha Senator from Wyoming; 
tha distinguished ranking minority 
member, and myself are willing to 
take this to conference, and we will 
aeek the advice of the Commerce 
Committee in the meantime. 

But we are willing to take this to 
conference, 

Mr. PRESSLER Mr. President, is 
my friend saying to me if the Com- 
merce Committee somehow wants 
jurisdiction over this, which they 
could have exercised, that it will be 
taken out in conference? 

I really would like to go to a vote, if 
I need to have a stronger hand in 
conference. 

Mr. JOHNSTON. Mr. President, I 
thought this would be a matter we 
could accept. If the Senator wishes to 
wait, we may well oppose it later. But 
that is up to him. 

Mr. PRESSLER Well, if the Sena- 
tor will accept it - 1 will always take 
an amendment if I can get it passed. 
But I would not want the implication 
to be that it is going to be taken out 
in conference. 

The Senator will give me a fair shot 
in conference? 

Mr. JOHNSTON. Mr. President, 
what I am saying is that the Com- 
merce Committee has jurisdiction over 
this matter. If they are against it, I 
am sure it would weigh very heavily 
with me as one member of conference, 



and I am sure with other 
Indeed, if we want to 
debate here 91* get the 
Committee over to talk 
matter at this time, I a 
would make it difficult to 



tha 
it 
hare, 



Mr. PRESSLER If the Senator wffl 
take the amendment, I wul agree to 
that. I am a member of the Com- 
merce Committee, and I am 99 per- 
cent sure that I can persuade them 
not to have any objection to it. Fa- 
mous last words. 

Mr. WALLOP. Mr. President, I echo 
the words of the distinguished com- 
mittee chairman. 

There is also, I say to my friend, yet 
another piece of relevant legislation 
coming through to which he could add 
this amendment, and that is the De- 
partment of Transportation Appropri- 
ations Act, upon which the Senate has 
yet to act. 

Mr. PRESSLER. Mr. President, 
someone told me that would be legis- 
lating on an appropriations bill. 

Mr. WALLOP. The Senator can do 
as he wishes. The Senator from Loui- 
siana and I are willing to accept the 
amendment, Mr. President. 

Mr. PRESSLER I am glad to hear 
that. I thank the Senator very much. 

The PRESIDING OFFICER la 
there further debate on the amend- 
ment? 

If not, the question is on agreeing to 
the amendment. 

The amendment (No. 2785) waa 
agreed to. 

Mr. JOHNSTON. Mr. President, I 
move to reconsider the vote by which 
the amendment was agreed to. 

Mr. PRESSLER. I move to lay that 
motion on the table. 

The motion to lay on the table • 
agreed to. 



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Mr. DASCHLE. Mr. President, I 
wish to state my support for the 
amendment from my colleague from 
South Dakota, Senator Pressler, relat- 
ing to pipeline safety. It is a good 
first step to improving pipeline safety 
and it should be enacted. 

In South Dakota, we have seen the 
pitfalls of shoddy pipeline manage- 
ment. As a result of a crack in the 
product pipeline between Alexandria, 
MN, and Sioux Falls, more than 
200,000 gallons of gasoline spilled 
beneath and onto a field near Renner, 
SD. Renner is just 4 miles north of 
Sioux Falls, the largest city in the 
State, and the spill occurred less than 
a mile away from the edge of the aqui- 
fer that provides the drinking water 
for Sioux Falls. After the leak was 
discovered, by a farmer walking in his 
field who suddenly discovered he was 
ankle-deep in gasoline, we learned 
that the pipeline must have been leak- 
ing for weeks, and the 200,000 gallons 
of lost product was never noticed to be 
missing by the owner of the pipeline, 
the Williams Pipe line Co. 

Clearly, the current system is inade- 
quate to protect the people from spills 
like the one we experienced in 
Renner. I still do not understand how 
that much product can be lost without 
anyone noticing. 

Adding 12 more inspectors to the 
Office of Pipeline Safety is a good first 
step. But I must be frank, I do not 
know if it would have made a differ- 
ence in Renner if we had had even 
100 more inspectors. Unless you have 
better and more comprehensive moni- 
toring; inspection, and reporting re- 
quirements, it will be simply impossi- 
ble to have enough inspectors in the 
right places at the right times. Unless 
we can establish better mechanisms 
for States to assume partial regulato- 



ry control over interstate pipelines, 
those with the most direct contact 
with the pipelines will have only limit- 
ed input. Finally, unless we can es- 
tablish comprehensive, nationwide 
standards for aboveground storage 
tanks, we may get the product into 
the tank farms safely only to have it 
leak away there. This has also been 
the experience in Sioux Falls as well 
as Fairfax, VA, and so many other 
places. 

On the last point, Senator Robb and 
I have legislation, S.1761, pending 
before the Senate Environment Com- 
mittee that would establish compre- 
hensive regulations for aboveground 
storage tanks. It was our intention to 
have this bill become a part of the 
RCRA reauthorization this year, but 
it now seems that this will have to 
wait until the next Congress. With 
regard to improving pipeline safety, it 
is imperative that Congress pass the 
long-stalled Pipeline Safety Act 
reauthorization, and that improved 
environmental safeguards be adopted, 
as well as better mechanisms to estab- 
lish State jurisdiction over interstate 
pipelines. 

In closing, I thank my colleague 
from South Dakota for offering this 
amendment, and I hope we can use 
this momentum to address the larger 
problem of pipeline and storage tank 
safety. 

The PRESIDING OFFICER. The 
Senator from Virginia. 

Mr. ROBB. Mr. President, I rise 
today - - 

The PRESIDING OFFICER. The 
Chair alerts the Senator from Virginia 
that the Symms-Gramm amendment 
is the pending business before the 
Senate. 

Mr. ROBB. Thank you, Mr. Presi- 
dent. I ask unanimous consent that 



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the Symms-Gramm amendment be 
temporarily set aside. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. ROBB. Mr. President, I rise 
today in support of the pending ener- 
gy legislation. 

This bill represents that which is, at 
the moment, politically possible. 

The chairman of the Energy Com- 
mittee, Senator Johnston, has done a 
masterful job, of crafting a bill which 
has the broad support, of environmen- 
talists; support from industry; support 
from the administration. 

The first vote on this bill, in the 
Senate was 94 to 4, and in the House, 
the margin was more than 10 to 1 
(3S1 to 37). 

I support the measure, as far as it 
goes, because it does take some impor- 
tant steps to wean our Nation from 
its overreliance on imported oil. 

But the truth is that this bill is 
missing what is the most potent tool 
available, to reduce our reliance on 
imported oil: shifting taxation from 
income to the motor fuels pump. 

By shifting, without increasing, the 
existing burden of taxation, we can 
encourage Americans to buy more fuel 
efficient cars, to car pool, and to use 
alternative forms of transportation. 

Changing the point of tax collection 
can save us millions of barrels of oil, 
unleash investment into alternative 
fuels, and reduce the risk of global 
warming. 

Omission of the gas tax in this ener- 
gy bill has not gone unnoticed by 
those outside the Halls of Congress. 

When the energy bill passed the 
House in late May, the New York 
Times headline read: 'Congress Ap- 
pears on the Verge of Creating A Na- 
tional Policy That Does Not Cover 
Oil.' 



The piece quoted Wilfrid L. Kohl, 
director of the International Energy 
Program at the Johns Hopkins School 
of Advanced International Studies. 

'I would call (the bill) a positive first 
step on the way to something we don't 
ever seem to achieve, which is a com- 
prehensive national energy policy,' 
Kohl said. 

Such a policy, he said, would re- 
quire a stiff gasoline tax. 

The article also quoted Eli Berg- 
man, director, of Americans for Ener- 
gy Independence. 

'Senators and Congressmen will 
whisper that the thing that would do 
the most would be a $1 hike, in the 
gasoline tax,' Bergman said. 

He continued: 'They'll whisper it, 
but they won't do anything abut it.' 

In June, the Washington Post ran 
an op-ed by J. Robinson West, presi- 
dent of the Petroleum Finance Co., 
Ltd., declaring: 

The energy bill • • • ignore*, llio fundamental 
issue, surrounding energy, and represents s 
refusal, to make, difficult choices. 

He continued, 

Congress, snd the administration know how to 
reduce our reliance on oil. but they arc loo timid 
to act. 

He went on: 

Almost every other governinoul has had the 
eoursge to raise the price of gasoline, with the 
result being enhanced fuel efficiency, and conser- 
vation. Unfortunately, a gasoline lax is consid- 
ered s grudge tax that Americans don't want to 
pay, and their politicians, on either side of the 
aisle, snd both ends of Pennsylvania Avenue are 
not about to propose it oven if they know, it will 



I did raise the gas tax issue on the 
first go around with this energy bill. 

Realizing that this question is a 
very sensitive one, I offered a modest 
amendment, expressing the sense of 
the Senate that the Congressional tax 
committees study the question of 
whether we ought to shift some of the 



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existing income tax burden to motor 
fuels. 

The concept is straightforward: 
Reduce the income tax which on the 
margins discourages people from 
working and investing and place the 
tax instead where it will result in 'less 
pollution' and 'greater security'. 

If a phased-in 40-cents-per-gallon 
increase were chosen the tax credit 
would amount to $215 for individuals 
and $431 for married couples filing 
jointly according to Joint Tax Com- 
mittee estimates. 

This proposal should not be all that 
hard to swallow. 

I personally would prefer a tougher 
approach, and have long advocated 
using revenues from an increase in 
the gas tax, to reduce the budget defi- 
cit, and/or invest in our basic infra- 
structure. 

And I am pleased that recent pro- 
posals put forth by Paul Tsongas and 
Ross Perot to reduce the deficit, by 
increasing the gas tax by 50 cents, 
have been received favorably by seri- 
ous observers. 

But I have been persuaded that if 
we try to hit two birds at once • ener- 
gy conservation and deficit reduction 
- we are likely to end up with neither. 

So for now, I am pushing a tax shift 
rather than a tax increase. And will 
continue to pursue deficit reduction 
through other measures. 

My amendment to study tax shift- 
ing, which was adopted in February 
and is part of the pending bill, repre- 
sents a small step forward on an ex- 
tremely difficult issue. 

I do not plan to offer an amend- 
ment to increase the gas tax, at this 
time. 

I realize that in an election year, 
the chances of passage are virtually 
nil, and that a negative vote now, on 



this issue, could actually damage its 
chances, in the future. 

I am willing to be patient, because I 
am confident that once the Finance 
Committee looks at the gas tax more 
closely, the rationale for reform in 
this area will grow; and that building 
on existing information, we will, over 
time, forge an overwhelming argu- 
ment, that a serious national energy 
policy requires the imposition of a 
conservation tax. 

The case is already building. 

Since the Senate adopted my 
amendment in February, two indepen- 
dent studies have further strength- 
ened the case for imposing a conserva- 
tion tax on motor fuels. 

In April, the National Research 
Council, the research arm of the Na- 
tional Academies of Science and Engi- 
neering, released a 10-month study 
which found that increasing gasoline 
prices, was in many ways, a more 
preferable way of achieving energy 
conservation, than increasing CAFE 
standards. 

The study, entitled 'Automotive 
Fuel Economy: How Far Should We 
Go?' found that while CAFE stan- 
dards are at odds with market signals 
- because increasing efficiency makes 
driving cheaper - increasing fuel pric- 
es would send an unmistakably, clear 
signal, to conserve. 

In June, the World Resources Insti- 
tute came out with a fascinating 
study, which found that the economic, 
environmental, health and security 
costs of driving, not covered by the 
current gasoline tax, total $300 billion 
a year. 

To accurately reflect the true costs 
of driving - highway construction and 
maintenance, highway services, com- 
muter parking, air pollution, global 
warming, national security risks, con- 



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gestion, accidents, and noise - the 
study found that motor fuels taxes 
should rise more than $2 per gallon 
above their current levels. 

Now, I realize that most politicians 
think that voters will not understand 
issues of externalities and social costs; 
but make no mistake: The American 
public knows the cost of foreign oil 
dependence all too well. 

They know that in the late 1970's, 
our dependency cost us jobs, while in 
the early 1990's, it cost us lives. 

They know that more than 100 of 
our Nation's cities are so polluted, in 
large part by automobile emissions, 
that they do not meet Federal clean 
air health guidelines. 

They know the gridlock they face 
commuting each morning is getting 
worse and worse. 

Mr. President, I am determined to 
move forward on this issue. 

I am advised that pursuant to the 
sense of the Senate amendment, the 
Finance Committee has requested 
that the Congressional Research Ser- 
vice (CRS) study this issue. 

I think this is a positive step, but it 
is my hope that once this study is 
complete, the Finance Committee will 
hold hearings on this subject. 

I know that when I testified before 
the Finance Committee in 
mid-February, the chairman stated 
his interest in considering this propos- 
al, and I look forward to working with 
him, on this issue in the future. 

Mr. President, I thank the Chair. I 
thank the chairman of the Energy 
Committee for permitting me to offer 
these few words. I yield the floor. 

Mr. JOHNSTON. Mr. President, 
what is the pending business? 

The PRESIDING OFFICER. The 
pending business is the Symms Gra- 
ham amendment, which recurs. 



Mr. JOHNSTON. Mr. President, 
Senator Metzenbaum has now re- 
moved his objection, and we are ready 
for the adoption of that amendment. 

The PRESIDING OFFICER. If 
there be no further debate, the ques- 
tion is on agreeing to the amendment. 

The amendment (No. 2784) was 
agreed to. 

Mr. GRAHAM. Mr. President, I 
move to reconsider the vote. 

Mr. JOHNSTON. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. JOHNSTON. Mr. President, we 
are now ready for the Rockefeller 
amendment which is, as I look over 
this list of potential amendments, 
really the last really essential amend- 
ment to be considered. That is not to 
say that it will be the last amendment 
to be considered. So let the word go 
out to Senator Rockefeller, wherever 
he is, to please come in and deal with 
his amendment. In the meantime, I 
suggest the absence of quorum. 

Mr. WALLOP. Mr. President, will 
the Senator withhold? 

Mr. JOHNSTON. Mr. President, I 
withhold. 

Mr. WALLOP. Let me add my 
urgingB to those of the committee 
chairman. This is an amendment 
which I think will arrive without need 
for considerable debate or controversy. 
But if that is not the case, it really 
belongs being in front of the Senate as 
soon as possible so that we can dispose 
of the amendment. A great deal of 
work has gone into the negotiations 
that brought us to this point, and the 
Senate needs time to consider it care- 
fully. 

I do not have any idea how long it 
may be debated, but should there be a 
desire to have extended debate, the 



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Senate is entitled to have the debate 
begin aa soon aa possible. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, we 
have just asked for a hot line to go 
out to ask Senators if they have addi- 
tional amendments. We know there is 
a Rockefeller amendment which we 
are prepared to accept basically with- 
out debate, unless there is some unex- 
pected gUtch m the amendment. The 
rest of these amendments appear to 
us, Mr. President, to be the kind of 
amendments that may, and we hope 
will, go away when pressed to the 
issue. 

So we are putting out a hot line. If 
we are lucky, we can finish this up in 
time for everyone to get away for an 
early dinner. If Senators are really 
serious about some of these amend- 
ments, we may be here several days. 
We hope it is an early dinner, Mr. 
President, because I know there are a 
lot of Senators who are anxious to get 
away because they told me that they 
are. The hot line will go out. 

Mr. WALLOP. Mr. President, I urgs 
my colleagues on my side of the aisle 
to consider carefully how valuable a 
contribution their amendments may 
be to the process of America's energy 
policy. If they can find it in their 
hearts to look to another time, look to 
another vehicle, we would be most 
grateful. At any rate, I do urge my 
colleagues to make known their inten- 



tions so that we can draw a circle 
around this bill and at least get this 
energy policy to conference where it 
really belong?. 

I urge a prompt response. Once 
again, we urge the arrival of the 
Rockefeller amendment. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER (Mr. 
Raid). The clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

AMENDMENT NO. 2786 
(Purpose: To extend the authorization of the 
Uranium Mill Tailing* Radiation Control Act of 
1978) 

Mr. JOHNSTON. Mr. President, I 
will send an amendment to the desk. 
It is somewhat in the nature of a 
technical amendment on behalf of 
Senator Brown which extends the 
date of the Uranium Mill Tailings Ra- 
diation Control Act of 1978 from 1994 
to 1998. 

I say it is in the nature of a techni- 
cal amendment because we think we 
can probably deal with this problem 
on the basis of the present legislation, 
that is, S. 1220, the bill presently un- 
der consideration. But it is probably 
prudent to accept this amendment. 
So I send that amendment to the desk 
at this time. 

The PRESIDING OFFICER. The 
clerk will report the amendment. 

The legislative clerk read as follows: 

The Senator from Louisiana (Mr. Johnston), 
for Mr. Brown, propo se ! an amendment num- 
bered 2786. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that reading 



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of the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

Al the appropriate place in the amendment, 
inaart tha following naw aaciion: 
SEC. . URANIUM MILL TAILINGS RADIATION 
CONTROL ACT EXTENSION. 

Section 1 12<a) of tha Uranium Mill Tailing. 
Radiation Control Act of 1978 (42 U.S.C. 7922(a)) 
ie amended by striking '1994' and inaerting 
•1998'. 

Mr. BROWN. Mr. President, I am 
pleased that the Senate has agreed to 
include my amendment, which will 
reauthorize the Uranium Mill Tailings 
Radiation Control Act of 1978, as part 
of the committee substitute amend- 
ment to H.R. 776, the Energy Efficien- 
cy Act. 

In October 1991, I introduced S. 
1885, which would have reauthorized 
the Uranium Mill Tailings Control Act 
of 1978 and extended the Uranium 
Mill Tailings Remedial Act (UMTRA) 
Program through September 1998. 

Uranium ore was processed in large 
part by private companies for use by 
the Department of Defense from the 
1940*8 through 1960. Once the con- 
tracts between these companies and 
the Federal Government were com- 
pleted, the uranium mills were shut 
down and large piles of uranium tail- 
ings, which contain radioactive ele- 
ments, were left on site. Recognizing 
the threat to human health and the 
environment that the tailing posed, 
Congress enacted Public Law 95-604, 
the Uranium Mill Tailings Radiation 
Control Act of 1978. 

Since the law's inception in 1978, 
the Department of Energy and affect- 
ed States have worked together to 
make the UMTRA Program a success. 
DOE, in conjunction with the States 
is responsible for the cleanup of 24 
inactive uranium mill tailings sites in 



10 States. Under the act, DOE pro- 
vides for 90 percent of the costs asso- 
ciated with the UMTRA Program, 
while the States contribute 10 per- 
cent. To date, the cleanup of nine of 
the sites has been completed. 

While significant pro gre s s has been 
made cleaning up these sites, we have 
been told by DOE that remediation of 
all 24 sites will not be completed by 
the stated expiration of the act in 
1994. Of the sites in Colorado - 
Durango, Grand Junction, Gunnison, 
Maybell, Naturita, Rifle, and Slick 
Rock - only the Durango site has been 
remediated. 

It is critical we assure affected 
States and communities that the pro- 
gram will continue, so that cleanup of 
all sites can be completed and the 
health and environmental risks associ- 
. ated with these tailings can be elimi- 
nated. The extension of the act also 
ensures the ability of States to budget 
for their required cost-sharing contri- 
butions to the program. 

This amendment will ensure the 
Federal Government's commitment to 
the cleanup of these sites. 

The PRESIDING OFFICER. The 
question is on agreeing to the amend- 
ment. 

The amendment (No. 2786) was 
agreed to. 

Mr. WALLOP. I move to reconsider 
the vote by which the amendment was 
agreed to. 

Mr. JOHNSTON. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. JOHNSTON. I suggest the 
absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 



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Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, we 
now have the results of our hotline 
back. On our side of the aisle, the 
only amendment requested is the 
Rockefeller amendment. 

I see Senator Rockefeller on the 
floor, and we are prepared to do that 
now. 

I wonder if the Senator from West 
Virginia (Mr. Rockefeller) would tell 
me how much time he would like. 

Mr. ROCKEFELLER. I say to the 
managers not more than 5 minutes 
for the entire amendment. 

Mr. WALLOP. My suggestion is if 
that is the case, why do we not take 
20 minutes, equally divided, with the 
intention of yielding back whatever 
time out of that that is not used. 

Mr. ROCKEFELLER. That is fine 
by this Senator. 

I say to the manager on the Demo- 
cratic side, we are awaiting the arrival 
of Senator Ford. 

Mr. JOHNSTON. Mr. President, I 
think we can go ahead and get these 
amendments identified at least. 

Mr. President, I ask unanimous 
consent that the only amendments to 
be considered on the pending legisla- 
tion H.R 776 are as follows: A 
Rockefeller amendment with respect 
to coal miner health; a Dodd amend- 
ment with respect to rollup securities. 

Mr. WALLOP. Mr. President, I 
suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. ROCKEFELLER. Mr. Presi- 
dent, I ask unanimous consent that 



the order for the quorum call be re- 
scinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

There is now pending before the 
Senate a unanimous-consent request 
propounded by the senior Senator 
from Louisiana. 

Mr. JOHNSTON. Mr. President, I 
withdraw that request. 

AMENDMENT NO. 2787 
(Purpose: Substitute for th« coal health provi- 

Mr. ROCKEFELLER. Mr. Presi- 
dent, I send an amendment to the 
desk and ask for its immediate consid- 
eration. 

The PRESIDING OFFICER. The 
clerk will report. 

The legislative clerk read as follows: 

The Senator from West Virginia 
(Mr. Rockefeller) proposes an amend- 
ment numbered 2787. 

Mr. ROCKEFELLER. Mr. Presi- 
dent, I ask unanimous consent that 
reading of the amendment be dis- 
pensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

(Subsequently, the following oc- 
curred:) 

AMENDMENT NO. 2787, AS MODIFIED 

Mr. ROCKEFELLER Mr. Presi- 
dent, I ask unanimous consent that 
my amendment be modified with the 
changes that I now send to the desk. 
And in case anybody is nervous, it is a 
simply a collating matter. We were 
advised by legislative counsel to do 
this. 

The PRESIDING OFFICER The 
amendment is so modified. 

(The text of the amendment (No. 
2787), as modified is printed in today's 
Record under 'Amendments Submit- 



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ted.') 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that there be 
a time agreement on the pending 
amendment of 20 minutes, equally 
divided between the Senator from 
West Virginia and the Senator from 
Wyoming, and that no second-degree 
amendments be in order. 

The PRESIDING OFFICER. Is 
there objection. 

Without objection, it is so ordered. 

Mr. ROCKEFELLER. Mr. Presi- 
dent, the Senate can be proud, the 
American people can be proud, that 
this legislation will see to it that the 
promise of health care is kept to tens 
of thousands of retired coal miners 
and their families. 

Everyone acknowledges that these 
elderly people deserve their health 
care coverage. They earned it in some 
of the most dangerous and important 
work in America. As former Secretary 
of Labor Dole's Coal Commission said 
very simply, the commitment to 
health care benefits should be hon- 
ored. 

The history of the two financially 
troubled health care trust funds can 
be traced back to an historic 1946 
agreement between the mine workers 
and the U.S. Government. Labor and 
industry leaders were called to the 
White House after President Truman 
seized the mines during a strike over 
the deplorable state of health care in 
the coalfields. 

The world and the coal industry 
and health care in America have 
changed in many ways since then. 
Skyrocketing health care costs and a 
crazy quilt of court decisions on com- 
pany liability have badly eroded the 
financial condition of the retired 
coalminer trust funds. 

But certain things have not 



changed. Health care is still one of 
the most important things in the life 
of a retired coalminer. The need re- 
mains for statesmanship among indus- 
try and labor leaders in ensuring that 
there is good health care in the 
coalfields. 

During the last few weeks I have 
been involved in intense and lengthy 
negotiations on this legislation. We 
have debated arcane points of law and 
obscure data about every facet of the 
coal industry. 

But we must never forget that what 
is important here is the people in- 
volved. 

Many of these retirees were born in 
the early decades of this century. 
Their active days in the mines were in 
the 1930's and 1940's and 1950's. 
They remember the days of the pick 
and shovel and dynamite, when 
caveins were not uncommon and 
methane explosions often brought 
sudden disaster. 

These miners gave so much for our 
country. They fueled American indus- 
try to a position of world leadership 
and sustained the country as a bul- 
wark of freedom in hot war and cold. 
What they won for themselves and 
their dependents was not a favor but 
what they paid for at a high price, 
often with their lives. 

In the deal that created this health 
program in the 1940's, the miners 
agreed to mechanization of the mines, 
opening the way to the industry's 
prosperity. The miners knew that 
tens of thousands of jobs would be lost 
but that they would have good health 
care in their twilight years. The in- 
dustry knew its labor costs would fall. 
This legislation is needed to see to it 
that the deal is honored. Mechaniza- 
tion is creating a very different eco- 
nomic future for the coal industry. 



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But this legislation is needed to honor 
an historic promise from the past - to 
take care of the people who made 
industrial history. 

In the coalfields, family is every- 
thing. Working together, families 
created riches for the coal industry 
and for the country. The modern in- 
dustrial might of America rose on the 
backs of these families. To tell the 
story of one of many thousands of 
those families, I invited a widow from 
my own State of West Virginia to 
testify before my subcommittee last 
fall 

Dixie Woolum told us how in the 
late 1940's the health trust funds 
transformed health care in the 
coalfields. She said that her husband 
told her that if anything happened to 
him, she would be taken care of. 
Because of financial trouble in the 
funds and legal loopholes, however, 
things did not go smoothly. Her 
health benefits were cut off and it 
took lawsuits to get them back for 
people like Mrs. Woolum. 

Mrs. Woolum spoke for herself and 
many thousands of others when she 
said: 

My husband was a devoted man to 
his work. He worked in bad condi- 
tions, but he never missed a day. • • • 
It is a blow in the face to think some 
day you have health coverage and the 
next you have nothing. • • • I am not 
an educated person, but I do know 
what is right and what is wrong. I 
hope through your work, this will not 
ever happen again to anyone else. 

If this legislation is enacted into 
law, as I believe it will be, Mrs. 
Woolum's wish that others will be 
spared her difficulties will be fulfilled. 
Some say today that those who have 
worked hard and played by the rules 
have been alighted in America in re- 



cent years. Here is an opportunity to 
prove that isn't so. Here is an oppor- 
tunity to show the world an older 
America and one that we can begin to 
rebuild here today. An America 
where those who work hard and do 
what is right for their country re- 
ceived in return their country's grati- 
tude. 

This has been one of the most con- 
tentious pieces of legislation I have 
worked on in the Senate. But I have 
said from the beginning that my goal 
was to protect the health care of re- 
tired coalminers and their families, 
and that I was not wedded to the 
details of how to do it. To get past 
the contentiousness, I have tried to 
listen to all concerned and accommo- 
date as many suggestions as I could. 
That will continue to be my approach 
as the legislative process continues. 

The legislation we consider today is 
significantly different from the bill I 
introduced last November. Instead of 
including a broad industrywide tax, 
the basic funding mechanism of this 
legislation generally requires premium 
payments from those for whom the 
retirees worked. These are the re- 
sponsible companies. Under both 
bills, companies with retirees still in 
the existing health funds would pay 
for their own retirees. We must stop 
the past practice in which existing 
companies dump their responsibilities 
onto the companies that have faithful- 
ly kept their commitments. 

The key difference between the two 
bills relates to the funding of health 
benefits for the orphan retirees. In 
general these are the people whose 
companies are out of business. Under 
the earlier bill, the tax would have 
funded those benefits. Here, in gener- 
al, the responsible coal operators and 
related companies will fiand the bene- 



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fits. The two existing health trust 
funds will be folded into a new, com- 
bined fund, in general for current 
fund orphans and nonorphans. Addi- 
tionally, a new 1992 fund will be re- 
quired to provide for certain other 
retirees, including those who might be 
orphaned by future bankruptcies or 
liquidations. 

The approach of the current legisla- 
tion was not lightly arrived at. 
Lengthy and difficult negotiations 
were required because of the myriad 
of conflicting interests in our nation- 
wide coal industry. As the Dole Com- 
mission indicated, more than one 
approach might be reasonable and 
fair. 

The current approach is the one 
sought by the administration and in 
the end it appeared to be the one 
most likely to command a consensus 
in the legislative process. Under this 
legislation, the current health benefits 
will be preserved. The approach of 
this legislation rests on the important 
principle that responsible companies 
should bear the cost of these health 
benefits. It is a rational approach. It 
is a fair approach. It is a good and 
reasonable way for Congress to see to 
it that the country keeps its word to 
the retired coalminers and their fami- 
lies. 

That the country must keep its 
word to these elderly people is the 
ultimate meaning of this legislation. 
Many Senators and other people have 
worked hard to see to it that the 
promises are kept. I express my grati- 
tude for his assistance to my senior 
colleague from West Virginia, Senator 
Byrd. I express my gratitude to Sena- 
tor Wallop for his cooperation and to 
Senator Ford and many others. 

As the poet, Robert Forst said, 'we 
have promises to keep and miles to 



go.' But we will have taken a big step 
toward our goal when we pass this 
legislation. The Senate can be proud 
of it. The country can be round of it. 
The country can be proud of itself. 
Keeping this kind of promise is what 
America is all about. 

Mr. BYRD. Mr. President, will the 
Senator yield to me briefly? 

Mr. ROCKEFELLER. I am pleased 
to yield. 

Mr. BYRD. I thank my colleague. 

Mr. President, the purpose of the 
amendment offered by my colleague 
from West Virginia, Mr. Rockefeller, is 
a simple one: it is to assure more than 
100,000 retired coal miners and de- 
pendents that they will continue to 
have access to adequate health care 
beyond February 1, 1993. 

It is to assure tens of thousands of 
retired coal miners - many of whom 
are in poor health, and all of whom 
who risked their lives to provide our 
Nation with the energy resources that 
made America the great economic and 
industrial power that it is today - that 
promises made to them during their 
working years are not now, in retire- 
ment, in their 'golden years', going to 
be reneged upon. 

It is to assure tens of thousands of 
dependents of such retirees, many of 
whom who saw their fathers, broth- 
ers, husbands, and sons sacrifice life 
and limb thousands of feet below 
ground in the dark and cramped re- 
cesses of an underground mine, and 
who must now watch their loved ones 
suffer the ravages of black lung and 
other debilitating health problems 
resulting from their work in the coal 
mines of America, that the health 
benefits upon which they so critically 
depend will not be suddenly taken 
away. 

This amendment is about honoring 



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4341 



commitments. It says that when 
promisee are made, promises will be 
kept. It is that simple. 

Yet, getting it to the floor has been 
anything but simple. The road has 
been long; filled with many twists and 
turns, and always seeming to be on an 
uphill climb. 

My colleague, Senator Rockefeller, 
however, has shown great patient and 
perseverance in seeing this matter 
through. 

I know how hard he has worked to 
bring this amendment to fruition. He 
has talked with me from time to time 
about it. I commend him on a job 
very well done. 

In addition, I wish to commend the 
Senator from Kentucky (Mr. Ford) 
and all of those who have worked so 
hard to bring this to a suc cessf ul con- 
clusion. 

As a result of this amendment, Mr. 
President, retired coal miners and 
their dependents will no longer need 
to fear the loss of the health care 
benefits. Through the merger of the 
1950 and 1974 United Mine Workers 
of America Benefit Funds, retired 
mine workers will continue to receive 
health care coverage through a new 
combined fund. Their benefits will be 
provided by those companies that are 
now or formerly were signatories to a 
National Bituminous Coal Agreement. 
It is these companies that made the 
promise of health benefits to their 
workers, and it is appropriate that 
these companies be collectively asked 
to provide these benefits. 

And this amendment accomplishes 
that 

Again, I want to pay my highest 
compliments - and I fall short of the 
appropriate words to do so - to my 
distinguished colleague, Senator 
Rockefeller. He has had his mind and 



his heart on this amendment for 
months and months, and he has spent 
many, many long hours in pursuing 
those efforts in support of the amend- 
ment over these many, many months. 

I take my hat off to him. I admire 
him for his tenacity, his perseverance, 
his high purpose, and his faithfulness 
to duty, as he has toiled along the way 
to make this amendment a reality. It 
deserves the support of every Member 
of the body. 

I close by once again commending 
my colleague, Senator Rockefeller, and 
by thanking Senator Wallop and the 
others who worked with Senator 
Rockefeller on this matter for so long 
a time. 

Mr. President, I thank my colleague 
for yielding, and I yield the floor. 

The PRESIDING OFFICER. Who 
yields time? 

The Senator from Wyoming controls 
10 minutes, and the Senator from 
West Virginia controls 3 1/2 minutes. 

The Senator from Wyoming is rec- 
ognized. 

Mr. WALLOP. Mr. President, I yield 
myself 4 minutes. 

Mr. President, let me give my 
thanks back to Senator Byrd, Senator 
Ford, and Senator Rockefeller. They 
know, and Senator Johnston knows, 
and others know I did not want this 
provision on this bill. It is not energy 
legislation. 

It was, nonetheless, part of the 
vehicle that arrived from the Finance 
Committee, and it was a circumstance 
with which we had to deal. It was not 
a question of wishing to, wanting to, 
not caring for, wishing to avoid, or not 
wanting to deal with the issue of the 
so-called orphans. I mean, they were 
never an issue. It was a question as 
to whose responsibility they were. 

Negotiations were correctly de- 



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scribed as difficult. But they were 
always conducted with at least a rea- 
sonable understanding of what was on 
the other side's plate, and what was 
causing difficulty. 

To that end, I particularly wish to 
thank the administration's folks who 
came to help us: Tom Scully, Gail 
Wilensky, and Barbara Selfridge. 

I also wish to thank Paul Joffe, 
Jonathan Wood, Kennie Gill, Ellen 
Doneski; and Jim Franson, of the 
legislative counsel. 

Of my own staff, Micheal Hoon; and 
of the Energy Committee minority 
staff, Marian Marshall and Gary 
Ellsworth. 

I think it is fair to say these people 
put in probably longer hours on the 
resolution presented by this amend- 
ment than the collection of the other 
amendments which will come to rest 
on or around this bill. 

I believe that the resolution which 
we have arrived at is as fair as we 
could possibly make it. I thank Sena- 
tor Byrd, Senator Rockefeller, and 
Senator Ford for their efforts to come 
to agreement, and for their under- 
standing of the problems that the 
original amendment presented to me. 

All of us have things with which we 
take some satisfaction. In this resolu- 
tion, all of us wish there were some 
little piece of it that we could have 
left as originally drafted, or not have 
included even as finally drafted. 

But, having said that, I think it 
shows the best traditions of the Sen- 
ate that a resolution to a very sticky, 
very thorny problem was arrived at in 
as fair and equitable a manner. And 
the best part of it is that the inno- 
cents in the program, whose plight 
brought us to the table, have had 
their interests protected and assured. 

Fundamentally, I think that was 



never a question that any of us 
wished to avoid. It was always my 
intention, certainly, that that should 
take place. 

Mr. President, I would yield the 
remainder of the time that I have to 
Senator Specter. 

But I would just like to make the 
following statement: That the amend- 
ment does not void the litigation 
known as the Evergreen case. I want 
to make clear that it is the Senator's 
intention that any liability ultimately 
assessed in that litigation shall apply 
only to that prior to the date of enact- 
ment, and not to future obligations. 

It is also my understanding that 
moneys that may be paid for past 
liability will not be interpreted as 
contributions which were actually 
received after 1997 and before July 20, 
1992, by the 1950 UMW benefit plan, 
or the 1974 one. 

Mr. President, I yield the remainder 
of the time to the Senator from Penn- 
sylvania (Mr. Specter). 

The PRESIDING OFFICER. The 
Senator from Pennsylvania is recog- 
nized for 5 minutes. 

Mr. SPECTER. Mr. President, I 
thank the Chair, and I thank my 
esteemed colleague from Wyoming for 
yielding time. 

Mr. President, I join in supporting 
this important amendment. I con- 
gratulate my colleagues for working 
out a very, very difficult issue. I com- 
pliment the Senator from West Vir- 
ginia for tackling this complex matter, 
and for shepherding it through the 
stages which we have arrived at here 
today. 

I know from personal experience the 
tremendous anguish of the retirees 
from the coal industry, because we 
have many of them in the Common- 
wealth of Pennsylvania. This 



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was brought to my attention by re- 
peated visits m western Pennsylvania, 
and especially southwestern Pennsyl- 
vania. 

Last January, I went to Washing- 
ton, PA - they call it 'little 
Washington'; maybe they should call 
it 'Big Washington,' but they call it 
little Washington' - to meet with 
several hundred of the coal retirees. 
During the course of that meeting; I 
heard of the kinds of problems that 
they were sustaining. It is especially 
tragic because they had expected to 
have benefits to have protected them 
from the ravages of aging, and the 
ravages of the need for medical care. 

As this matter has worked its way 
through the legislative process, there 
have been a great many who have 
contributed. The Senator from Ken- 
tucky is on the floor. I really observed 
- participated to a slight extent, but 
really observed - the negotiations one 
evening last week with the chairman 
of the Appropriations Committee, 
attended by the majority leader and 
the Republican leader. 

I believe this amendment takes the 
issue away from a contentious debate 
and a contentious vote and works it 
out, I think, on terms which are high- 
ly acceptable. 

Again, I thank my colleague from 
Wyoming for yielding me time, and I 
yield the floor. 

Mr. FORD. Will my distinguished 
friend from West 'Virginia yield me 
sometime? 

Mr. ROCKEFELLER. How much 
time remains? 

The PRESIDING OFFICER. The 
Senator has 3 1/2 minutes remaining. 

Mr. ROCKEFELLER. Mr. Presi- 
dent, I ask unanimous consent for 
about 2 minutes after that. 

But I yield the remainder of the 



time to the Senator from Kentucky. 

The PRESIDING OFFICER. The 
Senator from West Virginia is recog- 
nized. 

I am sorry, the Senator from Ken- 
tucky is recognized. 

Mr. FORD. We have been giving so 
many accolades to the distinguished 
Senator from West Virginia we think 
we are all from West Virginia. I have 
been called a third Senator from West 
Virginia, and I do not mind that at 
all. 

Mr. President, let me first say to my 
colleagues and good friends - Senator 
Jay Rockefeller, you just could not ask 
anyone to work any harder and be 
more dedicated than he has been on 
this issue; and Senator Byrd, with his 
expertise and ability to work out the 
funding formula; and Senator 
Malcolm Wallop with his good, hard 
negotiation • that their leadership and 
untiring effort, in my opinion, has 
produced this compromise. 

It was not always clear that we 
could accomplish our goal of protect- 
ing the health benefits of retirees and 
their families in the coal fields, includ- 
ing over 16,000 retirees in Kentucky. 
But after days, hours, and weeks of 
negotiations, we have achieved that 
end. 

Throughout this process, I have had 
two goals: first, to ensure that the 
beneficiaries of the UMWA Benefit 
Funds did not lose their much needed 
health care benefits, nor have them 
interrupted; and second, that the 
funding mechanism for paying for 
these benefits not include a new tax 
on coal companies that were never a 
part of this problem. 

This bipartisan compromise accom- 
plishes both of these goals and I am 
pleased to support this agreement. 

My mam interest in this process has 



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always been to protect the retirees 
who were promised lifetime benefits, 
without imposing a burden on Ken- 
tucky coal that would be devastating 
to our ability to remain competitive. 

I can remember standing in the hot 
burning Sun on a Saturday afternoon 
in July at the courthouse in Harlan 
County, KY. The Junior Chamber of 
Commerce, the Jaycees at that time, 
had raised funds for a memorial for 
all those who had lost their lives, in 
Harlan County alone, working in the 
coal mines. 

Close to 1,400 names were on that 
memorial. They were the names of 
hard working individuals that literally 
gave their lives to produce the energy 
that the rest of us in this Nation need 
to live our lives. Theirs was truly the 
ultimate sacrifice, in one of the most 
dangerous jobs I know. 

And when I remember that hot July 
afternoon, I remember the wives, and 
the children, and the families that 
were there that day to honor their 
loved ones. It is for these families, 
and the promise given to their loved 
ones that if anything happened to 
them, their families would have life- 
time health care benefits, that I re- 
main committed to seeing this reason- 
able, and fair, legislation signed into 
law. 

This bipartisan compromise ensures 
a permanent and stable funding base 
for the health benefits of existing 
retirees. It also puts in place a proce- 
dure whereby the United Mine Work- 
ers and the Bituminous Coal Opera- 
tors will negotiate a new fund to en- 
sure that the health benefits of a 
limited number of future orphans will 
be protected. 

Many of the changes I sought to 
have incorporated into the original 
proposal have been adopted, and I am 



most grateful to my colleague, Senator 
Rockefeller, and his most capable 
staff, for accommodating me. There is 
no new tax on nonsignatory coal in 
this agreement. We have closed the 
new orphan fund so to limit the prob- 
lem and ensure a long-term solution. 
We have attempted to allocate costs 
according to the principle that those 
most responsible should bear the 
greatest portion of costs. And we 
have ensured that our retirees, and 
their families, will not have to bear 
the cost of future problems. 

Of course, this is a negotiated set- 
tlement. And as with any compro- 
mise, no one Member, or party, got 
everything they wanted. But I believe 
that we can truly say that all of us, 
and the Nation as a whole, got some- 
thing. And that is a stable coal indus- 
try that will not face the heartache 
and trauma of a nationwide coal 
strike next February. Coal can be the 
key to our energy independence, and 
this agreement we are adopting today 
will ensure the long-term stability, 
and competitiveness, of this industry. 

I commend my colleague, Senator 
Rockefeller, for his tireless efforts to 
resolve this problem. I also want to 
commend Senator Byrd and Senator 
Wallop for their crucial participation 
in bringing together this compromise, 
and recognize the considerable contri- 
butions of the White House in putting 
this bipartisan compromise together. 

The retirees owe Senator 
Rockefeller a great debt of gratitude 
for ensuring that a promise made to 
them can be kept. This Nation owes 
the same gratitude for achieving a 
solution that is fair, and ensures that 
the coal industry, as a whole, can 
continue to prosper. 

Mr. President, not many times do 
you have an individual that works on 



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your staff that Is as dedicated as one 
Kennie Gill on mine. She has worked 
diligently. She has never given up. 
She has stood her ground on occasions 
when it was necessary. I am very 
pleased that she is an individual that 
r epresen ted me in this negotiation. 
And I want to pay a compliment to 
her, to Paul Joffe, to Gary Ellsworth, 
to Ellen and Doneski, others that 
worked so hard as staff to be sure 
that this piece of legislation was put 
together. 

I yield the floor. 

The PRESIDING OFFICER. The 
Senator's time has expired. 

Mr. JOHNSTON. Will the Senator 
yield me 30 seconds? 

The PRESIDING OFFICER. The 
Senator has no time to yield. 

Mr. WALLOP. Mr. President, I yield 
the remainder of my time, first, to 
Senator Johnston and the remainder 
to Senator Rockefeller. 

Mr. JOHNSTON. I thank my col- 
league. 

I simply wanted to state my admira- 
tion for the distinguished junior Sena- 
tor from West Virginia, Mr. 
Rockefeller; to Senator Ford, from 
Kentucky; to Senator Wallop; to the 
senior Senator from West Virginia, 
Senator Byrd; and the other Senators 
who have been involved in this mat- 
ter. 

Frankly, I thought they would nev- 
er do it. I thought this amendment 
was a dagger pointed at the heart of 
energy legislation and that we would 
be dragged down into the mire of the 
impossible dream of getting this legis- 
lation passed. But the distinguished 
Senator from West Virginia, with his 
stick-to-itivenees, with his good hu- 
mor, but with his absolute devotion to 
this idea, came and brought the par- 
ties together in an impossible dream. 



It really is impossible the way he 
brought us to the brink of disaster 
and, at the last minute, scooped the 
baby off the tracks and in the process 
saved the coal miners of West Virgin- 
ia. I hope they will always be grateful 
to him and to the Senator from Ken- 
tucky and the Senator from Wyoming, 
because they have accomplished the 
impossible. 

The PRESIDING OFFICER. The 
Senator from West Virginia is recog- 
nized for 2 minutes. 

Mr. ROCKEFELLER. I yield one of 
those minutes to the Senator from 
Pennsylvania (Mr. Wofford). 

Mr. WOFFORD. Mr. President, as a 
cosponsor of this amendment and as a 
supporter of the energy bill, at this 
creative, constructive and historic 
moment for coal miners and their 
families, I want to salute Senator 
Rockefeller for his dedicated, out- 
standing leadership. Indeed, I salute 
the two Senators from West Virginia, 
Senator Rockefeller and Senator Byrd 
our President pro tempore, as well as 
Senator Ford and my other colleagues 
who made this important solution 
possible. I see it as a promise fulfilled, 
a commitment honored. 

America's retired coal miners have 
worked in dangerous, dirty and often 
unhealthy conditions and they were 
promised health care benefits. Coal 
remains the single largest source of 
energy in the United States and it is 
the miners who deserve the benefits 
promised them. 

like other Americans, coal miners 
went to work each day under the 
assumption that their health benefits 
would be there when they retired. 

This amendment helps ensure that 
promise is kept. 

Today, that promise is being broken 
for thousands of retired coal miners 



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and their families. Not because they 
didn't work hard enough. Not be- 
cause they didn't plan ahead. But 
because of economic forces over which 
they have no control. 

Through no fault of their own, min- 
ers have become orphans in their 
retirement years. Their former em- 
ployers have gone out of business or 
simply no longer make contributions 
to the existing health benefit trust 
funds. Now our miners have no place 
else to turn except here, to their Gov- 
ernment. They played the game by 
one set of rules all their lives, and 
now somebody's changed the rules on 
them. 

In large parts of Pennsylvania gen- 
erations of miners have worked for 
over a century to bring coal out of the 
ground and provide the fuel that pow- 
ered America's industrial might. In 
communities built by immigrants who 
came to this country looking for a 
better life for themselves and their 
children. Generation after generation, 
they were more than willing to work 
hard to fulfill the dream. Of a secure 
retirement if you work hard; of help- 
ing your children go to college if they 
study hard; of owning your own home 
if you save; and of having a doctor if 
you need one. 

They did not expect anything hand- 
ed to them on a silver platter. But 
they also did not expect to have the 
rug pulled out from under their feet 
when they retired. 

For the miners and their families 
losing what they thought were guar- 
anteed health benefits, the safety net 
is broken. Congress can fix it and this 
amendment on which the Senator 
from West Virginia has worked so 
hard over the last year will do it. 

In 1990, a commission appointed by 
then Labor Secretary Dole, and 



chaired by former Secretary William 
Usery, addressed the problems facing 
retired miners. It reached a conclu- 
sion that ought to be a matter of com- 
mon sense and basic fairness: that 
retired miners are entitled to the 
health care benefits they were prom- 
ised and such commitment must be 
honored today. The basic recommen- 
dations of the Dole commission are 
contained in this amendment. 

It is time for us to enact them into 
law. It is time to commit our will and 
our wallet to taking care of our own 
people and our own problems. 

The health benefits provided to coal 
miners under this amendment are 
nothing more than what they are due. 
They worked hard for their retire- 
ment years. They have earned some 
peace of mind and a decent, healthy 
quality of life. This is not a handout. 
This is not a giveaway. 

This amendment represents a prom- 
ise kept, a commitment honored. 

The PRESIDING OFFICER. The 
Senator from West Virginia. 

Mr. ROCKEFELLER. I thank the 
Senator from Pennsylvania, the Sena- 
tor from Kentucky, the Senator from 
Louisiana, and the Senator from Wyo- 
ming. 

I also want to thank Kennie Gill, 
with Senator Ford; John Wood, with 
Senator Byrd; Gary Ellsworth and 
Mike Hoon, with Senator Wallop - all 
of them have been overwhelming; Jim 
Francis, one of the Senate legislative 
counsel, who has not been mentioned. 
The degree of work the people like 
that put in, the public has absolutely 
no idea how deep that is. 

I am very grateful to Tom Scully, 
Gail Wilensky, and Barbara Selfridge, 
of the White House, all of whom, once 
they came into the process, were deal- 
ing in very good faith and very con- 



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structure. 

I want to Bay, however, that the 
individual who aits beside me as I now 
speak, Paul Joffe, stands out to me in 
heroic terms on this. For 3 years, 
without stopping; he has made this 
his cause. Last week, a colleague 
measured the amount of time that he 
spent on this particular project during 
the course of the week, and it was 120 
hours. That was a typical week for 
him. 

People out there do not know that 
people in the Senate work as hard as 
they do, that the staff works as hard 
as they do. To me, Paul Joffe, who 
sits at my side, my legislative counsel 
on these things and my counsel on 
many things, stands as a model of 
public service. 

I think it is an inspiration. There 
are tens of thousands of coal miners 
out there who owe their health bene- 
fits to him and they do not know that 
but I so state them to him at this 
point. 

I also want to thank Ellen Doneski 
who helped Paul and myself for this. 

Mr. President, I conclude simply by 
saying that all of these things are 
terribly important because the work 
of the Senate is done by a combina- 
tion of the willingness of Senators to 
dig in and take a position and then 
reach consensus. But all of the most 
difficult of all of that work is done by 
the staff of the Senate. That point 
constantly needs to be made. 

I thank the Chair and I conclude by 
thanking Senator Johnston for his 
extraordinary patience in this whole 
process. There were times when he 
was not actually in such a good mood. 
That simply reflected his desire to get 
on with the matter. I am very grate- 
ful to the Senator from Louisiana. 

Mr. UEBERMAN. Mr. President, 



Senators Rockefeller, Ford, Byrd, and 
Wallop have worked long and hard to 
craft a compromise provision on coal 
industry retiree health benefits which 
balances the needs of the United Mine 
Workers of America (UMWA) retirees 
and the interests of domestic and 
foreign coal mining companies. The 
task has been a difficult one because 
of the divergent interests among all 
the parties involved - union and non- 
union coal companies, western and 
eastern coal companies, those who 
signed the 1988 BCOA-UMWA agree- 
ment and those who have separate 
agreements with the UMWA. 

I am particularly concerned about 
those companies that previously were 
signatories to a BCOA-UMWA agree- 
ment and now have separate labor 
agreements with the UMWA. In the 
case of the Pittston Co., which is 
headquartered in my State, they are 
being required to pay for retirees in 
the new Government fund created by 
this provision despite the fact that 
they had negotiated this issue as part 
of a separate UMWA collective bar- 
gaining agreement. I am concerned 
that Congress should not be in the 
business of abrogating collective bar- 
gaining agreements, except in the 
rarest circumstances. Congressional 
interference in the collective bargain- 
ing process could have troubling 
long-term repercussions. We should 
not be changing contract terms retro- 
actively by congressional action. 

I am also concerned about Congress 
interfering in pending court cases. In 
this instance, the evergreen case has 
been brought to determine Pittston's 
liability under its prior UMWA agree- 
ments. It would appear that the most 
appropriate way to resolve this issue 
is to allow this case to proceed to final 
judgment. 



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The Pittston-UMWA contract re- 
sulted from a painful, 14-month-long 
strike and is an elaborate agreement 
with contingencies to cover the possi- 
ble outcomes of the evergreen lawsuit 
and an agreement not to support 
legislation which would impose a 
reachback obligation on the company. 
I am concerned by the fact that the 
action we take today abrogates a col- 
lective bargaining agreement which I 
believe was negotiated in good faith. 

I am also troubled because this 
provision poses serious economic diffi- 
culties for those companies which 
export a substantial portion of their 
coal. Companies like Pittston cannot 
pass these costs through on the inter- 
national export market, while those 
coal companies who sell to domestic 
utility companies have contracts 
which allow them to pass through 
Government mandated costs. Last 
year Pittston exported approximately 
70 percent of the coal it mined. These 
exports are important to the economic 
strength of the United States. Partic- 
ularly given the current state of our 
economy, we should be strengthening 
not undermining companies' ability to 
compete abroad. 

I hope those who have drafted this 
provision will consider in conference 
establishing an export credit for those 
payments mandated by the provision. 
The credit would be based on the 
amount of coal mined in the United 
States and exported and should enable 
exporting companies to continue to 
compete on the international market. 
We cannot expect coal exporters to 
compete in the international market if 
their product is burdened by excessive 
Government fees or taxes. If these 
companies cannot continue to export 
coal, it is their employees in this coun- 
try who will suffer. I appreciate all 



the hard work my colleagues have 
done thus far on this provision and I 
look forward to working with them as 
the bill goes to conference. 

Mr. SIMON. Mr. President, I am 
proud to cosponsor legislation intro- 
duced to ensure the provision of 
health care benefits to retirees of the 
coal industry. I want to thank my 
good friend and colleague, Senator 
Rockefeller for his hard work in draft- 
ing the provisions of that bill and 
working out this amendment. I also 
want to express my appreciation to all 
the other Senators who have also 
worked hard on this legislation. 

Coal industry workers have contrib- 
uted significantly to providing energy 
consumed in the United States and 
abroad. It is vital to every worker as 
well as the American economy that we 
maintain a stable and strong coal 
industry. The provision of lifelong 
health benefits is crucial to ensuring 
the continued well-being and security 
of coal industry employees, retirees, 
and their dependents many of whom 
work and reside in Illinois. 

This bill provides a vehicle for in- 
suring all coal industry employees and 
retirees, particularly those retirees 
who have been orphaned by bankrupt 
companies and coal companies which 
no longer are in business. As our 
Nation grapples with proposals for 
providing insured health care to all 
individuals, let this proposed legisla- 
tion stand as an example of how in- 
dustry producers and consumers 
should view their responsibilities to 
American workers. Once again, I am 
proud to cosponsor this legislation 
which directly responds to the over- 
due health care needs of a dedicated 
and well-deserving group of Ameri- 
cans. 

The PRESIDING OFFICER. All 



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time has expired on the amendment. 
If there be no further debate, the 
question is on agreeing to the amend- 
ment. 

The amendment (No. 2787), as mod- 
ified, was agreed to. 

Mr. JOHNSTON. Mr. President, I 
move to reconsider the vote. 

Mr. FORD. I move to lay that mo- 
tion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. WELLSTONE. Mr. President, I 
will just take 30 seconds. I wanted to 
as a matter of official record thank 
Senator Rockefeller from West Virgin- 
ia for his fine work, and tell him I am 
very pleased to see the extension of 
benefits to the coal miners. 

Mr. President, that is all I wanted 
to do. So I suggest the absence of a 
quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The assistant legislative clerk pro- 
ceeded to call the roll. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER (Mr. 
Wellstone). Without objection, it is so 
ordered. 

Mr. WALLOP. Mr. President, we 
are right to the point where with a 
little understanding and cooperation 
from Members we could put together 
an agreement that would limit further 
amendments, describe those which 
remain, and there are not many re- 
maining. 

It is my hope that those who would 
once again seek to use this bill for 
other than energy policy purposes 
would resist. It is only postponing the 
time when we might get together a 
comprehensive energy policy. The 
Senate's privilege of nongermaneness 



ought once in a while be viewed with 
some discretion, and in this instance, 
it would be my hope Senator 
Johnston, after working for 18 years 
on energy policy, and Senator Wallop, 
after working 16 years on energy poli- 
cy, might be indulged and that the 
Senate, which has already spoken 94 
to 4 on its energy policy, might be 
permitted to work its will on matters 
relevant to that topic. 

So I urge those Senators who are 
dabbling in the occult, if you will, 
trying to figure ways to further or 
impede political careers in a political 
season might resist that and allow us 
to go ahead. The remaining amend- 
ments that deal with energy can be 
disposed of with relative dispatch. 
Those that do not deal with energy 
will impede our progress more than 
through the night, probably through 
tomorrow, and into Friday. 

Mr. President, I hope that calm and 
cool will prevail and we can be permit- 
ted to get on with this bill. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

AMENDMENT NO. 278S 

Mr. JOHNSTON. Mr. President, I 
will send shortly an amendment to 
the desk which broadens a study pro- 
vided in the bill to provide for a sur- 
vey of practices and policies under 
which electric cooperatives prepare 
least-cost plans, submit such plans to 
the REA, and the extent to which 



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such least-cost planning is reflected in 
rates charged to customers. 

In other words, it is a slight broad- 
ening of the subject matter of the 
study. It is submitted on behalf of 
Senator Simpson, and I now send that 
amendment to the desk. 

The PRESIDING OFFICER. The 
clerk will report the amendment. 

The bill clerk read as follows: 

The Senator from Louisiana (Mr. Johnston), 
for Mr. Simpson, proposes an amendment num- 
bered 2788 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that reading 
of the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

On page 274, after line 21, redesignate para- 
graphs (2) through (4) as paragraphs (S) through 
(6), respectively and insert a new paragraph (2) 
as follows: 

'(2) a survey of practices and policies under 
which electric cooperatives prepare least-cost 
plans, submit such plans to the Rural Electrifica- 
tion Administration, and the extent to which 
such least cost planning is reflected in rates 
charged to customers:' 

Mr. WALLOP. Mr. President, the 
amendment has been cleared on both 
sides. 

Mr. SIMPSON. Mr. President, I rise 
to offer an amendment which would 
require the Secretary of Energy to 
conduct a survey in order to examine 
the practices and policies under which 
electric cooperatives prepare least-cost 
energy plans, submit such plans to the 
Rural Electrification Administration, 
and the extent to which such 
least-cost planning is reflected in rates 
charged to customers. I strongly be- 
lieve that this important analysis by 
the Secretary of Energy will be a first 
step toward ensuring that rural elec- 
tric cooperative energy goals are 
in-line with the goals of the entire 
electric supply and distribution indus- 



try. 

After a close investigation of 
demand-side management (DSM) 
theory, which is supported by the 
regulated electric industry, and the 
movement toward integrated resource 
planning in the Nation's electricity 
industry, I became curious as to 
whether or not electric cooperatives 
are submitting least-cost plans which 
are comparable to those presently 
required by Federal and State law to 
be submitted by privately owned utili- 
ties. 

Demand side management is a 
method of improving a utility's finan- 
cial performance, and philosophically 
guards against needless capital outlays 
for construction and operating expens- 
es. It is my strongly held opinion that 
if the United States is to efficiently 
meet its energy needs into the 21st 
century, all providers must be a part 
of the equation. This amendment 
moves toward making the rural elec- 
tric cooperatives part of that strategy 
and active participants in the process. 

I thank the floor managers for ac- 
cepting this amendment. My fine 
colleague from Wyoming, Senator 
Malcolm Wallop, has worked doggedly 
and passionately on this most impor- 
tant bill. His dedication and devotion 
to formulating legislation that will 
enhance our domestic energy industry 
should be commended. I do so deeply 
thank Senator Bennett Johnston for 
his unstinting cooperation in helping 
to craft this important bipartisan 
amendment. His assistance is most 
appreciated. 

The PRESIDING OFFICER. Is 
there further debate? 

If there is no further debate, the 
question is on agreeing to the amend- 
ment. 

The amendment (No. 2788) was 



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agreed to. 

Mr. WALLOP. Mr. President, I 
move to reconsider the vote. 

Mr. JOHNSTON. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, I 
wonder if my distinguished colleague 
from Wyoming can tell us what the 
plans are on his side of the aisle for 
additional amendments. 

The PRESIDING OFFICER. The 
Senator from Wyoming is recognized. 

Mr. WALLOP. Mr. President, that 
we know of after the hotline, we have 
a Grassley ethanol amendment, a Dole 
ethanol amendment, a Dole solid 
waste disposal act, Senator 
Murkowski offers a pair of amend- 
ments in the form of studies, Senator 
D'Amato has an antidumping amend- 
ment, Senator Stevens has a tax cred- 
it amendment, which I understand 
the Finance Committee is working on 
now and will accept; Senator 
Simpson's we have just adopted; Sena- 
tor Burns has a tax credit for oil pro- 
duction tar sands; Senator Jeffords 
for alternative fuels; Senator Cochran 
for windfall profit tax, for school dis- 
tricts in Mississippi. The Senator from 
Wyoming has one that is called rele- 
vant, which is defense mechanism, in 
case the bill should run out from un- 
der us in one way or another. 

That is all that we know of. 

Mr. JOHNSTON. Mr. President, I 
wonder if the Senator from Texas 
would be willing to let us get a unani- 
mous consent embodying these 
amendment along with a Dodd rollup 
amendment under any formulation. 

Mr. GRAMM. If the distinguished 
chairman will yield, if that amend- 



ment were asked for and were put on 
the list, I would oppose that amend- 
ment, and I would request that the 
Social Security earnings cap repeal, 
the capital gains tax rate reduction, 
since this is a tax bill, and the crime 
bill, also be included on the amend- 
ment list. 

So I would be willing to enter into a 
unanimous-consent request embodying 
these amendments, the rollup amend- 
ment, and those three amendments. 

Mr. JOHNSTON. Mr. President, I 
do not know how long Senators want 
to expect to be protected. But if noth- 
ing is happening here, and no one 
wants to put in an amendment, I will 
say we will very soon go to third read- 
ing. I might say it is time the Sena- 
tors did say yea or nay as to whether 
they wish to push an amendment. 

Mr. WALLOP. Mr. President, will 
my colleague yield? 

Mr. JOHNSTON. Certainly. 

Mr. WALLOP. While we spoke, we 
disposed of an amendment. Senator 
Cochran will not offer his amendment 
on windfall profits tax. 

Mr. JOHNSTON. Please convey our 
warmest thanks to Senator Cochran. 
He has risen from the heights to even 
higher heights in the esteem of the 
Senator from Louisiana. 

Mr. WALLOP. Mr. President, I 
suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. WALLOP. Mr. President, all 
the people on our side who .have 
amendments have been notified that 



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the bill is open for amendment, that 
the progress, which has been good all 
day, is now stalled. I think it is unfair 
to other Senators. We approach the 
hour of half past 6, the time is going 
by, and no amendments are offered. 

I would join with my colleague from 
Louisiana in believing that after a 
short period of time Senators may not 
be serious in their intent to offer 
these amendments, and that we ought 
to go to third reading. 

I share with my colleague from 
Louisiana a desire to wrap up this bill 
and would hope that if any Senator is 
serious about offering an amendment 
they would show up and do it; other- 
wise I will join the Senator in the 
move to third reading. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. WELLSTONE. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

AMENDMENT NO. 2789 
(Purpose: To amend the Securities Exchange Act 
of 1984 with respect to limited partnership 
roUups) 

Mr. WELLSTONE. Mr. President, I 
send an amendment to the desk and 
ask for its immediate consideration. 

The PRESIDING OFFICER. The 
clerk will report. 

The assistant legislative clerk read 
as follows: 

The Senator from Minnesota (Mr. Wellstone) 
p rop os a l an amendment numbered 2789. 

Mr. WELLSTONE. Mr. President, I 
ask unanimous consent that reading 
of the amendment be dispensed with. 

The PRESIDING OFFICER. With- 



out objection, it is so ordered. 
The amendment is as follows: 

At the appropriate place in the Committee 
amendment, insert the following new title: 

TITLE XX - LIMITED PARTNERSHIP 
ROLLUP REFORM 
SEC. XX01. SHORT TITLE. 

This title may be cited as the 'Limited Partner- 
ship RoUup Reform Act of 1992*. 
SEC. XX02. REVISION OF PROXY SOLICI- 
TATION RULES WITH RESPECT TO LIMITED 
PARTNERSHIP ROLLUP TRANSACTIONS. 

(a) Amendment - Section 14 of the Securities 
and Exchange Act of 1934 (16 U.S.C. 78n) b 
amended by adding at the and the following new 
subsection: 

'(h) Proxy Solicitations and Tender Offers in 
Connection With Limited Partnership RoUup 



'(1) Proxy rules to contain special provisions. • 
It shall be unlawful for any person to solicit any 
proxy, consent, or Authorization concerning a 
limited partnership rollup transaction, or to 
make any tender offer in furtherance of a limited 
partnership rollup transaction, unless such 
transaction b conducted in accordance with rules 
prescribed by the Commission under sections 
14(a) and 14(d) as required by thb subsection. 
Such rules shall - 

'(A) permit any holder of a security that b the 
subject of the proposed limited partnership rollup 
transaction to engage in preliminary communica- 
tions for the purposes of determining whether to 
solicit proxies, consents, or authorizations in 
opposition to the proposed transaction, without 
regard to whether any euch communication 
would otherwise be considered a solicitation of 
proxies, and without being required to file solicit- 
ing material with the Commission prior to mak- 
ing that determination, except that nothing in 
thb subparagraph shall be construed to limit the 
application of any provision of thb title prohibit- 
ing, or reasonably designed to prevent, fraud- 
ulent, deceptive, or manipulative acta or practices 
under thb title; 

'(B) require the issuer to provide to holders of 
the securities that are the subject of the transec- 
tion such list of the holders of the issuer's secu- 
rities as the Commission may determine in such 
form and subject to such terms and conditions as 
the Commission may specify; 

'(C) prohibit compensating any person soliciting 
proxies, consents, or authorisations directly from 
security holders concerning such a transaction • 

'(Don the basis of whether the solicited proxies, 
consents, or authorizations either approve or 
dieapprove the pr oposed transaction; or 



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'(ii) contingent on the transaction's Approval, 
disapproval, or coaptation; 

'(D) aat forth disclosure requirements for solic- 
iting material distributed in connection with a 
limited partnership rollup transaction, including 
requirements for dear, concise, and comprehensi- 
ble disclosure, with respect to - 

'(0 sny changes in the business plan, voting 
rights, form of ownership interest or the general 
partner's compe n sa t i on in the proposed limited 
partnership rollup transaction from each of the 
original limited partnerships; 

'GD the conflicts of interest, if sny, of ths gen- 
eral partner; 

'(iii) whether it is expected that there will be a 
significant difference between the exchange val- 
ues of ths limited partnerahipa and ths trading 
pries of ths securities to be issued in the limited 
partnership rollup transaction; 

'(■v) the valuation of the limited partnerahipa 
and the method used to determine the value of 
limited partners' interests to be exchanged for 
the securities in ths limited partnership rollup 



'(v) ths differing risks and effects of the trans- 
action for investors in different limited partner- 
ships proposed to be included, and the risks and 
effects of completing the transaction with less 
than all limited partnerahipa; 

'(vi) s statement by the general partner ea to 
whether the propos e d limited partnership rollup 
transaction is fair or unfair to investors in each 
limited partnership, a discussion of the basis for 
that conclusion, and ths general partner's evalu- 
ation, and a des cri ption, of alternatives to the 
limited partnership rollup transaction, such as 
liquidation; 

'(vii) any opinion (other than an opinion of 
counsel), appraisal, or report received by the 
general partner or sponsor that is prepared by an 
outside party and that is materially related to the 
limited partnership rollup transaction and the 
identity and qualifications of the party who pre- 
pared the opinion, appraisal, or report, the meth- 
od of selection of such party, material past, exist- 
ing, or contemplated relationships between the 
party, or any of its affiliates and ths general 
partner, sponsor, successor, or sny other affiliate, 
compensation arrangements, and ths basis for 
rendering and methods used in developing the 
opinion, appraisal, or report; and 

'(viii) such ether matters deemed necessary or 
appropriate by the Commission; 

'(E) provide that any solicitation or offering 
p eriod with respect to sny proxy solicitation, 
tender offer, or information s tat em e nt in a limit- 
ed partnership rollup transaction shall be for not 



less than ths lesser of 60 calendar days or the 
msximum number of days permitted under appli- 
cable State law; and 

'(F) contain ouch other provision* as the Com- 
mission determines to be necessary or appropri- 
ate for the protection of investors in limited part- 
nership rollup transactions. The disclosure re- 
quirements under subparagraph (D) shall also 
require that the soliciting material include a 
dear and concise summary of the limited part- 
nership rollup transaction (including a summary 
of ths matters referred to in clauses (i) through 
(vii) of that subparagraph) with the risks of ths 
limited partnership rollup transaction sst forth 
prominently in ths forepart thereof. 

'(2) Exemptions. • The Commission msy, consis- 
tent with the public interest, the protection of 
investors, and the purposes of this Act, exempt by 
rule or order sny security or class of securities, 
sny transaction or dass of transactions, or any 
person or dsss of porsons, in whole or in part, 
conditionally or unconditionally, from the re- 
quirements impos e d pursuant to paragraph (1) 
or, from the definition contained in paragraph 
(4). 

'(3) Effect on commission authority. • Nothing 
in this subsection limits the authority of the 
Commission under subsection (s) or (d) or sny 
other provision of this titls or precludes the Com- 
mission from imposing, under subsection (s) or 
(d) or sny other provision of this titls, s remedy 
or procedure required to be impos e d under this 
subsection. 

'(4) Definition. • As used in this subsection the 
term 'limited partnership rollup transaction 1 
means s transaction involving • 

'(A) ths combination or reorganization of limit- 
ed partnerships, directly or indirectly, in which 
some or all investors in the limited partnerships 
receive new securities or securities in another 
entity, other than s transaction • 

'(i) in which - 

'(I) ths investors' limited partnership securities 
sre reported under a transaction reporting plan 
declared effective before January 1, 1991, by the 
Commission under section 1 1A; and 

'(ID the investors receive new securities or 
securities in another entity that are reported 
under a transaction reporting plan declared effec- 
tive before January 1, 1991, by the Commission 
under section 11 A; 

'(ii) involving only issuers that are not required 
to register or report under section 12 both before 
and after the transaction; 

'(iii) in which the securities to be issued or 
exchanged are not required to be and are not 
registered under the Securities Act of 1933; 



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'(iv) which will result in no significant adverse 
change to investors in any of the limited partner- 
ships with respect to voting rights, the term of 
existence of the entity, management compensa- 
tion, or investment objectives; or 

'(v) where each investor is provided an option to 
receive or retain a security under substantially 
the same terms and conditions ss the original 
issue; or 

'(B) the reorganisation of a single limited part- 
nership in which some or all investors in the 
limited partnership receive new securities or 
securities in another entity, and - 

'(i) transactions in the security issued are re- 
ported under a transaction reporting plan de- 
clared effective before January 1, 1991, by the 
Commission under section 1 IA; 

*(ii) the investors' limited partnership securities 
sre not reported under a transaction reporting 
plan declared effective before January 1, 1991, by 
the Commission under section 1 IA; 

'(iii) the issuer is required to register or report 
under section 12, both before and slier the trans- 
action, or the securities to be issued or exchanged 
are required to be or are registered under the 
Securities Act of 1933; 

'(iv) there sre significant adverse changes to 
security holders in voting rights, the term of 
existence of the entity, management compensa- 
tion, or investment objectives; and 

'(v) investors are not provided an option to 
receive or retain a security under substantially 
the same terms and conditions ss the original 
issue. 

'(6) Exclusion. • For purposes of this subsection, 
a limited partnership rollup transaction does not 
include s transaction that involves only s limited 
partnership or partnerships having an operating 
policy or practice of retaining cash available for 
distribution and reinvesting proceeds from the 
sale, financing, or refinancing of assets in accor- 
dance with such criteria ss the Commission de- 
termines sppropriste.'. 

(b) Schedule for Regulations. - The Securities 
and Exchange Commission shall, not later than 
12 montha alter the date of enactment of this 
Act, conduct rulemaking p r o c e e dings and pre- 
scribe final regulations under the Securities Act 
of 1933 and the Securities Exchange Act of 1934 
to implement the requirements of section 14(h) of 
the Securities Exchange Act of 1934, as amended 
by subsection (a). 

SEC. XX03. RULES OF FAIR PRACTICE IN 
ROLLUP TRANSACTIONS. 

(a) Registered Securities Association Rule. - 
Section 16A(b) of the Securities Exchange Act of 
1934 (16 UJS.C. 78o-3(b)) is amended by adding 



at the end the following new paragraph: 

'(12) The rules of the association to promote 
just and equitable principles of trade, as required 
by paragraph (6), include rules to prevent mem- 
bers of the association from participating in any 
limited partnership rollup transaction (as such 
term is defined in section 14(h)(4)) unless such 
transaction waa conducted in accordance with 
procedures designed to protect the rights of limit- 
ed partners, including • 

'(A) the right of dissenting limited partners to 
an appraisal and compensation or other rights 
designed to protect dissenting limited partners; 

'(B) the right not to have their voting power 
unfairly reduced or abridged; 

'(C) the right not to bear an unfair portion of 
the costs of s propos e d rollup transaction that b 
rejected; and 

'(D) restrictions on the conversion of contingent 
interests or fees into non-coutingent interests or 
fees end restrictions on the receipt of s 
non-contingent equity interest in exchange for 
fees for services which have not yet been provid- 
ed. As used in this paragraph, the term 
'dissenting limited partner' means a holder of a 
beneficial interest in a limited partnership that ia 
the subject of a limited partnership rollup trans- 
action who casts s vote against the transaction 
and complies with procedures established by the 
association, except thst for purposes of an ex- 
change or tender offer, such term means any 
person who files an obj ec tion in writing under 
the rules of ths sssocistion during ths period in 
which the offer is outstanding and complies with 
such othsr procedures established by the sssoda- 
tion.\ 

(b) Listing Standards of National Securities 
Exchanges. • Section 6(b) of the Securities Ex- 
change Act of 1934 ( 16 U.S.C. 780b)) ia amended 
by adding at the end the following: 

'(9) The rules of the exchange prohibit the list- 
ing of any security issued in a limited partner- 
ship rollup transaction (as such term is defined 
in section 14(h)(4)), unless such transaction was 
conducted in accordance with procedures de- 
signed to protect the rights of limited partners, 
including - 

'(A) the right of dissenting limited partners to 
an appraisal and compensation or other rights 
designed to protect dissenting limited partners; 

'(B) the right not to have their voting power 
unfairly reduced or abridged; 

'(C) the right not to bear an unfair portion of 
the costs of s proposed rollup transaction that is 
rejected; and 

'(D) restrictions on the conversion of contingent 
interests or fees into non-contingent interests or 



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fern snd restrictions on the receipt of * 
non-contingent equity interact in exchange for 
feea for eervicee which have not yet been provid- 
ed. Ac ueed in thie paragraph, the term 
'dieeenting limited partner' meane a holder of a 
beneficial intereet in a limited partnership that is 
the eubject of a limited partnership transaction 
who easts a vote against the transaction and com- 
plies with procedures established by the ex- 
change, except that for purposes of an exchange 
or tender offer, euch term meane any person who 
files en objection in writing under the rules of 
the exchange during the period in which the offer 
it outstanding/. 

(c) Standards for Automated Quotation Sjys- 
tems. • Section 16A(b) of the Securities Exchange 
Act of 1994 (16 UJS.C. 76o-3(b)) ie amended by 
adding at the end the following new paragraph: 

'(19) The rules of the association prohibit the 
authorisation for quotation on an automated 
interdeeJer quotation system sponsored by the 
association of any security designated by the 
Commission as a national market system security 
resulting from a limited partnership rollup trans- 
action (tm such term is defined in section 
14(h)(4)), unless such transaction was conducted 
in accordance with procedures designed to protect 
the rights of limited partners, including - 

'(A) the right of dissenting limited partners to 
an appraisal and compensation or other rights 
designed to protect dissenting limited partners; 

'(B) the right not to have their voting power 
unfairly reduced or abridged; 

'(C) the right not to bear an unfair portion of 
the costs of s propos e d rollup transaction that is 
rejected; and 

'(D) restrictions on the conversion of contingent 
interests or fees into non-contingent interests or 
fees and restrictions on the receipt of s 
non-contingent equity interest in exchange for 
fees for services which have not yet been provid- 
ed. As used in this paragraph, the term 
'dieeenting limited partner' means a holder of a 
beneficial interest in s limited partnership that is 
the eubject of s limited partnership transaction 
who easts s vote against the transaction and com- 
plies with procedures established by the associa- 
tion, except that for purposes of an exchange or 
tender offer such term meane any person who 
files an objection in writing under the rules of 
the association during the period during which 
the offer b outstanding.'. 

(d) Effect on Existing Authority. • The amend- 
ments made by this section ehall not limit the 
authority of the Securities and Exchange Com- 
mission, s registered securities association, or s 
national securities exchange under any provision 



of the Securities Exchange Act of 1994, or pre- 
clude the Commission or such association or 
exchange from imposing, under sny other euch 
provision, s remedy or procedure required to be 
imposed under euch amendments. 

(e) Effective Dste. • The amendments made by 
thie eection ehall become effective 17 months 
after the date of enactment of thia Act. 

AMENDMENT NO. 2790 TO AMENDMENT 
NO. 2769 

Mr. DODD. Mr. President, I send a 
substitute to the desk and ask for its 
immediate consideration. 

The PRESIDING OFFICER. The 
clerk will report. 

The assistant legislative clerk read 
as follows: 

The Senator from Connecticut (Mr. Dodd) 
proposes sn amendment numbered 2790 to 
amendment No. 2789. 

Mr. DODD. Mr. President, I ask 
unanimous consent that reading of 
the amendment be dispensed with. 

Mr. GRAMM. Mr. President, I ob- 
ject. 

The PRESIDING OFFICER (Mr. 
Wellstone). Objection is heard. The 
clerk will read the amendment. 

The assistant legislative clerk pro- 
ceeded to read the amendment. 

The text of the amendment is as 
follows: 

In lieu of the matter proposed to be inserted, 
insert the following: 

TITLE XX - LIMITED PARTNERSHIP ROLLUP 
REFORM 
SEC. XX01. SHORT TITLE. 

This title may be cited ss the 'Limited Psrtner- 
ehip Rollup Reform Act of 1992*. 
SEC. XX02. REVISION OF PROXY SOLICI- 
TATION RULES WITH RESPECT TO LIMITED 
PARTNERSHIP ROLLUP TRANSACTIONS. 

(a) Amendment. - Section 14 of the Securities 
and Exchange Act of 1934 (15 US.C. 78n) is 
amended by adding at the end the following new 



'(h) Proxy Solicitations and Tender Offers in 
Connection With Limited partnership Rollup 
Transactions. • 

'(1) Proxy rules to contain special provisions. - 
It shall be unlawful for any person to solicit sny 
proxy, consent, or suthorizstion concerning s 



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limited partnership rollup transaction, or to 
make any tender offer in furtherance of a limited 
partnership rollup transaction, unless such 
transaction is conducted in accordance with rules 
prescribed by the Commission under sections 
14(a) and 14(d) as required by this subsection. 
Such rules shall - 

'(A) permit any holder of a security that is the 
subject of the proposed limited partnership rollup 
transaction to engage in preliminary communica- 
tions for the purposes of determining whether to 
solicit proxies, consents, or authorizations in 
opposition to the proposed transaction, without 
regard to whether any such communication 
would otherwise be considered a solicitation of 
proxies, and without being required to file solicit- 
ing material with the Commission prior to mak- 
ing that determination, except that nothing in 
this subparagraph ahall be construed to limit the 
application of any provision of this title prohibit- 
ing, or reasonably designed to prevent, fraudu- 
lent, deceptive, or manipulative acts or practices 
under this title; 

'(B) require the issuer to provide to holders of 
the securities that are the subject of the transac- 
tion such list of the holders of the issuer's secu- 
rities as the Commission may determine in auch 
form and subject to auch terms and conditions ss 
the Commission may specify; 

'(C) prohibit compensating any person soliciting 
proxies, consents, or authorisations directly from 
security holders concerning such s transaction - 

'(i) on the basis of whether the solicited proxies, 
co nsen ts, or authorizations either approve or 
disapprove the proposed transaction; or 

'(ii) contingent on the transaction's approval, 
disapproval, or completion; 

•(D) set forth disclosure requirements for solic- 
iting material distributed in connection with s 
limited partnership foUup transaction, including 
requirements for clear, concise, and comprehensi- 
ble disclosure, with respect to • 

*(i) any changes in the business plan, voting 
rights, form of ownership interest or the general 
partner's compensation in the proposed limited 
partnership rollup transaction from each of the 
original limited partnerships; 

*(ii) the conflicts of interest, if sny, of the gen- 
eral partner; 

'(Hi) whether it is expected that there will be s 
significant difference between the exchange val- 
ues of the limited partnerships and the trading 
price of the securities to be issued in the limited 
partnership rollup transaction; 

'(iv) the valuation of the limited partnerships 
and the method used to determine the value of 
limited partners' interests to be exchanged for 



the securities in the limited partnership rollup 



'(v) the differing risks and effects of the trans- 
action for investors in different limited partner- 
ships propos e d to be included, and the risks and 
effects of completing the transaction with less 
than all limited partnerships; 

'(vi) s statement by the general partner as to 
whether the proposed limited partnership rollup 
transaction is fair or unfair to investors in each 
limited partnership, a discussion of the basis for 
that conclusion, and ths general partner's evalu- 
ation, and a description, of alternatives to the 
limited partnership rollup transaction, such as 
liquidation; 

'(vii) any opinion (other than an opinion of 
counsel), appraisal, or report received by the 
general partner or sponsor that is prepared by an 
outside party and that is materialry related to the 
limited partnership rollup transaction and the 
identity and qualifications of the party who pre- 
pared the opinion, appraisal, or report, the meth- 
od of selection of such party, material past, exist- 
ing, or contemplated relationships between the 
party, or any of its affiliates and the general 
partner, sponsor, s ucc essor, or any other affiliate, 
compensation arrangements, and the basis for 
rendering and methods used in developing the 
opinion, sppraiaal, or report; and 

*(viii) auch other matters deemed necessary or 
appropriate by the Commission; 

'(E) provide that any solicitation or offering 
period with respect to any proxy solicitation, 
tender offer, or information statement in s limit- 
ed partnership rollup tranaaction ahall be for not 
leas than the leaser of 60 calendar days or the 
maximum number of days permitted under appli- 
cable State law; and 

'(F) contain auch other provisions as the Com- 
mission determines to be necessary or appropri- 
ate for the protection of investors in limited part- 
nership rollup tranaactiona. The disclosure re- 
quirements under subparagraph (D) ahall also 
require that the soliciting material include a 
clear and concise summary of the limited part- 
nership rollup tranaaction (including a aummary 
of the matters referred to in clauses (i) through 
(vii) of that subparagraph) with ths risks of the 
limited partnership rollup tranaaction set forth 
prominently in the forepart thereof. 

'(2) Exemptions. - The Commission may, consis- 
tent with ths public interest, ths protection of 
investors, and the purposes of this Act, exempt by 
rule or order any security or dees of securities, 
any tranaaction or class of transactions, or sny 
person or class of persons, in whole or in part, 
Utionalry, 



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i imposed pursuant to paragraph (1) 
or, from tha definition eontainad in paragraph 
(4). 

'(3) Effect on eommiaaion authority. - Nothing 
in this subsection limits tha authority of tha 
Cirmmiseiirn under auhaaetion (a) or (d) or any 
other provision of this title or precludes the Com- 
mission from imposing, under subse ct ion (a) or 
(d) or any other provision of this title, a remedy 
or procedure required to be impos e d under this 



'(4) Definition. - As used in this subsection the 
term 'limited partnership rollup transaction' 
means a transaction involving - 

'(A) the combination or reorganisation of limit- 
ed partnerships, directly or indirectly, in which 
some or all investors in the limited partnerships 
receive new securities or securities in another 
entity, other than a transaction - 

'(i) in which - 

'(I) tha investors' limited partnership securities 
are reported under a transaction reporting plan 
declared effective before January 1, 1991, by the 
Commission under section 11A; and 

'(ID the investors receive new securities or 
securities in another entity that are reported 
under a transaction reporting plan declared effec- 
tive before January 1, 1991, by the Commission 
under section 11A; 

'(ii) involving onjy issuers that are not required 
to register or report under section 12 both before 
and after the transaction; 

*(iii) in which the securities to be issued or 
exchanged are not required to be and are not 
registered under the Securities Act of 1933; 

'(iv) which will result in no significant adverse 
change to investors in any of the limited partner- 
ships with respect to voting rights, the term of 
existence of the entity, management compensa- 
tion, or investment obj ect ives; or 

'(v) where each investor is provided an option to 
receive or retain a security under eubetantially 
the same terms and conditions as the original 

'(B) tha reorganisation of a single limited part- 
nership in which some or all investors in ths 
limited partnership receive new securities or 
securities in another entity, and • 

'© transactions in ths security issued are re- 
ported under a transaction reporting plan de- 
clared effective before January 1, 1991, by ths 
Commission under section 1 1A; 

'(ii) the investors' limited partnership securities 
are not reported under s transaction reporting 
plan declared effective before January 1, 1991, by 
tha Commission under section 11A; 

'(iii) the issuer is required to register or report 



under section 12, both before and after the trans- 
action, or the securities to be issued or exchanged 
are required to be or ere registered under the 
Securities Act of 1933; 

'(iv) there are significant adverse changes to 
security holders in voting rights, ths term of 
existence of ths entity, management compensa- 
tion, or investment objectives; and 

'(v) investors are not provided an option to 
receive or retain a security under substantially 
the same terms and conditions ss ths original 
issue. 

'(6) Exclusion. • For purposes of this subsection, 
s limited partnership rollup transaction does not 
include s transaction that involves only s limited 
partnership or partnerships having an operating 
policy or practice of retaining cash evailable for 
distribution and reinvesting proceeds from ths 
sale, financing, or refinancing of assets in accor- 
dance with ouch criteria ss the Commission de- 
termines eppropriste.'. 

(b) Schedule for Regulstions. - Ths Securities 
and Exchange Commission shall, not later than 
12 months after the date of enactment of this 
Act, conduct rulemaking proceedings and pre- 
scribe final regulations under the Securities Act 
of 1933 and the Securities Exchange Act of 1934 
to implement the requirements of section 14(h) of 
the Securities Exchange Act of 1934, ss smended 
by subsection (s). 

SEC. - 03. RULES OF FAIR PRACTICE IN 
ROLLUP TRANSACTIONS. 

(a) Registered Securities Association Rule. - 
Section 16A(b) of the Securities Exchange Act of 
1934 (16 U.S.C. 78o-3(b)) is smended by sdding 
st the end the following new paragraph: 

'(12) Ths rules of ths association to promote 
just and equitable principles of trade, ss required 
by paragraph (6), include rules to prevent mem- 
bers of the association from participating in any 
limited partnership rollup transaction (ss such 
term is defined in section 14(h)(4)) unless such 
transaction wss conducted in accordance with 
procedures designed to protect the rights of limit- 
ed partners, including - 

'(A) the right of dissenting limited partners to 
an appraisal and compensation or other righte 
designed to protect dissenting limited partners; 

'(B) the right not to have their voting power 
unfairly reduced or abridged; 

'(C) the right not to bear an unfair portion of 
ths costs of s proposed rollup transaction that is 
rejected; and 

'(D) restrictions on ths conversion of contingent 
interests or fees into non-contingent interests or 
lass and restrictions on the receipt of a 
non-contingent equity interest in exchange for 



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fees for services which have not yet been provid- 
ed. As used in this paragraph, the term 
'dissenting limited partner' means a holder of a 
beneficial interest in a limited partnership that is 
the subject of a limited partnership rollup trans- 
action who casts a vote against the transaction 
and complies with procedures established by the 
sssociation, except that for purposes of an ex- 
change or tender offer, such term means any 
person who files an objection in writing under 
the rules of the association during the period in 
which the offer is outstanding and complies with 
such other procedures established by the associa- 
tion.'. 

(b) Listing Standards of National Securities 
Exchanges. - Section 6(b) of the Securities Ex- 
change Act of 1034 ( 16 UJS.C. 78f0»» is amended 
by adding at the end the following: 

'(0) The rules of the exchange prohibit the list- 
ing of any security issued in a limited partner- 
ship rollup transact ion (as such term is defined 
in section 14(h)(4)), unless such transaction was 
conducted in accordance with procedures de- 
signed to protect the rights of limited partners, 
including - 

'(A) the right of dissenting limited partners to 
an appraisal and compensation or other rights 
designed to protect dissenting limited partners; 

'(B) the right not to have their voting power 
unfairly reduced or abridged; 

'(C) the right not to bear an unfair portion of 
the costs of s pro p osed rollup transaction that is 



'(D) restrictions on the conversion of contingent 
interests or fees into non-contingent interests or 
fess and restrictions on the receipt of a 
non-contingent equity interest in exchange for 
fess for services which have not yet been provid- 
ed. As used in this paragraph, the term 
'dissenting limited partner' means a holder of a 
beneficial interest in s limited partnership that is 
the aubject of a limited partnership transaction 
who easts a vote against the transaction and com- 
plies with procedures established by the ex- 
change, except that for purposes of an exchange 
or tender offer, such term means any person who 
files an olf actio n in writing under the rules of 
the exchange during the period in which the offer 
b outstanding.'. 

(c) Standards for Automated Quotation Sys- 
tems. - Section 16A(b) of the Securities Exchange 
Act of 1034 (16 UAC. 78o-3(b)) is amended by 
adding at the end the following new paragraph: 

'(13) The rules of the association prohibit the 
authorisation for quotation on an automated 
intsrdealer quotation system sponsored by the 
association of any security designated by the 



Commission as a national market system security 
resulting from a limited partnership rollup trans- 
action (as such term is defined in s e cti on 
14(h)(4)), unless such transaction was conducted 
in accordance with procedures designed to protect 
the rights of limited partners, including - 

'(A) the right of dissenting limited partners to 
an appraisal and compensation or otlier rights 
designed to protect dissenting limited partners; 

'(B) the right not to have their voting power 
unfairly reduced or abridged; 

'(C) the right not to bear an unfair portion of 
the costs of a propos e d rollup transaction that b 
rejected; and 

'(D) restrictions on the conversion of contingent 
interests or fees into non-contingent interests or 
fees and restrictions on the receipt of s 
non-contingent equity interest in exchange for 
fees for services which hsve not yet bean provid- 
ed. As used in thb paragraph, the term 
'dissenting limited partner' means a holder of a 
beneficial interest in a limited partnership tliat b 
the subject of s limited partnership transaction 
who casts a vote against the transaction and com- 
plies with procedures established by the associa- 
tion, except that for purposes of an exchange or 
tender offer auch term means any person who 
files an objection in writing under the rules of 
the association during the period during which 
the offer b outstanding.'. 

(d) Effect on Exbting Authority. • The amend- 
ments msde by thb section shall not limit the 
authority of the Securities and Exchange Com- 
mission, s regbtered securities association, or a 
national securities exchange under any provision 
of the Securities Exchange Act of 1034, or pre- 
clude the Commission or such association or 
exchange from imposing, under any other such 
provision, a remedy or procedure required to be 
imposed under such amendments. 

(s) Effective Date. - The amendments made by 
thb section shall become effective 18 monthe 
after the date of enactment of thb Act. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the read- 
ing of the amendment be temporarily 
suspended. 

The PRESIDING OFFICER (Mr. 
Ford). Without objection it is so or- 
dered. 

The Senator from Louisiana. 

Mr. JOHNSTON. Mr. President, 
the distinguished Senator from Texas 
has just advised that some conversa- 



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tions with the Senator from Connecti- 
cut might prove fruitful on this mat- 
ter and he advises that maybe we 
should set the whole amendment and 
second-degree amendment aside while 
those conversations proceed in order 
that we can maybe perhaps dispose of 
the remainder of the bill, hopefully. 

If the Senator from Connecticut is 
agreeable to that. 

Mr. DODD. To ask unanimous con- 
sent, temporarily lay it aside, and it 
would be the pending matter with no 
other legislative mater in between, I 
have no objection to that. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the 
Wellstone amendment, with the 
second-degree amendment by Senator 
Dodd, be temporarily laid aside. 

The PRESIDING OFFICER. Is 
there objection? Without objection, it 
is so ordered. 

Mr. JOHNSTON. Mr. President, we 
are now ready to do any other busi- 
ness, if any there is. 

I suggest the absence of a quorum. 

Mr. WALLOP. Will the Senator 
withhold? 

Mr. JOHNSTON. Yes. 

The PRESIDING OFFICER. The 
Senator from Wyoming. 

Mr. WALLOP. Mr. President, we 
are down to the point where this bill 
could be finished with some dispatch. 

The amendment of the Senator 
from Minnesota, as amended by the 
Senator from Connecticut, is not ener- 
gy policy. It is political policy, and I 
understand that. Everybody here 
does. 

But it is genuinely important, Mr. 
President, This Senate has spoken on 
the energy strategy, 94 to 4. We are 
now down to just one or two amend- 
ments which have to do with energy 
policy. It is my hope that the Senator 



from Texas and the Senator from 
Connecticut can come to some resolu- 
tion of it. 

In the meantime, I insist again that 
our colleagues who have amendments 
do us the courtesy of coming here to 
the floor and offering them. It is an 
abuse of the privileges of the Senate 
to allow two people to sit here with 
every intent to managing a bill and 
disposing of amendments with as 
much credibility and dispatch as we 
can. 

I would ask my colleagues - it is my 
understanding that we are the only 
ones on this side who have amend- 
ments remaining, absent that to be 
settled by the conversations that are 
temporarily set aside - so I would ask 
my leader, Senator Dole, or Senator 
Grassley, or Senator Murkowski, Sen- 
ator Stevens, or Senator Jeffords, to 
come to the floor and offer their 
amendments and do us the courtesy of 
dealing with the bill with dispatch. 
We are here and ready to accept those 
amendments. 

And I would say to my friend from 
Louisiana, that should it be that we 
arrive at some resolution that can 
dispose of the amendment now tempo- 
rarily laid aside, I will join my col- 
league in calling for third reading on 
this bill. There is no reason why the 
Senate should not dispose of this bill 
or the amendments that are there to 
be offered. There is no reason for 
delay. 

It is my hope that the two Senators 
now conversing can come up with a 
resolution of that which divides them 
and will permit us to get on to this 
bill. In the meantime, it is temporari- 
ly laid aside. 

And I say again to those Senators, if 
they wish to appear on the Nightly 
News or whatever, it is a good time. 



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Not much else is happening in Ameri- 
ca. Otherwise, we will go to third 
reading. 

Mr. JOHNSTON addressed the 
Chair. 

The PRESIDING OFFICER (Mr. 
Weilstone). The Senator from Louisi- 
ana. 

Mr. JOHNSTON. Mr. President, I 
would repeat what the Senator says 
about senatorial courtesy. There are 
a number of Senators, this one includ- 
ed, who have highly important mat- 
ters tonight involving, frankly, my 
wife, in my own case, and wives of 
others. And I do not mind at all miss- 
ing my event tonight, as others do 
not, if there is business to do. 

But, Mr. President, it is not right 
and it is not fair for Senators to keep 
us here waiting, not knowing whether 
Senators are going to put in an 
amendment or not. It is just not lair. 

So I appeal to Senators, in the spirit 
of Senatorial courtesy, for which this 
body is supposed to be greatly re- 
nowned, to summon up all of their 
Senatorial courtesy and do what they 
wish to do, either say yea or nay on 
their amendments, and come to it. 

I suggest the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, I 
am advised by the Senator from Texas 
(Mr. Gramm) that we believe we are 
very close to having the so-called 
rollup amendment by Senator Dodd 
worked out; that their stalls will be 
working. So that we do not expect 



that amendment will be a matter to 
prohibit us from going to third read- 
ing. 

So again I invite Senators who 
might have business to come before 
the Senate on this bill to please come 
because you are now on the critical 
path. The Dodd rollup amendment, 
in all probability, is not an impedi- 
ment to final passage on this bill, in 
all probability. So we would again 
invite Senators to come and do their 
amendments. 

The PRESIDING OFFICER. The 
Senator from Wyoming is recognized. 

Mr. WALLOP. Mr. President, I echo 
once again the plea of my colleague. 
We would very much like to complete 
work on this bill. I believe that is 
within our reach if we could only 
reach out and touch that which re- 
mains to be done. It is perfectly ridic- 
ulous that we sit here with nothing to 
do, our patience and the tolerance of 
the Senate being abused by colleagues 
who have amendments, and presum- 
ably they or their stalls can hear this 
plea. 

So I urge, again, our colleagues 
bring these down because should it be 
that we arrive at the conclusion of the 
arrangements between the Senator 
from Texas and the Senator from 
Connecticut, it will be my intention 
not withstanding that my leader has 
one of the amendments left, and other 
colleagues too, to go to third reading. 
I have no patience for staying here all 
night waiting for them to indulge us, 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER (Mr. 
Wofford). The clerk will call the roll. 

The legislative clerk preceded to call 
the roll. 

Mr. MURKOWSKI. Mr. President, 
I ask unanimous consent that the 



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order for the quorum call be rescind- 
ed. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

AMENDMENT NO. 2791 
(Purpose: To require the Council on Economic 
Advisers to complete and submit a jobs aurvay 
report on significant public end/dr private sector 
construction, dovol op m on tol or manufacturing 
pr ejects scheduled or to be proposed) 

Mr. MURKOWSKL Mr. President, 
I send an amendment to the desk and 
ask for its immediate consideration. 

The PRESIDING OFFICER. The 
clerk will report the amendment. 

The legislative clerk read as follows: 

The Senator from Alaska (Mr. Murkowaki) 
p ro p oses an amendment numbered 2791. 

Mr. FORD. Mr. President, I ask 
unanimous consent that reading of 
the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

At tbe appropriate place, insert the following 



Sec . (a) Jobs Survey Report. - Within avail- 
able funds, tbe Secretary of Labor and tbe Secre- 
tary of Commerce in consultation with the Coun- 
cil of Economic Advisers and working with other 
ap pr op riate Federal officiate, shell within ninety 
(90) days of the date of enactment of this Act, 
submit a Jobs Survey Report to tbe Congress on 
significant public and/or private sector construc- 
tion, development or manufacturing projects 
under consideration by Congress, scheduled, or 
p ro p osed to be undertaken or initiated prior to 
June SO, 1998. For purposes of this section, the 
term 'significant projects' means any new con- 
struction, devel op m en ts] or manufacturing pro- 
ject which will, at its peek, provide new job and 
employment opportunities to 2,600 or more peo- 
ple within the United States. 

(b) In developing the Jobs Survey Report re- 
quired by subsection (a), tbe Secretariee shall 
provide the Congress with the following informa- 
tion on the significant public and private sector 
pr ejects defined in subsection (a): 

(1) the location of Urn project; 

(2) the private or public sector sponsor of the 



(4) the sc h eduled period for construction and 

(6) the number of jobs associated with the pro- 
ject (by category): 
(A) construction; 
<B) fabrication; 

(C) manufacturing; 

(D) indirect; and, 

(E) ope r a t ion and maintenance. 

(6) tbe physical location of the jobs, by state 
and region, associated with the project; 

(7) the impact of the project, when completed, 
on improving national economic well-being and 
other aapecta of the national interest; 

(8) the estent to which the project, if undertak- 
en on a timely basis, would reduce unemploy- 
ment on a national, regional and state basis; 

(9) tbe potential impact of tbe project on pro- 
moting tbe export of VS. goods and aervicee and 
in reducing the balance of trade deficit; 

(10) any authorization, regulatory, financing or 
other impedimenta which threaten or many 
threaten to delay initiation of tbe project in ac- 
cordance with the sponsor's project schedule; 
and, 

(11) any appropriate legislation action recom- 
mended to the Congress to expedite initiation of 
the project eehedule and the creation of new jobs 
for unemployed American working men and 

(c) In preparing the Jobs Survey Report, the 
Secretariee shall devote one section of the Report 
to a review and analysis of trends underway in 
tbe nation 'a domestic petroleum industry which 
are eauaing the export of VS. capital and jobs. 
Tbs Council shall analyse the csusee of these 
trends and shall identify the contributing role, if 
any, of tbe following factors and make appropri- 
ate recommendstions to the Congress: 

(1) world oil prices; 

(2) any decline in technological leadership; 

(3) lack of leasing opportunities in prospective 
areas, including tbs public lends; 

(4) shortages of capital for domestic petroleum 



(3) The total capital coat of tbs project; 



(6) tax policy, environmental and other regula- 
tory restrictions which make development end 
operations more attractive in foreign countries; 

(6) significant changes in domestic demand for 
petroleum products; and, 

(7) any reduction in the degree of risk sssodst- 
ed with reliance on foreign sources of oil for 60 
percent or more of domestic demand. 

Mr. FORD. Parliamentary inquiry, 
Mr. President. Do we need to set aside 
the Wellstone-Dodd amendments in 



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order to accommodate the Senator 
from Alaska? 

The PRESIDING OFFICER. Not at 
this time. That consent was previous- 
ly granted. 

Mr. FORD. But that is in perpetu- 
ity? 

The PRESIDING OFFICER. The 
latter two amendments will recur 
upon disposition of this amendment. 

Mr. FORD. I thank the Chair. 

The PRESIDING OFFICER. The 
Senator from Alaska is recognized. 

Mr. MURKOWSKI. I thank the 
Chair. 

Mr. President, we have just con- 
ferred at some length on the amend- 
ment offered by the junior Senator 
from Alaska which would basically 
cover a jobs survey report directing 
the Secretary of Labor and the Secre- 
tary of Commerce, in consultation 
with the Council of Economic Advis- 
ers, and working with other appropri- 
ate Federal agencies, to submit within 
90 days of date of enactment a jobs 
survey report to the Congress on sig- 
nificant public or private sector con- 
struction, development, or manufac- 
turing projects under consideration by 
Congress scheduled or proposed or 
initiated prior to June 30, 1993. 

Inserted therein is the notation 
'with available funds.' 

The purpose of the amendment 
specifically requires that the Secretar- 
ies provide the Congress with informa- 
tion on the significant public- and 
private-sector projects identified in 
various subsections, specifically: Con- 
struction - fabrication, manufactured, 
indirect; operation maintenance; loca- 
tion of jobs; impact of projects; the 
extent to which the projects are un- 
dertaken on a timely basis are made 
known; potential impact for projects 
in promoting the export of U.S. goods; 



any authorization, regulatory financ- 
ing, and so forth. 

Covered in the report is detailed 
information relative to outflow of jobs 
in the United States as a consequence 
of investment overseas and increased 
dependence on imports. 

It is my understanding that the 
amendment has been cleared on this 
side by the minority, and I believe the 
majority has accepted the amendment 
as well. 

Mr. FORD. Mr. President, we have 
no objection on this side to the 
amendment as it has been corrected: 
'with available funds.' 

Mr. MURKOWSKI. I thank my 
friend from Kentucky. I urge immedi- 
ate adoption. 

The PRESIDING OFFICER. Is 
there further debate on the amend- 
ment? If not, the question is on agree- 
ing to the amendment of the Senator 
from Alaska. 

The amendment (No. 2791) was 
agreed to. 

Mr. FORD. Mr. President, I move to 
reconsider the vote by which the 
amendment was agreed to. 

Mr. MURKOWSKI. I move to lay 
that motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. MURKOWSKI. I thank my 
friend from Kentucky, and I thank 
the staff. 

Mr. FORD. Mr. President, I suggest 
the absence of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. GORTON. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 



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Mr. GORTON. Mr. President, I ask 
unanimous consent to proceed as in 
morning business. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

(The remarks of Mr. Gorton and 
Mr. Akaka pertaining to the introduc- 
tion of S. 3097 are located in today's 
Record under 'Statements on Intro- 
duced Bills and Joint Resolutions.') 

CHANGE OF VOTE 

Mr. ROTH. Mr. President, my re- 
quest has been approved by both the 
majority and Republican leaders. I 
ask unanimous consent that I be per- 
mitted to change my vote on rollcall 
vote No. 157 from yea to nay. This 
will not change the outcome of the 
vote. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. AKAKA. Mr. President, I sug- 
gest the absence of a quorum. 

The PRESIDING OFFICER. The 
absence of a quorum having been 
suggested, the clerk will call the roll. 
The bill clerk proceeded to call the 
roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

NUCLEAR REACTOR LICENSING 

Mr. SIMPSON. Mr. President, I 
wish to speak on the reform of the 
licensing process for nuclear energy 
plants which has been approved by 
both the Senate and the House. 

The provisions in the House and the 
Senate bills are identical and expand 
upon the Nuclear Regulatory 
Commission's (NRC) part 52 rule for 
a combined construction and operat- 
ing license. A Federal appeals court 



decided unanimously last week to 
uphold the NRC's part 52 rule in its 
entirety. 

This provision clarifies that public 
concerns should be addressed before a 
spade of soil is turned - not after com- 
pletion of a plant. 

At the Shoreham plantwe are wit- 
nessing the failure ofthe~ existing 
licensing process, where a completed 
plant - which never generated a single 
commercial kilowatt of electricity - is 
being torn down and dismantled. A 
true tragedy of fiscal and energy folly. 

Under the new proposal once the 
construction of a plant is approved by 
the Nuclear Regulatory Commission 
(NRC), a utility may proceed with 
construction without the specter of 
indefinite delays. 

The NRC may halt construction at 
any time if new information arises 
which the Commission decides is sig- 
nificant with respect to safety. 

In any event, any NRC licensing 
decision may be appealed in Federal 
court. 

ADVANCED REACTOR DESIGNS 

The Senate bill requires the Secre- 
tary of Energy to submit a 5-year 
program for the commercialization of 
advanced reactor technologies to Con- 
gress, targeting 1995 for the design 
completion for advanced light water 
reactors. 

These designs take advantage of 
natural forces of nature such as gravi- 
ty and natural circulation of the cool- 
ant in order to prevent potential acci- 
dents. In the event of an emergency, 
the reactor is designed to shut itself 
down and cool without the need for 
operator intervention. 

I am truly pleased with this provi- 
sion which will encourage safer, more 
reliable nuclear plant designs and will 



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encourage NRC certification of these 
standardized designs on a timely 
schedule designed to meet this 
country's growing need for new elec- 
tricity generating capacity. 

URANIUM ENRICHMENT RE- 
STRUCTURING 

This legislation seeks to take a step 
toward privatizing the Federal Pro- 
gram of Uranium Enrichment by 
creating a Government Enrichment 
Corporation. The Senate has passed 
this provision many times and we are 
very familiar with it and now the 
House has also approved it. 

This legislation would provide mech- 
anisms for partial reimbursement of 
the costs of reclamation and 
remediation at uranium mill tailings 
sites. 

I am also very pleased to see lan- 
guage which allows for cleanup reim- 
bursements at sites, which produced 
uranium for the U.S. defense pro- 
gram. 

NUCLEAR DECOMMSSIONING FUND 
I would like to thank my former 
colleague on the Nuclear Regulation 
Subcommittee, Senator Breaux, for all 
of his fine work to include a provision 
that he had introduced and I have 
cosponsored, dealing with the repeal 
of investment restrictions applicable 
to nuclear decommissioning funds. 

The removal of restrictions of in- 
vestments, which are currently limit- 
ed to tax-exempt bonds or Govern- 
ment securities, will open up a wider 
range of investment options for utili- 
ties to consider in managing these 
funds and will thereby greatly benefit 
utility ratepayers. 

DEPLETION ALLOWANCE FOR URANIUM 
I would also like to thank the Fi- 



nance Committee, and particularly 
Senators Bentsen, Packwood, and 
Hatch for rejecting the repeal of the 
depletion allowance for uranium and 
other minerals which the House in- 
cluded as an offset for tax credits for 
electricity generated using renewable 
resources. 

The depletion allowance provision 
has been in place in the U.S. Tax 
Code since 1913. 

Over the years, Congress has reex- 
amined whether to reduce or repeal 
the depletion allowance and each and 
every time has decided not to tinker 
with it. 

And for good reason - it is an incen- 
tive to encourage exploration and 
capital investment in the high-risk 
mining industry. I believe this provi- 
sion is still necessary to preserve our 
domestic mineral industry during 
cyclical market downturns and to 
enhance our international competi- 
tiveness. 

I trust that the Senate language 
will prevail in conference so that the 
tax credit for renewable sources of 
electricity is not offset by the repeal of 
the depletion allowance. 

ENERGY INDEPENDENCE 
Mr. JEFFORDS. Mr. President, I 
rise again to address the issue of ener- 
gy independence and our continuing 
failure to reach that goal. Over the 
years, particularly most recently, my 
office has received lots of mail about 
how the domestic energy industry, 
particularly our oil industry, is head- 
ing overseas and firing American 
workers. Let me cite some recent 
figures. Amoco announced recently 
8,500 job cuts, Unocal another 1,100. 
Mobil, the industry that fought so 
hard against my last effort to save the 
domestic energy jobs, is laying off 



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2,000 workers. 

British Petroleum is cutting 600 to 
700 jobs. Exxon cutting 1,000 domes- 
tic jobs. Arthur Anderson predicts 
40,000 to 50,000 more job losses in our 
oil industry. We had 4,500 rigs work- 
ing in the early 1980*8, now we have 
645 rip. Phillips Petroleum cuts 
1,350 jobs; Chevron slashes 2,500 jobs; 
Sun Oil projects firing 1,000 workers, 
and Shell may fire up to 4,650 Ameri- 



Even API, the American Petroleum 
Institute, may trim their staff 10 to 
15 percent, according to a June 15, 
1992, article in the Legal Times. Few- 
er lobbyists to oppose energy indepen- 



According to the Oil and Gas Jour- 
nal, America will end up losing 
411,000 jobs, that's almost the entire 
population of my State or several 
other States, such as Wyoming. Be- 
tween 1981 and 1989, 154 refineries 
closed in this country, 9 of which were 
in Wyoming. Refineries closed in Lusk, 
Osage, Glenrock, Cody, La Barge, 
Cowley, and Casper. Amoco recently 
announced that it was closing a refin- 
ery in Wyoming as well to bring the 
number to 10. We have got to stop 
this loss of jobs. 

Some may blame this loss on envi- 
ronmentalism, but that is not the 
reason. Oil companies are going over- 
seas because they make more money, 
not because anyone is forcing them to 
leave this country. There is plenty of 
oil right here in America without ever 
touching ANWR or the coastal areas. 
Greater use of enhanced oil recovery 
techniques could bring billions of 
American gallons to market and pro- 
vide American jobs. 

Why are these techniques not being 
used? Because oil recovery using these 
techniques is more expensive than 



conventional oil recovery. It's about 
economics, not environmentalism. 
Some oil companies say they have to 
leave because they cannot afford to 
comply with our environmental regu- 
lations. Well, if this is true, what does 
this mean? It means they are going to 
places that let them pollute. They say 
they have a choice to stay here in 
America and protect the environment, 
or go overseas and make more money. 
What do they choose? They choose to 
make more money and pollute. That, 
Mr. President, is the wrong choice and 
we should not reward those who make 
that choice. 

So where does this leave us? Soon, 
foreign governments will control the 
supply of oil, the shipping of oil, the 
refining of oil, and the marketing of 
oil. They are doing just what the oil 
executives of yesteryear in this coun- 
try realized they had to do to prosper. 
First, oil companies just refined oil 
and left the production to others con- 
sidering it too speculative. Then, they 
realized they needed to control the 
shipping. Soon afterward, oil compa- 
nies got into production, and finally, 
in I believe, in the 1920's they opened 
up service or filling stations. They 
controlled oil from below the ground 
all the way to the customer, and they 
prospered. 

Now, OPEC and our foreign com- 
petitors are doing the same, just as 
the Abdullah Tariki, the Red Sheikh 
realized they must do some years ago. 
They already control the bulk of the 
world's oil. They are building the 
refineries. In fact, how many of my 
colleagues realized that 85 percent of 
the MTBE for reformulated gasoline 
we required under the Clean Air Act 
is not going to be made in America. 
Did you know that the oil companies 
plan to import the MTBE and not use 



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American workers? When you voted 
for the Clean Air Act, as I did, were 
you voting for foreign jobs? I was not 
and I am sure you were not. More 
and more of the finished components 
and product are being made some- 
where other than America. We have 
lost over 150 refineries in this coun- 
try, who do you think is making up 
for this lost production. It is not our 
workers. 

So OPEC controls the supply, is 
taking over the production, we ail 
know the ships are not registered in 
this country, and the service stations 
are next. OPEC country's already 
own a significant interest in some of 
our convenience store chains and 
service stations. 

Little by little we are becoming 
more dependent on foreign energy 
sources. I believe this is wrong. I 
believe many of my colleagues also 
believe this is wrong. I doubt any 
member of this body will say that 
domestic energy production is not 
important. My colleagues from Wyo- 
ming; for example, are trying to help 
their uranium industry when cheaper 
nuclear fuel is available from the for- 
mer Soviet Union. My colleagues also 
worked to change stripper well royal- 
ties so as to help domestic oil produc- 
tion. Are these free market activities? 

My colleagues from the oil States 
have tried various measures to protect 
domestic production from floor prices 
to import fees to raising the oil pro- 
duction limit for meeting the defini- 
tion of a stripper well in order to re- 
ceive favorable tax treatment. These 
are not free market options. 

Why do my colleagues undertake 
these actions? Because they believe in 
domestic jobs, and they realize that 
there is no fee market for energy. 
Opposing efforts to increase domestic 



protection on the basis of maintaining 
a free market is thus highly question- 
able. 

Energy is the lif eblood of our econo- 
my. And I do not wish to be melodra- 
matic, but frankly, our energy policy 
has AIDS. Little by little our economy 
is being attacked by increasing depen- 
dency on foreign sources. Instead of 
curing the disease we are working all 
around the problem. 

This bill does make some significant 
advances in such areas as energy con- 
servation. But, there is one area it 
does not attack, and that is the de- 
pendency of our transportation sector 
on foreign energy sources. My col- 
leagues will point to the fleet provi- 
sions of this bill combined with the 
Clean Air Act as significant efforts 
toward diversification of fuels. True, 
but we have not diversified the source 
of these fuels. With the exception of 
natural gas, the overwhelming per- 
centage of these new fuels will come 
from offshore. Again, 85 percent of 
the MTBE will not be made in Ameri- 
ca. We have merely traded one depen- 
dency for another. 

So how do we cure the energy de- 
pendency disease? I realize that there 
is no silver bullet. There are many 
conflicting goals that we must bal- 
ance. Do we encourage further do- 
mestic oil production now, thereby 
depleting our reserves for future con- 
tingencies? Suppose we had never had 
a mandatory oil import quota pro- 
gram that the oil companies wanted 
and got We would have more 
low-cost domestic oil available today. 
So those interested in husbanding our 
resources should oppose oil import 
quotas. The same argument can be 
made about protectionist import fees. 

But, on the other hand, if we do not 
require some domestic production, we 



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lose thousands of jobs. OPEC can 
underprice us any day of the week 
and totally shut down our domestic 
industry. Little by little, that is what 
they are doing. Once we lose the 
capacity to produce our own energy, 
we will be defenseless as a nation. 
Two world wars were won because we 
had greater access to energy and could 
outproduce our enemies. I note with 
some irony, Mr. President, that when 
it comes to making weapons, we insist 
that the weapons be made here, even 
though they could be made cheaper 
elsewhere. But, when it comes to the 
fuels that actually make the weapons 
work, we adopt some laissez-faire 
attitude that it does not matter where 
the fuels come from. This is absurd, 
we cannot afford to lose our ability to 
produce energy. Nor can we afford to 
drain our oil reserves dry until we 
have developed alternatives to oil. 

So again, what is the answer? 
Handouts are not the answer, interna- 
tional oil companies do not need tax 
handouts. Oil companies are going to 
keep going overseas because OPEC oil 
is cheaper than our oil. But OPEC is 
smart; they will not kill us off too 
fast, 8,000 jobs here, 4,000 jobs there. 
A little at a time so we, the American 
people, do not get just mad enough to 
say enough is enough. But over time, 
we are talking about 400,000 jobs lost. 

We have to accept the fact that we 
need domestic energy production and 
we need to protect domestic jobs and 
capabilities. But how do we do this 
and still meet the goal of conserving 
our resources? 

There is only one answer to this 
problem and that is to protect a cer- 
tain percentage of domestic produc- 
tion, but the key is the domestic pro- 
duction of what type of energy? We do 
not have $2 a barrel oil, we will never 



be able to compete with OPEC on 
pricing or in a truly free market. 
This free market nonsense is just that 
- nonsense. OPEC is not a free mar- 
ket organization, its an organization 
designed to control prices for their 
benefit and our deteriment. Conven- 
tional oil is thus not the answer. 

Instead of the status quo of lost 
American jobs, I believe we should be 
requiring a certain percentage of do- 
mestic production of two types of 
energy. First, let us make use of 
those sources of energy that we either 
use or lose. Like stripper well oil. 
For the most part, once a stripper 
well shuts down, it is shut down forev- 
er. The oil associated with that well 
is lost. The pressures and subsurface 
characteristics and needed to continue 
oil production disappear. Why let this 
energy source go to waste, to be lost 
forever. That is wrong. For virtually 
pennies a gallon, we can keep the 
thousands of stripper wells going. 
This would decrease our trade balance 
and increase the income to thousands 
of Americans across this country. 
Nearly three-quarters of the wells in 
this country are stripper wells. Let us 
not lose the production from these 
wells. 

What is the second type of energy 
we should be mandating domestic 
production of? Those resources which 
are plentiful, like renewable resources. 
Our farmers can outproduce anyone 
in the world. They helped make our 
country great and they can continue 
to make America great. Let us put 
the family farmer back to work. 

The Senate has already consider 
this proposal and voted to table it, so 
I am not going to offer it again. But, 
I urge my colleagues on the committee 
to improve this bill so that it will 
decrease our energy dependence. 



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Americansoverwhelminglythinkwe 
are on the wrong track. In terms of 
our dependence on imported motor 
fuels, this bill does not put us on a 
new track. The only way to guaran- 
tee American jobs is in the motor fuels 
industry is to protect them. Mr. Pres- 
ident, I believe energy policy, in par- 
ticular oil policy, is one area that 
America has consistently failed to 
adopt an effective long-range strategy. 
The debate has volleyed back and 
forth between two diverse views. 
Some say we should not limit imports 
at all; that we need a totally free mar- 
ket. Buy the oil wherever its cheapest 
and husband our reserves. The other 
view is that we should become more 
reliant on our won resources, our own 
people. I believe American money 
should go to invest in American work- 
ers. I support domestic production. 

I will not accept the terms of the 
big oil companies. They lobby for 
easing the environmental regulations 
that have made us one of the cleanest 
countries in the world. They lobby for 
opening up sensitive ecosystems to 
their drilling. And for what long-term 
again? The oil companies keep missing 
one of the fundamental reason for 
opposition to drilling in ANWR. What 
does any American have to gain in the 
long-term from drilling in ANWR? 
The oil companies will drain it dry 
and then be right back where they are 
today: firing American workers and 
begging for more help from Congress. 
They want Americans to put a fragile 
ecosystem at risk for no long-term 
benefit, just a quick fix. If they would 
only think about a long-term strategy 
for America they might find a more 
receptive Congress. What is going to 
happen to the American worker when 
they have sucked the oil our of 
NAWR? They have never answered 



that question. 

I do not intend to reoffer my 
amendment to this bill. I believe I 
would be defeated again, so I will 
make time for more productive uses. 
We certainly need to start making 
productive use of our time. I will 
continue to fight for greater energy 
independence and for American work- 
ers. 

In the meantime, I hope the energy 
workers across this country will join 
the fray. Fight for your jobs and for 
greater use of American resources. 
Your jobs can be secure for a few pen- 
nies per gallon, a few pennies I believe 
Americans would be more than willing 
to pay to support their fellow Ameri- 
cans. Someday, I hope my children 
can fuel their car with American re- 
sources. When that day comes, we 
will once again be a strong America. 
Thank you, Mr. President. 

Mr. EXON. Mr. President, I had 
prepared an amendment to the energy 
bill relating to a coal rate study re- 
quired under this legislation. I will 
not be offering that amendment be- 
cause it is not my intention to delay 
the energy bill further. However, I 
would like to engage the manager of 
the bill in a colloquy regarding section 
14113 of S. 2166. This provision calk 
for the establishment of a data base 
containing transportation rate infor- 
mation for shipments of coal over a 
10-year period and a study of the 
impact of Federal policies on such 
rates. 

On September 4, 1991, Senator 
Hasten and I wrote a letter on behalf 
of the Subcommittee on Surface 
Transportation indicating our displea- 
sure with this provision. That letter 
raised both jurisdictional and substan- 
tive concerns with the provision. Cer- 
tain recent studies by the Interstate 



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Commerce Commission (ICC) appear 
to indicate a downward trend in rail- 
road coal rates have fallen 19.3 per- 
cent since 1980. 

This data suggest there may well be 
a need to rethink section 14113. I 
would like to inquire of the chairman 
if he would be willing to reexamine 
this section. 

Mr. JOHNSTON. I thank my col- 
league from Nebraska. As he knows, I 
have had a longstanding concern re- 
garding the relatively high costs of 
coal transportation by rail. However, 
he has raised some points that ap- 
proximately should be considered as 
we head into conference on this legis- 
lation. 

Mr. EXON. I thank the Senator 
from Louisiana and ask that the letter 
of September 4, 1991, be printed in 
the Record. 

There being no objection, the letter 
was ordered to be printed in the Re- 
cord, as follows: 

Committee on Commerce, Science, 
end Transportation, 
Washington, DC, September 4, 1991. 
Hon. Bennett Johnston, Chairman, 
Committee on Energy and National Resources, 
US. Senate, 
Washington, DC. 

Dear Bennett: Aa the Chairman and ranking 
Republican member of the Senate Surface Trans- 
portation Subcommittee, we ere writing to es> 
i concern over section 14113 of S. 1220, the 
f bill, which was reported to the full 



Specifically, Section 14113 would require the 
Department of Energy (DOE) to review increases 
in coal transportation rates resulting from last 
year's Clean Air Act amendments and other Fed- 
eral policies. It would direct DOE to establish a 
data base for all rates for domestic coal ship- 
ments moving by rail, pipeline, truck, conveyor 
belt, barge, and other modes of transportation 
over a 10-year period. Interestingly, it would 
require DOE to examine revenue to variable cost 
ratios of railroad coal rates, but not similar ratios 
for other transportation modes. It also csdudes 
from scrutiny modes transporting noncoal energy 



sources, 9M well 9M rates charged by energy pro- 
ducers. 

We urge that Section 14 1 13 be deleted from S. 
1220. The Surface Transportation Subcommittee 
of the Commerce Committee has jurisdiction over 
coal transportation rates. As recently ss the 
100th Congress, the Subcommittee held a series 
of hearings involving railroad coal rates. It also 
considered legislation on the Interstate Com- 
merce Commission's (ICC) implementation of the 
Staggers Rail Act, which allows shippers to file 
complaints on railroad rates deemed unreason- 
ably high and allows the ICC to order a rate 
reduction and award reparations. The full Sen- 
ate Commerce Committee specifically voted 
against reporting legislation on the subject at 
that time. 

A decade of experience under the Staggers Rail 
Act shows it is accomplishing largely what Con- 
gress intended. In fact, a May, 1991, ICC study 
showed that average, inflation-adjusted transpor- 
tation rates for coal fell by 14.2 percent between 
1980 and 1989. The Subcommittee will continue 
its oversight role on the implementation of the 
Staggers Rail Act by the ICC. 

In summary, we object to Section 14 1 13 of S. 
1330 and urge that it be deleted from the bill. 
Robert W. Kaaten, Jr., 

Ranking Republican, Surface Trans- 
portation Subcommittee. 
J. James Exon, 

Chairman, Surface Transportation 
Subcommittee. 

BIODIESEL 

Mr. BOND. Thank you, Mr. Presi- 
dent. Is it the understanding of the 
Senator from Louisiana that biodiesel 
would be considered covered under 
the definitions of alternative fuel and 
replacement fuel in S. 2166? 

Mr. JOHNSTON. Yes, it is my un- 
derstanding that biodiesel would in- 
deed be considered covered under the 
alternative fuel and replacement fuel 
definitions in the bill because biodiesel 
is derived from nonpetroleum feed 
stocks such as soybeans, vegetable oils, 
and animal byproducts. 

Mr. BOND. So biodiesel made from 
soybeans would also be included under 
these definitions? 

Mr. JOHNSTON. That is correct. 



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Mr. BOND. Is it also the Senator's 
intention that programs to promote 
the development and commercializa- 
tion of alternative fuels could include 
biodiesel, including biodiesel made 
from soybeans and animal byproducts, 
if the Secretary deems appropriate? 

Mr. JOHNSTON. Yes, that is my 
intention. 

Mr. BOND. I thank the Senator. 

UNANIMOUS-CONSENT AGREEMENT 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the only 
first-degree amendments remaining in 
order to H.R. 776, other than the 
pending committee substitute, and the 
pending Wellstone and Dodd amend- 
ments, numbers 2789 and 2790, be the 
following: 

Senator Grassley's ethanol amend- 
ment; Senator Dole's amendment 
regarding ethanol; Senator Dole's 
solid waste disposal/phosphorus acid 
process amendment; Senator 
Murkowski's amendment regarding a 
study of the future of oil and gas po- 
tential in ANWR, with a possible mod- 
ification by Senator Murkowski and 
Senator Wellstone of that amend- 
ment; Senator Stevens' tax credit 
regarding an oil pollution amendment; 
Senator D'Amato's amendment re- 
garding antidumping; that 
second-degree amendments be in or- 
der, provided they are relevant to the 
first-degree amendment and under 
the same time limitation, if one is in 
effect on the first degree; that no 
motions to recommit be in order; pro- 
vided further that if a subsequent 
unanimous-consent agreement is 
reached between Senators Dodd and 
Gramm on the Dodd-Wellstone 
amendments, then it be in order for 
Senator Dodd to modify or withdraw 
his amendment in order to conform to 



the accord; then the terms of the 
amendment limitations of this agree- 
ment remain in effect. 

Further, that if unanimous consent 
is not reached relative to the 
Dodd-Wellstone amendments, then 
any agreement regarding limitation on 
amendments to this bill is vitiated; 
that upon disposition of these 
above-listed amendments and the 
committee substitute, the Senate, 
without any intervening action or 
debate, proceed to third reading and 
final passage of the bill. 

The PRESIDING OFFICER. Is 
there objection? 

Mr. WALLOP. Mr. President, the 
minority has dealt with this and be- 
lieves it to be a good reflection of the 
best course to follow. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The text of the agreement is as 
follows: 

Ordered, That at 10 a.m. on Thursday, July 30, 
1992, the Senate resume consideration of H.R. 
776, the Comprehensive National Energy Policy 
Act, and the only first degree amendments re- 
maining in order, other than the pending com- 
mittee substitute and the pending Wellstone and 
Dodd amendments, Nos. 2789 and 2790. be the 
following: 

D'Amato: Anti-dumping. 

Dole: Regarding Ethanol. 

Dole: Solid waste diepoeel/phoephorue add 



Graesley: Ethanol. 

Stevens: Tax credit re: oil pollution. 

Ordered further, That second degree amend- 
ments be in order provided they ere relevant to 
the first degree amendment, and under the same 
time limitation if one b in effect on the ftni 



Ordered further, Thet no motions to recommit 
be in order. 

Ordered further, Thet if a subsequent unani- 
mous consent agreement is reached between 
Senators Dodd and Gramm on the 
Dodd-Wellstone amendments, then it be in order 
for Senator Dodd to modify or withdraw his 
amendment In order to conform to the accord; 
then the terms of the amendment limitations of 



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this a greemen t remain in effect; end if unani- 
moue consent b not reecbed relative to the 
Dodd-Wolletone emendment, tben any agreement 
regarding a limitation on amendments to this bill 
be vitiated. 

Ordered further, That upon disposition of 
these above listed amendments, and the commit- 
tee substitute, the Senate, without any interven- 
ing action or debate, proceed to third reading and 
final passage of the bill. 

Mr. JOHNSTON. Mr. President, I 
think Senators who just heard the 
reading of the unanimous-consent re- 
quest, which was agreed to, will un- 
derstand that it is all contingent upon 
reaching agreement on the 
Dodd-Wellstone amendments, and if 
they do not reach any agreement, 
then the whole matter is vitiated, and 
we are still in open season on our bill, 
which we trust will not happen. 

Mr. WALLOP. Mr. President, if the 
Senator will yield, it is my passionate 
desire that they reach such an agree- 
ment; that the long awaited, long 
struggled over energy policy not be 
held hostage to this extraneous argu- 
ment • not that it is not an important 
argument; it is that it is an extrane- 
ous argument. It has nothing to do 
with energy policy. 

So I urge the two Senators to find 
some resolution to that, and I can on- 
ly say that it is my hope, along with 
Senator Johnston's, that they do, and 
it is my hope that along about 2 
o'clock tomorrow afternoon, we are 
engaged in the vote on Anal passage of 
this legislation. 

It is beyond time, Mr. President, for 
it to go to conference. I think both of 
us would agree that the remaining 
amendments are well within the reach 
of resolution, either through vote or 
through negotiation. They are not 
that difficult, and the subjects which 
they contain are not that mysterious 
to Senators that we should not be able 



to arrange some kind of agreement, 
and the vote on them will be clear to 
all Senators. 

So, really, the only thing that con- 
founds final passage is the confronta- 
tion between the Senator from Con- 
necticut and the Senator from Texas. 

Mr. JOHNSTON. Mr. President, if 
the Senator will yield, we protected 
these four Senators on their amend- 
ments for about 3 hours now, while 
we have sat around waiting. I hope 
we do not plan to have another 3 or 4 
hours' protection tomorrow while we 
wait around. It would be easier just 
to come in at 1 or 2 o'clock and get 
started. 

Mr. WALLOP. I would say to my 
friend, Mr. President, that the agree- 
ment does not guarantee that they be 
brought up, only that they be in or- 
der. So should it be that all other 
matters are settled I would join my 
friend in calling for third reading and 
moving to final passage. 

Mr. JOHNSTON. I thank my 
friend. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the order for 
the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. WALLOP addressed the Chair. 

The PRESIDING OFFICER. The 
Chair informs the distinguished Sena- 
tor from Wyoming we need a request 
to set aside the pending amendment. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the pending 
business be set aside in order to con- 
sider an amendment that was part of 



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the unanimous-consent agreement. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

AMENDMENT NO. 2792 
(Purpose: To require ibe Secretary of Energy to 
conduct a study of the status and future of the 
domestic oil and gas industry and the potential 
impacts of development of the Coastal Plain of 
the Arctic National Wildlife Refuge on the oil and 
gas industry, the economy, and national security) 

Mr. WALLOP. Mr. President, on 
behalf of Senator Murkowski, I send 
an amendment to the desk and ask 
that it be stated. 

The PRESIDING OFFICER. The 
clerk will report the amendment. 

The legislative clerk read as follows: 

The Senator from Wyoming (Mr. Wallop), for 
Mr. Murkowski, proposes an amendment num- 
bered 2792. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the reading 
of the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

At the end of the bill insert the following new 
title: 

TITLE - STUDY OP THE FUTURE OIL AND 
GAS POTENTIAL AND ECONOMIC 
IMPACT 

Sec. . The Secretary of Energy, in consultation 
with the Secretaries of Labor, Commerce, State, 
the Interior, and Defense, shall prepare and com- 
plete within 6 months from the date of enact- 
ment of this Act and submit to the United States 
House of Representatives and the Committee on 
Energy and Natural Resources of the United 
States Senate a comprehensive study of the 
following: 

(1) the current and projected status of the 
domestic oil and gas industry, including: 

(A) the quantity and types of jobs lost in the 
industry during the 10 year period ending on the 
date of enactment of this Act; and 

<B) the potential for job creation and loss 
during the 10 year period beginning on the date 
of enactment of this Act together with the basis 
for any alternative projection; 

CD the historic and projected future trends in 
oil and gas industry investment in foreign coun- 
tries and the related reductions in investment in 



the United States; 

(5) the current and projected status of the rate 
of imports of foreign oil in absolute terms and as 
a percentage of consumption; 

(4) the current and projected impacts of in- 
creasing reliance on imported oil on: 

(A) the economy of the United States; 

(B) the balance of trade deficit of the United 
States; and 

(O national security interests of the United 
States, including related military and other costs; 

(6) the current and projected status of decline 
in production of oil from Alaska's North Slops 
transported through the Trans-Alaska Pipeline 
System (TAPS) end effects of this decline on: 

(A) regional and national employment in the 
United States; 

(B) the nations! security of the United States; 
and 

(C) energy prices in the United States; 

(6)(A) the sstimstsd date for the required re- 
moval of the TAPS in the event there is no oil 
production from the coastal plain of the Arctic 
National Wildlife Refuge (ANWR); and 

(B) ths effect of the shutdown and removal of 
the TAPS on the production of Alaska North 
Slope heavy oil res srvs s and othsrwiss economi- 
cally marginal fields for which production tech- 
nologies are in ths process of development; 

(7) the impact of potential ANWR coastal plain 
oil production on: 

(A) the longevity of ths TAPS and on oil pro- 
duction and consumption in ths United States; 
and 

(B) the potential loss of othsrwiss producible 
domestic available ress r vss; 

(7) ths potential quantity and typee of jobs that 
would be created, both directly and indirectly, by 
the esplorstion and development of the coastal 
plain of ANWR and the loss of such jobs if asplo- 
ration and development doss not occur; 

(8) ths domestic industrial production capabili- 
ties which would be created by the esplorstion 
and development of the coastal plain of ANWR 
and the potential loss of such capability of esplo- 
rstion and development does not occur, including 
the sbility to explore and develop other domestic 
oil and gss prospects; 

(9) the potential impact of esplorstion and 
development of the coastal plain of ANWR on: 

(A) the economy of the United States; 

(B) the economies of the regions of the United 



(Q the balance of trade deficit of the United 



(10) the projected potential revenues, both 
direct and indirect, to the United States Treeaury 



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snd the SUU of Atoka that would be gsneretod 
by exploration and development of oil reaervea 
within the ooaatal plain of ANWR; 

(11) the technologies available for reducing the 
environmental impact of exploration and produc- 
tion of oil from the coastal plain of ANWR; and 

(12) the development and application of Arctic 
oil production technologies on Alaska's North 
Slope including: 

(A) a comparison of the technology used at the 
Prudhoe Bay and Endicott oil fields; and 

(B) a comparison of technologies used and the 
environmental impact of Alaska North Slope 
deve l opment to conventional oil field exploration 
and development in the contiguous United 
States. 

AMENDMENT NO. 2792, AS MODIFIED 

Mr. WALLOP. I now send a modifi- 
cation by Senator Murkowski on be- 
half of himself and Mr. Wellstone to 
the desk and ask that it be stated. 

The PRESIDING OFFICER. The 
amendment is so modified. 

The amendment, as modified, is as 
follows: 

Strike all after the word 'TITLE' and insert 
the following: 

■ STUDY OF THE FUTURE OIL AND GAS 
POTENTIAL AND ECONOMIC IMPACT 

Sec. . The Secretary of Energy, in consultation 
with the Secretaries of Labor, Commerce, State, 
the Interior, and Defense, shall prepare and com- 
plete within 6 months from the date of enact- 
ment of this Act and submit to the United States 
House of Representatives and the Committee on 
Energy and Natural Resources of the United 
States Senate a comprehensive study of the fol- 
lowing: 

(1) the current and projected status of the 
domestic oil and gas industry and other energy 
industries, including: 

(A) the quantity and types of jobs created and 
lost in the industry during the 10 year period 
ending on the date of enactment of this Act; and 

(B) the potential for job creation and loss dur- 
ing the 10 year period beginning on the date of 
enactment of this Act together with the basis for 
any alternative projection; 

(2) the historic and projected future trends in 
oil end gas industry and other energy industry 
investment in the United States and foreign 
countries and the related change in investment 
in the United States; 

(3) the current and projected status of the rate 



of imports of foreign oil in absolute terms and as 
a percentage of consumption; 

(4) the current and projected impacts of in- 
creasing reliance on imported oil on: 

(A) the economy of the United States; 

(B) the balance of trade deficit of the United 



(Q national security interests of the United 
States, including related military and other costs; 

(6) the current and projected status of decline 
in production of oil from Alaska's North Slope 
transported through the Trans-Alaska Pipeline 
System (TAPS) end effects of this decline on: 

(A) regional and national employment in the 
United Steles; 

(B) the national security of the United States; 
and 

(O energy prices in the United States; 

(6) (A) the estimated date for the required 
removal of the TAPS in the event there is no oil 
production from the coastal plain of the Arctic 
National Wildlife Refuge (ANWR); and 

(B) the effect of the shutdown and removal of 
the TAPS on the production of Alaska North 
Slope heavy oil reserves snd otherwise economi- 
cally marginal field* for which production tech- 
nologies are in the process of development; 

(7) the impact of potential ANWR coastal plain 
oil production on: 

(A) the longevity of the TAPS and on oil pro- 
duction and consumption in the United States; 
snd 

(B) the potential loss of otherwise producible 
domestic available reserves; 

(7) the potential quantity and types of jobs that 
would be created, both directly and indirectly, by 
the exploration and development of the coastal 
plain of ANWR and the loss of such jobs if explo- 
ration and development does not occur; 

(S) the domestic industrial production capabili- 
ties which would be created by the exploration 
and development of the coastal plain of ANWR 
and the potential loss of such capability if explo- 
ration and development does not occur, including 
the ability to explore and develop other domestic 
oil snd gas prospects; 

(9) the potential impact of exploration and 
development of the coastal plain of ANWR on: 

(A) the economy of the United States; 

(B) the economies of the regions of the United 
State; and 

(C) the balance of trade deficit of the United 
States; 

XD) production from wells producing 16 barrels 
of oil per day or loss. 

(10) the projected potential revenues and costs, 
both direct and indirect, to the United States 



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Treasury and the State of Alaska that would ba 
generated or incurred by exploration and develop- 
ment of oil reserves within tbe coastal plain of 
ANWR; 

( 1 1) the technologies available for reducing the 
environmental impact of esploration and produc- 
tion of oil from the coastal plain of ANWR; end 

(12) the development and application of Arctic 
oil production technologies on Alaska's North 
Slope including: 

(A) a comparison of the technology used at the 
Prudhoe Bay and Endieott oil fields; and 

(B) a comparison of technologies available for 
Alaska North Slope development with conven- 
tional oil field esploration and development in 
the contiguous United States. 

(IS) all possible alternative energy supplies 
(including energy conservation) currently avail- 
able in the United States, and which might be 
available in the foreseeable future, that would 
provide the same amount or greater amounts of 
energy than are estimated by the Department of 
the Interior to be available from the coastal plain. 

(14) the known and estimated reserves of oil 
and gas on the North Slope of Alaska (including 
State and federal offshore lands) outside of the 
Arctic National Wildlife Refuge. 

Mr. WALLOP. Mr. President, on 
behalf of the minority and my under- 
standing of the majority, I say the 
differences between the Senator from 
Minnesota and the Senator from Alas- 
ka have been worked out, and it is 
acceptable to both aides. I call for the 
question on the amendment. 

The PRESIDING OFFICER Is 
there further debate on the amend- 
ment, as modified? If not, question is 
on agreeing to the amendment, as 
modified. 

The amendment (No. 2792), as mod- 
ified, was agreed to. 

Mr. WALLOP. Mr. President, I 
move to recensider the vote. 

Mr. JOHNSTON. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. WALLOP. Mr. President, I sug- 
gest the absence of a quorum. 

The PRESIDING OFFICER. The 



clerk will call the roll. 

The legislative clerk proceeded to 
call the roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

AMENDMENTS SUBMITTED 
SPECTE R AME NDMENT NO. 2783 
Mr. SPECTER proposed an amendment to 
the bill H.R. 776, supra, as follows: 

At the end of the Amendment, add the follow- 
ing: 
TITLE I - TAX INCENTIVE FOR HEALTH 
CARE ACCESS 
SEC. 101. DEDUCTIBILITY FOR 
SELF-EMPLOYED INDIVIDUALS. 

(s) In General. • Paragraph (1) of section 1620) 
of the Internal Revenue Code of 1986 (relating to 
special rules for health insurance costs of 
self-employed individuals) is amended by striking 
'26 percent of. 

(b) Deduction Msds Permanent. - Section 1620) 
of the Internal Revenue Code of 1986 is amended 
by striking paragraph (6). 

(c) Conforming Amendment. -Subparagraph (B) 
of section 1620X3) of the Internal Revenue Code 
of 1986 (relating to coordination with medical 
deduction, etc.) is amended • 

(1) by striking 'health insurance credit' and 
inserting 'health expenses credit and employer 
health insurance credit', 

(2) by striking 'section 82' and inserting 
'section 34A with respect to such insurance and 
section 38, respectively', and 

(3) by striking 'credit* in the heading thereof 
and inserting 'credits'. 

(d) Effective Dete. • The amendments made by 
thia section ehall apply to taxable years beginning 
after December 31, 1991. 

TITLE II - HEALTH CARE REFORM PROVI- 
SIONS 

SUBTITLE A - MODEL HEALTH CARE IN- 
SURANCE BENEFITS PLAN 
SEC. 201. MODEL HEALTH CARE INSUR- 
ANCE BENEFITS PLAN. 

(a) In General. • The Secretary ehall request 
that the NAIC - 

(1) develop a model health care insurance 
benefits plan that ehall contain standards that 
entities offering health care insurance p o l icies 
should meet with respect to the benefits and 
coverage provided under such poli ci es, and 



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(2) report to Iho Secretary on such standard*, 
not later than 1 year alter tho date of enactment 
of thia Act. If tho NAIC develop* such a plan by 
aucfa date and the Secretary finda that such plan 
im pl e m e n t* the requirements of aubeection (c), 
such plan shall be the model health care insur- 
ance benefits plan under thia Act. 

(b) Role of the Secretary in Absence of NAIC 
Plan. - If the NAIC fails to develop and report a 
model health care insurance benefits plan by the 
date specified in su b sec t ion (a) or the Secretary 
finda that such plan doss not implement the 
requirements of su b sec t ion (c), the Secretary 
shall develop and publish such a plan, by not 
lator than eighteen months after the date of 
enactment of thia Act. Such plan shall then be 
the plan under thia Act. 

(c) Contents. - Ths standards under the model 
benefits plan should require - 

( 1) that coverage be provided under health cars 
insurance policies for basic hospital, medical and 
surgical services, including preventative care 
se rvi ce s determined appropriate by the Secretary; 

(2) reasonable cost sharing by the beneficiaries 
under such policies; and 

(S) appropriate copaymenta and deductibles. 
SBC. 202. DEFINITIONS. 

As used in this title: 

(1) Health care insurance. - The term 'health 
care insurance' means sny hospital or medical 
expense incurred policy or certificate, hospital or 
medical service plan contract, health mainte- 
nance subscriber contract, multiple employer 
welfare arrangement, other employee welfare 
plan (aa defined in the Employee Retirement 
Income Security Act of 1974), or sny other health 
insurance arrangement, and includes an 
employment-related reinsurance plan, but does 
not include • 

(A) a self-insured health care insurance plan; or 

(B) any of the following offered by an insurer - 
(i) accident only, dental only, or disability 

income only insurance, 

(ii) coverage issued aa s supplement to liability 
insurance, 

(iii) worker's compensation or similar insur- 



(iv) automobile medical-payment insurance. 

(2) Managed cars plan. • The term 'managed 
care plan' means s health cars insurance plan in 
which ths insurer offering such plan utilises ths 
standards recommended under section 21 1 con- 
cerning the benefits and coverage under such 
plan. 

(3) Model benefits plan. • The term 'model 
benefits plan' meane the model health care 
insurance benefits plan developed under section 



201(a). 

(4) NAIC. - Ths term 'NAIC means the Nstion- 
sl Association of Insurance Commissioners. 

(6) Secretary, • The term 'Secretary' means the 
Secretary of Health and Human Services. 
(6) Small employer. • 

(A) In general. • The term 'small employer' 
means any employer which, on an average busi- 
ness day during the preceding taxable year, had 
more than 2 but less than 100 employees. 

(B) Employee. • The term 'employee' ahull not 
include • 

(i) s self-employed individual aa defined in 
section 401(c)(1) of ths Internet Revenue Code of 
1086, or 

(ii) an employee who works less than 20 hours 
per week. 

SUBTITLE B - MANAGED CARE 
SEC. 211. DEVELOPMENT OP STANDARDS 
FOR MANAGED CARE PLANS. 

(s) In General. • Not later than 1 year after the 
date of enactment of thia Act, the Secretary, 
taking into account recommendation* of the 
Managed Care Advisory Committee, shall develop 
recommended standards that insurers offering 
managed care plana should meet with respect to 
the benefits, coverage, and delivery systems 
provided under such plana. Such standards shall 
encompass ths standards by which managed care 
entities operate. 

(b) Managed Care Advisory Committee. • 

(1) Establishment. • There shall bo estsblishsd 
a Managed Care Advisory Committee (hereinafter 
referred to am ths 'Committee'). 

(2) Membership. • The Committee shall be 
compos e d of 6 members appointed by the Secre- 
tary, each member representing 1 of tho follow- 
ing areas: 

(A) Health care professions In. 

(B) Managed care industry. 

(C) Academia (with specific expertise in man- 
aged care plana). 

(D) Business management 

(E) Organised labor. 

(5) Compensation. - 

(A) In general. • Members of the Committee 
shall serve without compensation. 

(B) Expenses, etc., reimbursed. - While away 
from their homes or regular places of business on 
ths business of the Committee, the members may 
be allowed travel expenses, including per diem in 
lieu of subsistence, am authorized by section 5703 
of title 6, United States Code, for persons em- 
ployed intermittently in Government service. 

(C) Application of act. - The provisions of the 
Federal Advisory Committee Act (5 U.S.C. App.) 
shall not spply with respect to the Committee. 



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(D) Support. • The Secretary shall supply such 
necessary office facilities, office supplies, support 
services, and related expenses as necessary to 
carry out the functions of the Committee. 
SEC. 212. PREEMPTION OF PROVISIONS 
RELATING TO MANAGED CARE. 

In the case of a managed care plan mseting the 
recommended standards under section 211 that 
b offered by an insurer, the following provisions 
of State law are preempted and may not be 
enforced against the managed care plan with 
respect to an insurer offering such plan: 

(1) Restrictions on reimbursement rates or 
selective contracting. - Any law that restricts the 
ability of the insurer to negotiate reimbursement 
rates with health care providers or to contract 
selectively with one provider or a limited number 
of providers. 

(2) Restrictions on differential financial incen- 
tives. - Any law that limits the financial incen- 
tives that the managed care plan may require a 
beneficiary to pay* when a non-plan provider is 
used on a non-emergency basis. 

(3) Restrictions on utilization review methods. 

(A) In general. - Any law that • 

(i) prohibits utilization review of any or all 
treatment* and conditions; 

(ii) requires that such review be made by a 
resident of the State in which the treatment is to 
be offered or by an individual liceused in such 
State, or by a physician in any particular special- 
ty or with any board certified specialty of the 
same medical specialty as the provider whose 
services are being rendered; 

(iii) requires the use of specified standards of 
health care practice in such review or requires 
the disclosure of the specific criteria used in such 
review; 

(iv) requires payments to providers for the 
expenses of responding to utilization review 
requests; or 

(v) imposes liability for delays in performing 
such review. 

(B) Construction. - Nothing in subparagraph 
(A)(ii) shall be construed as prohibiting a State 
from requiring that utilization review be conduct- 
ed by a liceused health care professional, or 
requiring that any appeal from such a review be 
made by a licensed physician or by a licensed 
physician in any particular specialty or with any 
board certified specialty of the same medical 
specialty as the provider whose services are being 
rendered. 

(4) Restrictions on benefits. • Any law that 
mandates benefits under the managed care plan 
that are greater that the benefits recommended 



under the standards developed under section 211. 
SUBTITLE C • SMALL EMPLOYER PUR- 
CHASING GROUPS 
SEC. 221. QUALIFIED SMALL EMPLOYER 
PURCHASING GROUPS. 

(a) Defined. • For purposes of this title, an 
entity is a qualified small employer purchasing 
group if • 

(1) the entity submits an application lo the 
Secretary at such time, in such form and contain- 
ing such information as the Secretary may 
require; and 

(2) on the basis of information contained in the 
application and any other information the Secre- 
tary may require, the Secretary determines that 

(A) the entity is administered solely undor the 
authority and control of its member employers; 

(B) the membership of the entity coiisiuts solely 
of small employers (except that an employer 
member of the group may retain its moinborship 
in the group if, after the Secretary determines 
that the entity meets the requirements of this 
subsection, the number of employees of the 
employer member increases to more than 100); 

(C) with respect to each State in which its 
members are located, the entity consists of not 
fewer than 100 employers; 

(D) at the time the entity submits its applica- 
tion, the health care insurance plans with respect 
to the employer members of tlie entity are in 
compliance with applicable State laws and the 
model benefits plan relating to such plans; 

(E) the health care insurance plans of the entity 
and the employer members of the entity are not 
self-insured plans; 

(F) each enrollee in the program of tho entity 
may enroll with any participating carrier that 
offers health care insurance coverage in the 
geographic area in which the enrollee resides; 
and 

(G) such entity will be a nonprofit entity; and 

(3) such entity has a board of directors as 
described in subsection (b) with authority to act 
as described in subsection (c). 

(b) Operations. • A small employer purchasing 
group shall be administered by a board of direc- 
tors. The members of such board shsll bo elected 
by the employers that are members of the group, 
and such board members shall servo st the 
pleasure of the majority of such employers. 

(c) Duties of Board. • 

(1) In general. • The board shsll hevc the 
authority to • 

(A) enter into contracts with carriers to provide 
health care insurance coverage to eligible employ- 
ees and their dependents; 



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(B) enter into other contracta as art nnresairy 
or proper to cany out the proviaiona of thia 
subtitle; 

(O employ neceaaary staff; 

(D) appoint oommitteea aa neceaaary to provide 
technical aaaiatance in the operation of the 
entity's program; 

(E) aaaeaa participating employers a reaaonable 
fee for neceaaary coste in connection with the 



(F) undertake activitiea neceaaary to adminiater 
the program including marketing and publicising 
the program and assuring carrier, employer, and 
enrollee compliance with program requirements; 

(G) issue rules and regulatione neceaaary to 
carry out the purpose of this subtitle; end 

(H) accept and expend funds received through 
fees, grante, appropriations, or other appropriate 
and lawful mesne. 

(2) Program management. - 

(A) Geographic areas of coverage. - Ths board 
•hall eetsblieh geographic areas within which 
participating carriers may offer health care 
ineuranca coverage to eligible employees and 
dependenta. The board ahall contract with 
sufficient numbers and typee of carriers in an 
area to assure that employeea have a choice from 
among s reaaonable number and type of compet- 
ing health care inauranos carriers. 

(B) Contract requirementa. - 

G) In general. - The board ahall enter into 
eontracta with qualified carriers for the purpose 
of providing health cars insurance coverage to 
eligible employeea and dependenta, and ahall pay 
qualified carriers on st least s monthly basis st 
ths contracted ratea. 

(ii) General qualifieationa of carriers. - Partici- 
pating carriers shall be qualified if such carriers 
have - 

(I) adequate adminiatrative management, 

QD financial solvency, and 

Gil) the ability to assume the risk of providing 
and paying for covered services. A participating 
carrier may utilise reinsurance, provider risk 
sharing, and other appropriate mechaniama to 
•here a portion of the riek described in subclause 
(in). The board may establish risk adjuettnent 
mofhsnisms that can be utilised to addreee 
drcumstaneas where a participating carrier has 
s significantly disproportionate •here of high riek 
or low riek enroUeea based upon valid data 
provided by carrier. Any such risk adjuatment 
mechanism may bs developed and applied oiuy 
after consultation with the participating carriers. 

(O Program atandarda. • The board ahall re- 
quire that participating carriera that contract 
with or employ health care providers shall have 



mechaniama to aceompliah st least the following, 
satisfactory to the program: 

(i) Review the quality of care covered. 

(ii) Review the appropriateness of care covered. 

(iii) Provide accessible health services. 

(D) Uniformity of benefita. • The board ahall 
aaaure that participating carriera - 

(i) ahall offer substantially similar benefita to 
enroUees in the program, except that enrollesa 
cost sharing required by participating carriera 
may vary according to the basic method of opera- 
tion of the carrier, and 

(ii) ahall not vary ratea to email employers or 
enroUeea in the program on account of claim 
experience, health status or duration from issue. 

(E) Payment mechanism. • The board ahall 
establiah a mechanism to collect premiums from 
email employers, including remittance of the 
enrollee's share of the premium. 

(3) Notification of program benefita. • The board 
ahall uae appropriate and efficient means to 
notify employers of ths availability of sponsored 
health care insurance coverage from the program. 
The board ahall make available marketing materi- 
als which accurately summarize the carriera' 
ineuranca plana and ratea which are offered 
through the program. A participating carrier 
may contract with an agent or broker to provide 
marketing, advertising, or presentation proposals 
or otherwise disseminate information regarding 
coverage or services or rates offered in connec- 
tion with the program. 

(4) Conditions of participation. - 

(A) In general. - The board ahall eatabliah 
conditiona of participation for email employers 
and enroUees that - 

(i) aesure that the entity ia a valid email em- 
ployer purchasing group and is not formed for 
the purpose of securing health care ineuranca 
coverage; 

(ii) eesure that individuate in the group are not 
added for the purpose of securing such coverage; 

(iii) require that a specified percentage of 
employees and dependenta obtain health care 
ineuranca coverage; 

(iv) require minimum employer contributions; 
and 

(v) require prepayment of premiume or other 
mechanisms to sssure that payment wUl be made 
for coverage. 

(B) Minimum participation. • The board may 
require participating employers to agree to 
participate in the program for a specified mini- 
mum period of time and may include in any 
participation agreements with employers s re- 
quirement for s financial depoait or provision for 
a financial penalty, which would be invoked in 



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ths event ths employer violetee the participation 



(d) Grants. - 

(1) Authority. • The Secretary may award 
grants to qualified email employer purchasing 
groups to assist such groups in paying the expen- 
ditures associated with the formation and initial 
operations of such groups. 

(2) Application. - To be eligible to receive a 
grant under this subsection, s qualified small 
employer purchasing group shall request such a 
grant as part of the application submitted by 
such group under su b se ct ion (a)(1). 

(8) Authorisation of appropriations. - There are 
authorised to award grants under this subsec- 
tion, such sums as may be necessary. 

(a) Freedom of Contract. - Nothing in this 
subtitle shall be construed to prohibit a partici- 
pating carrier from offering health care insur- 
ance coverage to email employers that are not 
participating in the program of a small employer 
purchasing group. 

SEC. 222. PREEMPTION FROM INSURANCE 
MANDATES FOR SMALL EMPLOYER PUR- 
CHASING GROUPS. 

(a) Finding. - Congress finds that qualified 
email employer purchasing groups organised for 
the purpose of obtaining health insurance for the 
employer members of such groups affect inter- 



(b) Preemption of State Mandates. • In the case 
of s qualified email employer purchasing group, 
no provision of State law shall apply that re- 
quires the offering, as part of the health care 
insurance plan with respect to an employer 
member of such a group, of any services, category 
of care, or services of any class or type of provid- 
er that is in excess of that recommended under 
the model benefit plan. 

SUBTITLE D - INSURANCE MARKET RE- 
FORM 
SEC. 281. FAILURE TO SATISFY CERTAIN 
STANDARDS FOR HEALTH CARE INSUR- 
ANCE PROVIDED TO SMALL EMPLOYERS. 

(a) In General. • Subchapter L of chapter 1 of 
the Internal Revenue Code of 1986 (relating to 
insurance companies) is amended by adding at 
the end thereof the following new part: 
TART IV - HEALTH CARE INSURANCE 
PROVIDED TO SMALL EMPLOYERS 
'Sec 860. Failure to satisfy standards for health 
care Insurance of small employers. 
'Sec 860A. General issuance requirements. 
'Sec 860B. Specific contractual requirements. 
'Sec 660C. State compliance agreements. 
'Sec 860D. Definitions and other rules. 
'SBC. 860. FAILURE TO SATISFY CERTAIN 



STANDARDS FOR HEALTH CARE INSUR- 
ANCE OF SMALL EMPLOYERS. 

'(a) General Rule. - No health insurance con- 
tract issued to an eligible small employer shall be 
treated as a contract for purposes of section 807 
or 882 if the issuer of such s contract fails to 
meet at any time during any taxable year • 

'(1) the general issuance requirements of sec- 
tion 860A, or 

'(2) the specific contractual requirements of 
166OB. 



'(b) 

'(1) Section not to apply where failure not 
discovered exercising reasonable diligence. • 
Subsection (a) shall not apply with respect to any 
failure for which it ie established to the aatiefae- 
tion of the Secretary that the person deecribed in 
such eubsection did not know, or exercising 
reasonable diligence would not hsve known, that 
ouch failure existed. 

'(2) Section not to apply where failures correct- 
ed within 80 days. - 8ubsection (a) shall not 
apply with respect to sny failure if • 

'(A) such failure was dus to reasonable cause 
and not to willful neglect, end 

'(B) such failure b corrected during the 80-dsy 
period beginning on the 1st dote sny of ths 
persons described in such eubsection knew, or 
exercising reasonable diligence would hsve 
known, that such failure existed. 

'(8) Waiver by secretary. - In the case of s 
failure which Is dus to reasonable cause and not 
to willful neglect, the Secretary may waive the 
application of su b s ecti on (s). 
'SEC. 860A. GENERAL ISSUANCE REQUIRE- 
MENTS. 

'(s) General Rule. • The requirements of this 
section are met If s person meets • 

'(1) ths mandatory policy requirements of 
subsection (b), 

'(2) the guaranteed issue requirements of 
subse ct ion (c), and 

'(8) ths mandatory registration and disclosure 
requirements of su b s ectio n (d). 

'(b) Mandatory Policy Requirements. • 

'(1) In general. - The requirements of thie 
eu b sec ti on are met if any person issuing s health 
care insurance contract to any eligible small 
employer makes available to such employer a 
health care insurance contract which • 

'(A) provides benefits and coverage consistent 
with ths model health care insurance benefits 
plan developed under section 201 of the Health 
Equity and Access Improvement Act of 1991, and 

•(B) ie for a term of not less than 12 months. 

'(2) Pricing and marketing requirements. • The 
requirements of paragraph (1) are not met unless 



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'(A) the pries at which the eond2set described 
in paragraph (1) is mad* available b not greater 
than tha pries for aueh contract determined on 
the eame beak aa prices for other health care 
contracts within the same clsss of 
nsde available by the person to sligibls 
ssjsII employers, and 

•(B) such contract is made available to eligible 
small employers using at least ths marketing 
methods and other sales practices which are used 
in selling such other contracts. 

'(c) Guaranteed Issue. - 

'(1) In general. - The requirements of this 
■ubsection sre met if the person offering health 
care insurance contracts to eligible small employ- 
ers issu es such a contract to any eligible small 
employer sil k ing to enter into such a contract. 

'(2) Financial capacity exception. - Paragraph 
(1) shall not require any person to issue a health 
care insurance contract to the extent that the 
issuance of such contract would result in such 
person violating the financial solvency standards 
(if any) established by ths State in which such 
contract is to be issued. 

'(8) Delivery capacity exception. - Paragraph ( 1) 
shall not require any person to issue a health 
care insurance contract to the extent thet the 
issuance of such contract would result, upon 
demonstration to the Secretary, in such person 
exceeding its administrative capacity to serve 
previously enrolled groups and individuals (and 
additional individuals who will be expected to 
enroll boeauss of affiliation with such previously 
enrolled groups) 

'(4) Exception for certain employers. - Para- 
graph (1) shall not apply to a failure to issue e 
health care insurance contract to an 
employer if - 



'(A) such employer is unable to pay the premi- 
um for such contract, or 

'(B) in tha case of an eligible small employer 
with fewer than 16 employees, such employer 
mils to enroll a minimum percentage of the 
employer's eligible employees for coverage under 
such contract, so long as such percentage is 
enforced uniformly for all eligible small employ- 
ers of comparable size. 

'(6) Exception for alternative state programs. - 

'(A) In general. - Paragraph (1) shall not apply 
if the State in which the health care insurance 
contract is issued - 

*(i) hss a program which - 

'(D assures ths availability of health care insur- 
ance contracts to eligible small employers 
through ths equitable distribution of high risk 
groups among all persons offering such contracts 



to such employers, and 

'(II) is consistent with a model program devel- 
oped by the NAIC; 

'(ii) hss a qualified State-run reinsurance 
program, or 

'(iii) hss a program which ths Secretary of 
Health and Human Services hss determined 
sssures all sligibls small employers in the State 
an opportunity to purchass a health care insur- 
ance contract without regard to any risk charac- 
teristic. 

'(B) Reinsurance program. - 

*(i) Program requirements. • For purposes of 
subparagraph (A)(ii), a State-run reinsurance 
program is qualified if such program is one of the 
NAIC reinsurance program models developed 
under clause (ii) or is s variation of one of such 
models, ss approved by the Secretary of Hoalth 
and Human Services. 

'(ii) Models. - Not later than ths 120 day. after 
the date of the enactment of the Health Equity 
and Acorns Improvement Act of 1991, the NAIC 
shall develop esvsral models for e reinsurance 
program, including options for program funding. 

'(d) Mandatory Registration and Disclosure 
Requirements. - The requirements of this subsec- 
tion sre met if the person offering heslth care 
insurance contracta to eligible small employers in 
any State • 

'(1) registers with the State commissioner or 
superintendent of insurance or other State 
authority responsible for regulation of health 



'(2) fully dis cl oses the rating practices for small 
employer health care insurance contracts st the 
time such person offers s health care insurance 
contract to an eligible small employer, and 

'(8) fulry discloess ths terms for renewal of the 
contract at the time of the offering of such 
contract and at least 90 days before the expira- 
tion of such contract. 

'SEC. 860B. SPECIFIC CONTRACTUAL RE- 
QUIREMENTS. 

'(a) General Rule. • The requirements of this 
section sre met if the following requirements are 
met: 

'(1) The coverage requirements of subsection 
(b). 

'(2) The rating requirements of subsection (c). 

'(b) Coverage Requirements. • 

'(1) In general. • The requirements of this 
subs ect ion sre met with respect to sny hoalth 
care insurance contract if, under the terms snd 
operation of the contract, ths following require- 
ments sre met: 

'(A) Guaranteed eligibility. • No eligible employ- 
es (snd ths spouse or any dependent child of the 



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employee eligible for coverage) may be excluded 
from coverage under the contract. 

'(B) Limitationa on coverage of preexisting 
conditions. • Any limitation under the contract 
on any preexisting condition - 

'(i) may not extend beyond the 6-month period 
beginning with the date an insured is first cov- 
ered by the contract, and 

*(ii) may only apply to preexisting conditions 
which manifested themselves, or for which 
medical care or advice waa sought or recommend- 
ed, during the 3-month period preceding the date 
an insured is first covered by the contract. 

HO Guaranteed renewability. - 

'(i) In general. - The contract must be renewed 
at the election of the eligible email employer 
unices the contract is terminated for cause. 

'(ii) Cause. - For purposes of this subparagraph, 
the term 'cause* means • 

'(D nonpayment of the required premiums; 

'(ID fraud or misrepresentation of the employer 
or, with respect to coverage of individual 
insureds, the insureds or their representatives; 

'(IID noncompUanee with the contract's mini- 
mum participation requirements; 

'(IV) noncompliance with the contract's employ- 
er contribution requirements; or 

'(V) repeated misuse of s provider network 
provision in the contract. 

'(2) Waiting periods. - Paragraph UXA) shall 
not •PPtf to any period an employee is excluded 
from coverage under the contract eolery by reason 
of a requirement applicable to all employees that 
a minimum period of service with the employer is 
required before the employee is eligible for such 



'(8) Determination of periods for rulee relating 
to preexisting conditions. - For purposes of 
paragraph (1KB), the date on which an insured is 
first covered by s contract shall bs the earlier of 

'(A) the date on which coverage under such 
contract begins, or 

'(B) the first day of any continuous period • 

'(0 during which the insured waa covered under 
1 or more other health insurance arrangements, 
and 

'(ii) which does not end more than 120 days 
before the date employment with the employer 



'(4) Cessation of small employer health insur- 



ance contract. 

'(B) Notice requirement. • Subparagraph (A) 
shall apply onry if the person gives notice of the 
decision to terminate at least 90 days before the 
expiration of the contract. 

'(G) 6-year moratorium. • If, within 6 years of 
the year in which a parson terminates a class of 
business under subparagraph (A), such person 
establishes a new class of business, the issuance 
of such contracts in that year shall be treated as 
s failure to which this section applies. 

'(D) Transfers. - If, upon a failure to renew e 
contract to which subparagraph (A) applies, a 
person offers to transfer such contract to another 
class of business, such transfer must be made 
without regard to risk characteristics. 

'(c) Rating Requirement. • 

'(1) In general. - The requirementa of this 
subsection are met if • 

'(A) the requirements of paragraphs (2) and (3) 
are met, and 

'(B) any incresss in any premium rate under 
the renewal contract over the corresponding rate 
under the health care insurance contract being 
renewed does not exceed the applicable annual 



'(A) In general. - Except as otherwiee provided 
in this paragraph, a person shall not be treated 
as failing to meet the requirementa of paragraph 
(1HO if such person terminates the class of 
business which includes the health care insur- 



'(2) Limit on variation of premiums between 
classes of business. - 

'(A) In general. - The requirementa of this 
paragraph are met if the index rate for a rating 
period for any class of business of the ineurer 
does not e xceed the index rate for any other class 
of business by more than 20 percent. 

'(B) Exceptions. • Subparagraph (A) •hall not 
apply to a class of business if - 

'({) the class is one for which the insurer does 
not reje ct , and never has rejected, eligible small 
employers included within the class of business 
or otherwiee eligible employees and dependents 
who enroll on s timely basis, based upon risk 
characteristics, 

'(ii) the insurer does not transfer, and never 
has transferred, s health care insurance contract 
involuntarily into or out of the class of business, 
and 

'(iii) the class of business is currently available 
for purchase. 

'(3) Limit on variation in premium rates within 
s class of business - The requirements of this 
paragraph are mot if the premium rates charged 
during a rating period to eligible small employers 
with similar case characteristics (other than risk 
characteristics) for the same er similar coverage, 
or the rates which could be charged to such 
employers under the rating aystem for that class 
of business, do not vary from the index rate by 
more than 20 percent of the index rate. 



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'(4) Applicable annual adjusted increase. - For 
purpoaaa of paragraph (1KB) - 

'(A) In ganaral. - The applicable annual adjusted 
incraaaa is an amount equal to the aum of - 

'(i) the applicable percentage of the premium 
rate under the health care insurance contract 
being r enewed, plue 

'(ii) any increase in the rate under the renewal 
contract due to any change in coverage or to any 
change of case characteristics (othsr than risk 
characteristics),, plus 

'(iii) 6 percentage points. 

'(B) Applicable percentage. • 

'(i) In general. - For purposes of subparagraph 
(A), the applicable percentage ie the percentage 
(if sny) by which- 

'(D the premium rate for newly issued contracts 
for substantially similar coverage for an employer 
with similar case characteristics (othsr than risk 
characteristics) as the employer under the health 
care ineurance contract (determined on the let 
day of the rating period applicable to audi con- 
tracts), esceeds 

'(ID such rate on the 1st day of the rating 
period applicable to the contract being renewed. 

'(ii) Case s where no new business. - If no new 
contracts srs being issued for s class of business 
during sny rating period, the applicable percent- 
age shall be the percentage (if any) by which the 
bass premium rate determined under paragraph 
(6MB) with respect to the renewal contract ex- 
ceeds such rate for the contract to be renewed. 

'(6) Definitions. - For purpos e s of this subsec- 
tion - 

'(A) Index rate. - The term 'index rate' means, 
with r es p ec t toe class of business, the arithmetic 
average of the applicable bass premium rate and 
the cor responding highest premium rate for that 



'(B) Base premium rate. - The term 'base premi- 
um rate' mesne, for each class of business for 
each rating period, the lowest premium rate 
which could have been charged under a rating 
system for that class of business by the insurer to 
eligible email employers with similar casecharac- 
terietice (other than risk characteristics* for 
health care insurance contracts with the same or 
■nailer coverage. 

•SBC. SMC. STATE COMPLIANCE AGREE- 
MENTS. 

'(a) Agreements. - The Secretary of Health and 
Human Services may enter into an agreement 
with any State - 

'(1) to appry the standards set by the NAIC for 
health care insurance contracts in lieu of the 
requirements of this subchapter, and* 

'(2) to provide for the State to make the initial 



determination as to whether a person ie in 
compliance with such standards for purposes of 
applying the sanctions under section 850. 

'(b) Standards. • An agreement may be entered 
into under su b se ct ion (a)(1) only if • 

'(1) the chief executive officer of tho State 
requests such agreement be entered into, 

*(Z> the Secretary of Health and Human Servic- 
es determines thst the NAIC standards to be 
applied under the agreement will carry out the 
pu rp oses of this subchapter, and 

'(3) the Secretary determines that the NAIC 
standards to be applied under the agreement will 
appjy to substantially all health care ineurance 
contracts issued in such State to eligible smell 
employers. 

'(c) Termination. • The Secretary of Health and 
Human Services shall terminate any agreement 
if the Secretary determines that the application 
of NAIC standards by the State ceases to carry 
out the pu rp oses of this subchapter. 

'(d) NAIC Standards. - Not later than the 270 
days after ths date of the enectment of the 
Health Equity and Access Improvement Act of 
1991, the NAIC shall develop standards which 
provide for requirements substantially similar to 
the requirements of this subchapter. 
'SEC. MOD. DEFINITIONS AND OTHER 
RULES. 

For purposes of this part • 

'(1) Health cere ineurance. • The term 'health 
care insurance' means sny hospital or medics! 
expense incurred policy or certificate, hospital or 
medical service plan contract, hsslth mainte- 
nance subscriber contract, multiple employer 
welfare arrangement, other employee welfare 
plan (as defined in the Employee Retirement 
Income Security Act of 1974), or any other health 
insurance arrangement, and includes an 
employment-related reinsurance plan, but does 
not include • 

'(A) s self-insured health care insurance plan; 
or 

'(B) any of the following offered by en insurer 

'(i) accident only, dental only, or disability 
income only insurance, 

'(ii) coverage issued as s supplement to liability 
insurance, 

'(iii) worker's compensation or similar insur- 
ance, or 

'(iv) automobile medical-payment insurance. 

'(2) Class of business. - 

'(A) In general. - Except as provided in subpara- 
graph (B), the term 'class of business' mesne, 
with respect to health care insurance provided to 
eligible small employers, all health care Insurance 



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provided to such employee*. 

'(B) Establishment of groupings. - 

'(i) In general. - An ieeuer may e st a bli s h sepe- 
rmle cleeeei of business with reepect to health 
care inauranee provided to eligible email employ- 
en but on|y if aueh cleeeei are baaed on 1 or 
more of the following: 

'(D Bueineea marketed and eold through per- 
aona not participating in the marketing and eaie 
of such insurance to other eligible small employ- 
ers. 

'AD Business acquired from other insurers as a 
distinct grouping. 

'(Ill) Business provided through an association 
of not ices than 20 eligible small employers which 
was established for purposes other than obtaining 
insurance. 

'(IV) Business related to managed care plane (as 
defined in section 202(2) of the Health Equity 
and Access Improvement Act of 1991. 

'(V) Any other bueinees which the Secretary of 
Health and Human Services determines neede to 
be separately grouped to prevent a substantial 
threat to the solvency of the insurer. 

'(ii) Exception allowed. - Except as provided in 
subparagraph (C), an insurer may not establish 
more than one distinct group of eligible small 
employers for each category specified in clause 
G>. 

'(Q Special rule. - An insurer may establish up 
to 2 groups under each category in subparagraph 
(A) or (B) to account for differences in character- 
istics (other than differences in plan benefits) of 
health insurance plane that are expected to 
produce substantial variation in health care 



'(2) Characteristics. - 

'(A) In general. - The term 'characteristics' 
mesns, with r es p ec t to any insurance rating 
system, ths factors used in determining rates. 

'(B) Risk characteristics. - The term 'risk 
characteristics' means factors related to the 
health risks of individuals, including health 
status, prior claims experience, the duration 
sines ths data of issue of s health insurance plan 
or arrangement, industry, and occupation. 

'(O Geographic factors. • 

'(i) In general. • In applying geographic location 
as s characteristic, an insurer may not use for 
purposes of this subchapter areas smaller than 
3-digit postal tip code areas. 

'(ii) Study and report. -Not later than 120 days 
after the date of the enactment of the Health 
Equity and Access Improvement Act of 1991, the 
Comptroller General of the United States shall 
study end report to ths Congress concerning - 

'(D insurance industry practices in determining 



the geographic boundaries of communities used 
for setting rates, 

'(ID ths feasibility and desirability of establish- 
ing standardised geographic communities for 
setting rates, and 

'(III) the effect such standardised geographic 
communities would have on rates charged small 
employers. 

'(8) Eligible email employer. • 

'(A) In general. - The term 'eligible small 
employer' mesns any person which, on an aver- 
age business day during the preceding taxable 
year, had more than 2 but less than 60 employ- 
ees. 

'(B) Aggregation rules. • All members of the 
ssms controlled group of corporations (within the 
meaning of section 62(a)) and all persons under 
common control (within the meaning of section 
62(b)) shall be treated as 1 person. 

'(O Employes. • The term 'smployss' shall not 



'(i) s self-employed individual as defined in 
lection 401(c)(1), or 
'(ii) an employee who works ices than 20 hours 



'(4) Nsic - The term 'NAIC means the Nation- 
al Association of Insurance Commissioners.' 

(b) Conforming Amendment. - Subchapter L of 
chapter 1 of ths Internal Revenue Code of 1986 
is amended by adding at the end thereof the 
following new item: 'Part IV. Health care insur- 
ance provided to small employers.' 

(c) Effective Dates. - 

(1) In general. • The amendments made by this 
section shall apply to eontracte issued, or re- 
newed, after the date of the enactment of this 
Act. 

(2) Guaranteed issue. - The provisions of sec- 
tion 860A(c) of ths Internal Revenue Code of 
1986, as sdded by this section, shall apply to 
eontracte which are issued, or renewed, after the 
date which is 18 months after the date of the 
enactment of this Act. 

(8) Premium range. • In the case of any contract 
in effect on the date of ths enactment of this Act, 
the provisions of section 660B<cX 1XA) of such 
Code, ss sdded by this section, shall not apply to 
the premiums under such contract or any renew- 
al contract for benefits provided during the 
period beginning on such data and ending on the 
last day of the 2nd plan year beginning after 



TITLE m - ACCESS TO PRIMARY AND PRE- 
VENTIVE CARE 
SEC. 801. REAUTHORIZATION OF CERTAIN 
PROGRAMS PROVIDING PRIMARY AND PRE- 
VENTIVE CARE. 



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(a) 

SlTgXDCA) of the Public Health Service Act (42 
UAC 147MiKlXA)) is i 

(Dbyi 
eeg.fa 

O) by striking sot 'each of the teal years 1992 
1 1906' and inserting in lieu thereof 'fiscal 
• 1902; $390,000,000 for fiscal year 1998, and 
as may be nscssssry for each of the 
fecal years 1994 through 1996*. 

Ch) Tnkirmluiie Prevention Grants. - Section 
tVtqtCO of the Pubtie Health Service Act (42 
UAC 247V0K2)) is eminihd ■ 

CO by strike**; out 'and snchsiuns' and insert- 
ins; in lieu thereof 'such stuns*; and 

ttbystriknegout 'each of the fiscal jeers 1992 
rhrnngh 1998' and inserting in lien thereof 'fiscal 
year 1992, $90,000,000 for fiscal year 1998, and 
sneh sums as may he nseaasaiy for each of the 
Ascel years 1994 through 1996*. 

(e) Lead Poisoning Prevention. - Section 817AQ 
of the Public Health Service Act (42 U.S.C. 
*t7b-l<p) ie amended by striking out 'and 
$24,000,000 for fiseal year 1991' and inserting in 
Ken thereof '$24,000,000 for fiscal year 1991, 
$60,000,000 for fiscal year 1998, and such sums 
as maybe necessary for each of the fiseal years 
1994 through 1996.'. 

Id) Sexually Transmitted Diseases. - Section 
aUKdXl) of the Public Health Service Act (42 
UAC. 247e(dXl)> is amended - 

(1) by striking out 'and such sums' and insert- 
ins; in lieu thereof 'such sums'; and 

(2) by inserting before the first period the 
following: '$126,000,000 for fiscal year 1998, and 
such sums as may be necessary for each of the 
Ami years 1994 through 1996'. 

Co) Migrant Health Centers. • Section 
329(hMlXA) of the Public Health Service Act (42 
U-S.C. 264Wh)<lXA)) ie amended by striking out 
'and 1991, and such sums as may be necessary 
for each of the fiscal years 1992 through 1994' 
and inserting in lieu thereof 'through 1992, 
$80,000,000 for fiscal year 1998, and such sums 
as may be necessary for each of the fiscal years 
1994 through 1996'. 

(f) Community Health Centers. - Section 
390(gMlXA) of the Public Health Service Act (42 
UAC. 264e(gMl>(A» ie amended by striking out 
'and 1991, and such sums as may be necessary 
for each of the fiscal yeara 1992 through 1994' 
and inserting in lieu thereof 'through 1992, 
$700,000,000 for fiseal year 1998, and such •urns 
as may be necessary for each of the fiseal years 
1994 through 1996'. 

(g> Health Care Services for the Homeiees. - 
i S40(qH 1) of the Public Health Service Act 



(42 UAC. 266(qHl)) is amended by striking out 
'and such sums* and all that follows through the 
period and inserting in lieu thereof '$90,000,000 
for fiscal year 1998, and such sums as may be 
necessary for each of the fiscal years 1994 
through 1996.'. 

(h) Substance Abuse Prevention Programs. - 
Section 608<dXl) of the Public Health Service Act 
(42 VSJC. 290aa-6(d)(l)) ie amended - 

(1) by striking out 'and such sums' and insert- 
ing in lieu thereof 'such sums'; and 

(2) by inserting before the period the following: 
'$860,000,000 for fiscal year 1998, and such cume 
as msy be necessary for each of the fiscal years 
1994 through 1996'. 

(i) Family Planning Project Grants. • Section 
1001(d) of the Public Health Service Act (42 
U.S.C. 800(d)) ie smsndsd • 

(1) by striking out 'and $158,400,000' and 
inserting in lieu thereof '$168,400,000'; and 

(2) by inserting before the period the following: 
', $200,000,000 for fiseal year 1998, and such 
sums as may be necessary for each of Uie fiscal 
years 1994 through 1996'. 

(p Breast and Cervical Cancer Prevention. - 
Section 1609(a) of the Public Health Service Act 
(42 U AC. 800n-6(a)) ie amended • 

(1) by striking out 'and such sums' and insert- 
ing in lieu thereof 'such sums'; end 

(2) by striking out 'for each of the fiscsl years 
1992 and 1998' and inserting in lieu thereof 'for 
fiscal year 1992, $100,000,000 for fiscal year 
1998, and such sums as may be necessary for 
each of the fiseal years 1994 through 1996'. 

(k) Preventive Health and Health Services 
Block Grant - Section 1901(a) of the Public 
Health Service Act (42 U.S.C. 800w(e)) is amend- 
ed by striking out 'and such sums' snd all that 
follows through the end thereof and inserting the 
following: '$286,000,000 for fiscal year 1993. and 
such sums as msy be necessary for each of the 
fiscal years 1994 through 1996.'. 

(1) HIV Early Intervention. • Section 2666 of the 
Public Health Service Act (42 U.S.C. SOOiT-66) b 
amended • 

(1) by striking out 'and such sums' and insert- 
ing in lieu thereof 'such sums'; and 

(2) by striking out 'each of the fiscal years 1992 
through 1996' and inserting in lieu thereof 'fiscal 
year 1992, $810,000,000 for fiscal year 1998, and 
such sums as may be necessary for each of the 
fiscal years 1994 through 1996'. 

(m) Maternal snd Child Health Services Block 
Grant. • Section 601(a) of the Social Security Act 
(42 U.S.C. 701(a)) is amended by striking out 
'$686,000,000 for fiseal year 1990 and each fiscal 
year thereafter* and inserting iu lieu thereof 



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'1600,000.000 for feed year 1993, and such sum* 
ss may be neceeaary in each of the fecal years 
1994 through 1997*. 

TITLE IV - COST CONTAINMENT 
SEC. 401. NEW DRUG CLINICAL TRIALS 
PROGRAM. 

Part B of title IV of the Public Health Service 
Act (42 U.S.C. 2S4 et aeq.) is amended by adding 
at the end thereof the following new section: 
'SEC. 409. NEW DRUG CLINICAL TRIALS 
PROGRAM. 

'(a) In General. • The Director of the National 
Institutes of Health is authorized to establish 
and implement a program for the conduct of 
clinical trials with respect to new drugs and 
disease treatments determined to be promising by 
the Director. In determining which drugs and 
disease treatments that are to be the subject of 
such clinical trials, ths Director shall give priori* 
ty to those drugs and disease treatments targeted 
towards ths diseases determined • 

'(1) to be the most costly to treat; 

'(2) to have the highest mortality; or 

'(3) to affect the greatest number of individuals. 

'(b) Authorisation of Appropriations. - There 
are authorised to be appropriated to carry out 
this section, $120,000,000 for fecal year 1993, 
and such sums ss may be necessary in each of 
the fecal years 1994 through 1997.'. 
SEC. 402. MEDICAL TREATMENT EFFEC- 
TIVENESS. 

(a) Drug Abuse Demonstration Projects. • 
Section 609G(c)(l) of the Public Health Service 
Act (42 U.S.C. 290aa- 14(c)(1)) b amended • 

(1) by striking out 'and such sums' and insert- 
ing in lieu thereof 'such sums'; and 

(2) by striking out 'each of the fecal years 1990 
through 1991' and inserting in lieu thereof 'fees! 
year 1991, $200,000,000 for fecal year 1993, and 
such sums ss msy bs necessary for each of the 
fecal years 1994 through 1996*. 

(b) Agency for Health Care Policy and Research. 
• Section 926 of the Public Health Service Act (42 
U.S.C. 299c-6) b amended - 

(1) in su b se ct ion (a), by striking out 'and 
$70,000,000 for fecal year 1992' and inserting in 
lieu thereof '$70,000,000 for fecal year 1992, 
$ 100,000,000 for fecal year 1993, and audi sums 
ss msy be necessary for each of the fecal years 
1994 through 1996'; and 

(2) by adding at ths end thereof the following 



'(c) Use of Additional Appropriations. • Within 
amounts appropriated under subsection (a) for 
each of the fecal years 1993 through 1996 that 
are in excess of the amounts appropriated under 
such subsection for fecal year 1992, the Secre- 



tary shall givs priority to expanding research 
conducted to determine the most cost effective 
methods of health care and for developing and 
disseminating new practice guidelines related to 
such methods. In utilising such amounts, the 
Secretary shall give priority to diseases and 
disorders thst ths Secretary determine* are the 
most costly to the United Ststee end evidence s 
wids variation in current medicsl practice.'. 
SEC. 403. HEALTH CARE COST CONTROL - 
EXPENDITURE TARGETS. 

(s) In General. • Not later than I year a/tor the 
date of enactment of thb Act, the Secretary of 
Health and Human Services, after considering 
the recommendations of the Health Care Cost 
Control Advisory Committee esteblbhed under 
subsection (b), shall prepare and aubmit to the 
appropriate committees of the Congress s report 
concerning the establishment of national spend- 
ing targets for health care and health care servic- 
es. Such report shall contain the recommenda- 
tions of the Secretary concerning the feasibility 

(1) for controlling the cost of health care, 
reducing cost shifting and maintaining the 
quality of care; 

(2) of establbhing national targota for health 
expenditures; 

(3) of establbhing national reimbursement 
targets for hospital services; 

(4) establbhing national reimbursement tsrgets 
for physicians services; and 

(6) of establbhing national reimbursement 
targets for prescription drug services. 

(b) Health Care Cost Control Advisory Commit- 
tee. • 

(1) Establishment. • There shall be ostsblbhed 
s Health Care Cost Control Advisory Committee 
(hereinafter referred to in thb subsection ss the 
'Committee'). 

(2) Membership. • The Committee shall be 
composed of 6 individuab appointed by the 
Secretary, representing - 

(A) physicians; 

(B) hoapitab; 

(C) pharmacies; 

(D) private insurers; 

(E) State and local governments; 

(F) employers; 

(G) organized labor, and 

(H) academb with expertise ss s health econo- 
mist. 

(3) Compensation. • 

(A) In general. • Members of the Committee 
shall serve without compensation. 

(B) Expe n ses, reimbursed. • While swsy from 
their homes or regular places of business on the 



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business of the Committee, the members of the 
Committee mey be allowed travel expenaee, 
including per diem in lieu of eubeietenee, aa 
authorised by section 6703 of title 6. United 
Slates Code, for persons employed intermittently 
in Government service. 

(Q Application of the act. • The provisions of 
the Foderal Advisory Committee Act (6 U.S.C. 
App.) shall not apply with respect to the Commit- 
tee. 

(D) Support • The Secretary of Health and 
Human Services shall supply such necessary 
office facilities, office supplies, support services, 
and related expenaee aa n ece s sar y to carry out 
the functions of the Committee. 

TITLE V - REVENUE OFFSETS 

SUBTITLE A - GENERAL PROVISIONS 

SEC. 601. ELIMINATION OF THE STATUTE 

OF LIMITATIONS ON COLLECTION OF 

GUARANTEED STUDENT LOANS. 

Section 3(c) of the Higher Education Technical 
Amendments of 1991 (Public Law 102-26) ia 
amended by striking out 'that are brought before 
November 16, 1992*. 

SEC. 602. INCREASED BASE TAX RATE ON 
OZONE-DEPLETING CHEMICALS AND EX- 
PANSION OF LIST OF TAXED CHEMICALS. 

(a) In General. - Paragraph (1) of section 
4661(b) (relating to amount of tax) is amended to 
reed aa follows: 

'(B) Baae tax amount. • The base tax amount for 
purposes of subparagraph (A) with respect to any 
sale or use during e calendar year before 1996 
with respect to any ozone-depleting chemical ie 
the amount determined under the following table 
for audi calendar year: 
Calender Year Baae tax amount 

1992 $1.66 

1993 $2.76 

1994 $3.66 
1996 $4.66/ 

(b) Conforming Amendment*. • 

(1) Ratee retained for chemical ueed in rigid 
foam insulation. • The table in subparagraph (B) 
of section 4662(g)(2) (relsting to chemicals used 
in rigid foam insulation) ia amended • 

(A) by striking ' 16' and inserting ' 13.6', end 

(B) by striking ' 10' and inserting '9.6'. 

(2) Floor stock taxes. • 

(A) Subparagraph (C) of eection 4662(h)(2) 
(relating to other tax-increase dates) is emended 
by striking ' 1993, and 1994' and inserting ' 1993. 
1994, end 1996. and July 1, 1992'. 

(B) Paragraph (3) of section 4662(h) (relating to 
due date) ia amended - 

(i) by inserting 'or July 1' after 'January 1', 



(ii) by inserting 'or December 31, respectively,' 
after 'June 30'. 

(c) Effective Date. • The amendment* made "by 
this section shsll spply to taxable chemical* sold 
or used on or after July 1, 1992. 
SEC. 603. MARK TO MARKET INVENTORY 
METHOD FOR SECURITIES DEALERS. 

(a) General Rule. • Subpart D of part II of 
subchapter E of chapter 1 (relating to invento- 
ries) ie emended by sdding st the end thereof the 
following new section: 

•SEC. 476. MARK TO MARKET INVENTORY 
METHOD FOR DEALERS IN SECURITIES. 

'(e) General Rule. - Notwithstanding any other 
provision of this subpart, the following rules 
shsll spply to securities held by a dealer in 
securities: 

'(1) Any security which is inventory in the 
hands of the desler shsll be included in inventory 
st fair market value. 

'(2) In the caee of any security which is not 
inventory in the hsnds of the dealer and which is 
held st the close of sny taxable year • 

'(A) the dealer shall recognize gain or loss a* if 
such security were sold for it* fair market value 
on the laat business dsy of such laxablo year, and 

'(B) any gain or loss shall be taken into account 
for auch taxable year. Proper adjustment shall be 
made in the amount of any gain or loss subse- 
quently realized for gain or loss taken into 
account under the preceding sentence. The 
Secretary may provide by regulations for the 
application of this paragraph at times other than 
the timee provided in this paragraph. 

'(b) Exceptions. • 

'(1) In general. • Subsection (a) shall not apply 
to - 

'(A) any security held for investment, 

'(B) any security described in subsection 
(c)(2)(C) which ia originated or acquired by the 
taxpayer in the ordinary course of a trade or 
business of the taxpayer and which is not hold 
for sale, and 

'(C) any hedge with respect to • 

'(i) a security to which subsection (a) does not 
apply, or 

'(ii) a position or a liability which is not a 
security in the hands of the taxpayer. Subpara- 
graph (C) ahall not apply to any security held by 
a person in its capacity as a dealer in securities. 

'(2) Identification required. • Any security shall 
not be treated as described in subparagraph (A), 
(B), or (C) of paragraph (1), as the esse may be, 
unless such security b clearly identified in the 
dealer's records ss being described in such sub- 
paragraph before the close of the day on which it 
was acquired, originated, or entered into (or such 



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other tine as the Secretary may by regulations 



'(3) Securities subsequently not exempt. • If a 
security ceases to be described in paragraph ( 1) at 
any time aAer it was identified as such under 
paragraph (2), this section shall apply to such 
security as of the time such cessation occurs. 

'(4) Special rule for property held for invest- 
ment. - To the extent provided in regulations, 
subparagraph (A) of paragraph (1) shall not apply 
to any security described in subparagraph (D) or 
(E) of subsection (c)(2) which is held by a dealer 
in such securities. 

'(c) Definitions. • For purposes of this section - 

'(1) Dealer in securities defined. • The term 
'dealer in securities' means a taxpayer who - 

'(A) regularly purchase! securities from or sells 
securities to customers in the ordinary course of 
a trade or business; or 

'(B) regularly offers to enter into, sssume, 
offset, assign or otherwise terminate positions in 
securities with customers in the ordinary course 
of s trade or business. 

'(2) Security defined. • The term 'security' 
means any - 

'(A) share of stock in a corporation; 

'(B) partnership or beneficial ownership interest 
in a widely held or publicly traded partnership or 
trust; 

'(C) note, bond, debenture, or other evidence of 
indebtedness; 

'(D) any interest rate, currency, or equity 
notional principal contract; 

'(E) evidence of an interest in, or s derivative 
financial instrument in, sny security described in 
subparagraph (A), (B), (C), or (D), or any curren- 
cy, including any option, forward contract, abort 
position, and any similar financial instrument in 
such s security (but not including any contract to 
which section 1266(a) applies); and 

•(F) position which - 

'(i) is not a security described in subparagraph 
(A). (B), (Q. (D), or (E), 

'(ii) is a hedge with respect to such s security, 
and 

'(iii) is clearly identified in the dealer's records 
ss being described in this subparagraph before 
the dose of the day on which it was acquired or 
entered into (or such other time ss the Secretary 
may by regulations prescribe). 

'(8) Hedge. • The term 'hedge' includes any 
position which reduces the dealer's risk of inter- 
est rate or price changes or currency fluctua- 
tions. 

'(d) Special Rules. • For pu rp oses of this section 

'(1) Certain rules not to apply. - The rules of 



sections 263(g) and 263A shall not apply to 
securities to which subsection (a) applies. 

'(2) Improper identification. - If a taxpayer • 

'(A) identifies sny security or position under 
subsection (b)(2) ss being described in such 
subsection and such security or position is not so 
described, or 

'(B) fails under subsection (c)(2)(F)(iii) to identi- 
fy a security or position which is described in 
such subsection at the time such identification is 
required, the provisions of subsection (s) shall 
apply to such security or position, except that 
any loos under this section prior to the disposi- 
tion of the security shall be recognized only to 
the extent of gain previously rocognized under 
this section with respect to such security. 

'(e) Regulatory Authority. • The Secretary shall 
prescribe such regulations ss may be necessary or 
appropriate to carry out the purposes of this 
section, including rules • 

'(1) to prevent the use of year-end transfers, 
related parties, or other arrangements to avoid 
the provisions of this section, and 

'(2) to provide for the application of this section 
to hedges which do not hedge s specific security, 
position, or liability/ 

(b) Conforming Amendments. • 

(1) Paragraph (1) of section 986(d) is emended 

(A) by striking 'section 1256' end inserting 
'section 476 or 1266', and 

(B) by striking ' 1002 and 1266' and inserting 
'476, 1092, and 1266'. 

(2) The table of sections for subpart D of part II 
of subchapter E of chapter I is amonded by 
adding at the end thereof Uie following now item: 
'Sec 476. Mark to market inventory method for 
dealers in securities.' 

(c) Effective Date. • 

(1) In general. • The amendments made by this 
section shail apply to all taxable years ending on 
or sAer December 31, 1993. 

(2) Change in method of accounting. - In the 
cess of any taxpayer required by this section to 
change its method of accounting for any taxable 
year - 

(A) such change ahall be treated as initiated by 
the taxpayer, 

(B) such change ahall be treated as msde with 
the consent of the Secretary, and 

(Q the net amount of the adjustments required 
to be taken into account by the taxpayer under 
section 481 of the Internal Revenue Code of 1986 
shall be taken into account ratably over the 
10- taxable year period beginning with Uie first 
taxable year ending on or after December 31, 
1993. 



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SBC. 604. DISALLOWANCE OF INTEREST ON 
CERTAIN OVERPAYMENTS OF TAX. 

(a) General Rum. - Subsection (a) of section 
6611 k ■■■Willi tomdw follow.: 

'<•) Dsmllowanee of Intaraol on Certain 
Overpaymente. - 

•<1) Refunds within 46 dayssfter return is filed. 
• If any payment of tax imposed by this title is 
refunded within 46 days after the last day pre* 
scribed for filing the return of such tax (deter- 
mined without regard to any extension of time 
for filing the return) or, in the cess of a return 
filed after such last date, b refunded within 46 
days after the date the return is filed, no interest 
shall be allowed under subsection (a) on such 
overpayment. 

'(2) Refunds after claim for credit or refund. - 
If- 

'(A) the taxpayer files a claim for a credit or 
refund for any overpayment of tax imposed by 
this title, and 

'(B) such overpayment is refunded within 45 
days after such claim is filed, no interest shall be 
allowed on such overpayment from the date the 
claim is filed until the day the refund ia made. 

'(8) IRS initiated adjustments. • Notwithstand- 
ing any other provision, if an adjustment, initiat- 
ed by or on behalf of the Secretary, results in a 
refund or credit of an overpayment, interest on 
such overpayment shall be computed by subtract- 
ing 46 days from the number of days interest 
would otherwise be allowed with respect to such 
overpayment.' 

(b) Effective Dates. - 

(1) Paragraph (1) of section 6611(e) of the 
Internal Revenue Code of 1966 (as amended by 
subsection (a)) shall apply in the case of returns 
ths due date for which (determined without 
regard to extensions) is on or after July 1, 1992. 

(2) Paragraph (2) of section 6611(e) of such 
Code (as so emended) shsll spply in the case of 
claims for credit or refund of sny overpayment 
filed on or after Jujy 1, 1992 regardless of the 
taxable period to which such refund relstes. 

(3) Paragraph (3) of section 6611(e) of such 
Code (as so amended) shall apply in the case of 
any refund paid on or after July 1, 1992 regard- 
less of ths taxable period to which such refund 



SUBTITLE B - ELECTROMAGNETIC SPEC- 
TRUM FUNCTION 
SBC 611. SHORT TITLE. 

This subtitle may be cited as the 'Emerging 
Telecommunications Technologies Act of 1992*. 
SEC. 612. FINDINGS. 

The Congress finds thst • 

(1) spectrum is s valuable natural resource; 



(2) it b in the national interest thst thb re- 
source be used more efficiently; 

(8) the spectrum below 6 gigahertz (GHz) b 
becoming increasingly congested, and, ss a result 
entitiee thst develop innovative new 
spectrum-based services are finding it difficult to 
bring these services to the marketplace; 

(4) scarcity of assignable frequencies can and 
will - 

(A) impede the development and commercializa- 
tion of new spectrum -based products and servic- 

«•; 

(B) reduce the capacity and efficiency of the 
United Ststes telecommunications system; and 

(Q adversely affect the productive capacity and 
international competitiveness of the United 
Ststes economy; 

(5) the United Ststes Government presently 
lacks explicit authority to use excess 
radiocommunications capacity to satisfy 
non-United Ststes Government requirements; 

(6) more efficient use of the spectrum can 
provide the resources for increased economic 
returns; 

(7) msny commercial users derive significant 
economic benefits from their spectrum licenses, 
both through the income they earn from their 
use of the spectrum and the returns they realize 
upon transfer of their licenses to third parties; 
but under current procedures, the United Ststes 
public does not sufficiently share in their bene- 
fits; 

(6) msny United Ststes Government functions 
and responsibilities depend heavily on the use of 
the radio spectrum, involve unique applications, 
end are performed in the broad national and 
public interest; 

(9) competitive bidding for spectrum can yield 
significant benefits for the United Ststes econo- 
my by increasing the efficiency of spectrum 
allocations, assignment, and use; and for United 
Ststes taxpayers by producing substantial reve- 
nues for the United Ststes Treasury; and 

(10) the Secretary, the President, and the 
Commission should be directed to take appropri- 
ate steps to foster the more efficient use of this 
valuable national resource, including the reallo- 
cation of a target amount of 200 megahertz 
(MHz) of spectrum from United States Govern- 
ment use under section 305 of the Communica- 
tions Act to non-United States Government use 
pursuant to other provisions of the Communica- 
tions Act and the implementation of competitive 
bidding procedures by the Commission for some 
new assignments of the spectrum. 
SEC.613.NATIONALSPECTRUM PIJWNING. 

(a) Planning Activities. • The Secretary and the 



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Chairman of the Commiaaion shall, at least twice 
each year, conduct joint spectrum planning 
meetings with respect to the following issues - 

(1) future spectrum needs; 

(2) the spectrum allocation actions necessary to 
accommodate those needs, including consider- 
ation of innovation and marketplace develop- 
ments that may affect the relative efficiencies of 
different portions of the spectrum; and 

(3) sctions necessary to promote the efficient 
use of the spectrum, including proven spectrum 
management techniques to promote increased 
shared use of the spectrum as a moans of in- 
creasing non-United States Government access; 
and innovation in spectrum utilisation including 
means of providing incentives for spectrum users 
to develop innovstive services and technologies. 

(b) Reports. • The Secretary and the Chairman 
of the Commission shall submit a joint annus! 
report to the President on the joint spectrum 
planning meetings, conducted under subsection 
(a) and any recommendations for action devel- 
oped in such meetings.. 

(c) Open Process. - The Secretary and the 
Commission will conduct an open process under 
this section to ensure the full consideration and 
exchange of views among any interested entities, 
including all private, public, commercial, and 
governmental interests. 

SEC. 614. IDENTIFICATION OF REALLO- 
CABLE FREQUENCIES. 

(a) Identification Required. • The Secretary 
shall prepare and submit to the President the 
reports required by subsection (d) to identify 
bands of frequencies that • 

(1) are allocated on a primary basis for United 
States Government use and eligible for licensing 
pursuant to section 305(a) of the Communica- 
tions Act; 

(2) sre not required for the present or identifi- 
able future needs of the United States Govern- 



(3) can feasibly be made available during the 
next 15 years after enactment of this title for use 
under the provisions of the Communications Act 
for non-United States Government users; 

(4) will not result in costs to the Federal Gov- 
ernment that are excessive in relation to the 
benefite that may be obtained from the potential 
non-United States Government uses; and 

(6) are likely to have significant value for 
non-United States Government uses under the 
Communications Act. 
(b) Amount of Spectrum Recommended. - 
( I) In general. • The Secretary shall recommend 
ss a goal for reallocation, for use by non-United 
States Government stations, bands of frequencies 



constituting a target amount of 200 MHz, that 
are located below 6 GHz, and that meet the 
criteria specified in paregraplia ( 1) through (5) of 
subsection (a). If the Secretary identifies (ss 
meeting such criteria) bands of frequencies 
totalling more than 200 MHz, the Secretary ahall 
identify and recommend for reallocation those 
bands (totalling not less than 200 MHz) that are 
likely to have the greatest potential for 
non-United States Government uses under the 
Communications Act. 

(2) Mixed uses permitted to be counted. • Bands 
of frequencies which the Secretary recommends 
be partially retained for use by United States 
Government ststions, but which sre also recom- 
mended to be reallocated and made available 
under the Communications Act for use by 
non-United States Government ststions, msy be 
counted toward the target 200 MHz of spectrum 
required by paragraph (I) of this subsection, 
except that • 

(A) the bends of frequencies counted under this 
paragraph may not count toward inoro than 
one-half of the amount targeted by paragraph ( I) 
of this subsection; 

(B) s band of frequencies may not bo counted 
under thia paragraph unless tho assignments of 
the band to United States Government stations 
under section 305 of the Communications Act sre 
limited by geographic area, by time, or by other 
means so ss to guarantee that the potential use 
to be made by which United Ststes Government 
stations b substantially loss (as tnoasured by 
geographic area, time, or othorwise) then the 
potential United States Government uee to be 
made; and 

(C) the operational sharing ponnittod undor 
this paragraph ahall be subject to procedures 
which the Commission and the Department of 
Commerce shall establieh and implement to 
ensure against harmful interference. 

(c) Criteria for Identification. - 

(1) Needs of the united states government. - In 
determining whether a band of frequencies meets 
the criteria specified in subsection (a)(2), the 
Secretary ahall • 

(A) consider whether the band of frequencies is 
used to provide s communications service that is 
or could be available from a commercial provider; 

(B) seek to promote • 

(i) the msximum practicable reliance on com- 
mercially available substitutes; 

(ii) the sharing of frequencies (ss permitted 
under subsection (b)(2)); 

(iii) the development end use of new communi- 
cations technologies; and 

(iv) the use of nonradiating communications 



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systems what* practicable; 

(Q seek to avoid • 

(i) serious degradation of United SUtea Govern- 
■lent aarvicea and operations; 

(ii) excessive coota to the United States Govern- 
ment and civilian users of audi Government 



Secretary shall consider - 

(A) the extent to which equipment is commer- 
cially available that ia capable of utilizing the 



(iii) identification of any bands for reallocation 
that are likely to be subject to substitution for 
the reasons specified in section 406(b)(2)(A) 
through (O; and 

(D) exempt power marketing adminiatrationa 
and the Tennessee Valley Authority from any 
reallocation procedures. 

(2) Feasibility of use. • In determining whether 
a frequency band meets the criteria specified in 
subsection (aXS). the Secretary shall - 

(A) assume such frequencies will be assigned by 
the Commisaion under section 303 of the Com- 
munications Act over the course of fifteen years 
after the enactment of thb title; 

(B) assume reasonable ratea of scientific prog- 
ress and growth of demand for telecommunica- 
tions services; 

(C) determine the extent to which the realloca- 
tion or reassignment will relieve actual or poten- 
tial scarcity of frequencies available for 
non-United States Government use; 

(D) seek to include frequencies which can be 
used to stimulate the development of new tech- 



(E) consider the cost to reestablish United 
States Government aarvicea displaced by the 
reallocation of spectrum during the fifteen year 



(3) Costs to the united states government. • In 
determining whether a frequency band masts the 
criteria apecified in subsection (a)(4), the Secre- 
tary shall consider • 

(A) the costs to the United States Government 
of reaccommodating ita services in order to make 
spectrum available for non-United States Govern- 
ment use, including the increments! costs direct- 
ly attributable to the loss of the use of the fre- 
quency band; and 

(B) the benefits that could be obtained from 
reallocating such spectrum to non-United States 
Government users, including the value of auch 
spectrum in promoting - 

(i) the delivery of improved service to the 

public; 
(ii) the introduction of new services; and 
(iii) the development of new communications 

technologies. 

(4) Non-united states government use. • In 
determining whether a band of frequenciee meeta 
the criteria apecified in subsection (e)(6), the 



(B) the proximity of frequencies that are already 
assignod for non-United States Government use. 

(d) Procedure for Identification of Keallocable 
Bends of Frequencies. • 

(1) Submission of reports to tlio president to 
identify an initial 60 mhz to be made available 
immediately for reallocation, and to provide 
preliminary and final reports on additional 
frequencies to be reallocated. - 

(A) Within 3 months sfter the date of the 
enactment of thb title, the Secretary aim 1 1 pre- 
pare and submit to tho President s report which 
specificelly identifies sn initial 50 MHz of spec- 
trum thst ere located below 3 GHz. to be made 
available for reallocation to the Federal Commu- 
nications Commission upon issuuncc of this 
report, snd to be distributed by the Commission 
pursuant to competitive bidding procedure*. 

(B) The Department of Commerce shall make 
available to the Federal Communications Com- 
mission 60 MHz ss identified in subparagraph 
(A) of electromagnetic spectrum for allocation of 
land-mobile or land-mobilc-satellitc services. 
Notwithstanding section 553 of the Administra- 
tive Procedure Act and title 111 of the Communi- 
cations Act, the Fedoral Communications Coin- 
miasion shall allocate such spectrum and conduct 
competitive bidding procedures to complete the 
assignment of such spectrum in a manner which 
ensures thst the proceeds from such bidding are 
received by the Federal Government no later 
than September 30, 1992. From such proceeds. 
Federal sgenciee d is pi seed by this transfer of the 
electromagnetic spectrum to the Federal Commu- 
nications Commission shall be reimbursed for 
reasonsble costs directly attributable to audi 
displacement. The Department of Commerce 
shall determine the amount of, and arrange for, 
auch reimbursement. Amounts to agencies shall 
be available subject to appropriation Acts. 

(C) Within 12 months after the dutv of the 
enactment of this title, the Sccrclury shall pre- 
pare and submit to the President a preliminary 
report to identify reallocable bands of frequencies 
meeting the criteria established by this section. 

(D) Within 24 months sfter the dale of enact- 
ment of thb title, the Secretary shall prepare and 
submit to the President s final report which 
identifies the target 200 MHz for reallocation 
(which shall encompass the initial 60 MHz 
previously designated under subparagraph (A)). 

(E) The President shall publish tho reports 
required by this section in the Federal Register. 



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(2) Convening of private Motor advisory eom- 
mitteo. - Not later than 12 month* after tho 
onactmant of thia title, the 8acratarjr ahall eon- 
vana a private eeetor adviaorjr committee to - 

(A) review the bands of frequencies identified in 
the preliminary report required by paragraph 
(1HO; 

(B) adviee the Secretary with reapect to - 

0) the bends of frequencies which should be 
included in the final report required by para- 
graph (1KD); and 

Oi) the effective datee which should be eeteb- 
liehed under subssetion (e) with respect to ouch 
frequendee; 

(C) receive* public comment on the Secretary's 
preliminary and final report* under this subsse- 
tion; and 

(D) prepare and submit the report required by 
paragraph (4). The private eeetor edvieory com- 
mittee ehall meet at leoet quarterly until each of 
the actions required by section 406(a) have taken 



(8) Composition of committee; chairman. - The 
private eeetor edvieor committee ehall include • 

(A) the Chairman of the Commission, and the 
Secretary, or their deeignetsd representative*, 
and two other representative* from two different 
United States Government egendee that are 
epectrum users, other then the Department of 
Commerce, es such agencies mey be designated 
by the Secretary; and 

(B) Person* who are representative of • 

(i) manufacturers of spectrum-dependent tele- 

(ii) commercial users; 

(iii) other users of the electromagnetic epec- 
trum; and 

(iv) other interested members of the public who 
are knowledgeable about the usee of the electro- 
magnetic epectrum to be chosen by the Secretary. 
A majority of the members of the committee ehall 
be members described in eubparagraph (B), and 
one of such members shall be designated ee 
chairman by the Secretary. 

(4) Reeommendatione on spectrum allocation 
procedure*. - The private eeetor edvieory commit- 
tee ehall, not later than 12 monthe after it* 
formation, submit to the Secretary, the Commis- 
sion, the Committee on Energy and Commerce of 
the Houee of Repreeentetivee, and the Committee 
on Commerce, Science and Traneportation of the 
Senate, euch reeommendatione es the committee 
o on sids r s appro p r ia te for the reform of the 
prnnses of allocating the electromagnetic epec- 
trum between United States Government users 
and non-United Slates Government users, and 
any dissenting views thereon. 



(e) Timetable for Reallocation and Limitation. • 
The Secretary ehall, es part of the final report 
required by eubeection (dMIXD), include* timeta- 
ble for the effective datee by which the President 
shall, within 16 years after enactment of this 
title, withdraw or limit sssignmente on frequen- 
cies specified in the report. The recommended 
effective datee ehall • 

(1) permit the earliest possible reallocation of 
the frequency bands, taking into account the 
requirements of eection 406(e); 

(2) be baaed on the ueeful remaining life of 
equipment that hae been purchased or contracted 
for to operate on identified frequencies; 

(8) be based on the need to coordinate frequency 
uee with other notion*; end 

(4) ovoid the imposition of incremental costs on 
the United Statee Government directly attribut- 
able to the lose of the uee of frequendee or the 
changing to different frequendee that are exess- 
sivs in relation to the benefita that may be ob- 
tained from non-United Statee Government usee 
of the reassignsd frequendee. 
SEC. 616. WITHDRAWAL OF ASSIGNMENT 
TO UNITED STATES GOVERNMENT STA- 
TIONS. 

(a) In General. • The President shall • 

(1) within 3 months after receipt of the 
Secretary's report under eection 404(dXIMA), 
withdraw or limit the easignment to a United 
Stetee Government etation of any frequency on 
the initial 60 MHx which that report recom- 
mends for immediste reallocation; 

(2) with respect to other frequendee recom- 
mended for reallocation by the Secretary's report 
in eection 404(d)(1)(D). by the effective datee 
recommended pursuant to eection 404(e) (exeent 
as provided in subssetion (b)(4) of this eection), 
withdraw or limit the easignment to s United 
Statee Government etation of any frequency 
which that report recommends be reallocated or 
available for mixed uee on euch effective dates; 

(8) assign or reassign other frequendee to 
United Stetee Government etation* as necessary 
to adjust to such withdrawal or limitation of 



(4) publish in the Federal Register a notice end 
description of the action* taken under this 
subsection. 

(b) Exceptions. • 

(1) Authority to eubetitute. - If the President 
dcterminee that a circumstance described in 
section 406(b)(2) exhrta, the President - 

(A) mey, within 1 month after receipt of the 
Secretary* report under eection 404(dM IMA), and 
within 6 monthe after receipt of the Secretary* 
report under eection 404(dKlKD). eubetitute en 



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alternative frequency or band of fraqua nci ai for 
the frequency or band that ia subject to auch 
extermination and withdraw (or limit) the eesign- 
t of that alternative frequency or band in the 
r required by s ub se ct ion (a); and 

ubliah in the Federal Regiater a 
etatement of the reaaona for taking the action 
deeeribed in subparagraph (A). 

(2) Grounda for substitution. - For purposes of 
paragraph (1), the following circumstances are 
deeeribed in this paragraph: 

(A) the reassignment would seriously jeopardise 
the national security interests of the United 



loss of the use of the frequency pursuant to this 
section. The estimates of these costs shall be 
prepared by the affected agency, in consultation 
with the Department of Commerce. 

(d) There are authorised to be appropriated to 
the affected l ic e n see agencies such sums as may 
be necessary to carry out the purposes of this 



(B) the frequency pro p osed for reassignment ia 
uniquery suited to meeting important United 
States Governmental needs; 

(O the reassignment would seriously jeopardise 
public health or safety; or 

(D) the reassignment will result in incremental 
costs to the United States Government that are 
excessive in relation to the benefits that may be 
obtained from non-United States Government 
uses of the reassigned frequency. 

(3) Criteria for substituted frequencies. - For 
purposes of paragraph (1), a frequency may not 
be substituted for a frequency identified by the 
final report of the Secretary under section 
404(d)<l)(D) unless the substituted frequency 
also meets each of the criteria specified by section 
404(a). 

(4) Delays in implementation. - If the President 
determines that any action cannot be completed 
by the effective dates recommended by the Secre- 
tary pursuant to section 404(e), or that auch an 
action by auch date would result in a frequency 
being unused as a conse qu ence of the 
Ouniniasion's plan under section 406, the Presi- 
dent may - 

(A) withdraw or limit the assignment to United 
Steles Government stations on a later data that 
is consistent with auch plan, by providing notice 
to that effect in the Federal Register, including 
the reason that withdrawal at a later date ia 
required; or 

(B) substitute alternative frequencies pursuant 
to the proviaions of this su b s ect ion. 

(c) Costs of Withdrawing Frequencies Assigned 
to the United States Government; Appropriations 
Authorised. - Any United States Government 
licenses, or non-United States Government entity 
operating on behalf of a United States Govern- 
ment licensee, that is displaced from a frequency 
pursuant to this section may be reimbursed not 
more than the incremental costs it incurs, in 
such amounts as provided in advance in appro- 
priation Acta, that are directly attributable to the 



SBC. 616. DISTRIBUTION OF FREQUENCIES 
BY THE COMMISSION. 

(a) Plana Submitted. • 

(1) With respect to the initial 60 MHz to be 
reallocated from United States Government to 
non-United States Government use under section 
404(d)(1)(A), not later than 6 months after 
enactment of this title, the Commission shall 
complete a public notice and comment proceeding 
regarding the allocation of this spectrum and 
shall form a plan to assign such spectrum pursu- 
ant to competitive bidding procedures, pursuant 
to section 408, during fiscal years 1994 through 
1996. 

(2) With respect to the remaining spectrum to 
be reallocated from United States Government to 
non-United States Government use under section 
404(e), not later than 2 years after issuance of 
the report required by section 404(d)(1)(D), the 
Commission shall complete a public notice and 
comment pro cee ding; and the Commission shall, 
after consultation with the Secretary, prepare 
and submit to the President a plan for the distri- 
bution under the Communications Act of the 
frequency bends reallocated pursuant to the 
requirements of this title. Such plan shall - 

(A) not propose the immediate distribution of all 
such frequencies, but, taking into account the 
timetable recommended by the Secretary pursu- 
ant to section 404(e), shall propose - 

(i) gradually to distribute the frequencies re- 
maining, after making the reservation required 
by subparagraph (ii), over the course of a 10-year 
period beginning on the date of submission of 
such plan; and 

(ii) to reserve a significant portion of such 
frequencies for distribution beginning after the 
end of such 10-year period; 

(B) contain appropriate provisions to ensure - 
(i) the availability of frequencies for new tech- 
nologies end services in accordance with the 
policies of section 7 of the Communications Act 
(47 U5.C. 167); and 

(ii) the availability of frequencies to stimulate 
the development of such technologies; and 

(O not prevent the Commission from allocating 
bends of frequencies for specific usee in future 
rulemaking pr ocee dings. 

(b) Amendment to the Communications Act. • 



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Section 303 of the Communications Act is 
amended by adding at the end thereof the follow- 
ing new su b s ec tion: 

'(u) Have authority to assign the frequencies 
reallocated from United States Government use 
to non-United States Government use pursuant 
to the Emerging Telecommunications Technolo- 
gies Act of 199 1, except that any such assignment 
shall expressly be made subject to the right of the 
President to reclaim such frequencies under the 
provisions of section 407 of the Emerging Tele- 
communications Technologies Act of 1991.'. 
SEC. 617. AUTHORITY TO RECLAIM REAS- 
SIGNED FREQUENCIES. 

(a) Authority of President. - The President msy 
reclaim reallocated frequencies for reassignment 
to United States Government stations in accor- 
dance with this section. 

(b) Procedure for Reclaiming Frequencies. - 

(1) Unassigned frequencies. - If the frequencies 
to bo reclaimed have not been assigned by the 
Commission, the President may reclaim them 
based on the grounds described in section 
406(b)(2). 

(2) Assigned frequencies. • If the frequencies to 
be reclaimed have been assigned by the Commis- 
sion, the President msy reclaim them based on 
the grounds described in section 406(b)(2), except 
that the notification required by section 406(b)(1) 
shall include • 

(A) a timetable to accommodate an orderly 
transition for license— to obtain new frequencies 
and equipment necessary for their utilisation; 



(B) an estimate of the cost of displacing the 



(c) Costs of Reclaiming Frequencies. - Any 
non-United States Government li ce nsee that is 
displaced from s frequency pursuant to this 
section shall be reimbursed the incremental costs 
it incurs that are directly attributable to the loss 
of the use of the frequency pursuant to this 



(d) Effect on Other Lew. - Nothing in this 
section shall be construed to limit or otherwiee 
afreet the authority of the President under 
section 706 of the Communications Act (47 
U.S.C. 606). 
SEC. 616. COMPETITIVE BIDDING. 

(a) Competitive Bidding Authorised. • Section 
309 of the Communications Act is amended by 
adding the following new su b se c tion: 

'(p(lHA) The Commission shall use competitive 
bidding for awarding all initial licensee or new 
construction permits, including licensee and 
permits for spectrum reallocated for non-United 
States Government use pursuant to the Emerg- 



ing Telecommunications Technologies Act of 
1991, subject to the exclusions I is tod in para- 
graph (2). 

'(B) The Commission shsll require potential 
bidders to file s first-stage application indicating 
an intent to participate in the competitive bid- 
ding process and containing such other informa- 
tion ss the Commission finds necessary. AAer 
conducting the bidding, the Commission shsll 
require the winning bidder to submit s 
second-stage application. Upon determining that 
such application is acceptable for filing and that 
the applicant ia qualified pursuant to subpara- 
graph (C), the Commission shall grant a permit 



'(C) No construction permit or license shsll bs 
granted to en applicant selected pursuant to 
subparagraph (B) unless the Commission deter- 
mines that such applicant is qualified pursuant 
to section 306(b) and subsection (s) of this sec- 
tion, on the basis of the information contained in 
the first- and second-slags applications submitted 
under subparagraph (B). 

'(D) Each participant in the competitive bidding 
process is subject to the schedule of changes 
contained in section 6 of this Act. 

'(E) The Commission shall have the authority 
in awarding construction pormite or licenses 
under competitive bidding procedures to (i) define 
the geographic and frequency limitations and 
technical requirements, if any, of such permits or 
l ic e n ses; (ii) establish minimum acceptable com- 
petitive bide; and (iii) estsblish other appropriate 
conditions on such permits snd licensee that will 
eerve the public interest. 

*(F) The Commission, in designing the competi- 
tive bidding procedures under this subjection, 
shall study snd include procedures • 

'(i) to ensure bidding access for smsll snd rural 



'(ii) if appropriate, to extend the holding period 
for winning bidden awarded permits or licenses, 
snd 

'(iii) to expand review and enforcement require- 
ments to ensure that winning bidders continue to 
meet their obligations under this Act. 

'(G) The Commission shall, within 6 months 
after enactment of the Emerging Telecommunica- 
tions Technologies Act of 1991, following public 
notice snd comment proceedings, adopt rules 
sstablishing competitive bidding procedures 
under this su b se c tion, including the method of 
bidding snd the basis for payment (such as fiat 
fees, fixed or variable royalties, combinations of 
flat foss snd royaltiee, or other reasonable forme 
of payment); snd s plan for applying such com- 
petitive bidding procedures to the initial 60 MHs 



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reallocated from United States Government to 
non-United States Government uaa under section 
404(d)(1)(A) of the Emerging Telecommunica- 
tions Technologies Act of 109 l v to be distributed 
during the fiscal jeers 1094 through 1996. 

'(2) Competitive bidding shall not apply to - 

'(A) license renewals; 

•(B) the United States Government and State or 
local government entities; 

'(C) amateur operator ssrvices, over-the-air 
terrestrial radio and television broadcast services, 
public safety services, and radio astronomy 



'(D) private radio end-ussr licenses, such as 
Spsrisliisd Mobile Radio Service (SIIRS), mari- 
time, and aeronautical end-ussr licenses; 

'(E) any license grant to a non-United States 
Government li cen se e being moved from its cur- 
rent frequency assignment to a different one by 
the Commission in order to implement the goals 
and objectives underlying the Emerging Telecom- 
munications Teehnologiss Act of 1991; 

'(F) sny other service, class of services, or 
assignments that the Commission determines, 
after conducting public comment and notice 
proceedings, should be exempt from competitive 
bidding because of public interest factors war- 
ranting an exemption; and 

'(G) small businesses, ss defined in section 
3(a)(1) of the Small Business Act. 

'(3) In implementing this subsection, the Com- 
mission shall ensure that current and future 
rural telecommunications needs are met and that 
existing rural li cens ee s and thsir subscribers are 
not adversely affected. 

'(4) Monica received from competitive bidding 
pursuant to this subsection shall be deposited in 
the gensral fund of the United States Treasury.'. 

(b) Random Selection not to Apply When Com- 
petitive Bidding Required. - Section 309(i)(l) of 
the Communications Act is amended by striking 
the period after the word 'selection' and inserting 
', except in instances where competitive bidding 
procedures are required under subsection (p. 1 . 

(c) Spectrum Allocation Decisions. • Section 303 
of the Communications Act is amended by adding 
the following new subsection: 

'(v) In making spectrum allocation decisions 
among ssrvices thst are subject to competitive 
bidding, the Commission is suthorixed to consid- 
er ss one factor among others taken into account 
in making its determination, the relative econom- 
ic values and other public interest benefits of the 
proposed uses as reflected in the potential reve- 
nues that would be collected under its competi- 
tive bidding procedures/. 
SBC. 619. DEFINITIONS. 



As used in this subtitle: 

(1) The term 'allocation' means an entry in the 
National Table of Frequency Allocations of s 
given frequency band for the purpose of its use 
by one or more radiocommunications services. 

(2) The term 'assignment* means an authorisa- 
tion given by the Commission or the United 
States Government for a radio station to use a 
radio frequency or radio frequency channel. 

(3) The term 'Commission' means the Federal 
Communications Commission. 

(4) The term 'Communications Act' meana the 
Communications Act of 1934 (47 U.S.C. 161 et 
esq.). 

(6) The term 'Secretary' means the Secretary of 
Commerce. 

SUBTITLE C - OTHER PROVISIONS 
SEC. 621. EXTENSION OF CURRENT LAW 
REGARDING LUMP-SUM WITHDRAWAL OF 
RETIREMENT CONTRIBUTIONS FOR CIVIL 
SERVICE RETIREES. 

(a) Civil Service Retirement System. • Section 
S343e(0(3) of title 6, United States Code, is 
amended by striking out 'October 1, 1996' end 
inserting in lieu thereof 'October 1, 1996'. 

(b) Federal Employees Retirement System. • 
Section 6420a(0(3) of title 6, United States Code, 
is emended by striking out 'October 1, 1996' end 
inserting in lieu thereof 'October 6, 1996'. 
SEC. 622. EXTENSION OF THE PATENT AND 
TRADEMARK OFFICE USER FEE SUR- 
CHARGE THROUGH 1996. 

Section 10101 of the Omnibus Budget Reconcili- 
ation Act of 1990 (36 U.S.C. 41 note) is emended 

(1) in subsection (s) by striking '1996' snd 
inserting ' 1996'; 

(2) in subsection (b)(2) by striking '1996' snd 
inserting '1996'; and 

(3) in subsection (c) • 

(A) by striking ' 1996' the first piece it appears 
snd inserting ' 1996'; snd 

(B) by sdding at the end the following new 
paragraph: 

'(6) $107,000,000 in fiscal year 1996.' 
SEC. 623. ONE- YEAR EXTENSION OF CUS- 
TOMS USER FEES. 

Paragraph (3) of section 1303 l(j) of the Consoli- 
dated Omnibus Budget Reconciliation Act of 19S6 
(19 U.S.C. 68c<j)(3)) is emended by striking out 
' 1996' and inserting ' 1996'. 
SEC. 624. DISCLOSURES OF INFORMATION 
FOR VETERANS BENEFITS. 

(s) In General. - Section 6103(I)(7)(D) (relating 
to programs to which nils sppliee) is amended by 
striking 'September 30, 1992' in the last sentence 
and inserting 'September 30, 1996*. 



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(b) Conforming Amendment. - Section 6317(g) 
of title 38, United States Code, b emended by 
striking 'September 30, 1092' and inserting 
'September 30, 199*'. 

(c) Effective Date. • The amendments made by 
this section shall take effect on September 30, 
1992. 

SEC. 626. REVISION OF PROCEDURE RE- 
LATING TO CERTAIN LOAN DEFAULTS. 

(a) Revision. - Section 3732(c)(l)(0(ii) of title 
33, United States Code, is amended by striking 
out 'resale,' and inserting in lieu thereof 'resale 
(including losses sustained on the resale of the 
property),'. 

(b) Effective Date. - The amendment made by 
subsection (a) shall take effect on October 1, 
1991. 

SEC. 626. APPLICATION OF MEDICARE PART 
B LIMITS TO FEHBP ENROLLEE AGE 66 OR 
OLDER. 

(a) Federal Employees Health Benefits Program. 
- Subsection 8904(b) of title 6, United States 
Code, is amended: 

(1) by amending paragraph (1) to road as fol- 
lows: 

'(b)(1)(A) A plan, other than a prepayment plan 
described in section 8903(4) of this title, may not 
provide benefits under this chapter, in the case of 
any individual enrolled in the plan who is not mn 
employee and who is age 66 or older, to the 
extent that - 

'(i) a benefit claim involves a charge by a health 
care provider for a type of service or medical item 
which is covered for purposes of benefit payments 
under beth this chapter and title XVIII of the 
Social Security Act (42 UJS.C. 1396-1396ccc) 
relating to medicare hospital and supplementary 
medical insurance, and 

4 (ii) benefits otherwise payable under such 
provisions of law in the case of such individual 
would exc ee d applicable limitations on hospital 
and physician charges established for medicare 
purposes under sections 1886 and 1848 of the 
Social Security Act (42 UJS.C. 1396ww and 
1396w-4), respectively. 

*(B)(i) For purposes of this subsection, hospi- 
tals, physicians, and other suppliers of medical 
and health se r vices who have in force participa- 
tion agreements with the Secretary of Health and 
Human Services consistent with sections 1842(h) 
and 1886 of the Social Security Act (42 US.C. 
1396u(h) and 1396cc), whereby the participating 
provider accepts medicare benefits in full pay- 
ment of charges for covered items and services 
slier applicable patient copayments under sec- 
tions 1813, 1833 and 1866(a)(2) of the Social 
Security Act (42 UJS.C. 1396s. 13961, and 



1396cc(a)(2)) have been sstiefied, shall 
equivalent benefit payments and enroll©* 
copayments under this chapter as full payment 
for any item or service described undor subpara- 
graph (A) which is furnished to sn individual 
who is enrolled under this chapter and is not 
covered for purposes of benefit payments applica- 
ble to such item or service under provision* of 
title XVIII of the Social Security Act. 

'(H) Physicians and other health care suppliers 
who are non participating physicians, as defined 
by section 1842(i)(2) of the Social Security Act 
(42 U3.C. 1396u(i)(2)) for purposes of services 
furnished to medicare beneficiaries, may not bill 
in excess of the limiting charge prescribed under 
section 1848(g) of the Social Security Act (42 
VS.C. 1396w-4(g)) when providing services 
described under subparagraph (A) to an individu- 
al who is enrolled under this chapter and is not 
covered for purposes of benefit payment* applica- 
ble to those services under provisions of title 
XVIII of the Social Security Act. 

'(iii) The Office of Personnel Management elial! 
notify the Secretary of Health and Human Ser- 
vices if a hospital, physician, or other supplier of 
medical services is found to knowingly and 
willfully violate this subsection and the Secretary 
shall invoke appropriate sanctions in accordance 
with subsections 1128A(a)(2), 1848(g)(8). and 
1866(b)(2) of the Social Security Act (42 U.S.C. 
1320a-7a(a)(2), 1396w-4(g)(8), and 1396cc(b)(2)) 
and applicable regulations.'; and 

(2) by amending paragraph (3)(B) to read as 
follows: 

'(B) For purposes of this paragraph, the term 
'medicare program information' includes • 

'(i) the limitations on hospital charges estab- 
lished for medicare purposes under section 1886 
of the Social Security Act (42 US.C. I396ww) 
and the identity of hospitals which have in force 
agreements with the Secretary of Health and 
Human Services consistent with section 1866 of 
the Social Security Act (42 VS.C. 1396cc); and 

'(ii) the annual fee schedule amounts for servic- 
es of participating physicians and 'limiting 
charge' information for nonpartidpating physi- 
cians established for medicare purposes undor 
section 1848 of the Social Security Act (42 UAC. 
1396w-4) and the identity of physicians and 
suppliers who hsve in force participation a g ree 
ments with the Secretary consistent with subsec- 
tion 1842(h) of the Social Security Act (42 U.S.C. 
1396u(h).'. 

(b) Medicare Agreements With Institutional 
Providers. - Section 1866UM1) of the Social 
Security Act (42 US.C. I396cc(a)(l)) is t 



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(1) by striking out 'and' at the end of subpara- 
graph (P); 

C2) by atrikiBg out the period at ths and of 
subparagraph (Q) and inserting ', and', and 

(9) by inserting after subparagraph (Q) the 
following new paragraph: 

'QQ to accept as payaient in full the amounts 
that would be payable under this part (including 
the amounts of any coinsurance and deductibles 
required of individuals entitled to have payment 
made on their behalf) for an item or service 
which the provider normally furnishes to pa- 
tients (or others furnish under arrangement with 
the provider) and which ie furnished to an indi- 
vidual who has attained age 65, ie ineligible to 
receive benefits under this part, and ie enrolled, 
other than as an employee, under a health bene- 
fits plan described in paragraphs (1) through (3) 
of section 6903 and section 8903e of title 6, 
United States Code, if such item or service is of 
a type that ie covered under both this title and 
chapter 60 of title 6, United States Code.'. 

(c) Medicare Participating Physicians and 
Suppliers. - Section 1642(h)(1) of the Social 
Security Act (42 U.S.C. 1306u(h)(l)) ie amended, 
after the second sentence, by inserting the follow- 
ing new sentence: 'Such agreement shall provide, 
for any year beginning with 1993, that the physi- 
cian or supplier will accept as payment in full the 
amounts that would be payable under this part 
(plus the amounts of any coinsurance or deduct- 
ibles required of individuals on whose behalf 
payments are made under thia title) for an item 
or service furnished during such year to an 
individual who has attained age 66, is ineligible 
to receive benefits under this part, and is en- 
rolled, other than as sn employee, under a health 
benefits plan described in paragraphs ( 1) through 
(3) of section 6903 and section 6903e of title 6, 
United States Code, if such item or service ie of 
e type that ie covered under both this part and 
ehapter 69 of title 6, United States Code.'. 

(d) Medicare Actual Charge Limitation for 
Nonpartidpating Physicians. • Section 1648(g) of 
the Social Security Act (42 U.S.C. 1369w-4(g)) is 
•mended by sdding at the end thereof the follow- 
ing paragraph: 

'(8) Limitation of actual charges for enrolleee of 
the federal employees health benefits program. • 
(A) A nonpartidpating physician shall not impose 
an actual charge in excess of ths limiting charge 
defined in paragraph (2) for items and services 
furnished after 1992 in any case involving - 

'(i) an individual who has attained age 66, is 
ineligible to receive benefits under this part, and 
is enrolled, other than as an employee, under a 
health benefits plan described in paragraphs (1) 



through (3) or section 8903 or section 8903a of 
title 6, United States Code; and 

4 (ii) an item or service of a type that ia covered 
for benefita under both thia part and chapter 89 
of title 6, United States Code. 

f (B) If a person knowingly and willfully bills for 
physicians' services in violation of subparagraph 
(A), the Secretary shall apply sanctions against 
the person in accordance with section 1842(j)(2).'. 

(e) Effective Dates. • 

(1) Except ss provided in paragraph (2), the 
amendments made by this section shall be effec- 
tive with respect to health care provider charges 
for items and services furnished to individuals 
enrolled in plans under chapter 89 of title 6, 
United Ststes Code, in contract years beginning 
after December 31, 1992. 

(2) The amendment made by subsection (b) 
applies to agreements for periods sfler 1991. 

ROCKEFELLER (AND OTHERS) AMEND- 
MENT NO. 2787 

Mr. ROCKEFELLER (for himself. Mr. Byrd, 
Mr. Ford, Mr. Adams, Mr. Aksks, Mr. Dixon, Mr. 
Inouye, Mr. Riegle, Mr. Simon, Mr. Specter, end 
Mr. Woflbrd) proposed sn amendment to the bill 
H.R. 776, supra, ss follows: 

On page 646, strike subtitle C of title XX end 
insert: 

SUBTITLE C - HEALTH CARE OF COAL 
MINERS 
SEC. 1941. SHORT TITLE. 

This subtitle may be cited ss the *Cosl Industry 
Retiree Health Benefit Act of 1992'. 
SEC. 1942. FINDINGS AND DECLARATION OF 
POLICY. 

(a) Findings. - The Congress finds that - 

(1) the production, transportation, and use of 
coal substantially affects interstate and foreign 
commerce and the national public interest; snd 

(2) in order to secure the stability of interstate 
commerce, it is necessary to modify the current 
private health care benefit plan structure for 
retirees in the coal industry to identify persons 
most responsible for plan liabilities in order to 
stabilise plan funding and allow for the provision 
of health care benefits to such retirees. 

(b) Statement of Policy. - It is the policy of this 
subtitle - 

(1) to remedy problems with the provision and 
funding of health care benefita with respect to 
the beneficiaries of multiemployer benefit plans 
that provide health care benefita to retirees in 
the coal industry; 

(2) to allow for sufficient operating assets for 
such plans; and 

(3) to provide for the continuation of a privately 



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financed self-sufficient program for the delivery 
of health care benefits to the beneficiaries of such 



SBC. 1948. COAL INDUSTRY HEALTH BENE- 
FITS PROGRAM. 

(a) In General. - The Internal Revenue Code of 
1986 is amended by adding st the end the follow- 
ing new subtitle: 

'SUBTITLE J - COAL INDUSTRY HEALTH 
BENEFITS 
'Chapter 99. Coal industry health benefits. 
'CHAPTER 99 - COAL INDUSTRY HEALTH 
BENEFITS 

'Subchapter A - Definitions of general applicabili- 
ty 

'Subchapter B - Combined benefit fund. 
'Subchapter C - Health benefits of certain min- 
ers. 
'Subchapter D • Other provisions. 

'SUBCHAPTER A • DEFINITIONS OF GEN- 
ERAL APPLICABILITY 
'Sec. 9701. Definitions of general applicability. 
'SEC. 9701. DEFINITIONS OF GENERAL 
APPLICABILITY. 

'(a) Plans and Funds. - For purposes of this 
chapter - 

'(1) UMWA benefit plan. - 

'(A) In general. - The term 'UMWA Benefit 
Plan' means a plan • 

'(i) which is described in section 404(c), or a 
continuation thereof; and 

*(ii) which provides health benefits to retirees 
and beneficiaries of the industry which main- 
tained the 1960 UMWA Pension Plan. 

'(B) 1960 umwa benefit plan. • The term ' 1960 
UMWA Benefit Plan' means a UMWA Benefit 
Plan, participation in which is substantially 
limited to individuals who retired before 1976. 

'(C) 1974 umwa benefit plan. - The term ' 1974 
UMWA Benefit Plan 1 means a UMWA Benefit 
Plan, participation in which is substantially 
limited to individuals who retired on or after 
January 1, 1976. 

'(2) 1960 umwa pension plan. - The term ' 1960 
UMWA Pension Plan' means a pension plan 
described in section 404(c) (or a continuation 
thereof), participation in which is substantially 
limited to individuals who retired before 1976. 

'(8) 1974 umwa pension plan. • The term ' 1974 
UMWA Pension Plan' means a pension plan 
described in section 404(c) (or a continuation 
thereof), participation in which is substantially 
limited to individuals who retired in 1976 and 
thereafter. 

'(4) 1992 umwa benefit plan. - The term ' 1992 
UMWA Benefit Plan' means the plan referred to 
in section 97 ISA. 



'(6) Combined fund. - The term 'Combined 
Fund' means the United Mine Workers of Ameri- 
ca Combined Benefit Fund established under 
section 9702. 

'(b) Agreements. • For purposes of this section 

'(1) Coal wage agreement. • The term 'coal wage 



'(A) the National Bituminous Coal Wage Agree- 
ment, or 

'(B) any other agreement entered into between 
sn employer in the coal industry and the United 
Mine Workers of America that required or re- 
quires one or both of the following: 

'(i) the provision of health benefits to retirees of 
such employer, eligibility for which is based on 
years of service credited under s plsn established 
by the settlors and described in section 404(c) or 
a continuation of auch plan; or 

'(ii) contributions to the 1960 UMWA Benefit 
Plan or the 1974 UMWA Benefit Plan, or any 
predecessor thereof. 

'(2) Settlors. - The term 'settlors' moans the 
United Mine Workers of America snd the Bitumi- 
nous Coal Operators' Association, Inc. (referred 
to in this chapter as the 'BCOA'). 

'(8) National bituminous coal wage agreement. 
• The term 'National Bituminous Coal Wage 
Agreement' means a collective bargaining agree- 
ment negotiated by the BCOA and the United 
Mine Workers of America. 

'(c) Terms Relating to Operators. • For purposes 
of this section - 

'(1) Signatory operator. • The term 'signatory 
operator' means a person which is or wee a 
signatory to a coal wsge agreement. 

'(2) Related persons. - 

'(A) In general. • A person shall be considered 
to be a related person to a signatory operator if 
that person is • 

'(i) a member of the controlled group of corpora- 
tions (within the meaning of section 62(e)) which 
includes such signatory operator; 

'(ii) a trade or business which is under common 
control (ss determined under section 62(b)) with 
such signatory operator; or 

*(iii) any other person who is identified as 
hsving a partnership interest or joint venture 
with a signatory operator in a business within 
the coal industry, but only if such business 
employed eligible beneficiaries, except that this 
clause shall not apply to a person whose only 
interest is as a limited partner. A related person 
shall also include a successor in interest of any 
person des cribe d in clause (i), (ii), or (iii). 

'(B) Time for determination. - The relationships 
I in clauses (i), (ii), snd (iii) of subpara- 



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4897 



graph (A) shall be determined as of July 20, 
1992, except that if, on July 20, 1992, a signatory 
operator is no longer in business, the relation- 
ships shall be determined as of the time immedi- 
ately before such operator ceased to be in busi- 

'(3) 1986 agreement operator. - The term ' 1988 
agreement operator' mesne - 

'(A) a signatory operator which was a signatory 
to the 1988 National Bituminous Coal Wage 
Agreement, 

'(B) an employer in the coal industry which wss 
a signatory to an agreement containing pension 
and health care contribution and benefit provi- 
sions which are the same as those contained in 
the 1988 National Bituminous Coal Wage Agree- 
ment, or 

'(C) an employer from which contributions were 
actually received after 1987 and before July 20, 
1992, by the I960 UMWA Benefit Plan or the 
1974 UMWA Benefit Plan in connection with 
employment in the coal industry during the 
period covered by the 1988 National Bituminous 
Coal Wage Agreement. 

'(4) Last signatory operator. • The term 'last 
signatory operator' means, with respect to a coal 
industry retiree, a signatory operator which was 
the most recent coal industry employer of such 
retiree. 

'(6) Assigned operator. - The term 'assigned 
operator' means, with respect to an eligible 
beneficiary defined in section 9703(0, the signa- 
tory operator to which liability under subchapter 
B with respect to the beneficiary is assigned 
under section 9706. 

'(6) Operators of dependent beneficiaries. - For 
purposes of this chapter, the signatory operator, 
last signatory operator, or assigned operator of 
any eligible beneficiary under this chapter who is 
s coal industry retiree shall be considered to be 
the signatory operator, last signatory operator, or 
assigned operator with respect to any other 
individual who is an eligible beneficiary under 
this chapter by reason of a relationship to the 
retiree. 

'(7) Business. - For purposes of this chapter, a 
person shall be considered to be in business if 
auch person conducts or derives revenue from 
any business activity, whether or not in the coal 
industry. 

'(d) Enactment Date. - For purposes of this 
chapter, the term 'enactment date' means the 
date of the enactment of this chapter. 

'SUBCHAPTER B - COMBINED BENEFIT 
FUND 
'Part I • Establishment and Benefits 
'Part II - Financing 



'Part III - Enforcement 
'Part IV - Other Provisions 
•PART I - ESTABLISHMENT AND BENEFITS 
'Sec. 9702. Establishment of the United Mine 
Workers of America Combined Benefit Fund. 
'Sec. 9703. Plan benefits. 
'SEC. 9702. ESTABLISHMENT OF THE UNIT- 
ED MINE WORKERS OF AMERICA COM- 
BINED BENEFIT FUND. 

'(a) Establishment. - 

'(1) In general. • As soon ss practicable (but not 
later than 60 days) after the enactment date, the 
persons described in subsection (b) shall desig- 
nate the individuals to servo ss trustees. Such 
trustees shall create a now private plan to be 
known as the United Mine Workers of America 
Combined Benefit Fund. 

'(2) Merger of retiree benefit plans. - As of 
February 1, 1993, the settlors of the 1950 UMWA 
Benefit Plan and the 1974 UMWA Benefit Plan 
shall cause such plans to be merged into the 
Combined Fund, and such merger shall not be 
treated as an employer wilhdruwul for purposes 
of any 1988 coal wage agreement. 

'(3) Treatment of plan. • The Combined Fund 
shall be - 

'(A) a plan described in section 302(c)(5) of the 
Labor Management Relations Act. 1947 (29 
U.S.C. 186(c)(5)). 

'(B) en employee wolfare benefit plan within the 
meaning of section 3(1) of the Employee Retire- 
ment Income Security Act of 1974 (29 U.S.C. 
1002(D). and 

'(C) a multiemployer plan within the meaning 
of section 3(37) of such Act (29 U.S.C. 1002(37)). 

'(4) Tax treatment. - For purposes of this title, 
the Combined Fund and any related trust shall 
be treated as an organization exempt from tax 
under section 601(a). 

'(b) Board of Trustees. - 

'(1) In general. - For purposes of subsection (a), 
the board of trustees for the Combined Fund 
shall be appointed as follows: 

'(A) one individual who represents employers in 
the coal mining industry shall be designated by 
the BCOA; 

'(B) one individual shall bo designated by the 
three employers, other than 1988 agreement 
operators, who have been assigned the greatest 
number of eligible beneficiaries under section 
9706; 

'(C) two individuals designated by the United 
Mine Workers of America; and 

'(D) three persons selected by the persons 
appointed under subparagraphs (A), (B), and (C). 

'(2) Successor trustees. • Any successor trustee 
shall be appointed in the same manner as the 



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4898 



tnmlM Beengesjrrniii. TW pli 

llm (lessened Pom deemfl scoriae far the row or el 



i pay men ts required to 




'(AlBGOA. -If theBCX>Aceeseetoexiet.sny 
trustee or iMtuwar under paragraph ( IMA) she* 
U disignetid hjrtlwl eo as loy erc who «m 
»ofts»BCOAonthsonerto™etdeleond 
imherof 
i9706. 

'(B) Fo. 

l < 1KB) she* be iwfiuUJ by U» 
3 employers i. other than 1963 agreement opa ra - 
tors. which Um records of the I960 UMWA 
Benefit Plan and 1074 UMWA Benefit Plan 
indicate have tha greatest number of < 
beneficiaries aa of tha enactment « 
trustee and any 
November 1. 1998. 

'(c) Plan Yaar. - Tha first plan yaar of tha 
Combined Fund shall begin February 1. 1993, 
and and September 30, 1993. Each s u cce edi n g 
plan yaar shall begin on October I of each calen- 
dar yaar. 
'SEC. 9703. PLAN BENEFITS. 

'(a) In General. • Each eligible beneficiary of the 
Combined Fund shall receive - 

'(1) health benefits described in subsection (b), 
and 

'(2) in tha case of an eligible beneficiary de- 
scribed in subsection (IX 1), death benefits cover- 
age described in subsection (c). 

'(b) Health Benefits. - 

'(1) In general. • The trustees of the Combined 
Fund shall provide health care benefits to each 
eligible beneficiary by enrolling the beneficiary in 
a health care services plan which undertakes to 
provide such benefits on a prepaid risk basis. 
The trustees shall utilise all available plan 
resources to ensure that, consistent with para- 
graph (2), coverage under the managed care 
system shall to the maximum extent feasible be 
substantially the same as (and subject to the 
same limitations of) coverage provided under the 
1960 UMWA Benefit Plan and the 1974 UMWA 
Benefit Plan aa of January I. 1992. 

'(2) Plan payment rates. • 

'(A) In general. • The trust ass of the Combined 
Fund shall ne go t i ate payment rates with the 
health care services plana described in paragraph 
(1) for each plan yaar which are in amounts 
which - 

*(i) vary as necessary to ensure that beneficia- 
ries in different geographic areas have irraaa to 
a uniform level of health benefits; and 

*(ii) result in aggregate payments for such plan 
year from the Combined Fund which do not 



a tetal pre 
be seed la Ike Ceaaainsd Fund under i 
97044a) far the seen year, aajuatod aa provided in 
eenpsragrssbs (B) ami (O. 

'(B) Reductions - The amount deesrmsned 
under subparagraph (AMii) far any plan year 





*(ii) by the amount reserved far plan i 
tration usjder euhsartion (d). 

•(C) In tresses - TVs aseounl 
subparagraph (AMii) shall be i 

'(*) by any reduction in 
payments required to be paid under paction 
9704(a) by reason of transfers described in sec- 
tion 9706, 

*(ii) by any carryover to the plan year from any 
preceding plan yaar which • 

*(D is derived from amounta described in section 
9704<eM3MBMi>, and 

'(II) the t ru s t ees elect to use to pay benefits far 
the current plan year, and 

•(iii) any interest earned by the Combined Fund 
which the trustees elect to use to pey benefits far 
the current plan year. 

'(3) Qualified providers. • The trustees of the 
Combined Fund shall not enter into sn agree- 
ment under paragraph ( 1) with any provider of 
esrvicaa which is of a type which ia required to be 
certified by the Secretary of Health and Human 
Services when providing services under title 
XVIII of the Social Security Act unless the pro- 
vider is so certified. 

'(4) Effective date. • Benefits shall be provided 
under paragraph (1) on and after February I. 
1993. 

'(c) Death Benefits Coverage. - 

'(1) In general. • The tru st ee s of the Co m b i n ed 
Fund shall provide death benefits coverage In 
each eligible beneficiary described in subsection 
<0( 1) which is identical to the benefits provided 
under the 1960 UMWA Pension PUn or 1974 
UMWA Pension Plan, whichever ia applicable, on 
July 20, 1992. Such coverage shall be provided on 
and after February 1. 1993. 

'(2) Termination of coverage. • The 1960 
UMWA Pension PUn and the 1974 UMWA 
Pension Plan shall each bo amended to provide 
that death benefits coverage slisll not be p rov i ded 
to eligible beneficiariee on and after February I, 
1993. This paragraph shall not prohibit such 
plana from subsequently providing desth benefits 
not described in paragraph (I). 

'(d) Reserves for Administration. • Tlie trustees 
of the Combined Fund may reserve for each plan 



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year, for use in payment of the Administrative 
costs of the Combined Fund, an amount not to 
exceed 6 percent of the premiums to be paid to 
the Combined Fund under section 9704(a) during 
the plan year. 

*<e) Limitation on Enrollment. - The Combined 
Fund shall not enroll any individual who is not 
receiving benefits under the I960 UMWA Benefit 
Plan or the 1974 UMWA Benefit Plan as of July 
20. 1992. 

'(0 Eligible Beneficiary. - For purposes of this 
subchapter, the term 'eligible beneficiary' means 
an individual who • 

'(1) is a coal industry retiree who, on July 20, 
1992, was eligible to receive, and receiving, 
benefits from the 1960 UMWA Benefit Plan or 
the 1974 UMWA Benefit Plan, or 

'(2) on such date was eligible to receive, and 
receiving, benefit* in either such plan by reason 
of a relationship to such retiree. 

TART II - FINANCING 
'Sec. 9704. Liability of assigned operators. 
4 Sec. 9705. Transfers. 

'Sec. 9706. Assignment of eligible beneficiaries. 
'SEC. 9704. LIABILITY OF ASSIGNED OPERA- 
TORS. 

'(a) Annual Premiums. - Each assigned operator 
shall pay to the Combined Fund for each plan 
year beginning on or after February 1, 1993, an 
annual premium equal to the sum of the follow- 
ing three premiums - 

'(1) the health benefit premium determined 
under subs e ction (b) for such plan year, plus 

'(2) the deeth benefit premium determined 
under subs e ction (c) for such plan year, plus 

'(3) the unassigned beneficiaries premium 
determined under su b s ect ion (d) for such plan 
year. Any related person with respect to an 
assigned operator shall be jointly and severally 
liable for any premium required to be paid by 
•uch operator. 

'(b) Health Benefit Premium. - For purposes of 
this chapter • 

'(1) In general. • The health benefit premium 
for any plan year for any assigned operator shall 
be an amount equal to the product of the per 
beneficiary premium for the plan year multiplied 
by the number of eligible beneficiaries assigned to 
such operator under section 9706. 

'(2) Per beneficiary premium. - The Secretary of 
Health and Human Services shall calculate a per 
beneficiary premium for each plan year beginning 
on or after February 1, 1993, which is equal to 
the sum of - 

'(A) the amount determined by dividing - 

'(i) the aggregate amount of payments from the 

1960 UMWA Benefit Plan and the 1974 UMWA 



Benefit Plan for health benefits (loss reimburse- 
ments but including administrative costs) for the 
plan year beginning July I, 1991, for all individu- 
als covered under such plans for such plan year, 

'(ii) the number of such individuals, plus 

'(B) the amount determined under subpara- 
graph (A) multiplied by the percentage (if any) by 
which the medical component of the Consumer 
Price Index for the calendar year in which the 
plan year begins exceeds such component for 
1992. 

'(3) Adjustments for medicare reduction*. - If, 
by reason of a reduction in bunofiU under title 
XVIII of the Social Security Act, the level of 
health benefits under the Combined Fund would 
be reduced, the trustees of the Combined Fund 
shall increase the per beneficiary premium for 
the plan year in which the reduction occurs and 
each subsequent plan year by tho amount neces- 
sary to maintain the level of health benefit* 
which would have been provided without such 
reduction. 

'(c) Death Benefit Premium. • The death benefit 
premium for any plan year for any assigned 
operator shall be equal to tho applicable percent- 
age of the amount, actuarially dolortninod, which 
the Combined Fund will be required to pay 
during the plan year for death benefits coverage 
described in section 9703(c). 

'(d) Unassigned Beneficiaries Premium. • The 
unassigned beneficiaries premium for any plan 
year for any assigned operator shall be equal to 
the applicable percentage of the product of the 
per beneficiary premium for the plan year multi- 
plied by the number of eligible beneficiaries who 
are not assigned under section 9706 to any 
person for such plan year. 

'(e) Premium Accounts; Adjustments. - 

'(1) Accounts. - The trustees of the Combined 
Fund shall establish snd maintain 3 separate 
accounts for each of the premiums described in 
subsections (b), (c), snd (d). Such accounts shall 
be credited with the premiums received and 
debited with expenditures allocable to such 
premiums. 

'(2) Allocations. • 

'(A) Administrative expenses. • Administrative 
costs for any plan year shall be allocated to 
premium accounts under paragraph (1) on the 
basis of expenditures (other then administrative 
costs) from such accounts during the preceding 
plan year. 

'(B) Interest. - Interest shall be allocated to the 
account established for health benefit premiums. 

'(3) Shortfalls and surpluses. • 

'(A) In general. - Except as provided in subpara- 



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graph CB), if, for any plan year, there is a abort- 
fall or surplus in any premium account, the 
premium for the following plan year for each 
assigned operator shall be proportionately re- 
duced or increased, whichever is applicable, by 
the amount of such shortfall or surplus. 

'(B) Exception. • Subparagraph (A) shall not 
apply to any surplus in the health benefit premi- 
um account or the unsssigned beneficiaries 
premium account which is attributable to - 

'(i) the excess of the premiums credited to such 
account for a plan year over the benefits (and 
administrative costs) debited to such account for 
the plan year, but such excess shall only be 
available for purposes of the carryover described 
in section 9703(b)(2)(C)(ii) (relating to carryovers 
of premiums not used to provide benefits), or 

'(ii) interest credited under paragraph (2)(B) for 
the plan year or any preceding plan year. 

'(C) No authority for increased payments. - 
Nothing in this paragraph shall be construed to 
allow expenditures for health care benefits for 
any plan year in excess of the limit under section 
9703(b)(2). 

'(0 Applicable Percentage. - For purposes of this 



'(1) In general. - The term 
percentage 1 means, with respect to any assigned 
operator, the percentage determined by dividing 
the number of eligible beneficiaries assigned 
under section 0706 to such operator by the total 
number of eligible beneficiaries assigned under 
section 9706 to all such operators (determined on 
the basis of assignments as of October 1, 1998). 

'(2) Annual adjustments. • In the case of any 
plan year beginning on or after October 1, 1994, 
the applicable percentage for any assigned opera- 
tor shell be redetermined under paragraph ( 1) by 
making the following changes to the assignments 
as of October 1, 1998: 

'(A) Such assignment* shell be modified to 
reflect any changes during the period beginning 
October 1, 1993, end ending on the lest day of 
the preceding plan year pursuant to the appeele 
process under section 9706(0. 

'(B) The total number of assigned eligible 
beneficieriee shall bo reduced by the eligible 
beneficiaries of assigned operators which (and all 
related persons with respect to which) had ceased 
business (within the meaning of section 
9701(cH6)) during the period described in sub- 
paragraph (A). 

'(g) Payment of Premiums. • 

'(1) In general. • The annual premium under 
subsection (a) for any plan year shall be payable 
in 12 equal monthly installments, due on the 
twenty-fifth day of each calendar month iu the 



plan year. In the esse of the plan year beginning 
February 1, 1993, the annual premium under 
subsection (a) shall be edded to such premium for 
the plan year beginning October 1, 1993. 

'(2) Deductibility. - Any premium required by 
this section shell be deductible without regard to 
any limitation on deductibility based on the 
prefunding of health benefits. 

'(h) Information. • The trustees of the Com- 
bined Fund shell, not later then 60 days after the 
enactment date, furnish to the Secretary of 
Health and Human Services information as to 
the benefits end covered beneficiaries under the 
fund, and such other information as the Secre- 
tary may require to compute any premium under 



'(i) Transition Rules. • 

'(1) 1968 agreement operators. • 

'(A) 1st year coots. • During the plan year of the 
Combined Fund beginning February I. 1993, the 
1988 agreement operators shall make contribu- 
tions to the Combined Fund in amounts iiecos- 
eary to pay benefits and administrative costs of 
the Combined Fund incurred during such yeer, 
reduced by the amount transferred to the Com- 
bined Fund under section 9706(a) on February I. 
1998. 

'(B) Deficits from merged plane. - During the 
period beginning February 1, 1998, and ending 
September 30, 1994, the 1988 agreement opera- 
tore shell make contributions to the Combined 
Fund ae are necessary to pay off tho expenses 
accrued (and remaining unpaid) by Uie 1960 
UMWA Benefit Plen and the 1974 UMWA Bene- 
fit Plan as of February 1. 1993. reduced by the 
onsets of such plane es of such date. 

'(C) Failure. - If any 1988 agreement operator 
fails to meet any obligation under this paragraph, 
any contributions of such operator to the Com- 
bined Fund or any other plan deecribod in section 
404(c) shell not bo deductible under this title 
until such time es tho failure is corrected. 

*(D) Premium reductions. • 

'(i) 1st year payments. • In the esse of e 1968 
agreement ope ra tor making contributione under 
s»di paragraph (A), ths premium of such operator 
under subsection (s) ehell be reduced by the 
amount paid under subparagraph (A) by such 
ope ra tor for the plen yev beginning February I. 
1998. 

'(ii) Deficit payments. - In ths case a 1968 
agreement operator making contributions under 
wdmoisgisph (B), the premium of such operator 
under su b se c tion (s) shall be reduced by the 
amounts which are paid to the Combined Fund 
by r easo n of claims arming in connection with 
Iks 1960 UMWA Benefit Plen and the 1974 



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UMWA Benefit Plan as of February 1, 199S, 
including claims based on the 'evergreen clause' 
found in the language of the 1960 UMWA Bene- 
fit Plan and the 1974 UMWA Benefit Plan, and 
which are allocated to such operator under 
subparagraph (ED. 

*(iii) Limitation. - Clause (ii) shall not apply to 
the extent the amounts paid exceed the contribu- 



'(iv) Plan years. - Premiums under subsection 
(a) shall be reduced for the first plan year for 
which amounts described in clause (i) or (ii) are 
available and for any succeeding plan year until 
such amounts are exhausted. 

'(E) Allocations of contributions and refunds. - 
Contributions under subparagraphs (A) and (B), 
and premium reductions under subparagraph 
(D)(ii), shall be msde ratably on the basts of 
aggregate contributions msde by such operators 
under the applicable 1966 coal wage agreements 
as of January 31, 1999. 

*(2) 1st plan year. • In the case of the plan year 
of the Combined Fund beginning February 1, 
1993- 

'(A) the premiums under subsections (a)(1) and 
(a)(3) shall be 67 percent of such premiums 
without regard to this paragraph, and 

'(B) the premiums under subsection (a) shall be 
paid as provided in subsection (g). 

'(3) Startup costs. • The 1950 UMWA Benefit 
Plan and the 1974 UMWA Benefit Plan shsll psy 
the costs of the Combined Fund incurred before 
February 1, 1993. For purposes of this section, 
shall be treated as administrative 
incurred for the plan year beginning 
February 1, 1993. 
'SBC. 9706. TRANSFERS. 

'(a) Transfer of Assets From 1960 UMWA 
Pension Plan. • 

'(1) In general. - From the funda reserved under 
paragraph (2), the board of trustees of the 1960 
UMWA Pension Plsn shall transfer to the Com- 
bined Fund • 

'(A) $70,000,000 on Februsry 1, 1993, 

'(B) $70,000,000 on October 1, 1993, and 

'(C) $70,000,000 on October 1, 1994. 

'(2) Reservation. • Immediately upon the enact- 
ment date, the board of trustees of the 1960 
UMWA Pension Plan shall segregate 
$210,000,000 from the general assets of the plan. 
Such funda shall bs held in the plan until dis- 
bursed pursusnt to paragraph (1). Any interest 
on such funds shall be deposited into the general 
sssets of the 1960 UMWA Pension Plan. 

'(3) Use of funds. • Amounts transferred to the 
Combined Fund under paragraph ( 1) shall • 

'(A) in the case of the transfer on February 1, 



1993, be used to proportionately reduce the 
premium of each assigned operator under section 
9704(a) for the plan year of the Fund beginning 
February 1, 1993. and 

'(B) in the case of sny other such transfer, be 
used to proportionately reduce the unassigned 
beneficiary premium under section 9704(a)(3) and 
the death benefit premium under section 
9704(a)(2) of each assigned operator for the plan 
year in which transferred and for any subsequent 
plsn year in which audi funds remain available. 
Such funds may not be used to pay any amounts 
required to be paid by the 1988 agreement opera- 
tors under section 9704(i)(l)(B). 

'(4) Tsx treatment; validity of transfer. - 

'(A) No deduction. • No deduction shall be 
allowed under this titlo with respect to any 
transfer pursuant to paragraph (1), but such 
transfer shall not adversely afioct the deductibili- 
ty (under applicable provisions of this title) of 
contributions previously made by employers, or 
amounts hereafter contributed by employer*, lo 
the 1960 UMWA Pension Plan, the I960 UMWA 
Benefit Plan, the 1974 UMWA Pension Plan, the 
1974 UMWA Benefit Plan, the 1992 UMWA 
Benefit Plan, or the Combined Fund. 

'(B) Other tax provisions. • Any transfer pursu- 
ant to paragraph (1) - 

'(i) shall not be treated as an out pi oyer rever- 
sion from a qualified plan for purposes of section 
4980, and 

'(ii) shall not be includible in the gross income 
of any employer maintaining the I960 UMWA 
Penaion Plan. 

'(6) Treatment of transfer. • Any transfer 
pursuant to paragraph ( I) shall not be deemed to 
violate, or to be prohibited by, any provision of 
law, or to cause the settlors, joint board of trust- 
ees, employers or any related person to incur or 
be subject to liability, taxes, fines, or penalties of 
sny kind whatsoever. 

'(b) Transfers From Abandoned Mine Reclama- 
tion Fund. - 

'(I) In general. • The Combined Fund shall 
include any amount transferred to the Fund 
under section 402(h) of the Surface Mining 
Control snd Reclamation Act of 1977 (30 UiJ.C. 
1232(h)). 

'(2) Use of funds. • Any amount transferred 
under paragraph (1) for any fiscal year shall be 
used to proportionately reduce the unassigned 
beneficiary premium under section 9704(a)(3) of 
each assigned operator for the plan year in which 
transferred. 

'SEC. 9706. ASSIGNMENT OF ELIGIBLE 
BENEFICIARIES. 

*(s) In General. « For purposes of this chapter. 



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the Secretary of Health end Human Service* 
•hall, before October 1. IMS, assign eech coal 
industry retiree who is en eligible beneficiary to 
a signatory operator which (or any related person 
with respect to which) remains in business in the 
following order: 

'( 1) First, to the signatory operator which - 

'(A) was a signatory to the 1978 coal wage 
agreement or any subsequent coal wage agree- 
ment, and 

'(B) was the most recent signatory operator to 
employ the coal industry retiree in the coal 
industry for at least 2 years. 

'(2) Second, if the retiree ie not assigned under 
paragraph (1), to the signatory operator which • 

'(A) was a signatory to the 1978 coal wage 
agreement or any eubsequent coal wage agree- 
ment, and 

'(B) was the most recent signatory operator to 
employ the coal industry retiree in the coel 
industry. 

'(S) Third, if the retiree is not assigned under 
paragraph (1) or (2), to the signatory operator 
which employed the coal industry retiree in the 
coal industry for s longer period of time than any 
other signatory operator prior to the effective 
date of the 1978 coal wage agreement. 

'(b) Rules Relating to Employment and Reas- 
signment Upon Purchase. • For purposes of 
subsection (a) • 

'(I) Aggregation rules. - 

'(A) Related person. - Any employment of a coal 
industry retiree in the coal industry by a signato- 
ry operator shall be treated as employment by 
any related persons to such operator. 

'(B) Certain employment disregarded. • Employ- 
ment with • 

'(i) a person which is (and all related persons 
with respect to which are) no longer in business, 
or 

'(ii) a person during a period during which such 
person was not a signatory to a coal wage agree- 
ment, shall not be taken into account. 

'(2) Reassignment upon purchase. • If a person 
becomes a successor of sn assigned operator after 
the enactment date, the assigned operator may 
transfer the assignment of an eligible beneficiary 
under subsection (a) to such successor, and such 
successor shall be treated ss the assigned opera- 
tor with respect to such eligible beneficiary for 
purposes of this chapter. Notwithstanding the 
preceding sentence, the assigned operator trans- 
ferring such assignment (and any related person) 
shall remain the guarantor of the benefits provid- 
ed to the eligible beneficiary under this chapter. 
An assigned operator shall notify the trustees of 
the Combined Fund of any transfer described in 



this paragraph. 

f (c) Identification of Eligible Beneficiaries. - The 
1960 UMWA Benefit Plsn and the 1974 UMWA 
Benefit Plan shall, by the later of October I. 
1992, or the twentieth day after the enactment 
date, provide to the Secretary of Health and 
Human Services s list of the names and social 
security account numbers of each eligible benefi- 
ciary, including each deceased eligible beneficiary 
if any other individual is an eligible beneficiary 
by reason of s relationship to such deceased 
eligible beneficiary. In addition, the plans shall 
provide, where ascertainable from plan records, 
the nsmes of sll persons doecribed in subsection 
(s) with respect to any eligible beneficiary or 
deceased eligible beneficiary. 

'(d) Cooperation by Other Agencies and Per- 
sons. • 

'(1) Cooperation. • The head of any department, 
agency, or instrumentality of the United Slates 
shall cooperate fully and promptly with the 
Secretary of Health and Human Services in 
providing information which will enable the 
Secretary to carry out his responsibilities under 
this section. 

'(2) Providing of information • 

'(A) In general. • Notwithstanding any other 
provision oflsw, including section 610.'). the head 
of any other agency, department, or instrumen- 
tality shall, upon receiving a written request 
from the Secretary of Health and Human Servic- 
es in connection with this section, cause a search 
to be msde of the files and records maintained by 
such agency, department, or instrumentality with 
a view to determining whether the information 
requested is contained in such files or records. 
The Secretary shall be advised whether the 
search disclosed the information requested, and. 
if so, such information shall be promptly trans- 
mitted to the Secretary, except that if the disclo- 
sure of sny requested information would contra- 
vene nstionsl policy or security interests of the 
United States, or the confidentiality of census 
data, the in forms lion shall not be transmitted 
and the Secretary shall be so advised. 

'(B) Limitation. • Any information provided 
under subparagraph (A) shall be limited to infor- 
mation necessary for the Secretary to carry out 
hie duties under this section. 

'(3) Trustees. • The trustees of the Combined 
Fund, the 1950 UMWA Benefit Plan, the 1974 
UMWA Benefit Plan, the I960 UMWA Pension 
Plsn. and the 1974 UMWA Pension Man shall 
fully and promptly cooperate with the Secretary 
in furnishing, or assisting the Secretsry to 
obtain, any information the Secretary needs to 
carry out the Secretary's responsibilities under 



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this section. 

•<•) Notice by Secretary. - 

'(1) Notice to fund. - The Secretary of Health 
and Human Services •hall advise the trustees of 
the Combined Fund of the name of each person 
identified under this section as an assigned 
opera t or, and the names and social security 
account numbers of eligible beneficiaries with 
r es p e ct to whom he is identified. 

•(2) Other notice. -The Secretary of Health and 
Human Services shall notify each assigned 
operator of the names and social security account 
numbers of eligible beneficiaries who have been 
■esigned to such person under this section and a 
brief summary of the facta related to the basis for 



'(1) Reconsideration by Secretary. - 

'(1) In general. - Any assigned operator receiv- 
ing a notice under su b s ec tion (e)(2) with respect 
to an eligible beneficiary may, within SO days of 
receipt of such notice, request from the Secretary 
of Health and Human Servioes detailed informa- 
tion ae to the work history of the beneficiary and 
the basis of the assignment. 

'(2) Review. • An assigned operator may, within 
SO days of receipt of the information under 
paragraph (1), request review of the assignment. 
The Secretary of Health and Human Servioes 
shall conduct such review if the Secretary finds 
the operator provided evidence with the request 
constituting a prima facie case of error. 

'(S) Results of review. • 

'(A) Error. - If the Secretary of Health and 
Human Services determines under a review 
under paragraph (2) that an assignment was in 



*(i) the Secretary ehall notify the assigned 
operator and the trustees of the Combined Fund 
and the trustees ehall reduce the premiums of 
the operator under section 9704 by (or if there 
are no auch premiums, repay) all premiums paid 
under section 9704 with respect to the eligible 
beneficiary, and 

'(ii) the Secretary shall review the beneficiary 'e 
record for reassignment under su b s ec tion (s). 

'(B) No error. - If the Secretary of Health and 
Human Services determines under s review 
conducted under paragraph (2) that no error 
occurred, the Secretary ehall notify the assigned 
operator. 

'(4) Determinations. • Any determination by the 
Secretary of Health and Human Servioes under 
paragraph (2) or (S) ehall bo final. 

'(6) Peyment pending review. • An assigned 
operator ehall pay the premiums under section 
9704 pending review by the Secretary of Health 
and Human Services or by s court under this 



'(6) Private actions. • Nothing in this section 
ehall preclude the right of any person to bring a 
separate civil action against another person for 
responsibility for assigned premiums, notwith- 
standing any prior decision by ths Secretary. 

'(g) Confidentiality of Information. • Any person 
to which information is provided by the Secretary 
of Health and Human Services under this section 
shall not discloss such information except in any 
proceedings related to this section. Any civil or 
criminal penalty which is applicable to an unau- 
thorised disclosure under section 610S shall 
apply to any unauthorized disclosure under this 



TART III - ENFORCEMENT 
'See 9707. Failure to pay premium. 
'SEC. 9707. FAILURE TO PAY PREMIUM. 

'(a) General Rule. • There ie hereby imposed a 
penalty on the failure of any assigned operator to 
pay any premium required to be paid under 
section 9704 with respect to sny eligible benefi- 
ciary. 

'(b) Amount of Penalty. • The amount of the 
penalty imposed by eubeection (s) on any failure 
with respect to sny eligible beneficisry ehall be 
$100 per day in the noncompliance period with 
respect to sny such failure. 

'(c) Noncompliance Period. - For purposes of 
this section, the term 'noncompliance period' 
means, with respect to any failure to pay any 
premium or installment thereof, the period • 

'(1) beginning on the due date for euch premi- 
um or installment, and 

'(2) ending on the date of payment of euch 
premium or installment. 

'(d) Limitations on Amount of Penalty. • 

'(1) In general. • No penalty shall be imposed by 
eubeection (a) on any failure during any period 
for which it ie established to the satisfaction of 
the Secretary of the Treasury thst none of the 
persons responsible for euch failure knew, or 
exercising reasonable diligence, would have 
known, that auch failure exiatod. 

'(2) Corrections. - No penalty ehall be imposed 
by subsection (s) on any failure if • 

'(A) auch failure was due to reasonable cause 
and not to willful neglect, and 

'(B) auch failure ie corrected during the 30-day 
period beginning on the 1st date that any of the 
persons responsible for euch failure knew, or 
exercising reasonable diligence would have 
known, thst such failure existed. 

'(S) Waiver. - In the case of s failure that is due 
to reasonable cause end not to willful neglect, the 
Secretary of the Treasury msy waive all or part 
of the penalty imposed by subsection (a) for 



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failures to the extent that the Secretary deter- 
mines, in his sole discretion, that the payment of 
such penalty would be excessive relative to the 
failure involved. 

'(e) Liability for Penalty. - The person failing to 
meet the requirements of section 9704 shall be 
liable for the penalty imposed by subsection (a). 

'(0 Treatment. - For purposes of this title, the 
penalty imposed by this section shall be treated 
in the came manner as the tax impos ed by sec- 
tion 4980B. 

TART IV - OTHER PROVISIONS 
'Sec 0708. Effect on pending claims or obliga- 
tions. 

'SEC. 9708. EFFECT ON PENDING CLAIMS 
OR OBLIGATIONS. 

'All liability for contributions to the Combined 
Fund that arises on and after February 1, 1998, 
shall be determined exclusively under this chap- 
ter, including ail liability for contributions to the 
I960 UMWA Benefit Plan and the 1974 UMWA 
Benefit Plan for coal production on and after 
February 1, 1998. However, nothing in this 
chapter is intended to have any effect on any 
claims or obligations arising in connection with 
the 1960 UMWA Benefit Plan and the 1974 
UMWA Benefit Plan as of February 1, 1998, 
including claims or obligations based on the 
'evergreen' clause found in the language of the 
1960 UMWA Benefit Plan and the 1974 UMWA 
Benefit Plan. Thk chapter shall not be construed 
to affect any rights of subrogation of any 1988 
agreement operator with respect to contributions 
due to the 1960 UMWA Benefit Plsn or the 1974 
UMWA Benefit Plan as of Februsry 1, 1998. 

'SUBCHAPTER C - HEALTH BENEFITS OF 

CERTAIN MINERS 
'Part I - Individual employer plane 
'Part II - 1992 UMWA benefit plan 
'PART I - INDIVIDUAL EMPLOYER PLANS 
'Sec 9711. Continued obligations of individual 



'SEC. 9711. CONTINUED OBLIGATIONS OF 
INDIVIDUAL EMPLOYER PLANS. 

'(a) Coverage of Current Recipients. - The last 
signatory operator of any individual who, as of 
February 1, 1993, is receiving retiree health 
benefite from an individual employer plan main- 
tained pursuant to a 1978 or subsequent coal 
wage agreement ehail continue to provide health 
benefite coverage to such individual and the 
individual's eligible beneficiaries which is sub- 
stantially the same as (and subject to all the 
limitations of) the coverage providod by euch plan 
as of January 1, 1992. Such coverage shall con- 
tinue to be provided for as long as the last signs* 
tory operator (and any related person) remains in 



business. 

'(b) Coverage of Eligible Recipients. - 

'(1) In general. • The last signatory operator of 
any individual who, as of Februsry 1, 1998, is not 
receiving retiree health benefite undor the indi- 
vidual employer plan maintained by the last 
signatory operator pursuant to a 1978 or subse- 
quent coal wags agreement, but lies met the egs 
and service requirements for eligibility to receive 
benefite under euch plan aa of such dote, shall, at 
such time as such individual becomes eligible to 
receive benefite under euch plsn, provide health 
benefits coverage to such individual and the 
individual 'a eligible beneficiaries which is de- 
scribed in paragraph (2). This paragraph shall 
not apply to any individual who retired from the 
coal industry after September 80, 1994, or any 
eligible beneficiary of audi individual. 

'(2) Coverage. • Subject to the provisions of 
subsection (d), health benefite coverage ia de- 
scribed in this paragraph if it ia substantially the 
same es (and subject to ell ths limitations of) the 
coverage provided by the individual employer 
plan aa of January 1, 1992. Such coverage shall 
continue for es long as ths Isst signatory opera- 
tor (and any related person) remains in business. 

'(c) Joint and 8everal Liability of Related Per- 
eone. - Each related person of s Isst signatory 
operator to which subsection (s) or (b) applies 
shall be jointly and severally liable with the last 
signatory operator for the provision of health 
care coverage described in subsection (a) or (b). 

'(d) Managed Care and Coat Containment. • The 
lest signatory operator shall not be treated as 
failing to most ths requirements of subsection (s) 
or (b) if benefits are provided to eligible beneficia- 
ries under msnsgsd care and cost containment 
rules and procedures described in section 9712(e) 
or agreed to by the lest signatory operator and 
the United Mine Workers of Amsries. 

'(s) Treatment of Noncovered Employees. • The 
distance, level, end duration of benefite provided 
to former employees of s Isst signatory operator 
(and their eligible beneficiariee) who are not 
otherwiee covered by this chapter snd who are 
(or were) covered by a coal wage agreement shell 
only be determined by, end shall be subject to, 
collective bargaining, lawful unilateral action, or 
other applicable law. 

'(0 Eligible Beneficiary. • For purposes of this 
section, ths term 'eligible beneficiary' mesne any 
individual who ia eligible for health benefite 
under s plan desc ri b ed in subsection (s) or (b) by 
reason of the individual's relationship with ths 
retiree described in such subsection (or to an 
individual who, based on service snd employment 
hietory at ths time of death, would heve been so 



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described but for such faith). 

•(g) Rules Applicable to This Part and Part II. 
- For purpose* of this part and part II - 

'(1) Successor. - The term 'last signatory 
ope rat or* shall include a successor in interest of 
such operator. 

*(2) Reassignment upon purchase. - If a person 
become s a ■urreesnr of a last signatory operator 
after the enactment date, the last signatory 
operator may transfer any liability of such opera- 
tor under this chapter with respect to an eligible 
beneficiary to such successor, and such successor 
shall be treated as the last signatory operator 
with respect to such eligible beneficiary for 
purposes of this chapter. Notwithstanding the 
preceding sentence, the last signatory operator 
transferring such assignment (and any related 
person) shall remain the guarantor of the bene- 
fits provided to the eligible beneficiary under this 
chapter. A last signatory operator shall notify 
the trustees of the 1992 UMWA Benefit Plen of 
any transfer described in this paragraph. 

TART H - 1992 UMWA BENEFIT PLAN 
•Sec 9712. Establishment and coverage of 1992 
UMWA Benefit Plan. 

•SEC. 9712. ESTABLISHMENT AND COVER- 
AGE OF 1992 UMWA BENEFIT PLAN. 

•(a) Creation of Plan. - 

*( 1) In general. - As soon as practicable after the 
enactment dete, the settlors shall create a sepa- 
rate private plan which shall bo known as the 
United Mine Workers of America 1992 Benefit 
Plan. For purposes of this title, the 1992 UMWA 
Benefit Plan shall bo treated as an organization 
exempt from taxation under section 601(a). The 
settlors shall be responsible for designing the 
structure, Administration and terms of the 1992 
UMWA Benefit Plan, and for appointment and 
removal of the members of the board of trustees. 
The board of trustees shall initially consist of five 
members end shall thereafter be the number set 
by the settlors. 

'(2) Treetment of plen. - The 1992 UMWA 
Benefit Plen shall be - 

'(A) s plan described in section 302(c)(6) of the 
Labor Management Relations Act, 1947 (29 
U.S.C. 166(c)(6)), 

'(B) an employee welfare benefit plan within the 
meaning of section 3(1) of the Employee Retire- 
ment Income Security Act of 1974 (29 U.S.C. 
1002(1)), and 

'(C) a multiemployer plan within the meaning 
of section 3(37) of such Act (29 U.S.C. 1002(37)). 
•(b) Coverage Requirement. • 

'(1) In general. - The 1992 UMWA Benefit Plan 
ehall only provide health benefits coverage to any 
eligible beneficiary who is not eligible for benefits 



r the Combined Fund and shsll not provide 
ouch coverage to any other individual. 

•(2) Eligible beneficiary. • For purposes of this 
section, the term 'eligible beneficiary ' means an 
individual who • 

•(A) but for the enactment of this chapter, 
would be eligible to receive benefits from the 
1960 UMWA Benefit Plan or the 1974 UMWA 
Benefit Plan, based upon sge and service earned 
as of February 1, 1993; or 

•(B) with respect to whom coverage is required 
to be provided under section 971 1, but who does 
not receive ouch coverage from the applicable laat 
signatory operator or any related person, and any 
individual who ia eligible for benefits by reason of 
a relationship to an individual described in 
subparagraph (A) or (B). In no event shall the 
1992 UMWA Benefit Plan provide health benefit* 
coverage to any eligible beneficiary who is a coal 
industry retiree who retired from the coal indus- 
try after September 30, 1994, or any beneficiary 
of such individual. 

•(c) Health Benefit*. - 

•(1) In general. - The 1992 UMWA Benefit Plan 
shsll provide heslth care benefits coverage to 
each eligible beneficiary which ia substantially 
the ssme as (and subject to ell the limitations of) 
coverage provided under the I960 UMWA Benefit 
Plan and the 1974 UMWA Benefit Plan as of 
January 1, 1992. 

'(2) Managed care. • The 1992 UMWA Benefit 
Plan shall develop managed care and coat con- 
tainment rules which shall be applicable to the 
payment of benefits under this subsection. 
Application of such rules shall not cause the plan 
to be treated as fsiling to meet the requirements 
of this subsection. Such rules shall preserve 
freedom of choice while reinforcing managed care 
network use by allowing a point of service deci- 
sion ss to whether s network medical provider 
will be used. Major elements of such rules may 
include, but are not limited to, elementa de- 
scribed in paragraph (3). 

•(3) Major elementa of rules. • Elements de- 
scribed in this paragraph are • 

'(A) implementing formulary for drugs and 
subjecting the prescription program to a rigorous 
review of appropriate use, 

'(B) obtaining a unit price discount in exchange 
for patient volume and preferred provider status 
with the amount of the potential discount vary- 
ing by geographic region, 

'(C) limiting benefit payments to physicisns to 
the allowable charge under title XVIII of the 
Social Security Act, while protecting beneficiaries 
from balance billing by providers, 

•(D) utilising, in the claims payment function 



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'appropriateness of service' protocols under title 
XVIII of the Social Security Ad if mora stringent, 

'(E) creating mandatory utilisation review (UR) 
procedural, but placing the responsibility to 
follow such procedures on the physician or 
hospital, not the beneficiaries, 

'(F) selecting the most efficient physicians and 
state-of-the-art utilisation management tech- 
niques, includingambulatory care techniques, for 
medical services delivered by the managed care 
network, and 

'(G) utilising a managed care network provider 
system, as practiced in the health care industry, 
at the time medical services are needed 
(point-o f service) in order to receive maximum 
benefits available under this subsection. 

'(4) Last signatory operators. - The board of 
trustees of the 1992 UMWA Benefit Plan shall 
permit any last signatory operator required to 
maintain an individual employer plan under 
section 971 1 to utilise the managed care and coat 
containment rules and programs developed under 
this subsection if the operator electa to do so. 

'(6) Standards of quality. - Any m a n aged care 
system or cost containment adopted by the board 
of trustees of the 1992 UMWA Benefit Plan or by 
a last signatory operator may not be implemented 
unless it is approved by, and meets the standards 
of quality adopted by, a medical peer review 
panel, which has been established • 

'(A) by the settlors, or 

'(B) by the United Mine Workers of America 
and a last signatory operator or group of opera- 
tors. Standards of quality shall include accessibil- 
ity to medical care, taking into account that 
accessibility requirements may differ depending 
on the nature of the medical need. 

'(d) Guarantee of Benefits. - 

'(1) In general. -All 1988 last signatory opera- 
tors shall be responsible for financing the bene- 
fits described in subsection (c), in accordance 
with contribution requirements established in the 
1992 UMWA Benefit Plan. Such contribution 
requirements, which shall bs applied uniformly 
to each 1988 last signatory operator, on the basis 
of the number of eligibis and potentially eligible 
beneficiaries attributable to each operator, shall 
include: 

'(A) the payment of an annual prefunding 
premium for all eligible and potentially eligibis 
beneficiaries attributable to a 1988 last signatory 
operator, 

'(B) the payme n t of s monthly per beneficiary 
premium by each 1988 last signatory operator for 
each eligibis beneficiary of such operator who is 
described in su b se ct ion (b)(2) end who is receiv- 
ing benefits under the 1992 UMWA Benefit Plan, 



'(C) the provision of sscurity (in the for 
bond, letter of credit or cash escrow) 
amount equal to a portion of the projected 
cost to the 1992 UMWA Benefit Plan of | 
ing health benefits for eligible and pots 
eligible beneficiaries attributable to the 19 
signatory operator. If a 1988 last sig 
operator is unable to provide the sscur 
quired, the 1992 UMWA Benefit Plan 
require the operator to pay an annual prefi 
premium that » greater than the pr 
otherwise applicable. 

'(2) Adjustments. - Ths 1992 UMWA 1 
Plan shall provide for • 

'(A) annual adjustments of ths psr bout 
premium to cover changes in the cost of | 
ing benefits to eligible beneficiaries, and 

'(B) adjustments ss necessary to the i 
prefunding premium to reflect changes 
cost of providing benefits to eligible benefi 
for whom per beneficiary premiums are nc 

'(3) Additional liability. • Any last sig 
operator who is not s 1988 last signatory 
tor shall pay the monthly per beneficiary 
um under paragraph (1MB) for each i 
beneficiary d e s cri bed in such paragraph at 
able to that operator. 

'(4) Joint and several liability. • A 191 
signatory operator or laat signatory of 
described in paragraph (3), and any i 
parson to any such operator, shall bo Joint 
severally lisbls with such operator flc 
amount required to bs paid by such of 
under this section. 

'(6) Deductibility. • Any premium roqui 
this section shall bs deductible without rej 
any limitation on deductibility based < 
prefunding of health benefits. 

'(6) 1988 last signatory operator. • For pu 
of this section, the term '1988 last sig 
operator' meane a last signatory operator 
is s 1988 agreement operator. 

'SUBCHAPTER D - OTHER PROV1SK 
'Sec 9721. Civil enforcement. 
'Sec. 9722. Sham transactions 
'SEC. 9721. CIVIL ENFORCEMENT. 

'The provisions of section 430 1 of the Esj 
Retirement Income Security Act of 1974 
apply to sny claim arising out of sn oblige 
pay any amount required to be paid I 
chapter in the asms man nor mm sny claim i 
out of an obligation to pay withdrawal li 
under subtitle E of title IV of such Ac 
purposes of ths preceding sentence, a sig 
operator and related persons shall be tree 
the same manner ss < 



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4407 



•SBC. 0722. SHAM TRANSACTIONS. 

'If a principal purpose of any tranaaction is to 
evade or avoid liability under thia chapter, thia 
chapter ahall be applied (and audi liability shell 
be imposed) without regard to such tranaaction.' 

(b) Amendments to Surface Mining Act. - 

(1) Extension of fee program. - Section 402(b) of 
the Surface Mining Control and Reclamation Act 
of 1977 (30 UJS.C. 1282(b)) b amended by etrik- 
ing 'September 30, 1996* and inserting 
'September 30, 2004*. 

(2) Transfer to fund. • Section 402 of such Act 
(30 UJS.C. 1232) is amended by edding at the end 
the following new subsection: 

'(h) Transfer of Funds to Combined Fund. - (1) 
In the case of any fiscal year beginning on or 
after October 1, 1996, with respect to which fees 
are required to be paid under thia section, the 
Secretary shall, as of the beginning of such fiscal 
year and before any allocation under subsection 
(g), make the transfer provided in paragraph (2). 

'(2) The Secretary shall transfer from the fund 
to the United Mine Workers of America Com- 
bined Benefit Fund established undsr section 
9702 of the Internal Revenue Code of 1986 for 
any fiscal year an amount equal to the sum of - 

'(A) the amount of the interest which the Secre- 
tary sstimatse will be earned and paid to the 
Fund during the fiscal year, plus 

'(B) the amount by which the amount described 
in subparagraph (A) is less than $70,000,000. 

'(S)(A) The aggregate amount which may be 
transferred under paragraph (2) for any fiscal 
year shall not exceed the amount of expenditure 
which the trustees of the Combined Fund esti- 
mate will be debited against the unassignsd 
beneficiaries premium sccount under section 
9704(e) of the Internal Revenue Code of 19S6 for 
the fiscsl year of the Combined Fund in which 
the transfer is mads. 

'(B) The aggregate amount which may be trans- 
ferred under paragraph (2MB) for all fiscal years 
shall not exceed an amount equivalent to ell 
interest earned and paid to the fund after Sep- 
tember 30, 1992, and before October 1, 1996. 

'(4) If, for any fiscsl year, the amount trans- 
ferred is mors or less than the amount required 
to be transferred, the Secretary ehall appropriate- 
ly adjust the amount transferred for the next 
fiscsl year.' 

(3) Conforming amendments. • (A) Section 
401(c) of such Act (30 U.S.C. 1231(c)) ie emended 
by striking 'snd' st the end of paragraph ( 1 1), by 
redesignating paragraph (12) as paragraph (13), 
and by adding after paragraph (1 1) the following 
new paragraph: 

'(12) for the purpose described in section 



402(h); snd*. 

(B) Section 402(g)(1) of euch Act (30 U.S.C. 
1232(g)) is amended by striking 'Moneys' snd 
inserting 'Except es provided in subsection (h), 



ORDER FOR TOMORROW 
Mr. JOHNSTON. Mr. President, on 
behalf of the majority leader, I ask 
unanimous consent that when the 
Senate completes its business today, it 
stand in recess until 9:30 a.m., Thurs- 
day, July 30; that following the 
prayer, the Journal of Proceedings be 
deemed approved to date; that the 
time for the two leaders be reserved 
for their use later in the day; that 
there be a period for morning business 
not to extend beyond 10 a.m., with 
Senators permitted to speak therein 
for up to 5 minutes each; that Sena- 
tors Leahy and Lott be recognized for 
up to 15 minutes each; and that at 10 
a.m. the Senate resume consideration 
of H.R. 776, the energy bill. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

CONGRESSIONAL RECORD 

(SENATE) 

July 30, 1992 

Pegs S 10*67 

COMPREHENSIVE NATIONAL ENERGY 
POLICY ACT 

The PRESIDING OFFICER. Under 
the previous order, the Senate will 
now resume consideration of H.R. 776, 
which the clerk will report. 

The bill clerk read as follows: 

A bill (H.R. 776) to provide for improved* ener- 
gy efficiency. 

The Senate resumed consideration 
of the bill. 

Pending: 

(1) Wsllstone amendment No. 2789, to amend 
the Securities Exchange Act of 1934 with respect 
to limited partnership rollups. 

(2) Dodd amendment No. 2790 (to amendment 
No. 27S9), in the neture of s substitute. 

Mr. JOHNSTON. Mr. President, we 



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reason, of course, for this dilemma is 
that we do not have the intestinal 
fortitude, the guts, to make tough 
decisions. 

This bill has almost nothing in it to 
stimulate the domestic production of 
oil and gas. Why? This is the energy 
bill. It seems we would rather ram 
through the easy stuff and go home 
claiming victory. After the elections, 
well, maybe that is when we will talk 
about ANWR, that is when people will 
again talk about CARE standards. It 
is no wonder the American people are 
anxious, concerned, and discouraged. 

Mr. President, let me tell you what 
I hear people saying. They are saying 
they want jobs. They want American 
jobs. They want an expansion of the 
economy. They are also saying no 
blood for oil. We went through that 
effort in the Persian Gulf. Make no 
mistake about why we were over 
there. We were over there to keep the 
flow of oil available to the Western 
world. 

The American people are saying no 
more billion-dollar trade deficits. 
They are saying let us import less; let 
us produce more domestically. They 
are saying no more exporting of Amer- 
ican jobs. Why are we sending our jobs 
overseas with our investment when 
we could be developing our own do- 
mestic energy resources in this coun- 
try? What is Congress saying, Mr. 
President? Congress is saying we are 
not even going to have at this time an 
up/down vote on ANWR. 

It is unfortunate we are not going 
to have this debate of the one issue 
which means 735,000 new jobs 
throughout America, the largest single 
jobs issue identified in the Nation at 
this time. This body iB not even going 
to debate the merits. My colleagues 
on the other side of the aisle who 



have indicatd a support for ANWR say 
we simply cannot address the issue at 
this time because of the political reali- 
ties. 

Mr. President, the political realities 
are very simple. The Democratic 
Presidential team does not support 
the opening of ANWR and the leasing 
thereof. The Vice Presidential candi- 
date on the other side, my colleague 
and good friend, Senator Goife, not 
only opposes ANWR, but he proposes 
putting ANWR in a wilderness in 
perpetuity, which would foreclose this 
Nation from developing what has been 
identified as North America's largest 
potential oil reserve. 

It is, indeed, unfortunate we are not 
going to discuss the fact that in May 
alone this Nation spent $4.1 billion on 
imported oil. We are not going to dis- 
cuss the three-quarters of a million 
troops we sent to fight in the Persian 
Gulf to protect oil supplies when we 
could be producing oil here at home. 
It simply does not make sense. 

The unfortunate part is that we 
cannot seem to overcome the environ- 
mental opposition. Where is Ameri- 
can ingenuity? Where is American 
technology that has been able to meet 
the challenges ahead? Can we not 
encourage America's environmental 
community to come aboard, help us 
make ANWR development safer? Re- 
duce the footprint? Reduce the impact 
on the environment by using new 
technology? Of course, we can. But 
for reasons unknown to me in exact 
terms, the environmental community 
has yet to come aboard and say 1st us 
make a contribution to America's 
energy independence by reducing de- 
pendence on imported oil and gas by 
developing ANWR. And let us do it 
better, let us do it with U.S. jobs, with 
UJ5L ingenuity, with sound science as 



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4409 



were accepted. 

The first amendment was an 
amendment requiring an analysis of 
the economic benefits associated with 
opening the Arctic National Wildlife 
Reserve to oil development. 

The second was an amendment that 
would require an analysis of all pro- 
jects nationwide that could aid the 
economy and produce jobs. 

And, as a consequence of that com- 
parison, Mr. President, at about the 
end of the first quarter of next year 
this body is going to have a base of 
information. It is going to be a base 
of information that I think will clearly 
show the tremendous impact on the 
economy that opening ANWR could 
provide to this Nation, not only in 
jobs but also as a significant contribu- 
tion to offsetting the balance of pay- 
ments deficit. One only has to look at 
the balance-of-payments deficit to 
recognize that two-thirds of our deficit 
in the balance of payments is the cost 
of importing oil. 

The necessity of that continuing is, 
of course, dependent upon actions by 
this body and the House of Represen- 
tatives relative to the authorization to 
initiate the authority for lease sales in 
domestic areas of identified petroleum 
resource ANWR certainly fits into 
that category. 

So what we have done is set up a 
criterion that, as a consequence of the 
analysis, will show a comparison be- 
tween identified economic activities 
associated with new jobs emerging 
from projects that are planned 
throughout the country, that identify 
over 2,500 new jobs, and a comparison 
on what development might mean 
with regard to the Arctic National 
Wildlife Refuge. 

The stage is set, Mr. President, and 
my accompanying remarks are in 



support of a national energy strategy, 
which this Nation sorely needs. It is 
really time we wake up and smell the 
aroma of the coffee which surrounds 
us. The American people are scream- 
ing, and we are not hearing the mes- 
sage. You can hear it in the Congress. 
You can hear it in the headlines. You 
can watch it on the evening news. 
The American poeple are questioning 
the attainability of the American 
dream. They are concerned. They 
are scared. They are frightened. 
They are anxious. 

They are concerned that our econo- 
my is sinking, that they will wake up 
without jobs, that our children will 
lack the opportunity to have challeng- 
es, to own their own homes; the recog- 
nition that many of our jobs are going 
overseas and that our politicians do 
not seem to care. They are concerned 
the Japanese and the Europeans are 
taking our jobs, buying our property, 
taking over our technology, 
outcompeting us in every industry 
that really matters, industries that 
were basically the center of American 
ingenuity. 

The people are telling us, but we do 
not hear the message. Somehow we 
are not listening - listen or get out. 
That is the message. We hear it time 
and time again. Some suggest any- 
thing is better than what we have. 
We have all heard the anti-incumben- 
cy concerns expressed by the media. 

This bill before us, this so-called 
comprehensive energy plan and the 
debate we are having, is exactly what 
many Americans are concerned about. 
Any they are concerned that we do 
not get the point. We have before us 
a scaled-down bill. It is a worthwhile 
bill. But the bill itself avoids the ma- 
jor questions of reducing dependence 
on foreign sources for our oil. The 



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4410 



raw ion, of count, for this dflwnmi m 
that wo do not have the intestinal 
fortitude, the pits, to make tough 



have indkatd a support tor ANWR amy 
wo simply cannot addroai the issue at 
this tune because of the political reeb- 



This bill has almost nothing in it to 
stimulate the domestic production of 
oil and gas. Why? This is the energy 
bill. It seems we would rather ram 
through the easy stuff and go home 
claiming victory. After the elections, 
well, maybe that is when we will talk 
about ANWR, that is when people will 
again talk about CARE standards. It 
is no wonder the American people are 
anxious, concerned, and discouraged. 

Mr. President, let me tell you what 
I hear people saying. They are saying 
they want jobs. They want American 
jobs. They want an expansion of the 
economy. They are also saying no 
blood for oil. We went through that 
effort in the Persian Gulf. Make no 
mistake about why we were over 
there. We were over there to keep the 
flow of oil available to the Western 
world. 

The American people are saying no 
more billion-dollar trade deficits. 
They are saying let us import less; let 
us produce more domestically. They 
are saying no more exporting of Amer- 
ican jobs. Why are we sending our jobs 
overseas with our investment when 
we could be developing our own do- 
mestic energy resources in this coun- 
try? What is Congress saying, Mr. 
President? Congress is saying we are 
not even going to have at this time an 
up/down vote on ANWR. 

It is unfortunate we are not going 
to have this debate of the one issue 
which means 735,000 new jobs 
throughout America, the largest single 
jobs issue identified in the Nation at 
this time. This body is not even going 
to debate the merits. My colleagues 
on the other side of the aisle who 



Mr. President, the political realities 
are very simple. The D em oc rat ic 
Presidential team does not support 
the opening of ANWR and the leasing 
thereof. The Vice Presidential candi- 
date on the other side, my colleague 
and good friend, Senator Gor>, not 
only opposes ANWR, but he proposes 
putting ANWR in a wilderness in 
perpetuity, which would foreclose this 
Nation from developing what has been 
identified as North America's largest 
potential oil reserve. 

It is, indeed, unfortunate wo are not 
going to discuss the fact that in May 
alone this Nation spent $4. 1 billion on 
imported oil. We are not going to dis- 
cuss the three-quarters of a million 
troops we sent to fight in the Persian 
Gulf to protect oil supplies when we 
could be producing oil here at home. 
It simply does not make sense. 

The unfortunate part is that we 
cannot seem to overcome the environ- 
mental opposition. Where is Ameri- 
can ingenuity? Where is American 
technology that has been able to meet 
the challenges ahead? Can we not 
encourage America's environmental 
community to come aboard, help us 
make ANWR development safer? Re- 
duce the footprint? Reduce the impact 
on the environment by using new 
technology? Of course, we can. But 
for reasons unknown to me in exact 
terms, the environmental community 
has yet to come aboard and say let us 
make a contribution to America's 
energy independence by reducing de- 
pendence on imported oil and gas by 
developing ANWR. And let us do it 
better, let us do it with U.S. jobs, with 
U.S. ingenuity, with sound science as 



Digitized by 



Google 



4411 



opposed to emotion that so often car- 
ries the day in this body. More often 
than not, individuals who make the 
most eloquent argument prevail on an 
emotional basis. Decisions are made 
that have no sound scientific basis. 

Mr. President, the question of 
ANWR is not about Caribou, it is not 
about footprints in the wilderness, it 
is not about a 200-day supply of oil. It 
is about jobs. It is about creating jobs 
and keeping jobs in America. It is 
about stimulating the economy. It is 
about supplying ourselves with energy 
that we need so we do not have to 
fight wars against despots abroad. It 
is about wiping out half of our trade 
deficit. 

Mr. President, Congress is going to 
pass this bill. I am going to support 
this bill. We are going to go home and 
declare some kind of a victory to our 
constituents, but what a hollow victo- 
ry cry that will be. 

Let me explain a little bit further 
on why this is going to be a hollow 
victory. While this body avoids mean- 
ingful legislation to encourage domes- 
tic oil exploration and development, 
let us look around the world and see 
what is happening. Oil imports are at 
their highest levels since 1978. We 
currently import nearly 7.5 million 
barrels of crude oil a day. It is the 
highest level of imports since the win- 
ter of 1978. Domestic production is 
decreasing steadily and has fallen to a 
low of 7.2 million barrels a day. That 
is what the level was in 1968. My 
State of Alaska provides 25 percent of 
America's domestic oil production, but 
it, too, is beginning to decline at near- 
ly 10 percent a year. 

What are we going to do in 5 years? 
What are we going to do in 9 years? 
We are going to be importing more oil. 

Make no mistake about it, Mr. Pres- 



ident, we must and can and are doing 
a better job of conservation, but there 
is an expansion of our economy and as 
a consequence, there is a tremendous 
demand and will be for the foreseeable 
future for crude oil. Alternatives will 
be developed, but they must be eco- 
nomically competitive and currently 
they are not and will not be for the 
foreseeable future. 

So, Mr. President, imports are, 
again, over 50 percent. The number 
of active oil and gas rigs hit the lowest 
level ever recorded. Last month the 
rig count was 596. Imagine that, 596 
compared with 1981 when there were 
4,531 rigs drilling in the United 
States, rigs using American labor, 
providing jobs, providing for the eco- 
nomic vitality of the industry as well 
as the communities where those in- 
dustries were located. 

Offshore drilling in the United 
States fell by 41 percent this year 
alone. Refinery employment is on a 
major decline. The feeling in the in- 
dustry is that the domestic oil indus- 
try is struggling to survive. America 
is over regulated and the most promis- 
ing areas for new domestic production 
are closed - they are closed to explora- 
tion, Mr. President - by the Congress 
of the United States. 

There is little hope expressed for 
recovery within the industry and that 
is unfortunate, Mr. President, because 
the American oil industry is moving 
overseas before the very eyes of this 
body. American jobs are being filled in 
other countries and this body's inabili- 
ty to make tough decisions is allowing 
this to happen. When I mention this 
body, I am obviously including the 
House of Representatives as well. 

Last year, investment in America by 
30 large oil and gas companies fell by 
4 percent, while overseas investment 



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increased by 27 percent. Total capital 
expenditures was 50 percent higher 
overseas than in America. In the past 
5 years, U.S. oil companies have spent 
$30 billion more developing foreign 
resources than they have in develop- 
ing domestic oil fields in this country. 

Mr. President, the gap is increasing. 
The industry is going to other promis- 
ing areas in countries eager to develop 
their resources: Russia, South Ameri- 
ca, Southeast Asia, Africa, to name a 
few. More than 60 Western oil com- 
panies are negotiating now joint ven- 
tures with the former Soviet Repub- 
lics. That is happening right now: 
Chevron is in Kazakhstan, Marathon 
in Sakhalin, Unocal in Thailand, BP 
in Columbia, and Apache is in Burma. 

Other countries encourage oil explo- 
ration and development. The United 
States simply shuts its door on the 
most promising areas. Endless layers 
of Federal regulatory hurdles inhibit 
exploration and development both 
onshore and offshore. 

Mr. President, no new refiners have 
been built in America in recent years, 
and the prospects for new ones have 
been killed by the cost of compliance 
with the Clean Air Act. But new refin- 
eries are being constructed in other 
countries. Where is the balance? Can- 
not America come together with re- 
sponsible environmental oversight and 
challenge America's technological 
capability with engineering techniques 
that can induce this country to build 
new efficient refineries that can com- 
pete with refineries overseas? If not, 
Mr. President, the handwriting is on 
the wall. We are simply going to im- 
port not only crude but we will in- 
crease our import dependence on re- 
fined products. 

Mr. President, a lot of people seem 
to say, oh, well, that is all right How 



does that oil come in, how does that 
refined product come? It comes in in 
foreign tankers, owned by foreign 
nationals, foreign crewmen who do 
not have the same oversight that U.S. 
tankers have. Where is our own 
self-interest, Mr. President? I find it 
baffling and I think the American 
people find it unacceptable. 

The United States is the only coun- 
try in the world with drilling morato- 
riums on its coastal waters, including 
some of the most promising areas off 
the coasts of California, North Caroli- 
na, and Florida. We recognize there 
can be a risk in drilling and have 
excluded drilling from the most sensi- 
tive areas, like Bristol Bay, as we 
should, because clearly the value of 
the renewable red salmon resource far 
surpasses the potential value of the 
oil. 

But there are many other areas 
where we do not have that resource 
risk; in the Chukchi and Beaufort 
Seas in Alaska I support OCS drilling. 

So the question is balance. We 
cannot eliminate all areas. We have 
to measure the environmental impact, 
use discretion and use technology to 
reduce the element of risk. I will 
speak more on this later. 

Mr. President, how does the decline 
of the domestic oil industry affect 
America? We talked a little bit about 
jobs, but the petroleum industry in 
the United States has lost 350,000 
jobs in the last 10 years. The number 
of industry jobs has been cut in half 
over the last 10 years. These, Mr. 
President, are more jobs lost in the 
petroleum industry than in the auto- 
mobile industry, the steel industry, 
the textile industry, the chemical 
industry or the electronics industry. 
We have lost more jobs in America's 
petroleum industry than in the other 



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areas I mentioned. 

These are real jobs. AMOCO laid 
off 8,500, 15 percent of the company; 
Mobil, 2,000 jobs; Unocal, 1,000; 1,500 
jobs are going to be lost in my State of 
Alaska. Nationwide over 50,000 jobs 
are going to be lost in the petroleum 
industry this year. Job layoffs spin 
out in the economy, real estate values 
drop, stores close, banks fail, and 
more people lose their jobs. 

Let us look at the balance of trade, 
Mr. President. In the past 10 years, 
America has spent $500 billion on 
imported oil. Imagine what we could 
do in this Nation with $500 billion in 
our economy? That is a challenge to 
the responsibility of this body. 

In 1991, our Nation spent $43 bil- 
lion on imported oil. Our total trade 
deficit in 1991 was $66 billion. This 
means, Mr. President, two-thirds of 
our total trade deficit is for imported 
oil. 

We talk about offsetting a trade 
deficit. We talk about our trade with 
other countries. Let us focus on 
where the priority is. It is the cost of 
importing oil. We are doing it at the 
expense of our domestic industry by 
driving them out. And when you 
drive them out, Mr. President, what 
you set up is an increased dependence 
on imports because American capital 
goes overseas and the petroleum in- 
dustry develops oil fields for American 
consumers. It comes back in the form 
of crude oil for refining in the United 
States, or it is going to come back 
more and more in the refined product, 
in foreign ships, with foreign crews, to 
be consumed by Americans. 

Why not cut out the middleman? 
Can we not conceivably address the 
incentives within our own industry? 
Can we not meet with America' envi- 
ronmental community in a responsible 



manner to reduce this dependence? 
Certainly we can if we have the will to 
do it, and the will to do it is within 
the legislative body. 

Make no mistake about it, Mr. Pres- 
ident The President of the United 
States, George Bush, supports domes- 
tic energy production expansion. The 
President has gone on record nine 
times supporting the opening of 
ANWR. 

On the other hand, as I have noted, 
the Democratic Presidential candidate 
not only opposes ANWR, he wants to 
put it into wilderness in perpetuity. 

Mr. President, in May of this year 
we spent $4.1 billion on imported 
petroleum products; $3.2 billion of 
that was for importing crude oil, and 
that is in 1 month. That is greater 
than our May trade deficit with Ja- 
pan. Think of that: May, $4.1 billion 
on imported petroleum products, and 
$3.2 billion of that was for importing 
crude oil. 

(Mr. SIMON assumed the chair.) 

Mr. MURKOWSKI. Mr. President, 
as we debate the status of the energy 
bill, we are faced with the reality that 
we have before us a bill which does 
not include the most promising area 
in North America, namely ANWR, nor 
does it open any new areas for oil 
exploration in the United States. This 
body has failed, and failed miserably, 
to make the tough decisions to benefit 
the hard-working men and women of 
America. Development of ANWR 
would encourage America's oil produc- 
tion, independence, preserve American 
dollars, and create 735,000 American 
jobs in 50 States. This would be the 
largest single jobs project ever placed 
before the Congress, and the Congress 
has the authority, it has the power, to 
open it for competitive leasing. 

These would be jobs, as I have stat- 



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ed, spread to every State in the Na- 
tion: 80,000 in California, 60,000 in 
Texas, 34,000 in Florida, 22,000 in 
New Jersey, 10,000 in Colorado, 2,000 
even in the small State of Delaware. 
These are real jobs, for men and wom- 
en of America. For unemployed work- 
ers, these are sound jobs. They are 
not handouts: jobs for engineers, weld- 
ers, truckers, manufacturers, con- 
struction workers of all types. Be- 
cause to open that area for production 
is going to require pipe, valves, insula- 
tion, and on, and on. 

ANWR is a chance for this body to 
do something to actually create do- 
mestic jobs, to spur economic develop- 
ment. We talk about jump-starting 
the economy. What have we done? 
ANWR development alone would boost 
the U.S. gross national product by 
$50.4 billion. ANWR development 
would provide billions of dollars in 
taxes and royalties to the Federal and 
State governments each year. These 
are real dollars. 

The proof of that, Mr. President? 
Well, let us go back and take a look at 
reality. Prudhoe Bay oil is consumed 
solely in the United States as required 
by law, because when this body passed 
the authorization for the pipeline to 
be built, the 800-mile pipeline from 
Prudhoe Bay to Valdez, it mandated 
that the oil flowing through the pipe- 
line must be consumed in the United 
States. None of that oil goes to Japan 
or overseas. 

Mr. President, the State of Alaska 
produces about 23 to 25 percent of the 
total crude oil produced in this Na- 
tion. 

If we look at Prudhoe Bay since 
1977, Alaska's North Slope oil compa- 
nies have made direct purchases of 
supplies and services from every State 
in the Nation, totaling in excess of 



$47 billion. The total contribution to 
the U.S. economy to date from exist- 
ing Prudhoe Bay oil development is 
$300 billion. 

ANWR development could well be of 
a similar magnitude, it is potentially 
that big and large a project. 

The huge boost to the economy 
resulting from ANWR development 
can be realized without, Mr. Presi- 
dent, costing the U.S. Government 
one penny. We do not have to subsi- 
dize it. We do not have to make spe- 
cial provisions. All we have to do is 
authorize it for leasing and let the 
private sector go in there, put in their 
bids, and initiate exploration. If the 
reserves that are hoped to be there 
are there, by develop the field we will 
have a huge resource of domestic oil 
which will produce jobs and spur the 
economy. The huge boost to the econ- 
omy resulting from ANWR develop- 
ment can be realized without costing 
the Government one penny. The lease 
sales, the bonus bids, the royalties will 
raise billions of dollars for the Federal 
Treasury. 

Mr. President, where is the base of 
support? I am pleased to say a large 
number of my colleagues have contin- 
ued to support the opening of ANWR. 
They say it is perhaps not the right 
time; we have to wait until we get 
over the political gridlock that we are 
in; that we cannot embarrass the 
Democratic candidate for Vice Presi- 
dent. The labor community says that 
they are supporting candidates-elect 
Clinton and Gore; that they cannot 
move on it until the political process 
is over. We are in gridlock. 

So what is new, Mr. President? We 
are in gridlock. We cannot move on 
it. Well, the amendments that were 
passed last night keep the momentum 
alive. I have said earlier the first 



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requires an analysis of the economic 
benefits of opening ANWR to oil devel- 
opment, and that is solely an ANWR 
comparison. The second one considers 
all projects associated with creating 
more than 2,500 new jobs in any area 
of the United States. When we look at 
the two together, ANWR is going to 
make such an outstanding comparison 
that the focus will be on opening 
ANWR and the realization that we 
can do it safely. 

Mr. President, as I have stated, if 
ANWR was developed, $250 billion 
would not be sent overseas. It could 
cut the trade deficit in half. 

So why are we not moving, Mr. 
President? We know we are in an 
economic crisis. We are going to have 
to address the reality of reaping what 
we have sown. For far too long we 
have seen the elitist defeatists have 
the ear of the majority of this Con- 
gress. Their pessimism and fear have 
sown the seeds of weeds, so to speak. 
They do not believe in the American 
spirit of ingenuity or the ability of the 
U.S. industry to safely develop re- 
sources that make our country strong. 
They say we cannot do it. We should 
lock up things. 

Mr. President, we sent a man to the 
Moon. We can open up ANWR safely. 
The comparison that we have made in 
technology has been in evidence. 
Extension of the Prudhoe Bay field 
into the development of the Endicott 
field is an outstanding standing exam- 
ple. The Endicott field came in last 
February. It came in as the 10th larg- 
est producing field in the United 
States. Today, it is the sixth largest, 
at 120,000 barrels a day. But it is 
only 55 acres; that is the physical size 
of the area. 

People might say, we do not like oil 
fields. That is fine if you do not like 



oil fields, but we are dependent on oil. 
The Prudhoe Bay field is the best field 
in the world. We can be proud of it. 
Endicott and the technology used 
there is so far advanced and points to 
the technology that it can be used to 
open up ANWR safely. 

What are we talking about? We are 
talking about a huge area. There are 
18 million acres in the ANWR area. 
Half has been set aside in wilderness 
in perpetuity. That is fine. Out of 
the remaining 8 1/2 million acres, we 
are proposing to lease 1 1/2 million 
acres. They say if development takes 
place in that 1 1/2 million acres, the 
actual footprint, the concentration of 
development will be about 12,500 
acres. That is an area the size rough- 
ly of Dulles International Airport. 

So it is a persuasive argument. We 
have to overcome this 'can't do' phi- 
losophy that has succeeded in driving 
our industries out of the country. We 
have to do it now. 

Mr. President, some of the areas 
that I think we have to reflect on are 
proof of the advancements that have 
been made. We had a terrible acci- 
dent in Prince William Sound with 
the Exxon Valdez grounding - never 
should have occurred. But it did. 

But what has happened since then? 

Well, let us look at facts. We have 
had record salmon returns in the 
Prince William Sound. They swamped 
the market last year. This could be 
another record year because of the 
successful hatchery program. We had 
to dump 2 1/2 million salmon at sea 
simply because there was no way to 
harvest those salmon in the short 
length of time available, and they 
were clogging the mouth of the 
streams. They simply had to be dis- 
posed of. There was no other alterna- 
tive. The potential impact of pollu- 



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tion would have been too great. 

We nee the argument of the caribou 
in northwestern Alaska. Twenty years 
ago we had 64,000 in one area. Now 
we have over half a million. There 
are too many to count. 

Mr. President, advances in drilling 
and production technology will further 
minimize the footprint of develop- 
ment, many of which have been pio- 
neered from my State of Alaska. 
These include directional drilling, 
remjection of drill muds and cuttingB, 
reductions in well spacing, consolida- 
tion of support facilities, and drill pad 
size reduction. As I have indicated, 
Endicott field is proof - only 55 acres 
- and we can expect the advance of 
that technology. 

Alaska's West Sak oil field contains 
somewhere in the area of 15 to 25 
billion barrels of oil. But it is too 
heavy and too cold to produce under 
current technology.- It is locked in the 
sand. But we are researching recov- 
ery technology at the University of 
Alaska in Fairbanks. It is going to 
take a few more years to bring this on 
line. Would it not be a shame if we 
lost the pipeline because we did not 
keep it open with oil from a new 
source after Prudhoe Bay declines? 
And Prudhoe Bay is declining at 10 
percent a year. 

Eventually we are going to have to 
remove that pipeline, Mr. President, if 
it is not operated at a level that is 
economically feasible. 

How long will this body refuse to 
consider opening the coastal plain of 
ANWR? How high must the price of 
gas go up? How dependent do we have 
to become on the Mideast countries?. 

Are we going to have gas lines again 
or another war in the Mideast? The 
battle over ANWR is not about the 
loss of a mystical wilderness value or 



manipulated rumors of environmental 
destruction. It is about real people, 
working people, real jobs, people who 
are out of work, people who are con- 
cerned for their future, people who 
are concerned for their children. It is 
about having gas in our cars, turning 
on our lights in the schools, putting 
our food on the table. 

Mr. President, I am convinced, just 
as the people of my State are con- 
vinced, that ANWR is essential to our 
Nation's economy and that ANWR 
can be developed safely. 

This body and the House of Repre- 
sentatives must put the defeatist atti- 
tude aside, make the tough decisions 
for the benefit of American men and 
women, use the new technology to 
overcome old procedures, use our 
engineering capability, our planning 
capability, and our environmental 
capability. 

If we can put a man on the Moon, 
Mr. President, we can open up the 
coastal plain of ANWR to oil and gas 
development in an environmentally 
safe manner. 

Mr. President, it is an affront to my 
State that we have reached this stale- 
mate and this gridlock, and I know to 
many of my fellow Members of this 
body. 

Mr. President, we have seen the 
advancement of this legislation. We 
have seen it through the Energy Com- 
mittee. We have seen it structured as 
a partisan issue. We have seen it in 
the Presidential political arena that 
we are in. 

Specifically, Mr. President, we have 
seen a situation where we are in a 
gridlock, and are going to have to 
await a new Congress to address the 
issue of ANWR with some finality. 

That is indeed unfortunate, Mr. 
President. But nevertheless, that is 



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the position that we are in. 

Mr. President, I have gone on for 
some time. I see the floor manager 
who has been most patient, and I 
want to compliment him. I have fur- 
ther remarks, but I am going to ask 
unanimous consent that those re- 
marks be entered into the Record as if 
read. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. MURKOWSKI. I thank the 
Chair. I wish my colleagues a good 
day. 

Mr. JOHNSTON. Mr. President, I 
thought we had an amendment 
cleared by Mr. Stevens, but I under- 
stand Mr. Stevens wants to do the 
amendment himself and have some 
words to say. If the Senator from 
Alaska would like to resume his com- 
ments, he is free to do so until his 
colleague comes. 

Mr. MURKOWSKI. Mr. President, 
I would be happy to. I thank my 
friend from Louisiana. I will continue 
not at length but there are a couple 
more points that I feel should be 
made. 

I would like the record to reflect the 
action of the Energy Committee on 
the issue of ANWR. In May of 1991, 
there was a motion to strike ANWR 
leasing from the energy bill. I was a 
member of that committee. The mo- 
tion to strike ANWR leasing from the 
energy bill failed by a vote of 8 to 11. 

I am pleased to say that all mem- 
bers of our side of the aisle voted 
against striking ANWR, and we had 
two members of the other side with 
us, and as a consequence, we were 
able to prevail on an 8-to-ll vote. On 
May 23, passage of the energy bill 
including ANWR - 1 think it is impor- 
tant to note that the bill at that time 
did include ANWR - the vote in favor 



of passage in the committee was 17 to 
3. 

So in May 1991, the Energy Com- 
mittee voted out ANWR as part of the 
energy bill. We had 9 Republicans 
and 8 Democrats for which I am eter- 
nally grateful. Of course, we had the 
chairman of the Energy Committee as 
well. 

Then we went to the floor in No- 
vember 1991, with a cloture vote on 
the motion to proceed to the consider- 
ation of the entire energy bill. Sixty 
votes were required to invoke cloture. 
The Senate failed to invoke cloture. 
We got 50 votes and 44 against. 
Again, it is interesting to note the 
partisanship on the vote; 32 Republi- 
cans and 18 Democrats voted for clo- 
ture; 9 Republicans and 35 Democrats 
against cloture. That was the end of 
ANWR in the bill. We could not pre- 
vail. We needed 60 votes. 

On February 4, 1992, we had a 
second cloture vote on the motion to 
proceed to the energy bill without 
ANWR or CAFE. Well, that was not a 
vote of any consequence because clear- 
ly ANWR had been stricken under the 
motion to proceed. 

However, in February 1992, a 
unanimous consent agreement pro- 
posed by the junior Senator from Alas- 
ka before this body to allow an 
up-or-down vote on ANWR was taken 
both to the Republican and Democrat- 
ic caucuses. It was a unanimous con- 
sent agreement that could be stopped 
by only one person's objection. The 
Republican leader announced on the 
floor that there was no objection on 
the Republican side; hence, prospects 
for an up-or-down vote were depen- 
dent on the other side. 

Later that afternoon, on February 
4, 1992, a Member of the other side 
objected on behalf of six Senate Demo- 



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crats, opposing the unanimous con- 
sent agreement to grant an up or 
down vote on the ANWR amendment. 

Well, that is the reality, Mr. Presi- 
dent. We are in a gridlock, political 
gridlock, with the elections, and 
ANWR has moved up not just to be an 
energy issue, but it is going to be an 
issue in the Presidential debate, be- 
cause it divides the two sides. I think 
that is indeed unfortunate, because I 
think it sells America short on its 
technology and its ingenuity. I think 
America should recognize that the 
environmental community is not anx- 
ious to get aboard on ensuring how 
ANWR can be opened safely. They see 
this as an issue thousands of miles 
away from their membership - an 
idealistic issue. 

I took members up there, both of 
the environmental community and 
Members of this body. One member 
got off the plane and looked around 
and said, 'Where is the wilderness?' 
This is the wilderness, Mr. President. 

The point is that some of the irre- 
sponsible environmental groups look 
upon this as an issue to keep their 
membership growing, to bring in fund- 
ing, not as an issue to try and come 
aboard and address the concerns and 
the reality that is in the interest of 
America's energy security, to reduce 
our dependence on imported oil, to 
reduce the export of American jobs, 
and to address the stimulation of this 
economy by the most identifiable 
means available. This is a challenge 
to industry and a challenge to the 
environmental community; but the 
environmental community is hard and 
fast against it, because they can con- 
tinue to raise money. Nobody can 
afford to go up to ANWR and look at 
it, except a few environmental elitists. 
It would cost a $5,000 bill to go up 



there. 

So it is tied up in Presidential poli- 
tics, as I have indicated. Presidential 
candidate Clinton opposes ANWR 
development, and on February 37, 
1992, he stated: 

I support legislation expanding wilderness 
designation in the ANWR area to include the 1 .6 
million acre coastal plain. 

Well, Mr. President, that speaks for 
itself. Vice Presidential nominee Gore 
is a cosponsor of Senate bill 39, a bill 
to designate ANWR coastal plain as a 
wilderness. Those are the facts, Mr. 
President. 

Mr. President, there is an area of 
this bill that I am sensitive to. It is 
an important provision missing from 
the language that we are considering 
today, providing for cancellation of 
certain oil leases in the Bristol Bay 
area. I am pleased that the other 
body included them in their version of 
the bill. This is going to come up in 
the conference. 

I know the leadership is discourag- 
ing amendments and, after consider- 
ing the issue carefully, I have conclud- 
ed that focusing on this matter when 
the bill reaches conference is a strate- 
gy that will succeed. So I am not 
going to pursue the Bristol Bay lease 
buyback at that time. But the reality 
is that I have addressed it with my 
colleagues. The priority is on the wild 
salmon resource, which is renewable. 
I, along with virtually all Alaskans, 
feel that this area should be bought 
back. 

Mr. President, it is important to 
remind my colleagues that one very 
important provision is missing from 
the language we are considering to- 
day. That is language providing for 
the cancellation of certain oil leases in 
Alaska's Bristol Bay. 

I am pleased to note, however, that 



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such a provision is in the energy bill 
passed by the other body, and the 
cancellation of these leases will come 
up in the conference on this bill. 
During that conference, Mr. Presi- 
dent, I will extend every effort to en- 
sure that my colleagues agree to it. 

Candidly, Mr. President, I would 
have preferred to have language deal- 
ing with this sale in the Senate's sub- 
stitute as well as in the bill sent over 
by the other body, but circumstances 
have simply not permitted. Initially, 
there were questions about the Ener- 
gy Committee's jurisdiction over OCS 
issues. Later, when we debated the 
Senate energy bill on this floor, there 
was concern that including it would 
jeopardize other, legitimate leasing 
plans. Today, the leadership is dis- 
couraging amendments, and after 
considering this issue carefully, I have 
concluded that focusing on this mat- 
ter when the bill reaches conference is 
the strategy most likely to succeed. 

Mr. President, Bristol Bay is the 
foremost producer of wild salmon in 
the entire world, and a major reason 
why Alaska contributes a full 
one-third to the world supply of salm- 
on. Its dominant fish, the famous 
Alaska red salmon, or sockeye, is con- 
sidered one of the world's finest. For 
Alaskans it represents a major eco- 
nomic factor, as thousands of fisher- 
men, processing workers, and others 
depend on it for a major share of their 
livelihood. The Bristol Bay fishery is 
often called the 'billion-dollar fishery,' 
and there is a great deal of truth in 
that name. 

Despite what some preservationist 
groups would like the American peo- 
ple to believe, Alaskans have an excel- 
lent record of carefully husbanding 
the resources of our State. We believe 
deeply in conservation - the wise use 



of our resource wealth. 
\ The Bristol Bay question is an ex- 
ample of exactly this approach. The 
area's tremendous natural potential is 
an eloquent argument for the cancel- 
lation of these leases. 

Some years ago, when the Bristol 
Bay lease sale was initially proposed, 
the suggested sale area was vastly 
larger than the area actually leased. 
It was through the efforts of con- 
cerned Alaskans that approximately 
80 percent of the original area was 
eliminated. Mr. President, I was proud 
to play a substantial role in achieving 
that reduction. 

Now, it is time we take the final 
step, and I intend to press for conclu- 
sive action on this sale with all my 
strength in conference. 

I thank the Chair, and I feel quite 
certain that the action taken by my 
colleagues on the amendments which 
they approved last evening will show 
ANWR in its true light, and in the 
national security interests of our Na- 
tion. 

I thank the Chair and yield the 
floor. 

AMENDMENT NO. 2793 
(Purpose: To provide Tor equitable treatment of 
taxpayers entitled to credit* on account of pay- 
ments into the Trans-Alaska Pipeline Liability 
Fund) 

Mr. WALLOP. Mr. President, I send 
an amendment to the desk on behalf 
of Senator Stevens, the Senator from 
Alaska, and ask for its immediate con- 
sideration. 

The PRESIDING OFFICER. The 
clerk will report. 

The legislative clerk read as follows: 

The Senator from Wyoming (Mr. Wallop), for 
Mr. Stevens, proposes an amendment numbered 
2703. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that reading of 



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the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

At the appropriate place in the bill, add the 
following new section: 

SBC. . TRANS-ALASKA PIPELINE LIABILITY 
FUND INCOME TAX OFFSET. 

Subsection (d) of 26 U.S.C. 46 12 is amended by 
inserting the following new sentence before the 
last sentence of such subsection (d): 

'If a taxpayer who has paid into such 
Trans-Alaska Pipeline Liability Fund can not use 
such credit on account of the operation of any 
provision of section 46 1 1(0, then such credit may 
be taken to offset taxes otherwise due under 
section 11, in each year to the extent which 
would have been permissible hsd the Oil Spill 
Liability Trust Fund financing rate impos e d by 
section 4611 not lapsed pursuant to 4611(0(2) or 
expired pursuant to section 4611(0(1), provided 
that no such credit taken under thb sentence 
may be carried back to previous tax years.'. 

Mr. WALLOP. Mr. President, this 
amendment by Senator Stevens has 
been approved by both sides of the 
Finance Committee, and by the Sena- 
tor from Louisiana and myself. It is 
an amendment whose purpose is to 
provide for equitable treatment of tax- 
payers entitled to credits on accounts 
of payments into the trans-Alaska 
pipeline liability fund and has been 
cleared on both sides by both commit- 



I ask unanimous consent that an 
explanation of the amendment by 
Senator Stevens be printed in the Re- 
cord. 

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

EXPLANATION OF TRANS-ALASKA PIPE- 
LINE LIABILITY FUND AMENDMENT 
Under current lew (26 U.S.C. 46 11), an excise 
tax is impos e d on crude oil received at a United 
States refinery, and on petroleum products enter- 
ing the United SUtee for consumption, use, or 
warehousing. A portion of this tax, 6 cents per 
barrel, is dedicated to the Oil Spill Liability Trust 
Fund (the 'Oil Spill Fund*). 



Section 4612(d) allows a credit against a 
taxpayer's liability for the Oil Spill Fund tax 
equal to the amounts paid by the taxpayer before 
January 1, 1967, into the Trans- Alaska Pipeline 
Liability Fund (TAPLF), because those funds are 
to be transferred into the Oil Spill Fund. (The 
TAPLF is s privately owned entity created by 
Federal statute.) However, the credit only kicks 
in when the TAPLF funds are actually trans- 
ferred, and this transfer will occur only whsn ail 
outstanding claims against the TAPLF are paid. 

Issue: Ths TAPLF transfsr will not take place 
until late 1993 at the earliest, so the credit will 
not be available until late 1993. However, the 
6-cent tax against which the credit b spplied is 
now expected to be automatically suspended in 
early 1993 when the Oil Spill Fund reaches $1 
billion. Therefore, under current law, the oil 
companies will receive no TAPLF credit when the 
TAPLF funds ere transferred into the oil spill 
fund, because the tax against which the credit ap- 
plies, will hsvs lapsed. Taxpayer companies be- 
lieve thb b unfair, because contributors to other 
Funds • the Deepwster Port Liability Trust Fund 
and the Offshore Oil Pollution Com penes lion 
Fund • have received credits when those Funds 
were rolled into the Oil Spill Fund, but contribu- 
tors to ths TAPLF • which b s privets fund • will 
not receive similar credits. 

Ths amendment would allow tax payor compa- 
nies to take s credit against corporate income 
taxes following ths TAPLF transfer, notwith- 
standing suspension of ths 6-cent tsx dus to the 
billion dollar cap and continuing beyond expira- 
tion of the 6-cent tax as if thst tax had remained 
in effect. Thb provision does not permit any 
carryback application of the credit and would not 
apply the credit against the Alternative Minimum 
Tax. 

PROPOSED AMENDMENT 
At the appropriate place in the bill, add the 
following new section: 

SEC. . TRANS-ALASKA PIPELINE LIABILITY 
FUND INCOME TAX OFFSET. 

Subsection (d) of 26 VS. C. 4612 b amended 
by inserting the following new sentence before 
the last sentence of such su b se ct ion (d): 

'If s taxpayer who has paid into such 
Trans-Alaska Pipeline Liability Fund can not use 
such credit on account of the operation of any 
provision of section 461 1(0, then such credit may 
be taken to offset taxes otherwise due under 
section II, in each year to the extent which 
would have been permissible hsd the Oil Spill 
Liability Trust Fund financing rate im posed by 
section 4611 not lapsed pursuant to 46 11(0(21 or 



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t to Motion 4611(1X1), I 
that no Midi cradit tikira u n dsr this ssntoncs 
may bs carriad back to previous tax yean.' 

The PRESroiNG OFFICER. If 
there is no further debate, the ques- 
tion is on agreeing to the amendment. 

The amendment (No. 2793) was 
agreed to. 

Mr. JOHNSTON. Mr. President, I 
move to reconsider the vote. 

Mr. WALLOP. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. WALLOP. Mr. President, we 
are down to a very narrow selection of 
amendments that remain. My under- 
standing; after conversations with the 
Republican leader, is that most all of 
ours will have been worked out, or 
will be ripe for offering in the next 
little while, which will leave us, the 
Senate, confronted with a 
nongermane, irrelevant argument be- 
tween folks on the Banking Commit- 
tee, as standing between the Senate 
and its long-awaited energy policy bill 
going to conference. 

It is my hope - and I am certain it is 
the hope of the Senator from Louisi- 
ana - that it is resolved. Whatever its 
merits, it has no business on the ener- 
gy bill. Whatever its merits, it has no 
business tying us up with other things 
with equally little merit, and that is 
certain to be the case. 

So it is my hope that the parties 
involved in that will find a way to set- 
tle their argument. The Senator from 
Louisiana has worked on this for IS 
years, and I for 16, along with many 
others, for most of their Senate ca- 
reers as wefl. We have come too far 
to be distracted by irrelevant and 
nongermane amendments to energy 
strategy. 

Mr. President, I suggest the absence 



of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The legislative clerk proceeded to 
call the roll, and the following Sena- 
tors entered the Chamber and an- 
swered to their names: 

(QUORUM NO. 8) 
Dixon Johnston Mitchell 

Simon 

The PRESIDING OFFICER (Mr. 
Simon). A quorum is not present. 
The clerk will call names of the absent 
Senators. 

The legislative clerk resumed the 
call of the roll. 

The PRESIDING OFFICER. The 
majority leader. 

Mr. MITCHELL. Mr. President, I 
move that the Sergeant at Arms be 
instructed to request the presence of 
absent Senators, and I ask for the 
yeas and nays. 

The PRESIDING OFFICER. Is 
there a sufficient second? 

There is a sufficient second. 

The yeas and nays were ordered. 

The PRESIDING OFFICER. The 
question is on agreeing to the motion 
of the Senator from Maine. The yeas 
and nays have been ordered, and the 
clerk will call the roll. 

The legislative clerk called the roll. 

Mr. FORD. I announce that the 
Senator from North Dakota (Mr. 
Burdick), the Senator from California 
(Mr. Cranston), and the Senator from 
Tennessee (Mr. Gore), are necessarily 
absent. 

Mr. SIMPSON. I announce that the 
Senator from Vermont (Mr. Jeffords) 
and the Senator from Idaho (Mr. 
Symmt) are necessarily absent. 

I further announce that the Senator 
from North Carolina (Mr. Helms) is 
absent due to illness. 



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The PRESIDING OFFICER. (Mr. 
Lieberman). Are there any other Sen- 
ators in the Chamber who desire to 
vote? 

The result was announced, yeas 84, 
nays 10, as follows: 

(ROLLCALL VOTE NO. 162 LEG.) 





YEAS- 84 


Adams 


Akaka 


Baucus 


BmiImd 


Bidan 


Bingaman 


Bond 


Boran 


Bradley 


Brown 


Bryan 


Bumpers 


Burns 


Byrd 


Chafee 


Costs 


Cochran 


Cohan 


Conrad 


Craig 


D'Amato 


Dsnforth 


Dsschb 


DeConcini 


Dixon 


Dodd 


Dole 


Domenid 


Duranbargar 


• Eion 


Ford 


Glann 


Gorton 


Graham 


Grassley 


Harkin 


Hatch 


Hatfield 


Heflin 


Holling* 


Inouya 


Johnston 


Kssssbsum 


Kennedy 


Kerrey 


Ksrry 


Kohl 


Lautenberg 


Leahy 


Levin 


Lieberman 


Lugar 


Mack 


MeUenbaum 


Mikulaki 


Mitchell 


Moynihan 


Nieklss 


Nunn 


Packwood 


PaU 


Praaslar 


Pryor 


Raid 


RiagU 


Robb 


RockafaUar 


Roth 


Rudman 


Sanford 


Sarbsnas 


Saaser 


Seymour 


Shelby 


Simon 


Simpson 


Specter 


Stevens 


Thurmond 


Wallop 


Warner 


Wdlstona 


Wirth 


Wofford 




NAYS- 10 


Braaus 


Fowler 


Garn 


Gramm 


Kastan 


Lott 


McCain 


McConnaU 


MurkowekJ 


Smith 








NOTVOTING-6 


Burdick 


Cranston 


Gore 


Halma 


Jeffbrd* 


Sjymme 


So the motion was 


agreed to. 


The PRESIDING OFFICER. With 


the addition of Senators voting who 


did not answer the 


quorum call, a 


quorum is now present. 


The Chair recognizes the Senate 


majority leader. 





Mr. MITCHELL. Mr. President, I 
commend the Senators from Louisi- 
ana and Wyoming for their efforts to 
move this bill forward, through a 
great deal of adversity and a lot of 
unanticipated obstacles. 

In order to enable the Senate to 
complete action on the many impor- 
tant measures that face us, it is im- 
perative that we proceed promptly 
with this and other bills we must take 
up. 

I ask those Senators who have an 
interest in this bill to remain in the 
Senate Chamber so that we can work 
out those interests. 

The problem that the managers 
have encountered - - 

Mr. WALLOP. Mr. President, can 
we have order? 

The PRESIDING OFFICER. The 
Senator from Wyoming is correct. 
The Senate is not in order. Will 
Senators please clear the aisles, please 
take their conversations out of the 
Chamber? 

The majority leader has the floor. 

Mr. MITCHELL. Mr. President, the 
problem that the managers have en- 
countered, and the reason for this 
rare procedural vote, was to get Sena- 
tors to come to the Senate floor so 
that they could then conduct and 
complete whatever negotiations are 
necessary to permit the managers to 
proceed with the bill. 

There is an old saying that the only 
thingB certain in life are death and 
taxes. But their is a third thing that 
is certain in the Senate, and that is at 
about 8 o'clock this evening, 10, 12, 
20, or 25 Senators will come up to me 
and ask why it is we must do business 
between 8 p.m. and 10 p.m.? The rea- 
son is, of course, we did not do any 
business between 10 a.m. and noon. 

Mr. JOHNSTON. And between 6 



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p jbl and 10 p jn. last night. 

Mr. MITCHELL. So we simply have 
to pr o c eed , and the managers have 
exhibited great patience and persever- 
ance over a very long course over the 
consideration of this bill, which 
stretches back now on calendar time 
over several months. 

So I encourage all of those Senators 
who have an interest. We have only a 
few matters remaining. They are 
important. But they are few in num- 
ber, and it is my hope that we can 
complete action later today and in 
time to enable us to proceed to other 
business. 

Mr. JOHNSTON. Mr. President, I 
am very pleased to say that we now 
have one of the biggest stumbling 
blocks worked out. Senator Bentsen 
has said that he has no objection to 
the D'Amato amendment. So we are 
now prepared to take the D'Amato 
amendment. 

Mr. D'AMATO addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from New York is recognized. 

Mr. D'AMATO. Mr. President, on 
behalf of myself and Senator 
Moynihan, I send an amendment to 
the desk. 

The PRESIDING OFFICER. Is 
there objection to laying aside the 
pending amendment? Without objec- 
tion, it is so ordered. 

AMENDMENT NO. 2704 
(Purpose: To amend the Tariff Act of 1930 to 
prevent circumvention of antidumping end coun- 
tervailing duty orders) 

Mr. D'AMATO. Mr. President, I 
send an amendment to the desk and 
ask for its immediate consideration. 

The PRESIDING OFFICER. The 
clerk wOl report. 

The bill clerk read as follows: 

The Senator from New York (Mr. D'Amato), 
for himself and Mr. Moynihan, proposes an 



amendment numbered 2704. 

Mr. D'AMATO. Mr. President, I ask 
unanimous consent that reading of 
the amendment be dispensed with. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment is as follows: 

At the appropriate place insert: 
SEC. . AMENDMENT TO SECTION 
781(A)(1)B) OF THE TARIFF ACT OF i930 (19 
U.S.C. 1677J(AM1MB)). 

In section 781(a)(1)(B), the phrase 'produced in 
the foreign country with respect to which such 
order or finding applies' is deleted and the fol- 
lowing new text is inserted in lieu thereof: 
'supplied by an exporter or producer in the for- 
eign country with respect to which the order or 
finding spplies, from parts or component* from 
suppliers that have historically supplied the parts 
or components to that exporter or producer, or 
from parts or components supplied by any party 
in any foreign country on behalf of such an ex- 
porter or producer'. 

SEC. . AMENDMENT TO SECTION 
781(A)(2)(B) OF THE TARIFF ACT OF 1930 (19 
U.S.C. 1677J(A)(2)(B)). 

In section 781(a)(2)(B), the phrase 'produced in 
the foreign country with respect to which such 
order or finding described in paragraph (1) 
applies' is deleted and the phrase 'described in 
subparagraph (1MB)' is inserted in lieu thereof. 
SEC. . AMENDMENT TO SECTION 
781(A)(2)(C) OF THE TARIFF ACT OF 1930 ( 19 
U.S.C. 1677J(AM2)(0). 

In section 781(a)(2)(C), the phrase 'produced in 
the foreign country' is deleted and the phrase 
'described in subparagraph (1KB)' is inserted in 
lieu thereof. 

SEC. . AMENDMENT TO SECTION 
781(A)(1)(B) OF THE TARIFF ACT OF 1930 (19 
U.S.C. 1677J(A)(1)(B)). 

The following phrase is inserted after the lan- 
guage of section 781(b)(l)(B)(ii): 'or (iii) is sup- 
plied by the exporter or producer in any foreign 
country with respect to which such order or 
finding spplies, or from suppliers that have his- 
torically supplied the parts or components to that 
exporter or producer,'. 

Mr. D'AMATO. Mr. President, I am 
pleased to propose an amendment 
that deserves the immediate attention 
of this body. It is necessary in order 
to give the 875 workers in Cortland, 



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NY, and other American workers, a 
second chance at a level playing field. 

I want to thank the managers of 
the bill who recognize the urgency of 
the situation. 

Without action on this amendment 
and without a strong commitment to 
our U.S. fair trade laws, companies 
and workers from all across this Na- 
tion will end like Smith Corona - out 
on the street. I am joined by my col- 
league Senator Moynihan. 

The necessity and urgency of our 
amendment is highlighted by a true 
tragedy in our attempt to be not only 
globally, but domestically, competitive. 
It is without question, an amendment 
that will strengthen all U.S. compa- 
nies ability to compete in a fair mar- 
ketplace. The tragedy is that of the 
Smith Corona Corp. and the last 
American factory of the last American 
manufacturer of consumer typewrit- 
ers. It is also a story, not so uncom- 
mon, about how we fail to provide a 
competitive environment right here in 
our own backyard. It is not about 
investment in capital or research. It is 
about U.S. fair trade laws and the 
exploitation of those laws by foreign 
countries and foreign companies. 

It is also about fairness. While I 
support free trade goals and believe 
they are admirable, they must be 
balanced with the realities of the over- 
all trade environment. Smith Corona 
has attempted for more than a decade 
to utilize U.S. fair trade laws to pro- 
tect themselves from foreign compa- 
nies who import to the United States 
and sell well below product cost, a 
practice known as dumping. We ail 
know that in a free market, compa- 
nies cannot sell below cost and survive 
over the long run. Smith Corona, 
operating in the realities of a 
free-market economy, has been forced 



to bring numerous antidumping < 
before the U.S. Government. They 
won with an affirmative decision eight 
different times. Their main Japanese 
competitor, Brother, Inc. was found to 
be selling well below product cost. For 
example in I960, the Commerce De- 
partment found that Brother was 
selling portables below cost and called 
for duties of 48.7 percent. Last Au- 
gust, Commerce again found that 
Brother was guilty of dumping and 
imposed duties of close to 60 percent. 
Those are not insignificant violations 
intended by our U.S. fair trade laws. 
They are obscene and outrageous. 
But, foreign importers have found a 
way to avoid paying them. 

The 1983 trade bill created a new 
anticircumvention law to prohibit 
foreign manufacturers from avoiding 
duties by setting up U.S. plants. But, 
foreign countries found a loophole 
that restricted duties only to the origi- 
nal country of import, not to third 
party countries from which parts can 
be imported. 

By setting up an assembly operation 
in the United States and importing 
from a third-part country, they can 
totally avoid paying the antidumping 
duties. Importers can then afford to 
continue pricing their products below 
fair market value and drive competi- 
tive American manufacturers from 
our own, free, market. In the end, we 
have traded manufacturing jobs for 
often temporary assembly jobs. Thus, 
we weaken our economic base further. 

This amendment is a much narrow- 
er version of the legislation that I 
introduced last Friday and is intended 
to deal with the problem facing Smith 
Corona. More specifically, this amend- 
ment is needed to close a loophole in 
the 8ourcing of third country parts 
from historical suppliers that permit 



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foreign manufacturers to evade 
antidumping duty orders. Under 
existing law, the value of these 
third-country parts is counted against 
circumvention because the parts do 
not originate from the original export- 
ing country subject to the order, not- 
withstanding the fact that such party 
may have always been supplied by 
third-party countries. 

This has led to the anomalous re- 
sult that merchandise is taken outside 
the scope of an antidumping order 
through the transplant of a simple 
assembly operation even though there 
has been absolutely no change in the 
mix or sourcing of the covered 
merchandise's component parts. This 
amendment will provide the Depart- 
ment of Commerce with the statutory 
authority to reach circumvention 
patterns of this nature which current 
law does not address. 

While we work every day to level 
the playing field and open markets 
abroad, loopholes in our own U.S. 
trade laws undercut our competitive 
position right here in our own back- 
yard. It may not be too late to help 
Smith Corona's 875 employees. It is 
also not too late to help the thousands 
of other U.S. companies who are 
prayed upon by foreign competition. 

We must not delay this action to 
look out for the best interest of U.S. 
industry and U.S. jobs. Our U.S. 
industries should be investing in re- 
search, development and capital, not 
in court battles. We must strengthen 
the law in order to ensure that our 
companies do not continue to be un- 
dercut by unfair trade practices. 

Mr. President, I ask for the urgent 
support of all my colleagues. Nothing 
is more important today than an 
American job. 

Mr. President, let me thank the 



chairman of the Finance Committee, 
Senator Bentsen the Republican lead- 
er and the managers of this bill. Be- 
cause what we are attempting to do 
here, by way of this legislation, is to 
deal with the inequity and the manip- 
ulation of the trade rules that unfair- 
ly, illegally impacts American workers. 

In this particular case it involves 
the workers at a plant located in New 
York. But it is just as apt to be a 
plant located in any place in America. 
Smith Corona is the last American 
typewriter manufacturer left. What is 
taking place is that a foreign competi- 
tor is unfairly using predatory pricing 
tactics, cutting its costs below what it 
cost to produce, and violating the law 
time after time after time. And yet, 
through a subterfuge, it continues to 
do that. This amendment attempts to 
deal with that very serious loophole. 

I am pleased to offer this amend- 
ment on behalf of Senator Moynihan 
and myself. It is my hope that we 
would and will have the ability to 
close this loophole, and possibly even 
save these jobs. I ask unanimous con- 
sent that a statement by the president 
of Smith Corona on July 23, 1992 be 
included in the Record. 

Mr. President, I thank the chair- 
man and the Republican leader for his 
help. 

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

STATEMENT OF G. LEE THOMPSON, CHAIR- 
MAN, SMITH CORONA CORP. BEFORE THE 
SENATE COMMITTEE ON BANKING, HOUS- 
ING, AND URBAN AFFAIRS, JULY 23, 1992 

Mr. Chairman, members or the committee, my 
name is G. Lee Thompson. I am chairman or 
Smith Corona Corp. Thank you for the opportu- 
nity to testify before you today on VS. competi- 
tiveness. 

U.S. businesses can compete with anyone. Our 
companies are competitive in the production of 



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i a broad spectrum of 
idsavors. 

What b competitiveness? The President's Com- 
mission on Industrial Competitiveness put for- 
ward a useful definition in 1966: 

'Competitiveness for a nation b the degree to 
which it can, under fires and fair market condi- 
tions, produce goods and services that meet the 
test of international markets while simultaneous- 
ly maintaining or expanding the real incomes of 
its dtixens.' 

'Competitiveness is the basis for a nation's 
standard of living.' 

Note the important qualifier: 'Under free and 
fair market conditions.' This is where I want to 
put the emphasis of my statement today. And it 
is where I have the most direct experience. 

Today Smith Corona stands as the Nation's 
last remaining manufacturer of portable electric 
typewriters and word processors. 

In the coming months, however, Smith Corona 
will join the ranks of so many of our Nation's 
former dome st i c manufacturing concerns • head- 
quartered in the United States, but forced to 
move manufacturing operations offshore to com- 
pete against foreign competitors who compete on 
terms inconsistent with fair trade. 

The prospect of losing VS. manufacturing in 
the typewriter industry to low wage foreign 
seem a small footnote to 
• where borders are coming down 
and the production engine is fueled by the lowest 
costs, most efficient inputs, end open competi- 
tion. While this ides seams to represent whet is 
best shout the hope end opportunity inherent in 
the United States, it also represents a naive, 
simplistic and destructive approach to real-world 
public policy making. 

Do me sti c manufacturing is the driving force 
behind much of the growth and expansion in our 
economy. Based on quantitative information, the 
chamber of commerce figured the importance of 
domestic manufacturing and its contributions to 
a community's economy to bs an additional 64 
non-manufacturing jobs for every 100 manufac- 
turingjobs. These jobs rangs from wholesale and 
retail trade, to transportation, finance business 
services, and so forth. Aggregate personal income 
associated with additional manufacturing jobs 
was sufficient to spawn seven new retail estab- 
lishments. Maintaining dome st i c manufacturing 
is dearly a key to global competitiveness end our 
continued economic success. 

While pursuing s fuxxy notion of global free 
trade, our Government has missed its real effects 
on American manufacturing. I fear, Mr. Chair- 
man, that our current trade and competition 



policy will lead to the eventual demies of US. 
manufacturing, competitiveness end opportunity, 
and destroy all that led companies like Smith 
Corona to become world leaders. 

Smith Corona b a valid illustration of both the 
success of US. competitiveness and the failure of 
our Government to r ,Mt # *ir a competitive mar- 



For mors than 100 years. Smith Corona has 
been the world leader in the manufacturing of 
portable typewriters; first manual, then electric, 
then electronic, leading us to word prnnessing 
The typewriter industry has long been driven by 
design ingenuity, features, consumer needs, and 
market dynamics such ss pricing. In the 
mid-1970's our foreign competitors took s new 
approach - unfair pricing. Thb divergence from 
fair competition sent the industry on a race to 
the bottom. 

Just 2 days ago we announced the eventual 
relocation of our manufacturing operations to 
Mexico, costing 776 of our employees their jobs. 
Intense predatory pricing recharacterised the 
whole nature of our business. Were thb pricing 
b as ed on features, quality, performance or most 
importantly • efficiencies • the market would 
have been enhanced for both consumer and pro- 
ducer. However, our foreign competition did not 
have better costs of production, efficiencies or 
other mesne to reduce prices. 

Rather, a protected home market permitted 
them to est upon the VS. market, knowing that 
barriers to price compet i tion protected them at 



To wit, the managing director of our Jepsnsss 
competitors recently admitted in the June 22 
'Financial Times' article • article attached • that 
hb company. Brother Industries, has tolerated 
losses in its U-S. operations to secure market 
share. Put another way, they circumvented VS. 
lsws and continued dumping their products to 
increase sales at the expense of US. manufactur- 
ers. As each of you must know, VS. mmpsnies 
cannot survive by selling below cost over time. 

To our Government, I say, wake up - thb b 
the real world of competition. If companies can- 
not turn to their Government to provide condi- 
tions of fair competition, predatory pricing will 
force VS. companies out of business or offshore. 

In an effort to end the dumping, Smith Corona 
initiated actions to obtain relief through the fur 
trade regime mandated by Congress. Since 1979, 
we have prevailed in 6 separate antidumping 



Despite thb string of i 
have never been forced to comply with the dump- 
ing orders. Instead, the targets of our action 



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have persistentry, cleverly and with the support 
of our Government, circumvented VS. 
antidumping trade lews. 

In 1986 Congress responded by cresting sn 
snticareumventaon lew. It was intended to bo 
black snd white, with just enough gray to give 
the admi n ist ra tors st the Commerce Department 
the flexibility to address new typos of avoidance. 
Yet, Mr. Chairman, as we have experienced time 
and again, discretion divorced from a focus on 
the statutory purpose too often results in bad 
decisions and last Jobs. 

For example, after passage of the 198$ Trade 
Bill, foreign manufacturers found that shifting 
the base of s company's assembly operations 
would allow them to evade dumping duties. By 
establishing s phantom factory, where virtually 
no value is added other than mere assembly, a 
dumper can claim that the U.S.-assembled type- 
writer is no longer the object of a dumping order 
- even when the final product is the same identi- 
cal product subject to an order. 

Does this make sense? It does if your intention 
is to circumvent U.S. trade lews. Is it good pub- 
lic policy? Only if we wish to displace VS. man- 
ufacturing with assembly line work. 

Assembly operations do not generate the high 
wages, high tech jobs crested by real manufactur- 
ing. The level of related activity in other sectors 
I mentioned earlier does not occur. Even recog- 
nizing the positive spin-ofT from a few assembly 
positions in a transplant operation, the 
sssembly-only operation obviously requires far 
fewer workers per unit of production. 

For more than a doxen years Smith Corona has 
fought at the front lines, using every legal and 
political weapon in the arsenal available to VS. 
manufacturers. Yet, we have consistently come 
up empty. The lews do not move fsst enough to 
keep up with new techniques designed to attack 
manufacturers; Government officials charged 
with enforcing our lsws have unfortunately too 
often exercised discretion to let the dumping 
continue. The natural interest of shareholders in 
maximizing return on investment says you play 
Don Quixote only so long. 

Mr. Chairman, from ths front lines of US. 
manufacturing, I have witnessed the ravages of 
unfair trade snd noted the inability of adminis- 
trative diecretion to support the advancement of 
VS. industry. As vice president of Sylvania 
Television, and then as president of Singer Sew- 
ing Machine, industry's calls for fair trade were 
dismissed ss protectionist. There is no longer s 
VS. sewing machine or T.V. industry, with the 
exception of Zenith. 

In their wake, we clearly see thst s failure to 



act leads to the wholesale devastation of entire 
industries snd s further erosion of the VS. com- 
mercial base. My experiences have revealed to 
me certain basic shortcomings in American com- 
petitiveness. 

First, Americans fail to understand or appreci- 
ate the substantial importance of manufacturing. 
To many, investment in America is investment, 
without regard to its source or character. The 
continuing thirst for capital investment hss led 
many of our communities snd their political 
leaders to race to the bottom, willing to displace 
manufacturing with assembly jobs, so long ss ths 
job lands in their community. We ignore nation- 
al interests in our pursuit of the parochial. 

Second, I am concerned about the failure of 
Government to respond in s timely fashion . By 
ths time relief comes to industry, or even the 
prospect of relief, it may be too little too late, 
such as with Smith Corona. 

In pursuing relief, we frequently heard the 
claim that adequate diecretion existed to remedy 
our problem. But, how useful is discration if it is 
in ths hands of those who for whatever reason 
choose not to set? 

Politics! leaders need to reflect on why it mat- 
ters if a manufacturing job ia displaced with as- 
sembly. Where does the manufacturing go? 
Where will the skilled labor reside? Where is the 
vslue snd whst are the wsges? Does foreign own- 
ership matter? Of course, who will make the 
decisions of where we manufacture, do our engi- 
neering and design, high technology, and, where 
will the profits go? 

Do these phantom factories represent the fu- 
ture of American manufacturing? To claim them 
as manufacturing is sn exaggeration, to encour- 
age their growth is a national resignation to low 
wages and decline. 

In closing, let me underscore that Smith Coro- 
na hss pursued every available means to ensure 
fsir trade and secure s competitive marketplace 
for UfS. manufactured goods. Ths successive 
failure of our Government to respond in a timely 
and effective manner hss denied us the opportu- 
nities for competitiveness snd forced us to join 
other VS. manufacturers offshore. 

Thank you very much for your time. 
[From Finacial Times, June 22, 1992 
BROTHER SUMS DOWN BLOATED PROD- 
UCT RANGE 

In the foyer of the Brother Industries building, 
s smiling photograph of Mr. Juan Antonio 
Samaranch, president of the International Olym- 
pic Committee, congratulates the Jspaneee com- 
pany on sitting st the top table of Olympic corpo- 
rate sponsors along with Coca-Cola, SM, Philips 



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and a few others. 

Having already paid for ita high profile. Broth- 
er should be able to bask in Olympic year publici- 
ty. Instead, the year of Barcelona has become an 
important test of strength for the maker of infor- 
mation equipment, sewing machines and other 
household electric appliances. 

With profits under pressure. Brother has just 
announced a restructuring plan that could be- 
come commonplace among Japanese manufactur- 
ers, many of which are burdened by too broad a 
product range and struggling in overcrowded 
consumer and business equipment markets. 

Another problem not unique to Brother is the 
side-efTect of having achieved the admirable aim 
of producing high-quality goods at reasonable 
cost • the company has consistently reported poor 
operating profits and has been dependent on 
non-operating items, such as profits on stock 
sales, to boost its earnings. 

The weakness of Japanese stock prices has not 
only increased the cost of capital for manufactur- 
ers such as Brother, which lifted it long-term 
institutional borrowing from sero to Y3bn 
($23.8m) last year, but it has also denied the 
traditional easy profits on marketable securities. 

For Brother, these circumstances were behind 
a mediocre operating profit of Y486m last year, 
down from Y2.36bn. The company would have 
reported a loss were it not for a change in pen- 
sion plan accounting that produced an operating 
gainofY669m. 

Sales for the year were down from Y166bn to 
Y165.2bn. Net profit rose slightly from YS.2bn to 
Y3.6bn, thanks mainly to a Yl.lbn increase in 
gains on property and equipment sales, and an 
extra Y699m in gains on stocks sold. 

In response. Brother plans to cut its product 
range by about 30 per cent to 700 items, transfer 
10 per cent of ita 6,300 Japaness workers to new 
ventures, increase the percentage of parts pro- 
duced in -house, and make research and develop- 
ment operations more market sensitive. 

Mr. Tamotsu Shimisu, the company's manag- 
ing director, said a slowing economy had forced 
the restructuring. Office automation equipment 
and industrial machinery markets, already over- 
flowing with competitors, were made all the more 
difficult by capital spending cuts. Meanwhile, 
sales of its old mainline product, home sewing 
machines, rose by 16 per cent. 

He reckons that reducing the product line by 
30 per cent will reduce sales by only 10 per cent, 
ss the items to be discarded are clearly not 
Brother's best sellers. 

At the same tame, the company is hoping that 
a focus on successful products will eventually 



lead to an increase in sales and most importantly, 
stronger profits. 

'If it's not contributing to profits, we will no 
longer make it. Sometimes you continue to pro- 
duce a loss-making item because it is something 
that your customers want and you have to keep 
their loyalty,' Mr. Shimisu said. Items to be 
pruned, he says, will include white goods and 
older-style sewing machines. 

Asked whether the company had tolerated 
losses in order to secure market share, tilted his 
head beck, c losed his eyes and said: 'Yes, that's 
true.' He explained, for example, that US dis- 
count stores wanted high-volume, low-cost deals 
that sometimes force a company to take lossss. 

Mr. Shimisu pointed to a curious contradiction 
that Brother was trying to resolve. Its interna- 
tional sales division is wholly owned and tends to 
produce good-quality market research material 
for product developers, while market trends are 
loss well-tracked at home, where sales are han- 
dled by an affiliate of the company. 

'Within Japan, we have been product-driven 
and we have got to become more market orient- 
ed,' Mr. Shimisu said. Again, Brother is one of 
many Japanese manufacturers reaching this 
conclusion, ss ths boom years of ths lets 1980s • 
when GNP expanded at 6 per cent and 7 per cent 
and the stock market soared geve 

over-confident producers the impression that 
virtually anything would sell. 

During this period, companies rapidly intro- 
duced slight variations on existing producers and 
also attempted to squeeze into new markets. The 
steel companies elbowed their wsy into electron- 
ics, the camera makers attempted to re-establish 
themselves ss office equipment companies, and 
the consumer electronics makers launched hun- 
dreds of now items each year. 

Times have changed. Japaness car makers are 
at least talking about slowing ths flow of their 
new releases, while Hitachi, ths consumer and 
commercial electronics company, wants to length- 
en the life-cycle of its products to reduce expendi- 
ture on research and development. 

But, in spite of weak earnings and murmurings 
about reform, most companies are yet to bite the 
bullet, and there are doubts ss to whether 
Brother's changes go far enough. 

For example, the planned shift in parts 
soureing only aims to increase in-houee compo- 
nents from 12 per cent to 13 per cent of all parte. 
The company also wants to maintain Japanese 
production at 80 per cent of the total, though it 
hints that south-east Asian and Chinees f a ct o ri es 
will probably take s larger share if profits contin- 
ue to falter. 



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Mr. Shimiiu is con/Went that the sueesas of 
mw ventures will allow the company to ooak up 
■inn— labour, making redundancies unneoataaiy. 
Om of those now ventures is a karaoke (singing 
machine) systems company, Joysound, of which 
he m a director. 

Brother plans to provide karaoke hardware and 
software in Japan, and would eventually like to 
go international. However, the company could 
find the h*rf»fr* room as crowded as the white 
goods market and, in two years the company may 
bs reckoning as to whether the start-up funds 
could have been better spent shoring up its posi- 
tion in information equipment, which accounts 
for about 40 per cent of sales. 

The company is genuinely reassessing the cost 
of being an Olympic star, and contemplating 
whether to he a corporate front-runner again at 
the 1996 games in Atlanta. 

'They want a lot more money for Atlanta,' 
explained Mr. Shimixu, aware that Brother's 
presence in the main stadium is less important 
than its survival in the market. 

Mr. JOHNSTON. Mr. President, we 
are prepared to accept the amend- 
ment. 

Mr. MOYNIHAN. Mr. President, I 
am pleased to join with my colleague 
Senator D'Amato in offering an 
amendment to the U.S. trade laws 
that will make it harder for foreign 
producers to evade U.S. antidumping 
and countervailing penalty tariffs. 
And, hopefully, the enactment of this 
change will cause the management of 
Smith Corona to reverse their decision 
to shut down all manufacturing oper- 
ations in Cortland, NY. 

We need to hear from the adminis- 
tration that the President will support 
such a change in the law. And we 
need to hear from Smith Corona that 
it will keep the plant open. 

At a minimum, the change in the 
law offered by Senator D'Amato and 
me today will, we hope, provide some 
relief for other U.S. manufacturers 
who win dumping cases against for- 
eign imports, only to see the foreign 
companies find new ways to circum- 
vent the penalty tariffs that they 



must pay. 

This is one more step in a long line 
of efforts that I have made to assist 
Smith Corona to get the relief it has 
been entitled to. I had to change the 
law in the 1983 Trade Act to get the 
administration to stop dumped type- 
writers from Japan, and today I am 
trying to do it again. 

We thank the chairman and rank- 
ing member of the Finance Committee 
for their assistance on this measure. 

Mr. ROCKEFELLER. Mr. Presi- 
dent, I support this amendment • it is 
identical to a provision in S. 3046, 
which I introduced earlier this month 

- and action on it is long overdue. 

This amendment deals with circum- 
vention - deliberate efforts by import- 
ers or foreign producers to avoid the 
consequences of unfair trade practice 
penalties by shifting the location of 
their production or the composition of 
their product. 

There are a growing number of 
examples of circumvention, and the 
Senator from New York has described 
one of the most blatant - and tragic - 
situations involving Smith Corona. I 
would like to provide another example 

- in my judgment, an even clearer case 
of circumvention - that might help 
explain this complex matter to Sena- 
tors. 

In brief, there is presently outstand- 
ing an antidumping duty order 
against silicon metal, a substance used 
in making aluminum, among other 
things. Silicon metal is generally 
defined as containing more than 96 
percent silicon, and the antidumping 
duty order contains that specification. 

To no one's surprise, except perhaps 
the Commerce Department, after the 
domestic industry won this case, one 
of the foreign producers began ship- 
ping material that was 94 percent or 



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95 percent silicon, apparently to the 
same customers it had previously, and 
presumably for the same purposes. 
To my mind, this is an obvious case of 
circumvention, and one which our 
amendments to the law in 1983 were 
intended to address. Commerce De- 
partment lawyers, in contrast, argue 
that those amendments do not give 
them authority to revise the existing 
antidumping duty order to include 
these new imports. In other words, if 
the lawyers get their way, the foreign 
producers will get away with what can 
on|y be regarded as a deliberate effort 
to circumvent U.S. law. 

Mr. President, I have written Secre- 
tary of Commerce Barbara Franklin 
on this matter, and I ask that the text 
of my letter be printed in the Record 
at the conclusion of my remarks. 

This amendment is intended to deal 
with situations like the silicon metals 
case and the Smith Corona case, 
which were not anticipated in 1979, 
when we last made major revisions in 
the law. It should come as no surprise 
that over 13 years importers and for- 
eign manufacturers have learned a 
great deal about our law, including its 
loopholes, and have discovered how to 
exploit those gaps to their advantage. 
The trend toward globalization of 
production ha also contributed signifi- 
cantly toward the problem by making 
it easier for producers to move their 
production or assembly from place to 
place to stay ahead of a dumping duty 
orders. 

At the most obvious level, circum- 
vention is fraud, and we already have 
adequate provisions in our law to 
address it, provisions which I dis- 
cussed in greater detail when I intro- 
duced S. 3046. Even with the law, 
however, sufficient enforcement re- 
sources will always be a problem in 



i of this kind. It is not hard for a 
determined importer consistently to 
stay ahead of customs enforcement 
authorities. 

The pending amendment is intend- 
ed to deal with more complicated situ- 
ations, such as when the product in 
question is in some fashion trans- 
formed in a second country, thus per- 
mitting the argument that the import 
is no longer of the dumping country's 
origin. Often that also involves a 
Customs Service decision as to wheth- 
er the product has been sufficiently 
altered or sufficient value has been 
added in the second country to trans- 
fer origin. 

The Smith Corona case involves the 
most complicated situation when as- 
sembly of a finished product is moved 
into the United States. In that case, 
the dumped end product is no longer 
being imported, but most or all of its 
component parts are, for assembly 
here. Since both U.S. law and GATT 
rules limit attaching dumping duties 
to the like product, the duties cannot 
simply and easily be transferred from 
the finished product to its parts. 

The solution to the problem where 
final assembly is in the United States 
and the components are imported 
from countries other than that cov- 
ered by the initial duty order, the 
amendment would apply the existing 
order in cases where the same compa- 
ny was involved in the assembly in the 
United States and the parts came 
from historic suppliers. This is the 
same approach as that proposed by 
Congressman Rostenkowski, the chair- 
man of the Ways and Means Commit- 
tee, in H.R. 5100, his recently passed 
omnibus trade bill. 

Mr. President, this is a balanced 
amendment that deals with an impor- 
tant trade law problem. I urge its 



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adoption. 

There being no objection, the letter 
was ordered to be printed in the Re- 
cord, as follows: 

U.S. Senate, 
Washington, DC, 
July 24, 1992. 
Hon. Barbara H. Franklin, 
Secretary of Commerce, 
Washington, DC. 

Dear Madam Secretary: I am writing to com- 
ment on an important decision your Department 
b considering regarding enforcement of the cir- 
cumvention provisions of our antidumping law. 
The case in question is Silicon Metal from the 
People's Republic of China, Case No. A-670-806. 

In brief, the petitioners in this case are arguing 
that the PRC b circumventing the existing 
dumping duty by shipping metal that is 94-96 
percent silicon rather than the 96 percent silicon 
which was the industry standard for silicon metal 
at the time the petition was Tiled, and which b 
the composition specified in the dumping order. 
It b seeking modification of the eeope of the 
order to include the 94-96 percent silicon metal 
now being imported, which it contends b either 
a minor alteration of the class or kind of mer- 
chendbe covered by the order or a 
later-developed product. 

While thb appears to me to be ee a clear a case 
of circumvention ee I have seen based on the 
facts presented to me, and I cannot understand 
the Departments reluctance to move quickly to 
modify the order, I particularly want to comment 
on Congressional intent with respect to the pro- 
vision of law at issue in thb case. As you may 
know, I eerved on the Finance Committee when 
the circumvention language in the law, section 
781 of the Tariff Act of 1930, was adopted es part 
of the Omnibus Trade and Competitiveness Act 
of 1988, and I followed the debate on these provi- 



The later-developed products provision in par- 
ticular came initially from the Senate and was 
intended to epply to merchandise that wee simi- 
lar to that covered by the order with respect to 
general physical characteristics, expectations of 
the ultimate purchasers, ultimate use, channeb 
of trade, and advertisement and display; all crite- 
ria which my understanding of the facts in thb 
ease tell me are being met. 

There b no question that Congress clearly 
intended in cases like this, whether covered by 
the minor alterations provision or the 
later-developed products provision, that the order 
be applied to products that are circumventing it. 



Your legal staff seems to be under the impression 
that the phrase 'clarify the scope of the order/ 
which eppears et e few points in the legblative 
history, limits the euthority of the Department to 
expand an order beyond its original terms. To 
the contrary, thb language refers not to what the 
Department b permitted to do under the circum- 
vention provisions, but rather, to what Con gre ss 
did in enacting the circumvention provbione, i .e. 
clarify that orders are to cover minor alterations, 
newly developed products, and other forms of 
circumvention when the statutory criteria are 
met. The Department's current interpretation, 
which b contrary to what I understood was in- 
tended at the time, renders section 781 virtually 
ueelcee in fighting circumvention. Indeed, thb 
interpretation allows foreign producers to con- 
tinue the very practices thst section 781 was 
intended to prevent. 

Congress wee concerned that foreign producers 
could 'technically transform' merchandise eo that 
it would fall outside the scope of an antidumping 
order. For that reason, Congress required the 
Department to dbremvd such technical transfor- 
mations, and analyze circumvention using 
'practical measurements,' including 'such criteria 
ee the overall characteristics of the merchandise, 
the expectations of ultimate users, the use of the 
merchandise, the channeb of marketing and the 
cost of any modification relative to the total value 
of the imported product.' (S. Kept. 100-71, p. 
100). 

I would also note that your Department itself 
has recognised that the circumvention provbione 
require it to conduct a circumvention investiga- 
tion even where 'the descriptions of the merchan- 
dise, along with the Department end the ITC's 
final determinations in the original petition, 
make clear that (the merchandise) b not within 
the scope of the antidumping duty order.' Brass 
Sheet and Strip From Germany: Final Negative 
Determination of Circumvention of Antidumping 
Order. In that case, the Department concluded 
that the allegedly circumventing merchandise did 
not fall within the scope of the existing order, 
but it nevertheless, "independently evaluated 
each of the five criteria under the minor alter- 
ations provision as set forth in the legblstive 
hbtory.' In doing so, the Department recognised 
that circumvention cases require a different in- 
quiry - and it conducted that inquiry. Similar 
circumstances exist in the silicon metal case. 

I am also concerned that the Department ap- 
pears to be suggesting that because it had previ- 
ously rejected s requeet to expand the scops of 
thb investigation to include material that con- 
tained as little as 90 percent or lose silicon, it b 



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now precluded from including within the scope of 
the order meteriaJ conteining 04-96 percent sili- 
con. Thet is UnUmount to saying that because 
the Department made one mistake, it is required 
to make another one in order to be consistent, 
even though the facts of the second request, ss 
well ss its legal basis, are different from the first. 
The su gg e sti on that tha proper form of relief in 
such circumstances is to sue the Department 
forces on the petitioners the most expensive and 
time-consuming path open to them. I would 
certainly hope, in the interest of minimising the 
administrative burden, that the Department will 
not end up taking the position that it will never 
change ita mind unless forced to by the courts! 

From the standpoint of the law, in addition, 
such an interpretation appears to me to su gg e st 
that petitioners should have the burden of antici- 
pating every possible variation of the product in 
question in advance of the investigation, even 
though section 781 clearly encompasses situa- 
tions that develop during, after, or as a result of 
the investigation. That interpretation would also 
render this provision effectively moot. 

I understand that the Department has not yet 
made ita decision in this matter. I am confident 
that your decision will be in accord with the law 
and Congressional intent. I hope the foregoing 
comments will help clarify that intent. 
Sincerely, 

John D. Rockefeller IV. 

The PRESIDING OFFICER. Is 
there further debate on the amend- 
ment? 

Mr. BENTSEN. Mr. President, we 
are happy to accept the amendment. 

The PRESIDING OFFICER. Is 
there further debate? Hearing none, 
the question is on agreeing to the 
amendment offered by the Senator 
from New York. 

The amendment (No. 2794) was 
agreed to. 

Mr. D'AMATO. Mr. President, I 
move to reconsider the vote by which 
the amendment was agreed to. 

Mr. JOHNSTON. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. JOHNSTON. Mr. President, 
what is the pending business? 



The PRESIDING OFFICER. The 
pending business is the amendment 
offered by the Senator from Connecti- 
cut (Mr. Dodd), 2790, to amendment 
No. 2789 offered by the Senator from 
Minnesota (Mr. Wellstone). 

Mr. JOHNSTON. Mr. President, 
may I direct an inquiry to the Senator 
from Connecticut? Does the Senator 
wish to vote on that matter at this 
point? 

Mr. DODD. Mr. President, first of 
all, I say to the distinguished Senator 
from Louisiana, this is a matter that 
is being worked on right now. We are 
trying to see if we can come up with 
some resolution of this issue in terms 
of how the matter will be disposed of. 
That is an ongoing process at this 
particular moment. I will not press 
for the vote at this particular moment 
on the issue. 

Mr. JOHNSTON. I thank the Sena- 
tor. As I understand the Senator, 
there is hope that the matter will be 
worked out soon. 

Mr. DODD. Hope springs eternal I 
am hoping that will be the case. 

Mr. JOHNSTON. Mr. President, 
that leaves three other amendments. 
I wonder if Senator Dole's amendment 
regarding ethanol and Senator 
Grassley 9 s ethanol amendment will be 
offered. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the two ref- 
erenced amendments, Dole ethanol, 
Grassley ethanol, be dropped from the 
list in the consent agreement pro- 
pounded last night. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, 
that leaves Senator Dole's solid waste 
disposal, phosphoric acid process 
amendment. 

There is the one remaining amend- 



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4483 



ment, other than the Dodd amend- 
ment, which is the phosphoric acid 
amendment. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, 
the one clear message that the Ameri- 
can public and the Congress are send- 
ing to the President this year is that 
they are not happy with the direction 
of this country. They are demanding 
change. More than any other legisla- 
tion in the Congress, or in recent 
history, for that matter, the National 
Energy Security Act • this energy bill 
now pending • has the potential to 
bring about that change. It promises 
far-reaching changes that will have a 
profound and positive impact on the 
American economy, on the environ- 
ment, and on the daily lives of the 
American people. 

The energy policy of the past two 
decades has led us to an 
ever-increasing reliance upon foreign 
sources of oil, the devastation of the 
domestic oil and gas industry, and the 
export of tens of thousands of Ameri- 
can jobs, and tens of billions of Ameri- 
can dollars. 

With this vote today, we are taking 
a monumental step toward changing 
that failed policy of the past, replacing 
it with a made-in-America energy 
policy for the future. 

With this vote, we are telling the 
American people that we get the mes- 
sage. We are willing to rise above 



partisan politics to tackle one of the 
most difficult and complex problems 
facing our country. We are capable, 
Mr. President, of delivering the 
changes needed to promote America's 
energy security. 

Mr. President, I suggest the absence 
of a quorum. 

The PRESIDING OFFICER. The 
clerk will call the roll. 

The bill clerk proceeded to call the 
roll. 

Mr. JOHNSTON. Mr. President, I 
ask unanimous consent that the order 
for the quorum call be rescinded. 

The PRESIDING OFFICER (Mr. 
Wofford). Without objection, it is so 
ordered. 

LDC BYPASS PROVISIONS 

Mr. FOWLER. Mr. President, I 
would like to commend the distin- 
guished Senator from Louisiana for 
his dedication and persistence to the 
pending national energy legislation. I 
would like to ask a question concern- 
ing one of the more contentious items 
addressed in the legislation which 
deals with the subject of natural gas 
local distribution company (LDC) 
bypass. 

I had the occasion some years ago to 
chair one of the Energy and Natural 
Resources Committee hearingB which 
was dedicated to this topic. I am well 
aware of the strong views held on 
both sides of the matter, and I believe 
it to be in the best interest of all to 
adopt the language in S. 2166, which 
states that neither the so-called op- 
tional certificate nor the enhanced 
section 311 procedures can be used to 
accomplish a LDC bypass if the LDC 
objects. 

Although the language in the Sen- 
ate bill does not fully satisfy the con- 
sumer groups, State public utility 



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commissions, and LDC's, it does seem 
to strike a politically realistic balance 
in that the new, streamlined, and 
enhanced regulatory procedures will 
not be available for bypass while the 
traditional Natural Gas Act section 7 
procedures will remain available. 

I would like to direct an inquiry to 
my distinguished colleague, the chair- 
man of the Energy Committee, as to 
what his intentions are during the 
conference with the House with re- 
gard to the bypass language embodied 
in the Senate bill? 

Mr. JOHNSTON. LDC bypass is 
one of a number of issues addressed in 
the natural gas provisions of the Sen- 
ate and House energy bills where the 
two Houses have taken somewhat 
different approaches. In order to 
reconcile the differences between the 
two bills in conference, some compro- 
mises and tradeoffs will be necessary. 

Therefore, while I cannot assure the 
Senator from Georgia that the Senate 
bypass language will emerge from 
conference intact, I can give him my 
assurances that in negotiating with 
the House I will do my best to pre- 
serve the balance and protect the 
interests that are reflected in the 
provision of the Senate bill. 

Mr. FOWLER. I thank the chair- 
man for his cogent response. 

MURKOWSKI STUDY AMENDMENT NO. 
2791 

Mr. WIRTH. Mr. President, Senator 
Murkowaki believes very strongly that 
we should open the Arctic National 
Wildlife Refuge to oil drilling. I hap- 
pen to believe that this is exactly the 
wrong thing to do. Now, I happen to 
think we have already had a lot of 
study of this proposal, but I am not 
averse to having it studied a little 
more. If nothing else, that might help 



bring some of the worst hyperbole 
about the benefits of drilling in the 
Arctic refuge under rein. 

Back at the beginning of the year, 
administration officials began tossing 
around rather large estimates of the 
number of jobs that would be created 
by oil development in the Arctic ref- 
uge. 

The President's budget message put 
this number at around 200,000. Oth- 
ers in the administration claimed 
735,000 new jobs. My colleague from 
Alaska quoted the 735,000 figure on 
this floor. 

The American Petroleum Institute 
bought full page ads using this figure. 
The really striking thing about this ad 
is the breakdown of how many jobs 
wiU supposedly be created in each 
State. California supposedly will reap 
80,000 new jobs. Florida and Illinois 
get about 30,000 new jobs. 

But Alaska only gets about 13,000 
jobs, Mr. President. The State where 
all this massive industrial develop- 
ment is to take place only gains 
13,000 new jobs according to this 
study. All the construction crews, the 
drilling crews, all the people involved 
to transporting all that equipment to 
the Arctic Circle, the people needed to 
feed, clothe, and house those workers 
- all the real jobs that would be creat- 
ed if oil was even found - amount to 
only 13,000 jobs. 

Please remember that Interior Sec- 
retary Hodel asserted that the chance 
of even a minimum amount of produc- 
ible oil - not the billions of barrels 
figures we always hear, but just a few 
hundred thousand barrels - was 19 
percent. In other words, Hodel 
thought the odds were 4 to 1 that no 
oil development would take place. 

In fact, Mr. President, the Depart- 
ment of the Interior's environmental 



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impact statement on oil development 
in the Arctic refuge states that the 
actual number of people who will be 
employed for oil development in the 
Arctic refuge for the boom cycle of a 
few years of construction would be 
about 6,000 people; 6,000 jobs, or 
13,000 jobs, is nothing to sneeze at. 
But here we are asked to believe that 
in the rest of the country; in Hawaii, 
Vermont, Kentucky, and every other 
State in the Nation, 700,000 other 
jobs would be created. These absurdly 
inflated job estimates come from a 
study commissioned by the American 
Petroleum Institute back in 1990. We 
did not hear much about it back then, 
Mr. President, because the study is 
embarrassingly flawed. But now job 
creation is the new political hot potato 
• so this study was resurrected. 

These numbers are not based on 
real jobs which might be created in 
construction or in the oil industry. 
They are, instead, based on a projec- 
tion that finding oil in the Arctic 
would have a major effect on the 
whole national economy. But that 
projection, and the conclusion that 
opening the Arctic would create 
700,000 jobs, is founded on two as- 
sumptions which we know are simply 
not true. 

The first false assumption is that oil 
from the Arctic refuge would reduce 
world oil prices by $3.60 a barrel. 
That is simply wrong. ANWR produc- 
tion - if there was any - would range 
from 0.1 percent to 2.2 percent of 
total world demand. So it is not very 
much in the context of the world mar- 
ket. 

But even more important to remem- 
ber is that the Middle Eastern nations 
have the ability to swamp any effect 
that ANWR might have with their 
own ability to turn production up or 



down. Kuwait and Iraq produced 
nearly 10 percent of the world's oil, 
but their removal from the world 
market was quickly replaced by their 
OPEC neighbors. 

According to a February 1992 report 
by the Congressional Research 
Service's Economics Division, the 
likely effect of additional supplies 
from ANWR would be that, 'OPEC 
may cut output * * * to offset the 
supply effect of ANWR, as it usually 
has in similar situations.' 

The result of that, Mr. President, 
would be little or no change at all in 
oil prices. 

The second false assumption is that 
lower oil prices create jobs. In the 
first place, lower oil prices can cost us 
as many or more jobs as it may create. 
It is low oil prices that have cost us 
400,000 real jobs in oil and gas pro- 
duction over the past decade. 

And if you think that low oil prices 
cause the general economy to boom, 
why is our economy in the shape it is 
in, at a time when oil prices have been 
stuck lower than they were before 
Desert Storm started? 

In December 1990 oil prices were 
about $26 a barrel. Today, they are 
$6 lower than that • about $20 a bar- 
rel. Has that added thousands of jobs 
to our economy? Does our economy 
look more robust now than it did a 
year ago? 

The price drop over the past 14 
months is twice what the authors of 
this study claim would produce 
735,000 jobs. But where are the jobs, 
Mr. President? Right now, low oil 
prices are costing us jobs, as those low 
prices strangle our domestic oil and 
gas industry. The Senate just voted by 
an overwhelming margin to change 
the tax rules to give a billion dollars' 
worth of tax relief to oil and gas pro- 



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duoers precisely because lower prices 
have decimated the oilpatch. 

Mr. President, there are many other 
faulty assumptions that went into this 
job projection. The study simply as- 
sumes that we will find oil in ANWR, 
even though the Department of the 
Interior says the odds are that we will 
not. Then it assumes that we will 
find every potential oilfield there 
chock full of oil - something the De- 
partment of the Interior says has less 
than a 1 in a 100 chance. 

Then, Mr. President, we should not 
forget that any jobs created by open- 
ing ANWR would not, for the most 
part, happen until sometime after the 
year 2000. The oil industry has testi- 
fied that the earliest we could get oil 
from the Arctic Refuge is 10 years 
after leasing - and that it could take 
even longer. Members should know, 
too, that there is lots of oil available 
outside the Arctic Wildlife Refuge on 
Alaska's North Slope. There are sever- 
al very large known fields, fields with 
literally billions of barrels of oil in 
them, just sitting there. Why are they 
sitting? Because today's low oil prices 
make producing them unprofitable. 
The same could well happen in the 
Arctic Refuge. 

In short, Mr. President, talk of 
opening the Arctic refuge creating 
thousands upon thousands of jobs is 
unsupported by any reasonable analy- 
sis. 

Of course oil development would 
create some jobs, as would OCS devel- 
opment off California or the Florida 
Keys, or damming the Grand Canyon 
to provide cheap hydroelectric power. 
But that does not mean we should do 
these things. 

If we are lucky, the study Senator 
Murkowski has proposed will take 
these facts into account, and help rein 



in the wild and incredible projections 
that have been bandied about on this 
issue. 

UNANIMOUS CONSENT AGREEMENT 

Mr. JOHNSTON. Mr. President, I 
will shortly ask for a unanimous con- 
sent agreement on the Dodd amend- 
ment. It has been worked out, al- 
though we are adding one final clause. 

I thank the Senator from Connecti- 
cut and the Senator from Texas (Mr. 
Gramm) for working out this very 
difficult and contentious matter. It is 
not finally worked out to the satisfac- 
tion of either one because the issue 
has not been disposed of, but at least 
this unanimous consent agreement 
will give a measure of procedure to 
deal with this. 

So, Mr. President, I ask unanimous 
consent that when the Senate next 
receives from the House a message on 
S. 2733, the GSE bill, and the Senate 
has disposed of the motion to disagree 
to the House amendment, that the 
Senate be deemed to have agreed to 
either a motion to request a confer- 
ence with the House or have agreed to 
the House request for a conference, 
without any intervening action or 
debate, and that the Chair be autho- 
rized to appoint conferees on the part 
of the Senate; provided further, that 
no amendment dealing with the sub- 
ject of limited partnership rollups will 
be in order to any legislation prior to 
the Senate reconvening on September 
8, 1992. 

Mr. President, before I put that 
unanimous consent I yield to Senator 
Dodd. 

Mr. DODD. Mr. President, I thank 
the Senator for yielding. 

Let me add that I have made an 
assurance to Senator Gramm of Texas 
that I will notify him a day in advance 



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of the day which I plan on offering an 
amendment dealing with the topic of 
limited partnerships. 

This is not necessarily part of the 
unanimous consent agreement but as 
a statement to be included in the 
context of the unanimous consent 
request that is now pending by the 
Senator from Louisiana. 

Mr. JOHNSTON. Mr. President, I 
now put the request. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. DODD. Mr. President, I ask 
unanimous consent that I may be able 
to withdraw the Wellstone amend- 
ment. 

Mr. JOHNSTON. As amended by 
the Dodd amendment. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

The amendment (No. 2789) was 
withdrawn. 

Mr. DODD. Mr. President, I with- 
draw my own amendment (No. 2790) 
as well. 

The PRESIDING OFFICER. The 
amendment is withdrawn. 

The amendment (No. 2790) was 
withdrawn. 

Mr. DODD. Mr. President, if I could 
just take 30 seconds, I want to person- 
ally thank Senator Johnston and Sen- 
ator Wallop, as managers of the legis- 
lation, for their great patience and for 
the consideration they have shown to 
me, both yesterday evening and today. 
I also want to thank my colleague 
from Minnesota, Senator Wellstone, 
who offered the underlying rollup 
amendment on my behalf last night, 
so that I could offer a second-degree 
amendment to that amendment. I 
thank him for his willingness to ac- 
commodate me on a procedural mat- 
ter. 

Mr. President, I am willing to with- 



draw my amendment today, in order 
to help my friend from Louisiana 
advance this legislation. I also believe 
the unanimous consent agreement 
we've worked out will greatly advance 
the prospects for seeing the rollup 
provisions adopted as part of the GSE 
legislation. 

As my colleagues know, the rollup 
measure was passed overwhelmingly 
by the Senate just a few weeks ago, as 
part of the bill to reform 
Government-sponsored enterprises. 
Eighty-seven Members of this body 
voted against a motion to table the 
amendment. That's 87 Senators who 
supported this measure. And yet, my 
friend from Texas decided that the 
wishes of 87 of his colleagues • and, I 
might add, the wishes of millions of 
investors througout this country - 
should be disregarded, because he does 
not like the measure. 

He has indicated in the past that he 
would do everything possible to pre- 
vent rollup reform from becoming the 
law of the land. And, so, he raised 
procedural roadblocks to a 
much-needed bill to reform 
Government-sponsored enterprises - a 
bill which passed by a vote of 77 to 19, 
and which also contains provisions on 
lender liability and a host of other 
carefully developed provisions sup- 
ported by our colleagues. 

Mr. President, I felt I had no other 
choice but to offer this amendment 
gain last night, and let the Senate 
work its will yet another time. But, 
as my colleagues know, last night, 
after I offered the amendment, my 
friend from Texas indicated that he 
would offer the crime bill and other 
matters to the energy bill - again in 
an effort to thwart the will of the 
Senate and prevent the rollup bill 
from becoming law. 



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We made an attempt to work on the 
problems he identified in the bill, and 
last night, I thought we had an agree- 
ment. But this morning, my staff was 
advised that Senator Gramm had 
asked that the entire dissenters rights 
provisions of the bill be dropped - and 
made into a study. It was represented 
to us, quite simply, that the case had 
not been made. I would remind my 
colleague that the dissenter's rights 
provisions are the provisions designed 
to prevent limited partners who vote 
against a rollup from having a bad 
deal literally crammed down their 
throats. No one can say, after review- 
ing the record of abuses in these 
transactions, that the case has not 
been made for protections in this area. 
So, of course, I could not agree to drop 
these important provisions. 

Mr. President, the Limited Partner- 
ship Rollup Reform Act was intro- 
duced over a year ago. There are now 
74 Senate cosponsors. 

My colleagues and I have received 
thousands of letters on this issue. 
Our constituents - not special inter- 
ests, but small investors in our States 
- have documented a long record of 
abuse in limited partnership rollups. 
They have been ripped off, they are 
mad and they are upset. They have 
asked for our help. 

And, yet, we are told, the case has 
not been made for action. 

Mr. President, I am deeply disap- 
pointed that we have not been able to 
enact this measure at this time. How- 
ever, I want it to be clear that this 
issue will not go way. 

I believe that the action we took 
today will advance considerably the 
chances of enacting this bill. 

I am satisfied that with this 
unanimous consent agreement, we will 
be able to revisit this legislation before 



adjournment this year and pass this 
legislation, which goes a great dis- 
tance to protect small investors. 
There are approximately 8 million 
small investors in limited partner- 
ships, many of whom have invested a 
great share of their savingB in these 
arrangements. Many of those people 
are in jeopardy today, and until we 
pass some legislation that offers pro- 
tection to them, they will remain in 
jeopardy. 

I will do my very best to see that 
the legislation is adopted, and the 
unanimous consent agreement pro- 
vides us the chance of doing that. 

Again, I want to thank my two good 
friends from Louisiana and Wyoming 
and apologize for causing them any 
delay in the consideration of a very 
good bill that they have brought to 
the floor. I hope we will be able to 
pass this energy bill very briefly and 
move on to other matters. I thank 
them for their patience and consider- 
ation and for their help in bringing us 
to the point where we have been able 
to adopt this unanimous consent 
agreement. 

Mr. JOHNSTON addressed the 
Chair. 

The PRESIDING OFFICER. The 
Senator from Louisiana is recognized. 

Mr. JOHNSTON. Mr. President, I 
thank the Senator from Connecticut 
very much and strongly support him 
in his rollup legislation. 

Mr. President, I have made some 
study of this rollup legislation, and I 
can tell him that it is, in my judg- 
ment, an outrage the kind of skin 
game that is going on with some of 
those who wish to take advantage of 
rolling up, that is, combining, collating 
these real estate partnerships, putting 
them together under one partnership 
and using it for the benefit of the 



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corporate head who takes it over rath- 
er than for the benefit of the stock- 
holders. 

I will certainly help him on another 
piece of legislation wherever it may 
be. But I thank him for working out 
the procedure by which he will consid- 
er that matter on another bill. 

Mr. President, what is the pending 
business? 

The PRESIDING OFFICER. The 
pending business is the committee 
substitute to H.R. 776. 

Mr. BAUCUS addressed the Chair. 

The PRESIDING OFFICER. The 
Senator from Montana. , 

Mr. BAUCUS. I wonder if I might 
engage in a colloquy with the chair- 
man of the committee regarding juris- 
diction of the EPW Committee with 
respect to EPW issues in the House 
bill. There are provisions in the 
House energy bill which very directly 
deal with the jurisdiction not of the 
Energy Committee but of the Envi- 
ronment and Public Works Commit- 
tee. 

I compliment the chairman on his 
bill for going the extra mile to come 
up with a bill basically staying with 
the jurisdiction of the Energy Com- 
mittee. I am wondering if the chair- 
man of the committee would consent 
to the two EPW members - which I 
know the chairman has already 
agreed to with respect to the nuclear 
provisions, the jurisdiction of the 
EPW committee - to also agree that 
those two members, the chairman of 
the committee, Chairman Burdick, 
and Senator Chafee will be conferees 
with respect to - and I can name them 
here - several sections of the House 
bill which deals directly with the juris- 
diction of Environment and Public 
Works Committee. I could read the 
sections, but they have to do essential- 



ly with carbon dioxide emissions con- 
trols, language taken directly from the 
Clean Air Act, also in the House bill 
legislation, which is essentially lan- 
guage in a bill introduced on this side 
which was referred to the EPW com- 
mittee. 

I can go over the sections with the 
chairman if he would like to. But I 
would just like to ask the chairman 
what he intends to do with respect to 
those provisions. 

Mr. JOHNSTON. Mr. President, 
first of all, as the Senator from Mon- 
tana, my good friend, knows, I have 
made every effort to fully cooperate 
with both him and the Environment 
and Public Works Committee. 

Just to recount, we had a waste oil 
provision that we felt strongly about 
on the committee but that the Sena- 
tor from Montana also felt strongly 
about. He asked that we drop that, 
and we did. There was another provi- 
sion with regard to WEPCO, which 
was in the bill and had cleared the 
committee but the Senator felt strong- 
ly about that and we dropped that. 

I mention that simply to point out 
our desire in passage of the bill to 
accommodate the EPW Committee. 
Now that the bill has passed - and by 
the way, Mr. President, we have ap- 
preciated very much the leadership of 
the Senator from Montana and his 
help on the committee. He has been 
very helpful. It has been really a 
team effort in that respect. 

Now when it came to conferees, Mr. 
President, the usual procedures oh a 
conference is that the committee who 
has handled the bill, the one to which 
the bill has been referred, appoints 
the conferees. But because we had 
received a request from the Environ- 
ment and Public Works Committee, as 
well as the Commerce Committee and 



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the Banking Committee, who had a 
great interest in the bill, I had agreed 
- 1 had not spoken for the Republican 
minority, but from my own standpoint 
as chairman - to have a member ap- 
pointed, the chairman and ranking 
minority member of each of those 
committees, to serve on the confer- 
ence and was not going to contest that 
at all. And as a matter of fact, I 
think that their presence there will be 
helpful. I have suggested that not out 
of recognizing their right to do so, - 
because even though matters might be 
in their jurisdiction, it is not necessar- 
ily a custom to do that - but I think it 
is a good custom to do it and it has 
been followed in some cases. 

Now with respect to the particular 
matters at issue, for example, the 
so-called global warming matter is a 
highly contentious matter. The ques- 
tion of where that jurisdiction resides 
is, I do not know whether it is disput- 
ed or whether it is joint between the 
Energy Committee and the Environ- 
ment and Public Works Committee, 
but in any event it is not in the Sen- 
ate bill. And the House provision is a 
rather innocuous provision, as I recall. 
It may still be highly contentious, but 
from my standpoint it is rather innoc- 
uous. 

Suffice it to say that I could not 
agree to that particular measure with- 
out, in my view, having a big fight 
over a relatively small matter. Since 
it is not in the Senate bill, I do not 
think it is any precedent; in other 
words, I am not attempting to resolve 
that question of whether you have 
jurisdiction or do not have jurisdiction 
over that particular measure. But I 
hope the Senator would let us go for- 
ward with the up-front offer of the 
chairman and ranking minority mem- 
ber on those principal measures in 



which he has an interest and let us go 
forward without global warming. 

Believe me, global warming is so 
exceedingly contentious. Frankly, I do 
not understand why it should be so 
contentious. I would be willing to do 
some things in global warming per- 
haps that my other colleague from 
Montana would not be willing to do. 
But we are not going to solve or pre- 
vent from solution the global warming 
problems in this measure. My guess is 
that global warming will not end up in 
the final report. That is just my 
guess, because it is not worth fighting 
over and would probably provoke a 
good big fight. 

So what I am asking of my dear 
friend, who has been so helpful on 
this bill, is that I hope he will recog- 
nize that I had tried my best to be 
cooperative with EPW. And I hope 
that is a relationship that will contin- 
ue, and I am sure it will, at least from 
our standpoint, and I am sure it is 
from the standpoint of the senior 
Senator from Wyoming. But I hope he 
will let us move forward without pro- 
voking what I think might be a diffi- 
cult sticking point over a small mat- 
ter. 

The PRESIDING OFFICER (Mr. 
Pryor). The Senator from Montana. 

Mr. BAUCUS. Mr. President, I ap- 
preciate what the chairman of the 
committee has just said. I must say, 
these are not innocuous, small mat- 
ters. Let me read the provision of the 
House bill, on page 465, section 1317. 
The title 'Early Banking of Emissions 
Credits for Efficiency Improvements 
from the Application of Clean Coal 
Technologies. ' It goes on to say: 

The Secretary, in consultation with the Admin- 
istrator of the Environmental Protection Agency, 
•hell promulgate regulations within IS months 
after the date of enactment of this section Is 



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establish baseline emissions of carbon dioxide 
from existing utility sources that apply clean coal 
technologies. For purposes of the preceding sen- 
tence, baseline emissions for sources subject to 
title IV of the Act entitled 'An Act to amend the 
Clean Air Act to provide for attainment and 
maintenance • • •. 

That is the Clean Air Act. That is 
pretty basic, to establish baseline 
emissions of carbon dioxide. If any- 
thing is in the Environment and Pub- 
lic Works Committee, it is the Clean 
Air Act - anything in the jurisdiction 
of the committee. This is language 
referring directly to the Clean Air Act. 

I can go on. The other sections are 
1604 and 1605 with respect to C02 
and global warming. Again, it directly 
refers to the Clean Air Act and emis- 
sions trading which is the heart - one 
of the cornerstones of the Clean Air 
Act we just passed not too long ago. I 
am not saying they are not partially 
within the jurisdiction of the Energy 
Committee. I am not competent to 
address that question. I certainly am 
competent to address the question of 
whether they are in the jurisdiction of 
the EPW Committee. It is clear they 
are. In fact, the language, which I 
will read if the Senator would like me 
to read it with respect to sections 
1604 and 1605, is language in a bill 
which was referred to the Environ- 
ment and Public Works Committee. 

I am not asking for more conferees. 
I am just asking that the two confer- 
ees from the EPW Committee be able 
to conference not only on the nuclear 
energy portions with respect to the 
jurisdiction of the EPW Committee 
but also conference on these issues. I 
mean the chairman - he may be the 
chairman of the conference. I do not 
know. Certainly, the chairman of the 
Senate conferees. 

There will be other conferees there 
in addition to the two conferees from 



the Environment and Public Works 
Committee, which is to say the chair- 
man will certainly have more than his 
say in the conference, as it should be. 
We are just asking the chairman of 
the committee and the ranking mem- 
ber of the committee at least be able 
to sit down and attend the conference 
with respect to issues within the juris- 
diction of their committee. 

The PRESIDING OFFICER. The 
Senator from Wyoming. 

Mr. WALLOP. Mr. President, I 
would say to my friend from Montana, 
one of the things he well recognizes 
about the bill and its passage through 
this House in the first place was that 
we tried very hard to make it an ener- 
gy bill, energy conservation, energy 
production bill. And we tried equally 
hard and equally successfully to keep 
it from being a Clean Air Act, a Clean 
Water Act, or any such thing. It was 
an energy policy bill. 

I have to say if this bill should come 
back from conference with carbon 
dioxide credit systems and global 
warming and other kinds of things, we 
will not have, as close as we have 
come, an energy policy. I just feel 
that strongly about it. 

This bill should come from confer- 
ence as it goes to conference from the 
Senate, as an energy policy bill and 
not an environmental bill. To confuse 
those things will be to dilute the ef- 
forts that we have so steadfastly pur- 
sued in trying to make a balanced bill 
both from the standpoint of produc- 
tion and conservation. 

There are environmental benefits 
from the conservation provisions of 
this bill. Make no mistake about it - 
enormous environmental consequenc- 
es to the benefit of the country. But 
for us to get wandering off into the 
Clean Air Act, Clean Water Act, or 



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f 



other agencies of Government, would 
be a dreadful mistake, and it would 
mean for the first time that the Sen- 
ate and the House, the Congress, got 
close to making energy policy and 
sought to sacrifice that on some other 
alter. 

So I just lay down my strong opposi- 
tion to the request of the Senator 
from Montana. 

The PRESIDING OFFICER The 
Senator from Montana. 

Mr. BAUCUS. I do not quite under- 
stand the Senator from Wyoming. On 
the one hand, I hear the Senator from 
Wyoming saying he wants this to be 
an energy bill, not an environmental 
bill. 

On the other hand, the Senator is 
saying he objects to EPW being a 
member of the conference with re- 
spect to EPW matters. 

Mr. WALLOP. If the Senator would 
yield, we have agreed to a level of 
involvement for the Environment and 
Public Works Committee here. That 
has been crafted by the Senator from 
Louisiana and I presume with the 
chairman of the Environment and 
Public Works Committee. 

Mr. BAUCUS. Mr. President, might 
I ask the chairman and ranking mem- 
ber of the committee if they might be 
interested in an alternative course 
here? That is to state they will resist 
in conference these provisions of the 
House bill? That is those that deal 
with jurisdiction of the Environment 
and Public Works Committee? That 
would be, essentially, sections 1317 
dealing with C02 emissions banking; 
sections 1604 and 1606 with respect to 
carbon dioxide and global wanning; 
emissions; and portions of section 
2121 dealing with pollution preven- 
tion. 

Mr. WALLOP. That has an absolute 



commitment from the Senator from 
Wyoming on those issues. 

Mr. JOHNSTON. Mr. President, I 
am becoming reacquainted here with 
those sections. We have a provision in 
our bill with respect to least cost plan- 
ning. The Secretary would prepare a 
least cost plan, taking into consider- 
ation C02 emissions. I think that is 
more of a general - that is no baseline 
for the Clean Air Act, that is for least 
cost planning for utilities, I believe, 
and for the Nation as a whole. 

So that part is in the Senate bilL 
And I think that part was within our 
jurisdiction and I do not believe would 
be within your jurisdiction. 

I think those other matters with 
regard to Clean Air Act, it would cer- 
tainly be my inclination, not under- 
standing them very well, but, clearer, 
to resist those as I have said earlier. 
In other words, I have no agenda to 
seek those out and pass those. That is 
my inclination. If you will trust me 
that I am not fully acquainted with all 
of the intricacies of them - that is my 
general feeling. 

And my friend from Wyoming; you 
have heard him state in very dear 
terms - I think he probably is mors 
acquainted with these provisions than 
I. If he feels very strongly about it, I 
am sure that means we would both 
resist them. 

The PRESIDING OFFICER. The 
Senator from Wyoming. 

Mr. WALLOP. If the Senator from 
Montana would yield again, it is clear 
that these are public parts of that 
legislation, and the Senator's view on 
them is easily transmitted to either of 
us. I appreciate particularly the view 
that I just heard expressed by the 
Senator from Montana on those par- 
ticular issues. 

So my own recommitment is yes, I 



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will resist that. 

The PRESIDING OFFICER. The 
Senator from Montana. 

Mr. BAUCUS. Mr. President, with 
the commitments given by the Sena- 
tor from Wyoming, and as I under- 
stand the commitment given by the 
Senator from Louisiana, namely, to 
resist those sections in the House bill 
that I mentioned particularly insofar 
as they refer to the jurisdiction of the 
Environment and Public Works Com- 
mittee - and I do believe that is the 
understanding that I have from him, 
the Senator from Louisiana • I would 
be inclined to no longer resist the 
Senate going forward with this bill. 

Might I again clarify the intention 
of the Senator with respect to those 
sections? Is the Senator saying in 
conference he will resist those sections 
that I indicated? 

Mr. JOHNSTON. Mr. President, I 
am not trying to hedge my response. 
I am simply trying to tell the Senator 
I do not fully understand the three 
provisions. 

But it is my feeling at this point 
that is exactly what I would do; that 
is, resist those. Let me put it this 
way: If there would be any change in 
attitude, I would certainly consult 
with the Senator from Montana. And 
I do not know why there would be a 
change in attitude. Also, you have to 
understand that, in a conference, I do 
not know how strongly the other side 
would be pushing for these matters 
and whether it would be a deal break- 
er if we did not go along with some 
language. I am sure that is not the 
case. But with that caveat, I can say, 
yes, the Senator has accurately stated 
my position. 

Mr. BAUCUS. Mr. President, with 
that understanding, and I appreciate 
the comments of the Senator from 



Wyoming and the Senator from Loui- 
siana, I will not resist the Senator 
going further on this bill. But it is 
important to realize that if the House 
were to press these issues that the 
Senate conferees do resist them. And 
I also understand the chairman will 
consult with me, and appropriate 
members of the committee. 

Mr. WALLOP. If the Senator will 
yield, should it be we cannot resist 
forcefully enough and they come back 
here with it, I will join with the Sena- 
tor. 

Mr. BAUCUS. I thank both Sena- 
tors. 

The PRESIDING OFFICER. Is 
there further debate? 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the one re- 
maining amendment that was part of 
the unanimous consent agreement 
entered into last night, the amend- 
ment from the Republican leader, Mr. 
Dole, on solid waste disposal and phos- 
phoric acid, be dropped from that list. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. WELLSTONE. Mr. President, 
let me begin by expressing my appreci- 
ation to the chairman and ranking 
minority members of the Senate Fi- 
nance Committee and the Senate 
Energy Committee for their leadership 
and cooperation during the Senate 
consideration of H.R. 776. They have 
successfully navigated a comprehen- 
sive energy package through the Sen- 
ate, one which now includes some 
important tax provisions to comple- 
ment the Senate's action earlier this 
year on S. 2166. 

Of particular importance are the 
provisions of title XIX, the new Fi- 
nance Committee provisions, which 
assist energy conservation and renew- 
able energy technologies. These provi- 



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sions extend existing tax credits which 
expired at the end of June, and autho- 
rize new tax incentives for both re- 
newable energy and energy efficiency 
technologies. Earlier this year, I 
joined with a number of my colleagues 
in urging the Finance Committee to 
adopt these provisions because of their 
critical importance to the continued 
existence of a renewable energy indus- 
try in our country. 

The provisions in title XDC regard- 
ing coal miners health care also of 
particular importance to me. The 
efforts of my distinguished colleagues 
from West Virginia and Kentucky - 
Senator Rockefeller, Senator Byrd, 
and Senator Ford - in securing posi- 
tive action to protect the health care 
benefits of retired miners and their 
dependents has resulted in a major 
accomplishment. I strongly encourage 
the Senate conferees to insist on re- 
taining these provisions in the final 
legislation. 

Mr. President, despite these positive 
accomplishments, this legislation still 
retains many negative features. Earli- 
er this year, I expressed my concerns 
with the provisions of S. 2166 which 
are now incorporated into H.R. 776. 
At that time, I explained my vote 
against final passage of the bill at 
some length. In part, I explained: 

When ell b Mid end done, I believe that while 
this bill he* been improved, it still retain* eerious 
flaws. It violates many of the principles I believe 
ars important, pri n c i p l es of public participation 
in decisionmaking, principles of protecting the 
consumer and taxpayer, principles of preserving 
due process for farmers and ranchers. Further, 
on balance 3. 2 166 proposes too much support for 
nuclear power and coal, and too little for renew- 
able energy and efficiency. Finally, I cannot 
defend this legislation as representing an energy 
policy which responds to our most urgent prob- 



In deciding how to cast my vote 
today, I take particular note of the 



new provisions which are before the 
Senate for the first time • the provi- 
sions reported by the Senate Finance 
Committee. Again, I believe that in 
deciding my final vote I should exam- 
ine these provisions in their totality. 

While the Finance Committee's title 
has some very positive provisions, on 
balance it still represents a continua- 
tion of the status quo - it supports 
continued use of fossil fuels more than 
a transition to renewable energy 
sources. It provides some $400 million 
in tax incentives for renewable energy 
sources, but gives new tax breaks to 
the oil and gas industry worth over 
$1.5 billion - tax breaks which I joined 
Senator Bradley in trying to strike 
from this bill The tax benefits for 
the oil and gas industry counterbal- 
ance all of the title XDC's provisions 
for solar energy, windpower, hiomass 
fuels, alternative fuels, energy conser- 
vation, and increased transit riderahip 
combined. 

These new tax provisions will effec- 
tively make a bad situation somewhat 
worse. A study conducted by the Cen- 
ter for Renewable Resources in 1985 
concluded that existing Federal laws, 
particularly the tax laws, provide 
major subsidies for nuclear power and 
fossil fuels and far less support for 
renewable energy sources. That study 
concluded, for example, that the an- 
nual subsidies for nuclear 
amounted to some $15.56 
those for oil production totaled $8.58 
billion annually, while renewable ener- 
gy sources received only $1.7 billion 
per year. 

In its totality, therefore, this bill's 
provisions continue to support fossil 
fuels and nuclear energy more than 
energy efficiency and renewable < 
gy sources. For this reason, I will i 
my vote against RR 776 on final pass 



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Perhaps in the future, the Congress 
will see fit to begin unraveling the 
complex laws which subsidize fossil 
fuels and undermine investments in 
energy efficiency and renewable re- 
sources. This bill does contain a pro- 
vision which I believe could lay the 
groundwork for progress in this direc- 
tion. 

An amendment I offered to S. 2166 
which was adopted by unanimous 
consent, and which Representative 
Sikorski successfully offered to the 
House bill, requests that the National 
Academy of Sciences conduct a com- 
plete study of how the government 
distorts the energy marketplace. 

Specifically, this provision directs 
DOE to contract with the National 
Academy of Sciences to prepare a 
study quantifying past and present 
direct and indirect subsidies for differ- 
ent energy resources. This study grew 
out of the response I received last 
summer to questions I had submitted 
to the Department of Energy. 

In testimony before the Senate, 
Energy Goals Act Hearing July 18, 
1991, the Department of Energy 
agreed that a broad range of Govern- 
ment actions impact the production 
and consumption of energy. But, 
DOE has not conducted a study of 
energy subsidies, nor has it updated 
earlier studies. Yet, DOE criticized 
earlier studies for their very biased 
view of Government action in the 
energy marketplace. 

What those previously attempting 
the task of quantifying energy subsi- 
dies have concluded is quite astonish- 
ing. In the 1970's the Battelle Memo- 
rial Laboratory conducted a study of 
energy subsidies which concluded that 
$252 billion was allocated to energy 
producers between 1921 and 1978 - 
the bulk of which subsidized fossil 



fuels. In the 1980's, the Rocky Moun- 
tain Institute concluded that there 
were over $40 billion in annual subsi- 
dies from various laws and regula- 
tions, and again they concluded that 
fossil fuels received the lion's share. 

These studies demonstrate the criti- 
cal importance of embarking upon 
this discussion. The energy bill before 
us today might amount to several 
billion dollars of programs and incen- 
tives over the next 5 years. For all of 
our labors in producing this 
1,000-page-plus new energy bill, the 
sum total of its influence on the mar- 
ketplace will only be a fraction of 
what studies indicate existing subsi- 
dies already exert. In fact, the influ- 
ence of existing subsidies may exceed 
the impact of this bill by a factor of 5, 
10, or even more. 

Given tight Federal budget - bud- 
gets which cannot find the money to 
fund essential health, education, and 
other programs • it is time for Con- 
gress to begin the hard job of making 
new energy policy by unraveling exist- 
ing subsidies instead of simply adding 
more subsidies to the mix. If previous 
studies are correct, it should be more 
cost-effective, and more influential 
upon the marketplace, for Congress to 
address the tens of billions of dollars 
in existing subsidies rather than cre- 
ating a few new programs to promote 
energy policy priorities. 

To begin this process, Congress 
needs a starting point • that is what I 
hope this National Academy Study 
will provide. An inherent problem for 
any study of subsidies to overcome is 
the fact that what one person may 
view as a subsidy another person will 
view as a legitimate business expense. 
Therefore, it is imperative that any 
such study be conducted by an impar- 
tial group, one which takes no ideolog- 



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ical stance for or against on energy 
source or fuel. Impartiality is essential 
if any such study is to be an effective 
policy instrument. In my view, the 
National Academy of Sciences has 
such a track record of impartiality 
and its work product will have wide- 
spread credibility. Moreover, a thor- 
ough examination of energy subsidies 
will require a great deal of sophistica- 
tion. Unraveling the actual market 
distortion of various tax provisions, 
regulatory laws, agency programs, and 
other Government actions will de- 
mand the type of expertise which the 
Academy embodies. 

Mr. President, virtually every ener- 
gy interest group testifying before the 
Senate Energy Committee told us 
they only wanted a level playing field. 
In fact, I believe that if one took the 
time to look back through the Energy 
Committee's hearings over the past 
decade one would find they have been 
asking us to give them a level playing 
field for many years. This provision, 
therefore, may be the only provision of 
this bill which responds to the re- 
quests of every interest group. This 
amendment will give us the informa- 
tion we need to discover where the 
level playing field really lies. 

While I cast my vote against this 
bill because the tax provisions contin- 
ue subsidizing fossil fuels over renew- 
able energy sources, I do wish to call 
to the attention of my colleagues this 
important provision. A provision 
which I hope will help future Con- 
gresses begin to make a fundamental 
change in energy policy, to begin a 
transition away from fossil fuels and 
toward energy efficiency and renew- 
able energy technologies, and to do so 
in a fiscally responsible and economi- 
cally efficient way. 

Mr. BRADLEY. Mr. President, 



when we moved to the energy nil 
yesterday, there was circulated a long 
list of amendments. While those 
amendments covered the widest vari- 
ety of issues, both relevant and irrele- 
vant to the underlying bill, one area 
not covered was natural gas 
prorationing. This issue, which 
sounds technical and arcane, is any- 
thing but. It's volatile, intensely con- 
troversial, and has spawned - un- 
known to many of my colleagues - 
some of the sharpest vitriol associated 
with this bill. 

At the center of the energy bill is a 
new and greater commitment to natu- 
ral gas. We streamline pipeline siting 
and promote natural gas vehicles. We 
open the door for increased gas use in 
electric utilities and industry. Wher- 
ever you look and however you ana- 
lyze it, you will see in this bill an en- 
dorsement of natural gas as a fuel of 
choice for America's future. 

Mr. President, this bill represents a 
logical step. The Congress has for 
almost 15 years pushed to create com- 
petitive markets for gas. With each 
legislative step, we've dismantled an- 
other part of the huge regulatory 
machine that controlled gas markets 
for decades. Today, we're doing 
things much differently than we did 
even a decade age. We don't have 
price controls. We don't have the 
Fuel Use Act. We have a gas transpor- 
tation system that's open access. We 
have direct price negotiation between 
the customer and the producer. We 
have competition between gas produc- 
ers for market share. We have abun- 
dant supply. We have low prices. 

It is in this context that I first be- 
came aware and, ultimately, alarmed 
about the issue of natural gas 
prorationing. Prorationing is an issue 
that, although esoteric, is as old as 



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the oil business. In the dawn of the 
oil business, wellfields in Pennsylvania 
and Ohio were quickly drained by oil 
producers who had no way to protect 
their fields. Under the rules of cap- 
ture which governed property rights, 
mineral production was a 
use-it-or-lose-it proposition, with each 
driller racing to exhaust a shared 
reserve. Prorationing, which estab- 
lished and protected correlative rights, 
was a natural and appropriate re- 
sponse to this oilfield free for all. And 
the same, legitimate rationale for 
prorationing is applicable still. 

The problem that I discovered, how- 
ever, had three aspects. First, a series 
of so-called reforms in prorationing 
were proposed last fall. Some of these 
reforms were implemented this past 
spring. Three States - Oklahoma, 
Texas, and Louisiana - were in the 
forefront. These three States also 
represent over 50 percent of domestic 
natural gas supply. 

Second, the rhetoric and public 
statements of many officials and 
oilmen were unambiguous and threat- 
ening. When the Energy Committee 
held a hearing on this on June 18, I 
submitted for the Record some 12 
pages of quotes from the press that 
stated that the prorationing effort 
had a simple goal. Accordingly to one 
headline, all these reforms were, 
'motivated purely by price.' 

Third, the gas market itself seemed 
to back up this tough talk. Prices 
were historically low in January and 
February. Four warmer than expected 
winters and a national recession had 
taken a toll. Most analysts pointed to 
an anemic spring market, since almost 
without exception the slackened de- 
mand that accompanies warmer 
weather means even lower prices. But 
this did not happen. In fact, the op- 



posite, the improbable occurred: prices 
shot up. The price for May deliveries 
of gas shot up 30 percent in just 6 
days in mid-April. 

Naturally, the thought of 
State-sanctioned price controls is ab- 
horrent. We have not worked for 15 
years to free markets for gas so that 
they can be manipulated by a few 
States. Mr. President, these concerns 
were not mine alone. Last May, 34 
Senators endorsed an investigation of 
these developments. In the House, 
the Markey-Scheuer amendment was 
adopted by a strong majority of Mem- 
bers. This amendment attempts to 
balance Federal and State powers and 
make price manipulation by States 
illegal. 

I know there has been a lot of inter- 
est as to whether I would pursue a 
similar amendment here on the Sen- 
ate floor. Given my interest and obvi- 
ous concerns, such an action would be 
a natural event. But I will state today 
that I will forego at this time the 
pursuit of any such legislative remedy. 

Let me state quite clearly why I 
have made this decision. For the 
Record, I remain skeptical. First, I 
believe the Oklahoma prorationing 
law is bad for gas producers, and con- 
sumers. It targets only large wells 
and all large wells. It also targets 
seasonal purchases by utilities that 
are trying to buy gas in the period of 
lowest prices and demand. Second, I 
remain concerned that should these 
three States begin to coordinate cut- 
backs, we could easily see price manip- 
ulation that could threaten our na- 
tional interest and consumers. Lastly, 
I am not convinced that existing law 
provides a legal remedy for aggressive 
actions taken by the producing States' 
regulators. Following last month's 
Energy Committee hearing, I sent a 



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detailed set of questions to the De- 
partment of Energy on this issue. I 
have not received a reply. 

Mr. President, my concerns remain. 
But I'm willing to hold off. As a result 
of my involvement with prorationing, 
I have had extensive conversation 
with the key regulators. While the 
threat of many States working togeth- 
er remains, I cannot conclude - given 
the direct conversations I have had - 
that this is the goal or intention of 
many of those involved. The chair- 
man of the Texas Railroad Commis- 
sion, Lena Guerrero, and I have dis- 
cussed this at length. I respect her 
and I trust her. Her words have 
made an impact on me. She could not 
be stronger or more clear. She has 
stated forcefully the position of the 
TRC: Their prorationing reforms are 
not targeted at the consumer, as in- 
deed there are many gas consumers in 
Texas. Rather, she is certain that the 
adopted regulations - as opposed to 
some of the proposals that have been 
discus s e d at times - will remain a 
straightforward and necessary updat- 
ing of Texas prorationing authorities. 

I have had conversations with other 
legislators. Shortly after the Oklaho- 
ma statute was enacted, Congressman 
Synar called me directly to address my 
concerns. I believe he and others will 
work to see that we don't backslide 
into a system of production controls 
or a natural gas cartel. 

On account of this reassurance, I do 
not see a reason to push ahead at this 
time. As I said, I do have some re- 
maining skepticism. I have concerns. 
But I will wait both to see how the 
conference committee deals with the 
issue, and to see how the producing 
States implement their prorationing 
proposals. For the moment, at least, 
the advocacy of their representatives 



leads me to give them the benefit of 
my doubts. 

REINSURANCE EXCISE TAX 

Mr. SYMMS. Mr. President, during 
the Finance Committee markup of the 
energy bill, an amendment was added 
which would increase the tax on rein- 
surance purchased from foreign com- 
panies. U.S. insurance companies 
have opposed similar amendments 
over the past 2 years and are opposed 
to this amendment. The rate increase 
will raise the cost of reinsurance sold 
to consumers. In the current econom- 
ic climate, there is no justification for 
Federal action which would increase 
insurance costs. 

I am also concerned about the im- 
pact of the amendment on our rela- 
tions with foreign countries. The 
United States has negotiated waivers 
of the excise tax with more than a 
dozen countries. Those treaties re- 
duce the rate to zero on our treaty 
partners. However, a foreign reinsur- 
er would nonetheless pay a 1 percent 
tax, not zero, even if it qualified un- 
der the new rules. More recent trea- 
ties provide a waiver of the tax, but 
reduce the benefit of the waver if a 
foreign reinsurer places reinsurance in 
third countries that do not have simi- 
lar waiver in their U.S. tax treaties. 
The amendment would add a new 
three-part test for loss of the treaty 
benefit, in place of the one negotiated 
in the treaties. 

If foreign governments are to rejy 
upon these treaties, we must respect 
and abide by the terms of the treaty. 
Adopting a new test after ratification 
of these treaties will disrupt relations 
with our trading partners, and impair 
the ability of the U.S. Treasury to 
negotiate favorable terms for our 
multi-national companies doing busi- 



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nesses abroad. 

Only a few jurisdictions appear to 
be the target of this measure. But we 
have no assurance that are the only 
ones affected. I am very reluctant to 
impose a legislative solution to a prob- 
lem which may be of very limited 
dimension. I am even more wary of 
adopting a measure that disrupts 
relations with our major trading part- 
ners. 

An energy bill is a strange place to 
impose a tax on insurance companies. 
Indeed, the proposal originated in a 
recently introduced House tax bill, 
which was just the subject of hearings 
in the House and never in the Senate. 
In the view of the strong objections of 
U.S. insurers, we ought not act in 
haste, without fully understanding the 
impact of these actions. I urge the 
conferees to reject this proposal so 
that we do not adversely affect domes- 
tic companies and their policyholders. 

EXEMPT BOND VOLUME CAP FOR HIGH 
SPEED RAIL PROJECTS 

Mr. MACK. Mr. President, 
high-speed rail technology has proven 
itself in many industrialized countries 
throughout the world today. In fact, 
both the French and the Japanese 
have developed and currently run 
high-speed trains. High-speed rail 
offers a clean, efficient alternative to 
other forms of mass transit. Yet, the 
United States, which formerly has 
enjoyed the status as leader in trans- 
portation technology, now finds itself 
not only lagging behind our foreign 
neighbors but hindering our States 
ability to fund such public projects. 

The bond volume cap amendment 
does not ask for any unique or un- 
precedented exception to law or policy. 
It simply extends the same benefits 
available to States for funding other 



public projects such as airports, sea- 
ports, and solid waste disposal facili- 
ties to high speed rail projects. 

This change makes sense and is 
long overdue. I am pleased that my 
colleagues have joined in support of 
this amendment. 

INCREASING THE TAX-DEDUCTION FOR 
THE SELF-EMPLOYED 

Mr. MACK Mr. President, I wish to 
clarify my position in support of Sena- 
tor Specter's amendment offered yes- 
terday on the floor which would per- 
manently increase the tax deduction 
for health insurance costs for the 
self-employed from 25 to 100 percent. 
This increase makes insurance more 
affordable for self-employed individu- 
als and their families by granting 
them the same 100 percent deduction 
for health benefit costs currently 
granted to large businesses. 

I have consistently supported this 
provision which provides for fairness 
in the business community. This 
measure is contained in S. 1936, the 
Senate Republican health care task 
force bill of which I am an original 
cosponsor. In addition, this provision 
is included in the small business bill I 
introduced, S. 2727. 

I want to make one thing clear 
about my support of this amendment, 
however. I find it troubling that this 
body has forced upon itself rules 
which hamstring our ability to enact 
good policy. My vote in support of 
this amendment reflects my support 
for raising the health insurance de- 
duction as opposed to the revenue 
provisions used to pay for it. 

COAL HEALTH BENEFITS PROVISION - 
AMENDMENT NO. 2787 

Ms. MIKULSKI. Mr. President, I 
am glad to see that the Senate has 



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reached a compromise that will pro- 
tect retired coal miners' health bene- 
fits without imposing an unfair tax on 
the coal industry. This compromise is 
good for the retirees, but it also is 
good for coal miners in Maryland and 
elsewhere who were threatened by the 
original tax that was proposed. 

Coal mines in Maryland were clear- 
ly threatened by a planned tax of up 
to $l/hour, possibly more, on 
nonsignatory companies that would 
help pay for retirees' benefits. That 
proposal was unfair: it asked compa- 
nies that were treating their employ- 
ees fairly and keeping their promises 
to pay for someone else's problem. 
And if it went through, it would have 
hurt Maryland's coal mines and cost 
us jobs - both in western Maryland 
and in the Port of Baltimore, through 
which coal is shipped. 

That's why I worked with Senator 
Rockefeller this spring to help Mary- 
land get a fair deal. I told him I 
wanted to help him protect the retired 
miners in Maryland and across the 
country. But I also told him that I 
could only back him up if he promised 
to help the nonsignatory mines in 
Maryland. These mines never were 
involved in the agreement that the 
Bituminous Coal Operators Associa- 
tion made to their employees, and 
they shouldn't have to take on an 
unfair share of the burden to help the 
BCOA keep its promises. 

Senator Rockefeller did help Mary- 
land and other States, and has crafted 
a proposal that is fair to all coal mines 
and their workers. I want to congrat- 
ulate Senator Rockefeller for his dedi- 
cation and his hard work. Without 
him and without his genuine concern, 
120,000 coal miners and their families 
would be losing their health care next 
year. I'm happy to endorse this new 



agreement, and to see that coal min- 
ers will keep the benefits they earned. 
I'm also glad that that no coal-related 
jobs are threatened in Maryland or 
elsewhere. 

I support this compromise and I 
encourage the House of Representa- 
tives to join in endorsing it. 

BTHANOL USE AND THE FUTURE 

Mr. KERREY. Mr. President, I am 
pleased to announce that the percent- 
age of gasoline sold in Nebraska con- 
taining ethanol reached an all-time 
high in 1991. This represents the 
highest State average in the Nation. 
By volume, over 350 million gallons of 
10-percent ethanol blended fuel were 
sold in Nebraska in 1991, accounting 
for 45 percent of all gasoline sales, 
according to the Nebraska Gasohol 
Committee. 

Nationally, ethanol blended fuels 
accounted for over 8 percent of all 
gasoline sold in 1991. 

This is a good indication of consum- 
er acceptance of ethanol blended gaso- 
lines and a recognition of the environ- 
mental and economic benefits of etha- 
nol. 

This good news comes at a time 
that we are awaiting a decision by the 
U.S. Environmental Protection Agen- 
cy (EPA) on Clean Air Act regulations 
concerning reformulated fuel stan- 
dards and oxygenate requirements. 
The proposed rule could seriously 
hamper the use of ethanol in ozone 
nonattainment areas, and thereby 
limit the use of domestically produced 
renewable fuel. 

In recent months, I have joined 
other Senators and thousands of citi- 
zens from the Midwest and elsewhere 
in an effort to ensure that EPA follow 
through on Congress' intent in writ- 
ing the Clean Air Act amendments 



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that ethanol qualify under these pro- 
grams. Recently, even the President 
indicated that he was supportive. We 
are still awaiting an EPA decision and 
I hope that the Congress will not have 
to readdress this issue in the coming 
year to ensure that the administration 
follows through on our intent. 

I am pleased that the Senate today 
passed the Comprehensive National 
Energy Policy Act (H.R. 776), which 
includes a provision authored by Sen- 
ator Daschle that would encourage 
the use of ethanol to meet oxygenate 
requirements mandated by the Clean 
Air Act of 1990. Currently, the excise 
tax exemption of 5.4 cents per gallon 
is limited to fuels containing 
10-percent ethanol by volume. Under 
the bill's provision, ethanol blenders 
would be allowed a 4.1-cent-per-gallon 
tax exemption for a 
7. 7-percent -by- volume ethanol blend, 
and a 3-cents-per-gallon exemption for 
a blend of 5. 7-percent-by- volume etha- 
nol blend. This will partially respond 
to some of the concerns raised about 
whether ethanol will be able to partic- 
ipate in the Clean Air Act's programs 
as Congress clearly intended, though 
it by no means removes the regulatory 
obstacles faced by ethanol. I urge the 
conferees to work to see that this 
provision is included in the final ver- 
sion of this energy legislation. 

A VOTE FOR UMWA RETIREES 

Mr. WARNER. Mr. President, the 
national energy strategy legislation 
now pending Senate passage contains 
a landmark financing package for the 
troubled retiree health insurance 
program of the United Mine Workers 
of America (UMWA). 

This is good new for nearly 10,000 
Virginia retirees and their families. 
As recently as 3 weeks ago, a related 



financing scheme for an industrywide 
coal tax was dead in the water. With 
the active support of President Bush, 
however, we have reached a new fund- 
ing agreement. 

Under the legislation, UMWA retir- 
ee health costs will be assigned to 
both present and former members of 
the Bituminous Coal Operators Asso- 
ciation (BCOA), depending on the 
length and time of employment as 
recorded by the Social Security Ad- 
ministration. For those orphan retir- 
ees for whom former employers no 
longer exist, they too well be assigned 
on a proportional basis. 

Major financial support will come 
immediately to the UMWA health 
funds by a transfer of $210 million 
from the UMWA pension fund over 
the next 3 years. Additional costs for 
1996 and beyond will be covered by 
transfer payments from the Federal 
abandoned mine lands (AML) fund. 

Virginia UMWA retirees should 
sleep better tonight knowing that the 
Federal Government has stepped in to 
restore their health insurance pro- 
gram. In the long term, the entire 
coal industry will be sacrificing to 
assure the continued delivery of these 
benefits. We revere those who have 
worked in the coalfields, however, and 
the 40-year promise of these benefits 
has been our overriding concern. 

Mr. WALLOP. Mr. President, so far 
as I know, with resolution of the issue 
of rollups, there are now no further 
amendments that can come before us. 
I say to my friend that I hope he does, 
and if he does not, I will, ask for the 
yeas and nays on this bill. I think 
Senators are entitled to it. I will have 
just a few remarks after the chairman 
before we go to a vote. 

Mr. JOHNSTON. Mr. President, I 
had previously made some remarks 



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about this bill in one of those many 
down times we had, which the press is 
free to quote from as if I said them at 
this more propitious time. 

In any event, Mr. President, it has 
been, of course, a pleasure working 
with my distinguished ranking minori- 
ty member and with the staff. I will 
not go further with congratulations 
than that, since we have had so many 
fits and starts in this bill and since 
the conference will be a long and diffi- 
cult one. 

There are well over a thousand 
pages in this bill. I would not want to 
count the number of pages that finally 
come out of this bill as finally passed, 
but there are well over a thousand 
pages. There are many highly conten- 
tious matters. There are some poten- 
tial deal breakers in this bill. 

I say that not to reflect pessimism 
at all, because I also think, on the 
other hand, that the demand of the 
country for an energy policy is very, 
very strong. The President of the 
United States is for this bill, the 
Speaker of the House is for this bill, 
the majority leader of the Senate is 
for this bill, the Democrats are for it, 
the Republicans are for it, the country 
needs it, and I say woe to him who 
stands in the way of passing this bill 
which is strongly needed by the Amer- 
ican people. 

I do not believe people are going to 
try to stand in the door of progress in 
this bill. And, on the other hand, I 
sound the alarm of concern that we 
have a long way to go to get this bill 
passed. 

From my standpoint, Mr. President, 
I hope we can have a first meeting of 
the conference early next week, if that 
meets with the schedule and desires of 
the distinguished Senator from Wyo- 
ming. 



I hope that meets with his schedule. 
We plan to get this bill out, I hope, 
quickly and decisively for the Ameri- 
can people. 

I thank all Senators and especially 
the Senator from Wyoming. 

The PRESIDING OFFICER The 
Senator from Wyoming. 

Mr. WALLOP. Mr. President, I 
obviously return my thanks and admi- 
ration to the Senator from Louisiana, 
the chairman of the committee, who 
has done an absolutely masterful job, 
not once now, but twice on this floor 
getting us to this point. The bill was 
balanced when it passed the Senate 
the first time 94 to 4. I believe that 
we have preserved that balance after 
the current debate and perhaps even 
strengthened it with some of the Fi- 
nance Committee provisions. 

I am confident that we can main- 
tain that balance through the confer- 
ence. I commit to doing it, and I say 
that it is extremely important to 
maintain that balance. 

I am confident, as is the chairman, 
that we can reach agreement, if the 
philosophy is to produce a consensus 
agreement in the national interest 
and not to produce a political state- 
ment 

We have not allowed partisan poli- 
tics to dictate what we have accom- 
plished, and that is one of the rare 
accomplishments, I say to my friend 
from Louisiana, that he has managed 
to do. We have, even through it has 
been an election year, been able to 
achieve that, and we must assure that 
the result of the conference is as bi- 
partisan as has been the result of the 
separate debates that have taken 
place in this House. 

I say to my friend also, and those 
who were involved in the most conten- 
tious issues, this Senator, for an en- 



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tirely different reason, is extraordi- 
narily grateful that we were able to 
resolve this matter. I say to my friend 
in the Chair, who understands these 
things quite well, on tomorrow I go 
back to my home State of Wyoming to 
celebrate with the rest of my family 
our centennial on our ranch in Wyo- 
ming. For us, hat was a matter of 
such import that, had we not settled 
the energy bill, I still would have 
gone. So I am most grateful to have 
been a part of this final thing. I will 
not delay it any longer lest somebody 
contrives some genius senatorial way 
to get in our way. 

Mr. JOHNSTON. Mr. President, I 
ask for the yeas and nays on final 
passage. 

The PRESIDING OFFICER. Is 
there a sufficient second? 

There is a sufficient second. 

The yeas and nays were ordered. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that a list of ac- 
knowledgements of the majority and 
minority staff who have worked so 
diligently be printed in the Record, as 
well as two members of my personal 
staff who have been so instrumental 
in achieving this. 

There being no objection, the list 
was ordered to be printed in the Re- 
cord, as follows: 

COMMITTEE 

Rob Wallace. Gray Ellsworth, Richard Grundy, 
Jim Beirne, Marian Marshall, Judy Pensabene, 
Howard Useen, Jim OToole, Gerry Handy, Carol 
Craft, Gigi Beall, Kelly Fiecher. 

Michael Hoon and Jodi Brayion, personal sUfT, 
and the majority staff. 

The PRESIDING OFFICER. If 
there be no further amendment to be 
proposed, the question is on agreeing 
to the committee amendment in the 
nature of a substitute, as amended. 

The committee amendment was 
agreed to. 



The PRESIDING OFFICER. The 
question is on the engrossment of the 
amendments and third reading of the 
bill. 

The amendments were ordered to 
be engrossed, and the bill to be read 
the third time. 

The bill was read a third time. 

The PRESIDING OFFICER. The 
bill having been read the third time, 
the question is, Shall the bill pass? 

The yeas and nays have been or- 
dered. The clerk will call the roll. 

The bill clerk called the roll. 

Mr. FORD. I announce that the 
Senator from North Dakota (Mr. 
Burdick) is necessarily absent. 

Mr. SIMPSON. I announce that the 
Senator from Vermont (Mr. Jeffords) 
and the Senator from Idaho (Mr. 
Symms) are necessarily absent. 

I further announce that the Senator 
from North Carolina (Mr. Helms) is 
absent due to Illness. 

The PRESIDING OFFICER (Mr. 
Dodd). Are there any other Senators 
in the Chamber desiring to vote? 

The result was announced • yeas 93, 
nays 3, as follows: 



(ROLLCALL VOTE NO. 163 LEG.) 




YEAS- 


93 


Adams 


Akaka 


Baucus 


Bentaen 


Biden 


Bingaman 


Bond 


Boren 


Bradley 


Breaui 


Brown 


Bryan 


Bumpers 


Burns 


Byrd 


Chafee 


Coats 


Cochran 


Cohen 


Conrad 


Craig 


Cranston 


D'Amato 


Danforth 


Daschle 


DeConcini 


Dixon 


Dodd 


Dole 


Domenici 


Eton 


Ford 


Fowler 


Gam 


Glenn 


Gore 


Gorton 


Graham 


Gramm 


Grassley 


Harkin 


Hatch 


Hatfield 


Heflin 


Hollings 


Inouye 


Johnston 


Kassebaum 


Hasten 


Kennedy 


Kerrey 


Kerry 


Kohl 


La u ten berg 


Leahy 


Levin 


Liebennan 



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Lott 


Lugar 


Mack 


McCain 


McConnaU 


Matianbaum 


Mikubki 


Mitchell 


Moynihan 


Murkowiki 


Nicklaa 


Nunn 


Packwood 


Pall 


Praaaler 


Pryor 


Raid 


Riagla 


Robb 


Rockefeller 


Roth 


Rudman 


Sanford 


Sarbanaa 


Siainr 


Seymour 


Shelby 


Simon 


Simpoon 


Spaciar 


Stevens 


Thurmond 


Wallop 


Warnar 


Wirth 

NAYS-3 


Woflbrd 


Durenbargar 


Smith 


Welbtone 




NOT VOTINC 


i-4 


Burdick 


Halma 


Jaflorda 



Symma 

So the bill (H.R. 776) as amended, 
was passed. 

Mr. WALLOP. Mr. President, I 
move to reconsider the vote. 

Mr. DOMENICI. I move to lay that 
motion on the table. 

The motion to lay on the table was 
agreed to. 

Mr. WALLOP. Mr. President, I ask 
unanimous consent that the Senate 
amendment to H.R. 776, the energy 
bill, be printed. 

The PRESIDING OFFICER. With- 
out objection, it is so ordered. 

Mr. JOHNSTON. Mr. President, I 
move that the Senate insist on its 
amendment, request a conference 
with the House on the disagreeing 
votes of the two Houses, and that the 
Chair be authorized to appoint confer- 
ees. 

The motion was agreed to; and the 
Presiding Officer appointed: 

From the Committee on Energy and 
Natural Resources, for all titles except 
title XDC of H.R. 776 and title XX of 
the Senate amendment (Revenue 
provisions): Mr. Johnston, Mr. Bump- 
ers, Mr. Ford, Mr. Bingaman, Mr. 
Wirth, Mr. Conrad, Mr. Shelby, Mr. 
Wallop, Mr. Hatfield, Mr. Domenici, 



Mr. Murkowski, Mr. Nickles, and Mr. 
Burns. 

From the Committee on Govern- 
mental Affairs, conferees for subtitle 
B of title VI of the Senate amendment 
(Federal energy management): Mr. 
Glenn and Mr. Stevens. 

From the Committee on Commerce, 
Science, and Transportation, conferees 
for subtitles A, B, and C, of title XII of 
the Senate amendment (Outer Conti- 
nental Shelf revenue sharing), pipe- 
line safety issues (as contained in 
Senate amendment No. 2785): Mr. 
Hollings and Mr. Danforth. 

From the Committee on Banking, 
Housing and Urban Affairs, conferees 
for title XV of the Senate amendment 
(Public Utility Holding Company Act 
reform): Mr. Riegie and Mr. Garn. 

From the Committee on Environ- 
ment and Public Works, conferees for 
the following provisions of H.R. 776: 
section 2481 (transshipment of pluto- 
nium); title XXVIII (Nuclear Plant 
Licensing); subtitle A of title XXDC 
(below regulatory concern); section 
3009 (exemption from annual charg- 
es): Mr. Burdick and Mr. Chafee. 

From the Committee on Veterans' 
Affairs, conferees on sections 6101 and 
6102 of title VI of the Senate amend- 
ment (building energy efficiency): Mr. 
Cranston and Mr. Specter. 

From the Committee on Finance, 
conferees on title XDC of H.R. 776 and 
title XX of the Senate amendment 
(revenue provisions): Mr. Bentsen, Mr. 
Moynihan, Mr. Baucus, Mr. Boren, 
Mr. Daschle, Mr. Breaux, Mr. 
Packwood, Mr. Dole, Mr. Roth, Mr. 
Danforth, and Mr. Chafee conferees 
on the part of the Senate. 

Mr. JOHNSTON. Mr. President, 
with thanks to all I yield the floor. 



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102d Cokoubsb 1 f Rgpow 

SdStmion J HOUSE OP REPRESENTATIVES { 102 -ioi8 



ENERGY POLICY ACT OF 1992 



CONFERENCE REPORT 

TO ACCOMPANY 

H.R. 776 






October 5, 1992.— Ordered to be printed 



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JOINT EXPLANATORY ST ATEME NT OP THE COMMITTEE OP 

CONFERENCE 

The managers on the part of the House and the Senate at the 
conference on the disagreeing votes of the two Houses on the 
amendments of the Senate to the bill (HLR. 776) to provide for im- 
proved energy efficiency submit the following joint statement to 
the House and the Senate in explanation of the action a gree d upon 
by the managers and recommended in the accompanying confer- 
ence report. 

TITLE I— ENERGY EFFICIENCY 

SUBTITLE A— BUILDINGS 

Sec. 101. Building Energy Efficiency Standards 

Section 101(c) would amend the Cranston-Gonralex National 
Affordable Housing Act (P.L. 101-625) to ensure that the Secretary 
of Housing and Urban Development develops energy efficiency 
standards for new homes financed through Federal mortgage pro- 
grams as required by that Act The subsection also expands the 
coverage of the standards from HUD insured mortgages only, to 
the mortgage insurance and guarantee programs of the Depart- 
ments of Agriculture and Veterans Affairs. Such standards shall 
meet or exceed the requirements of the Council of American Build- 
ing Officials Model Energy Code 1992 (CABO-MEC 1992) or, in the 
case of multifamily high rises, the requirements of the American 
Society of Heating, Refrigerating, and Air-Conditioning Engineers 
standards (ASHRAE 90.1-1989), and shall be cost-effective with re- 
spect to construction and operating costs on a life-cycle cost basis. 
The Conferees believe that these consensus standards are costreffeo 
tive with respect to construction and operating costs on a life-cycle 
cost basis. If, in carrying out their responsibilities under this sub- 
section, the Secretaries wish to conduct life-cycle cost analyses, 
they should use a 26 or SO year term to reflect the facts that 
houses have long useful lives and are commonly financed through 
80 year mortgages. 

subtitle b— ununxs 

Sec. 111. Encouragement of Investments in Conservation and Energy 
Efficiency by Electric Utilities 

This section would amend the Public Utility Regulatory Poli- 
cies Act of 1978 to require utilities and public utility commissions 
to consider requiring three new Federal standards? 

1. integrated resource planning which compares supply and 
demand-side options on a systematic and comparable basis; 



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2. cost recovery for energy e ffi ci en cy programs and measures 
that makes them at least as profitable as supply side measures; 
and 

3. rate changes that encourage investments in efficiency meas- 
ures in generation, transmission and distribution of power. 

Whether or not utilities and public utility commissions choose 
to implement these policies, they must hold a public hearing and 
state why they will not implement them. The Conferees recognize 
that a number of States have already implemented some or all of 
the standards encouraged under this section. The Conferees do not 
intend that such States go through additional rulemaking proceed- 
ings simply to satisfy the procedural requirement above, nor do 
th^y intend that States repeat such proceedings in the future. 
These States are encouraged to demonstrate that they have imple- 
mented the standards by referencing actions they have already 
taken. States have substantial discretion in how they implement 
the standards encouraged under this section. 

It is the intent of this subtitle to promote energy efficiency, in 
particular by encouraging utilities, which have a unique relation- 
ship with their customers, to expand demand-side management 
(DSM) programs. It is also intended that utility commissions must 
consider the impact which these expanded DSM programs may 
have on small businesses already engaged in similar activities, and 
shall implement these standards so as to assure that utility actions 
will not provide utilities with unfair competitive advantages over 
such small businesses. It is further intended that whenever practi- 
cable and consistent with energy efficiency goals, utility commis- 
sions will encourage approaches to the implementation of DSM ac- 
tivities that would be mutually beneficial to utilities and small 
businesses, such as through joint utility-small business arrange- 
ments using rebates or vouchers. 

The subsection dealing with small business protection neither 
precludes, nor mandates, the adoption of competitive bidding for 
demand-side management services. By adding this provision, the 
Conferees do not intend that utilities be precluded from engaging 
in energy conservation, energy efficiency or other demand-side 
measures. 

Whether utilities engage in such activities should continue to 
be determined by state laws and state regulatory commissions, 
keeping in mind the requirements of this subsection. The Conferees 
intend that nothing in this subsection in any way interfere with 
the ability of utilities to assure safe and reliable service. State reg- 
ulatory commissions are encouraged to utilize their existing au- 
thority in implementing this subsection; the implementation of this 
subsection is not intended to require the creation of new adminis- 
trative or regulatory procedures. 

&c 114- Amendment of Hoover Power Plant Act 

Section 114 would amend the Hoover Power Plant Act of 1984 
to require the Western Area Power Administration (WAPA) to 
issue rules requiring all but its smallest customers to engage in in- 
tegrated resource planning (JRP). The Conferees recognise the ef- 
forts that many customers nave already undertaken with respect to 
IRP. The Conferees further recognise that these customers vary in 



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size and capability to plan, and therefore intend that regulation* 
be flexible enough to allow for reasonable variations in compliance 
requirements. 

In section 204(b) of such Act, as amended by this section, the 
customer is required, in preparation and development of the IRP, 
to provide for full public participation, including participation of 
governing boards. This language reflects the sound policy that 
better decisions result when the affected customers are involved in 
the resource planning process. Preference entities serve the public 
and are accountable to their consumers. By allowing the consumer 
to participate in the IRP preparation and development process, rec- 
ognition of the public interest is assured. 

Section 204(c), as amended, would direct the Administrator to 
accept integrated resource plans that are currently being imple- 
mented by customers under other programs as fulfilling the re- 
quirements of this provision "to the extent such plan substantially 
complies with requirements of this title." The Conferees intend for 
the Administrator to be flexible in determining what satisfies the 
"substantial compliance" standard. IRP plans to take significant 
resources to plan and implement 

Finally, it is not the Conferees 9 intent that WAPA force 
changes in customers 9 approved IRP plans. WAPA should accept 
good faith efforts to comply with approved plans as generally satis- 
fying compliance standards. 

Sec. 115. Encouragement of Investments in Conservation and Energy 
Efficiency by Gas Utilities 

This section would amend the natural gas provisions of the 
Public Utility Regulatory Policies Act of 1978 to require utilities 
and State regulatory commissions to consider requiring two new 
Federal standards: 

1. implement integrated resource planning for State regulated 
gas utilities; and 

2. allow State regulated gas utilities to earn a profit on invest- 
ments in energy efficiency. 

States may choose not to implement these requirements, but 
they must hold a hearing and state why they are not implementing 
them. 

The Conferees recognize that a number of States have already 
implemented some or both of the standards encouraged under this 
section. The Conferees do not intend that such States go through 
additional rulemakingprooeedings simply to satisfy the procedural 
requirements above. These States are encouraged to demonstrate 
that they have implemented the standards by referencing actions 
they have already taken. The Conferees believe that States should 
have substantial discretion in how th$y implement the standards 
encouraged under this section. 

It is intended that Integrated Resource Planning dRP) be con- 
sidered only for local gas distribution companies who directly serve 
ultimate users of gas. In examining natural gas supply options 
under IRP, it is not intended that the sources, conditions, or other 
characteristics of the upstream supply of gas be analysed. Rattier, 
the IRP is intended to examine and compare demand-side options 



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with the general option of additional supplies to end use customers 
by the load gas distribution company. 

The subsection in this section regarding the competitive 
impact of the implementation of these standards on small business- 
es has the same intent as that described under section 111. 



SUBTITLE C— STANDARDS 

In general 

The provisions of this subtitle would significantly expand the 
coverage of the appliance energy efficiency standards program and 
the energy labeling program under the Energy Policy and Conser- 
vation Act (EFCA). It is the intent of the Conferees that the Secre- 
tary shall seek to harmonize these standards internationally, par- 
ticularly with standards established or under development in 
Canada and Mexico, nations with which the United States conducts 
substantial trade. Such harmonization will simplify enforcement, 
reduce impediments to trade, and will reduce burdens on manufac- 
turers. 

In addition, the Conferees have concerns regarding the adequa- 
cy of the current enforcement penalties under EPCA. These penal- 
ties were established many years ago. Accordingly, the conferees 
expect the Secretary to review the adequacy of the enforcement 
provisions of these programs and to recommend changes to the 
Congress, if appropriate. 

Sec 121. Energy Efficiency Labeling for Windows and Window Sys- 
tems 

9 The National Fenestration Rating Council (NFRQ is initially 
directed to develop this voluntary rating program according to 
commonly accepted procedures for the development of national 
testing procedure ana labeling programs. Such commonly accepted 
procedures are those recognized by the Federal Trade Commission 
(FT©, or that are consistent with FTC policy. 

In addition, it is intended that, should NFRC develop this pro- 
gram, its implementation and administration also will be in accord- 
ance with commonly accept ed p rocedures. Such procedures must 
assure, at a minimum, that NFRC has sufficient oversight and au- 
thority to assure that accreditation and certification procedures 
result in compliance with its program. 

Sec liS. Energy Efficiency Labeling for Commercial Office Equip- 
ment 

This section would require the Secretary to provide financial 
assistance to support the development of a voluntary national test- 
ing and information program for commercial office equipment in 
accordance with commonly accepted procedure for the development 
of such testing and information programs. Such commonly accept- 
ed procedures are those recognized by the Federal Trade Commis- 
sion or consistent with FTC policy. 

If such a voluntary program is not established within 3 years, 
then the Secretary and the Federal Trade Commission are directed 
to develop test procedures and labeling rules for commercial office 
equipment. • 



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Sec. 126. Energy Efficiency Labeling for Luminaries 

This section would require the Secretary to provide financial 
assistance to support the development of a voluntary national test- 
ing and information program for luminaries in accordance with 
commonly accepted procedures for the development of such testing 
and information programs. Such commonly accepted procedures 
are those recognized by the Federal Trade Commission or that are 
consistent with FTC policy. 

Sec 127. Report on the Potential of Cooperative Advanced Appli- 
ance Development 

This section would require the Secretary, in consultation with 
the Administrator of EPA, to prepare and submit a report to Con- 
gress on the potential for the development and commercialization 
of appliances which are substantially more efficient that those re- 
quired by Federal or State law. Any recommendations relate to the 
commercialization of such advanced appliances should take into ac- 
count any issues regarding the marketing of such appliances. 

The Conferees are aware that the Environmental Protection 
Agency is already engaged in supporting industry efforts to develop 
hi$h efficiency refrigerators and other products and do not intend 
this study to delay those ongoing efforts. The study should particu- 
larly focus on those appliances and products that EPA is not car- 
rently working on. In addition, it is intended that the two agencies 
will coordinate their efforts in this area and avoid duplication of 
effort. 

SUBTITLE F— FEDERAL AGENCY ENERGY MANAGEMENT 

Sec. 155. Energy Savings Performance Contracts 

This section would amend title Vm of the National Energy 
Conservation Policy Act to further promote the use of energy per- 
formance contracts. 

It is estimated that the Federal government could reduce its 
energy costs by approximately $1 billion annually through the in- 
stallation of energy efficiency measures in its buildings. However, 
the budget deficit has prevented the necessary investments from 
being made by the government 

energy savings performance contracts are a mechanism 
through which private sector funds can finance Federal energy effi- 
ciency improvements. The Conferees recognize that these contracts 
differ significantly from traditional Federal procurement contracts. 
Under these contracts, the contractor is expected to bear the risk 
of performance, make a significant initial capital investment, guar- 
antee significant energy savings to the government agency, and 
from these savings the agency, in effect, makes payment to the con- 
tractor. 

Because these contracts differ significantly from traditional 
Federal contracts, existing contracting regulations may be incon- 
sistent. Current regulations were not formulated for application to 
energy performance contracts. Accordingly, this provision author- 
izes and directs the Secretary, with the concurrence of the Federal 
Acquisition Regulation (FAR) Council, to develop procedures and 
methods for the implementation of such contracts. Tb "*««^ 



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the benefits to the government of such contracts, the Secretary, 
with the concurrence of the FAR Council, is given wide latitude to 
develop substitute regulations where existing procurement regula- 
tions are inconsistent with the goal of promoting energy perform- 
ance contracts. These substitute regulations must, however, be con- 
sistent with Federal procurement laws. 

The section requires new procurement regulations be issued 
within 180 days, and the Conferees expect prompt action to carry 
out this requirement consistent with public participation. 

It is also the expectation of the Conferees that uniform regula- 
tions will be developed both to relieve Federal agencies of the need 
to individually develop performance contract procedures and meth- 
ods and to encourage energy service companies to contract with 
Federal agencies on a uniform basis. 

Finally, subsection (aX2XDXii) authorizes multiyear contracts 
for up to 26 years, provided funds are available for payments to the 
contractor in the first year. The section creates special protections 
for the taxpayer in view of the risk inherent in committing the 
Federal government to such multi-year contracts. For example, the 
government may be liable for payment of a substantial cancellation 
fee. Accordingly, subsection (aX2XDXiii) requires that a Federal 
agency must notify the appropriate authorizing and appropriating 
committees of the Congress before signing such a contract if it con- 
tains a clause permitting a cancellation charge in excess of 
$750,000. Subsection (aXZXDXi) also provides that such contracts be 
awarded in a competitive manner, and the Conferees intend that 
Federal agencies endeavor to secure the broadcast participation by 
qualified firms. 

TITLE H— NATURAL GAS 

The Conferees agreed not to include most of the text of title II 
of H.R. 776, regarding natural gas pipelines, in the conference 
report The one exception is that the conference report includes an 
amended section 201 regarding fewer restrictions on certain natu- 
ral gas imports and exports. 

The decision not to include most of title II includes section 214 
of the House bill regarding State regulation of the production of 
natural gas, Le., prorationing. However, the Conferees included a 
new section 202, stating the sense of the Congress that natural gas 
consumers and producers, and the national economy, are best 
served by a competitive natural gas wellhead market One of the 
reasons that Conferees decidod not to include section 214 is the rec- 
ognition that, under existing law, a state cannot use its proration 
authority for the purpose of restricting supplies and raising the 
price of natural gas. Kg., Northwest Central Pipeline Corp. v. State 
Corporation Commission of Kansas, 489 U.S. 493 (1989); Transconti- 
nental Gas Pipe Line Corp. v. State Oil and Gas Board of Miss., 474 
UA 409 (1986). The Conferees recognize that both the Congress 
and the UJS. Supreme Court have long recognized the necessity of 
state-administered systems for defining and enforcing property 
rights in natural gas reservoirs. Still, states may not regulate natu- 
ral gas production without regard to the effect that such regulation 
may have on interstate commerce. Under existing law, a method of 



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regulating production must: (1) achieve or advance the legitimate 
state interests in conserving natural resources, preventing waste, 
and protecting correlative rights; and (2) not be preempted by, or 
overly disruptive of, Federal law. Should a state use its proration 
authority for the purpose of restricting supplies and raising the 
price of natural gas, the Conferees do not believe that such regula- 
tion would satisfy the standard under existing law. The Con feree s 
believe that the new section 202, stating the sense of the Con gre s s , 
is consistent with existing law. 

TITLE IV— ALTERNATIVE FUELS AND NON-FEDERAL 
PROGRAMS 

Sectio n 408 authorises the Federal Energy Regulatory Commis- 
sion (FERO, under the Natural Gas or Federal Power Acts, to con- 
sider the environmental and other benefits of r e s ea rch and devel- 
opment efforts on Alternative Fuel Vehicles ( AFV) by the Gas Re- 
search Institute (GRD or the Electric Power Research Institute. 

If the bene fits e xceed the direct costs of the r e s ea rch and de- 
velopment, the FERC may allow natural gas pipelines and electric 
utilities to recover the costs in their "just and reasonable'* rate fil- 
ings under the Natural Gas and the Federal Power Acts. 

Cost sharing is required to the maximum practicable extent. 
This section recognizes that cost sharing may not be practicable for 
all natural gas transportation, pollution control, and emissions re- 
duction projects. 

The cofunding provisions are intended to become effective for 
new projects initiated after the date of enactment of this legislation 
and would not require GRI to cancel existing contracts to comply 
with the cofunding provision. 

TITLE V— AVAILABILITY AND USE OF REPLACEMENT 
FUELS, ALTERNATIVE FUELS, AND ALTERNATIVE 
FUELED PRIVATE VEHICLES 

The intent of section 501(aXD is not to cover all affiliates or 
divisions of the many large energy companies which have some, 
but not all, of their corporate units engaged in alternative fuels op- 
erations. 

For example, the oil and gas production affiliate or division of 
a mqjor energy company described in 501(aXlXC) would be covered; 
so might a propane pipeline unit or a natural gas proces s i n g divi- 
sion, if the substantially engaged" test is met 

But an oil tanker division, a gasoline marketing affiliate, or a 
petrochemical unit whose mqjor operations are the production of 
plastics, for example, would not be covered. 

The Secretary has broad discretion to define the coverage of 
this provision. For example, he may in his discretion exempt some . 
crude oil-related operations of an oil and gas production affiliate 
(but not the gas-related operations), or the petrochemical oper- 
ations of a covered methanol unit (but not the methanol-related 
business). 



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TITLE VII— ELECTRICITY 

Under current law, the Securities and Exchange Commission 
has authority to permit, on a case-by-case basis, certain utility 
functions outside the United States. Further, new section 32 of 
PUHCA allows exempt wholesale generators located outside the 
United States to engage in both wholesale and retail generation. 
Hie provisions of new section 33 supplement these foreign options 
for utility operations and do not in any way limit any pers on's abil- 
ity to pursue SEC approval under current law or the EWG course. 

The definition of an EWG has been drafted to permit an EWG 
to sell wholesale power that it has not generated itself. Buyers of 
wholesale power may desire to purchase capacity in increments 
that ex c eed what the most economical unit would produce. Conse- 
quently, the legislation would permit an EWG, for example, to gen- 
erate 350 Megawatts and purchase an additional SO Megawatts in 
order to met a purchaser's 400 MW capacity need. 

The definition of an exempt wholesale generator contained in 
section 32(aXD permits an exempt wholesale generator to own fa- 
cilities and goods, such as fuel and related transportation, storage 
and handling facilities, reasonably necessary for the operation of 
its business. 

Rates, charges, terms, and conditions for wholesale transmis- 
sion services ordered under section 211 in all cases shall be just 
and reasonable, and not unduly discriminatory or preferential. The 
Conferees intend the term "associated services" to mean the cost of 
ancillary services such as back-up power, interconnection costs, and 
radial lines. 

New section 212(h) of the Federal Power Act contains a savings 
clause for State laws dealing with retail wheeling. Thus, State laws 
that either prohibit or permit retail wheeling are unaffecting by 
this subsection. And, if otherwise valid, remain in full force and 
effect. 

The Conferees do not intend to limit or modify the authority of 
State commissions to review the prudence or imprudence of whole- 
sale purchases by retail utilities under their jurisdiction. 

The Bonneville Power Administration (BPA) has set policies 
from time to time for furnishing transmission service on the Feder- 
al Columbia River Transmission System. BPA has done so under 
the laws which define its authority and obligations concerning 
transmission, which law s rem ain fully effective and applicable. It is 
expected that, when the FERC exercises its authority under section 
211 to require BPA to provide transmission service, it will do so 
consistent with the laws governing BPA. Transmission contracts 
entered into in accordance with BPA's policies which are in exist- 
ence on the date of enactment of this Act are unaffected by the 
FERCs new authority to order access to transmission controlled by 
BPA. Similarly, BPA's short-term transmission service allocation 
meth odology for economy energy trades is also unaffected by the 
FERCs new authori ty to order acc ess to transmission controlled by 
BPA. However, the FERC is not bound by the transmission policy 
choices BPA has made or may make in the future as to new firm 
transmission service requests. 



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A primary BPA obligation under the laws that define BPA's 
authority and obligations is to provide transmission service over 
available capacity tor its customers within the Pacific Northwest as 
that region is defined in 16 UJ3.C. section 839a(14). Historically, 
Bonneville Power Administration has built most of