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[Congressional Record Volume 141, Number 71 (Tuesday, May 2, 1995)]
[Senate]
[Pages S6006-S6010]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DASCHLE:
  S. 742. A bill to amend the Wild and Scenic Rivers Act to limit 
acquisition of land on the 39-mile segment of the Missouri River, 
Nebraska and South Dakota, designated as a recreational river, to 
acquisition from willing sellers, and for other purposes; to the 
Committee on Energy and Natural Resources.

          the wild and scenic rivers act amendment act of 1995

  Mr. DASCHLE. Mr. President, in 1991 Congress designated a 39-mile 
stretch of the Missouri River from Fort Randall to Lewis and Clark Lake 
as a national recreational river. The purpose of the recreational river 
designation is to protect the river and its environment, protect 
landowner rights, and provide for visitor use.
  Recreational river designations preserve an important part of our 
Nation's natural heritage. This section, along with other segments of 
the Missouri River, provides critical native wildlife habitat, buffers 
against floods, and scenic waterways for recreation including fishing 
and hunting. For these reasons, South Dakotans feel strongly about the 
care and management of the river.
  The National Park Service is currently evaluating alternative plans 
for managing this segment of the Missouri River. The selected plan will 
set goals and mechanisms for the care and public use of the river.
  Numerous South Dakotans have commented officially on management 
alternatives proposed by the National 
[[Page S6007]]  Park Service. Some favor plans that emphasize the 
protection of wildlife habitat and provision of a primitive river 
experience. Others advocate a recreational emphasis with attention 
drawn to cultural and historical aspects of the river. Most agree on a 
balanced approach to river management.
  However, many people who own land adjacent to the river have 
expressed concerns about the effectiveness of river protection efforts. 
They worry that recreational facilities developed on either side of the 
river will threaten the fragile river ecosystem. They are afraid that 
the Federal Government will take away portions of their land but will 
not do an adequate job of river protection.
  I have always believed that ranchers and farmers are the original 
environmentalists. They make their living off the land and, therefore, 
know how the Earth and its rivers work. For farmers and ranchers, a 
healthy Earth makes for a healthy living.
  The National Park Service has stated that, at this juncture, it does 
not believe that land condemnation will be necessary to accomplish the 
designation. While I appreciate the sensitivity of the Park Service to 
this issue, concerns persist among landowners over the potential for 
land condemnation when the final plan is announced. These fears, which 
have created a climate of mistrust, threaten to impede the designation 
process. For this process to move forward in a constructive and 
productive way, I believe it is important to clarify this issue and 
ensure that land condemnation is no longer an option in this process.
  Therefore, today I am introducing a bill to amend the Wild and Scenic 
Rivers Act. The bill will limit acquisition of land on the 39-mile 
segment of the Missouri River designated as a recreational river to 
acquisition from willing sellers.
  The bill seeks to ensure that the people who live with the river, who 
best know its seasonal ebbs and flows, will retain control of the 
management decisions that will affect them and the river. The bill 
guarantees that landowners with river property will not have their land 
condemned by the National Park Service for the purpose of this 
designation.
  South Dakotans living along this stretch of the Missouri River are 
entitled to be the stewards of their own land. They are eager to 
protect this stretch of the river and to maintain its natural beauty.
  In this time when States are clamoring for greater control over their 
natural environment and the laws that guide its use, it is my hope that 
Congress will provide the degree of control that Americans are asking 
for along this 39-mile stretch of river. Local landowners must take 
responsibility for the health and well-being of their natural 
environment. This bill, which applies only to the 39-mile stretch of 
the Missouri River from Fort Randall to Lewis and Clark Lake, will 
provide that opportunity in this case.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 742

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

     SECTION. 1. LIMITATION OF ACQUISITION OF LAND ON PORTION OF 
                   THE MISSOURI RIVER DESIGNATED AS A RECREATIONAL 
                   RIVER.

       Section 3(a)(22) of the Wild and Scenic Rivers Act (16 
     U.S.C. 1274(a)(22)) is amended in the ninth sentence by 
     striking ``owner:'' and all that follows through the end of 
     the sentence and inserting ``owner.''
                                 ______

      By Mrs. HUTCHISON:
  S. 743. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit for investment necessary to revitalize communities within 
the United States, and for other purposes; to the Committee on Finance.

                commercial revitalization tax credit act

  Mrs. HUTCHISON. Mr. President, the bill that I am introducing today 
is the Commercial Revitalization Tax Credit Act of 1995 [CRTC]. This 
legislation will encourage business investment in economically 
distressed areas. It will create jobs; expand economic activity; 
improve the physical appearance and increase property values in these 
areas. My bill would provide a targeted, limited tax credit to 
businesses to help defray their costs of construction, expansion, and 
renovation. Currently, such an incentive is lacking. This credit would 
fill a gap in the range of tools that States and localities need to 
make declining neighborhoods good places to do business, to work, and 
to reside. Martha Murphree, executive director of the Houston chapter 
of the American Institute of Architects said it very well: This 
legislation would ``give small businesses leverage to expand and/or 
improve their facilities, thus adding value to their establishments and 
allowing them to hire more employees.''
  In fact, the American Institute of Architects is one of the prime 
reasons that this bill came to my attention and I applaud them for 
taking this initiative.
  Mr. President, this tax credit will help businesses form a 
partnership with the Government to help revitalize areas of our country 
that have, in some cases, long suffered from neglect.
  I firmly believe that we must reduce the size and scope of the 
Federal Government. I also firmly believe that there are compassionate 
ways to aid our cities without adding more Federal Government 
bureaucracy. Expanding tax incentives to enable the private sector to 
create real jobs in the economically depressed areas of our country is 
an excellent way to combat poverty, crime, despair, and the physical 
deterioration of our cities. This legislation encourages empowerment at 
the local level. It builds on the empowerment zone/enterprise community 
program that is now unfolding in 109 communities across the Nation. My 
own State of Texas has five of these specially designated areas in 
these cities: Houston, Dallas, El Paso, San Antonio, and Waco. The 
legislation could also benefit additional communities which have had 
previously approved and designated economic revitalization areas and 
which now receive Federal funds under the Community Development Block 
Grant Program.
  I have always been a supporter of the pro-growth ideas that are at 
the foundation of the enterprise zone concept. But what was enacted in 
1993 did not include the broad based incentives for capital formation 
that former Secretary of Housing and Urban Development Jack Kemp had 
envisioned. These specially designated zones primarily encourage wage-
based tax credits to employers who hire an individual to work for a 
business within the zone. But there is no existing incentive for a 
business within the zone to expand so that larger numbers of people 
could be hired. Increasing and upgrading buildings and infrastructure 
is a necessary part of improving our cities and combating cycles of 
poverty and crime. This is the part of the equation that has been 
missing.
  This is not intended to be a panacea. I do not anticipate that the 
tax credits will be the primary reason for going forward with such an 
expansion. However, I do think it can be an important, positive factor 
that would give the business man or woman the push needed to go forward 
with construction, renovation, or expansion. The credit will mitigate 
the inherent risk in business decisions to locate in areas experiencing 
a variety of social and economic troubles. The credit will provide an 
incentive to invest in these areas, and the result will be new sources 
of tax revenues and new jobs.
  We have seen how other targeted tax incentives can achieve such 
goals. Two excellent examples are the historic rehabilitation tax 
credit and the low-income housing tax credit. The historic 
rehabilitation tax credit provides a 20-percent credit to the owners of 
properties listed on the National Register of Historic Places to 
restore their properties for commercial purposes. According to the 
National Park Service, the credit has definitely created jobs. In 
fiscal year 1994, the credit produced almost 21,000 jobs, among 524 
projects, and leveraged $483 million in private investment at a Federal 
cost of $97 million. Over the previous 4 fiscal years, $509 million in 
tax credits leveraged $2.5 billion in private investment. In the 17 
years since Congress enacted the credit, it has generated almost $17 
billion in private investment, in more than 25,000 projects. Moreover, 
this credit has preserved thousands of this Nation's most precious 
architectural treasures. It has also sparked tourism 
[[Page S6008]]  which in turn has generated millions of tax dollars.
  The low-income housing tax credit is the residential housing 
construction and rehabilitation partner to the CRTC. It provides a tax 
credit of up to 9 percent per year for up to 10 years against the cost 
of developing or renovating housing affordable to low- and moderate-
income people. Since its creation in 1986, it has financed 700,000 new 
and rehabilitated housing units. At an annual credit amounting to about 
$320 million, the low-income housing tax credit attracts about $975 
million in private investment a year. According to the U.S. Department 
of Housing and Urban Development, for every 100,000 new housing starts, 
170,000 jobs are created. Of these jobs, 40 percent are on-site and 
another 20 percent are in trade, transportation, and services that come 
primarily from local markets. The National Association of Homebuilders 
reported that, for fiscal year 1992, the 92,000 units built or 
rehabilitated spun off more that $1.6 billion in wages and taxes.
  Clearly, Congress has found that targeted tax credits can serve a 
valuable public purpose. My proposal will do the same for economically 
depressed communities struggling to attract new business investment, 
just as the historic rehabilitation tax credit has done for historic 
properties and the low-income housing tax credit has done for 
affordable housing. According to the National Association for Counties' 
report on business development incentives, it is important to ensure 
that tax incentives are crafted to encourage new activity which might 
not otherwise occur. Also, the credit must be carefully targeted and 
used judiciously. There must be safeguards to ensure accountability. 
The tax credit must fit within a State or locality's overall economic 
development policy. It must also be designed to stimulate the local 
economy, and to promote job growth in economically depressed areas. My 
proposal meets all of those standards.
  This tax credit will be a cost-efficient instrument of Federal 
policy. It will require a minimum of Federal bureaucracy. Most of the 
work will be done by the State, which will allocate the tax credits, 
and monitor projects to make sure that the proposed benefits are 
realized. It will engage the private sector in addressing the economic 
development needs of low-income communities. The Government cannot and 
should not do the job alone. Private sector involvement helps ensure 
success. Because their own funds will be at risk, private investors 
will rigorously assess the feasibility of ventures before undertaking 
them. This is not a charity or a Government give away program. The 
credit will attract additional private lending. Lenders want to see the 
kind of private equity investment generated by the CRTC before they 
will consider a loan, particularly in an economically distressed 
community. The CRTC is flexible. It will work for a wide range of 
retail, industrial, health care, and other facilities which are crucial 
to making their communities good places to live and to do business. The 
CRTC is based on the principal of paying for performance. Tax credits 
can be claimed only after the investment is made; the project 
completed; the assets remain in use; and income is generated. That 
ensures that the taxpayers will get what they are paying for.
  The tax credit I propose has the following major features:
  The credit may be applied to construction, amounting to at least 25-
percent of the basis of the property, which takes place in specially 
designated revitalization areas, including enterprise communities, 
empowerment zones, and other areas specially designated according to 
Federal, State, or local law.
  Qualified taxpayers could choose a one time 20-percent tax credit 
against the cost of new construction or rehabilitation. For instance, 
if the expansion of a supermarket in the El Paso enterprise community 
cost $150,000, the tax credit against income would be $30,000. 
Alternatively, the business owner could take a 5-percent credit each 
year over a 10-year period.
  Annually, the credit would be allocated to each of the States, 
according to a formula that takes into account the number of localities 
where over half the people earn less than 60 percent of the area's 
median income.
  Localities would determine their priority projects and forward them 
to the State for allocation of credits according to an evaluation 
system which the States establish.
  The CRTC would provide $1.5 billion in tax credits over 5 years, in 
amounts as follows: $100 million in fiscal year 1996, $200 million for 
fiscal year 1997, and $400 million each year from fiscal years 1998 to 
2000.
  Mr. President, the legislation I offer today is designed to attract 
over $7 billion of private sector investment to the most troubled 
neighborhoods and communities of this Nation. It will create jobs, 
generate tax revenue, and improve the physical appearance of these 
specially designated revitalization areas. With a minimum of 
bureaucracy and through a proven tax mechanism, my initiative will make 
a difference to the people and the economies of hundreds of communities 
and thousands of neighborhoods across this country.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 743
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Commercial Revitalization 
     Tax Act of 1995''.

     SEC. 2. COMMERCIAL REVITALIZATION TAX CREDIT.

       (a) Allowance of Credit.--Section 46 of the Internal 
     Revenue Code of 1986 (relating to investment credit) is 
     amended by striking ``and'' at the end of paragraph (2), by 
     striking the period at the end of paragraph (3) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(4) the commercial revitalization credit.''
       (b) Commercial Revitalization Credit.--Subpart E of part IV 
     of subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 (relating to rules for computing investment credit) is 
     amended by inserting after section 48 the following new 
     section:

     ``SEC. 48A. COMMERCIAL REVITALIZATION CREDIT.

       ``(a) General Rule.--For purposes of section 46, except as 
     provided in subsection (e), the commercial revitalization 
     credit for any taxable year is an amount equal to the 
     applicable percentage of the qualified revitalization 
     expenditures with respect to any qualified revitalization 
     building.
       ``(b) Applicable Percentage.--For purposes of this 
     section--
       ``(1) In general.--The term `applicable percentage' means--
       ``(A) 20 percent, or
       ``(B) at the election of the taxpayer, 5 percent for each 
     taxable year in the credit period.
     The election under subparagraph (B), once made, shall be 
     irrevocable.
       ``(2) Credit period.--
       ``(A) In general.--The term `credit period' means, with 
     respect to any building, the period of 10 taxable years 
     beginning with the taxable year in which the building is 
     placed in service.
       ``(B) Applicable rules.--Rules similar to the rules under 
     paragraphs (2) and (4) of section 42(f) shall apply.
       ``(c) Qualified Revitalization Buildings and 
     Expenditures.--For purposes of this section--
       ``(1) Qualified revitalization building.--The term 
     `qualified revitalization building' means any building (and 
     its structural components) if--
       ``(A) such building is located in an eligible commercial 
     revitalization area,
       ``(B) a commercial revitalization credit amount is 
     allocated to the building under subsection (e), and
       ``(C) depreciation (or amortization in lieu of 
     depreciation) is allowable with respect to the building.
       ``(2) Qualified rehabilitation expenditure.--
       ``(A) In general.--The term `qualified rehabilitation 
     expenditure' means any amount properly chargeable to capital 
     account--
       ``(i) for property for which depreciation is allowable 
     under section 168 and which is--

       ``(I) nonresidential real property, or
       ``(II) an addition or improvement to property described in 
     subclause (I),

       ``(ii) in connection with the construction or substantial 
     rehabilitation or reconstruction of a qualified 
     revitalization building, and
       ``(iii) for the acquisition of land in connection with the 
     qualified revitalization building.
       ``(B) Dollar limitation.--The aggregate amount which may be 
     treated as qualified revitalization expenditures with respect 
     to any qualified revitalization building for any taxable year 
     shall not exceed $10,000,000, reduced by any such 
     expenditures with respect to the building taken into account 
     by the taxpayer or any predecessor in determining the amount 
     of the credit under this section for all preceding taxable 
     years.
     [[Page S6009]]   ``(C) Certain expenditures not included.--
     The term `qualified revitalization expenditure' does not 
     include--
       ``(i) Straight line depreciation must be used.--Any 
     expenditure (other than with respect to land acquisitions) 
     with respect to which the taxpayer does not use the straight 
     line method over a recovery period determined under 
     subsection (c) or (g) of section 168. The preceding sentence 
     shall not apply to any expenditure to the extent the 
     alternative depreciation system of section 168(g) applies to 
     such expenditure by reason of subparagraph (B) or (C) of 
     section 168(g)(1).
       ``(ii) Acquisition costs.--The costs of acquiring any 
     building or interest therein and any land in connection with 
     such building to the extent that such costs exceed 30 percent 
     of the qualified revitalization expenditures determined 
     without regard to this clause.
       ``(iii) Other credits.--Any expenditure which the taxpayer 
     may take into account in computing any other credit allowable 
     under this part unless the taxpayer elects to take the 
     expenditure into account only for purposes of this section.
       ``(3) Eligible commercial revitalization area.--The term 
     `eligible commercial revitalization area' means--
       ``(A) an empowerment zone or enterprise community 
     designated under subchapter U,
       ``(B) any area established pursuant to any consolidated 
     planning process for the use of Federal housing and community 
     development funds, and
       ``(C) any other specially designated commercial 
     revitalization district established by any State or local 
     government, which is a low-income census tract or low-income 
     nonmetropolitan area (as defined in subsection (e)(2)(C)) and 
     is not primarily a nonresidential central business district.
       ``(4) Substantial rehabilitation or reconstruction.--For 
     purposes of this subsection, a rehabilitation or 
     reconstruction shall be treated as a substantial 
     rehabilitation or reconstruction only if the qualified 
     revitalization expenditures in connection with the 
     rehabilitation or reconstruction exceed 25 percent of the 
     fair market value of the building (and its structural 
     components) immediately before the rehabilitation or 
     reconstruction.
       ``(d) When Expenditures Taken Into Account.--
       ``(1) In general.--Qualified revitalization expenditures 
     with respect to any qualified revitalization building shall 
     be taken into account for the taxable year in which the 
     qualified rehabilitated building is placed in service. For 
     purposes of the preceding sentence, a substantial 
     rehabilitation or reconstruction of a building shall be 
     treated as a separate building.
       ``(2) Progress expenditure payments.--Rules similar to the 
     rules of subsections (b)(2) and (d) of section 47 shall apply 
     for purposes of this section.
       ``(e) Limitation on Aggregate Credits Allowable With 
     Respect To Buildings Located in a State.--
       ``(1) In general.--The amount of the credit determined 
     under this section for any taxable year with respect to any 
     building shall not exceed the commercial revitalization 
     credit amount (in the case of an amount determined under 
     subsection (b)(1)(B), the present value of such amount as 
     determined under the rules of section 42(b)(2)(C)) allocated 
     to such building under this subsection by the commercial 
     revitalization credit agency. Such allocation shall be made 
     at the same time and in the same manner as under paragraphs 
     (1) and (7) of section 42(h).
       ``(2) Commercial revitalization credit amount for 
     agencies.--
       ``(A) In general.--The aggregate commercial revitalization 
     credit amount which a commercial revitalization credit agency 
     may allocate for any calendar year is the portion of the 
     State commercial revitalization credit ceiling allocated 
     under this paragraph for such calendar year for such agency.
       ``(B) State commercial revitalization credit ceiling.--
       ``(i) In general.--The State commercial revitalization 
     credit ceiling applicable to any State for any calendar year 
     is an amount which bears the same ratio to the national 
     ceiling for the calendar year as the population of low-income 
     census tracts and low-income nonmetropolitan areas within the 
     State bears to the population of such tracts and areas within 
     all States.
       ``(ii) National ceiling.--For purposes of clause (i), the 
     national ceiling is $100,000,000 for 1996, $200,000,000 for 
     1997, and $400,000,000 for calendar years after 1997.
       ``(iii) Other special rules.--Rules similar to the rules of 
     subparagraphs (D), (E), (F), and (G) of section 42(h)(3) 
     shall apply for purposes of this subsection.
       ``(C) Low-income areas.--For purposes of subparagraph (B), 
     the terms `low-income census tract' and `low-income 
     nonmetropolitan area' mean a tract or area in which, 
     according to the most recent census data available, at least 
     50 percent of residents earned no more than 60 percent of the 
     median household income for the applicable Metropolitan 
     Standard Area, Consolidated Metropolitan Standard Area, or 
     all nonmetropolitan areas in the State.
       ``(D) Commercial revitalization credit agency.--For 
     purposes of this section, the term `commercial revitalization 
     credit agency' means any agency authorized by a State to 
     carry out this section.
       ``(E) State.--For purposes of this section, the term 
     `State' includes a possession of the United States.
       ``(f) Responsibilities of Commercial Revitalization Credit 
     Agencies.--
       ``(1) Plans for allocation.--Notwithstanding any other 
     provision of this section, the commercial revitalization 
     credit dollar amount with respect to any building shall be 
     zero unless--
       ``(A) such amount was allocated pursuant to a qualified 
     allocation plan of the commercial revitalization credit 
     agency which is approved by the governmental unit (in 
     accordance with rules similar to the rules of section 
     147(f)(2) (other than subparagraph (B)(ii) thereof)) of which 
     such agency is a part, and
       ``(B) such agency notifies the chief executive officer (or 
     its equivalent) of the local jurisdiction within which the 
     building is located of such project and provides such 
     individual a reasonable opportunity to comment on the 
     project.
       ``(2) Qualified allocation plan.--For purposes of this 
     subsection, the term `qualified allocation plan' means any 
     plan--
       ``(A) which sets forth selection criteria to be used to 
     determine priorities of the commercial revitalization credit 
     agency which are appropriate to local conditions,
       ``(B) which considers--
       ``(i) the degree to which a project contributes to the 
     implementation of a strategic plan that is devised for an 
     eligible commercial revitalization area through a citizen 
     participation process,
       ``(ii) the amount of any increase in permanent, full-time 
     employment by reason of any project, and
       ``(iii) the active involvement of residents and nonprofit 
     groups within the eligible commercial revitalization area, 
     and
       ``(C) which provides a procedure that the agency (or its 
     agent) will follow in monitoring for compliance with this 
     section.
       ``(g) Termination.--This section shall not apply to any 
     building placed in service after December 31, 2000.''
       (b) Conforming Amendments.--
       (1) Section 39(d) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new paragraph:
       ``(7) No carryback of section 48a credit before 
     enactment.--No portion of the unused business credit for any 
     taxable year which is attributable to any commercial 
     revitalization credit determined under section 48A may be 
     carried back to a taxable year ending before the date of the 
     enactment of section 48A.''
       (2) Subparagraph (B) of section 48(a)(2) of such Code is 
     amended by inserting ``or commercial revitalization'' after 
     ``rehabilitation'' each place it appears in the text and 
     heading thereof.
       (3) Subparagraph (C) of section 49(a)(1) of such Code is 
     amended by striking ``and'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(iv) the basis of any qualified revitalization building 
     attributable to qualified revitalization expenditures.''
       (4) Paragraph (2) of section 50(a) of such Code is amended 
     by inserting ``or 48A(d)(2)'' after ``section 47(d)'' each 
     place it appears.
       (5) Subparagraph (B) of section 50(a)(2) of such Code is 
     amended by adding at the end the following new sentence: ``A 
     similar rule shall apply for purposes of section 48A.''
       (6) Paragraph (2) of section 50(b) of such Code is amended 
     by striking ``and'' at the end of subparagraph (C), by 
     striking the period at the end of subparagraph (D) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(E) a qualified revitalization building to the extent of 
     the portion of the basis which is attributable to qualified 
     revitalization expenditures.''
       (7) Subparagraph (C) of section 50(b)(4) of such Code is 
     amended by inserting ``or commercial revitalization'' after 
     ``rehabilitated'' each place it appears in the text or 
     heading thereof.
       (8) Subparagraph (C) of section 469(i)(3) is amended--
       (A) by inserting ``or section 48A'' after ``section 42'', 
     and
       (B) by striking ``credit'' in the heading and inserting 
     ``and commercial revitalization credits''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     1995.
                                 ______

      By Mr. CRAIG.
  S. 744. A bill to authorize minors who are under the child labor 
provisions of the Fair Labor Standards Act of 1938 and who are under 18 
years of age to load materials into balers and compactors that meet 
appropriate American National Standards Institute design safety 
standards; to the Committee on Labor and Human Resources.

      the balers and compactors safety standards modernization act

  Mr. CRAIG. Mr. President, I introduce the Balers and Compactors 
Safety Standards Modernization Act.
  This bill would make long-overdue revisions to safety standards set 
by the Department of Labor's Hazardous Occupation Order Number 12 (HO 
12).
  HO 12 is a regulation issued by DOL in 1954 to protect employees who 
are under 18 years of age. In brief, it specifically prohibits minors 
from operating more than a dozen different types 
[[Page S6010]]  of equipment in the workplace. I certainly agree with 
the underlying purpose of HO 12, which is that younger workers should 
not be allowed to operate certain types of machinery when doing so 
would place them in harm's way.
  Specifically, this Safety Standards Modernization Act would address 
problems caused by DOL's interpretation and enforcement of HO 12, with 
respect to cardboard balers and compactors that commonly are used in 
supermarkets, grocery stores, and other retail establishments, for 
preparing and bundling cardboard and paper materials for recycling 
purposes.
  DOL's current interpretation of HO 12 goes so far as to prohibit 
minors from placing, tossing, or loading cardboard or paper materials 
into a baler or compactor. Such activities take place during a loading 
phase that is prior to, and separate from, the actual operation of the 
machine. While such a loading-phase prohibition may have made sense 
back in 1954, when HO 12 was originally issued, such is not the case 
today.
  Technology has brought about significant safety advancements to 
balers and compactors. Much like a household microwave oven or trash 
compactor, the newest generation of balers now in use in grocery stores 
and other locations cannot be engaged and operated during the loading 
phase.
  This important design feature is a result of safety standards issued 
by the American National Standards Institute [ANSI]. An employee is not 
at risk when placing cardboard materials into a baler that is in 
compliance with ANSI standards Z.245.5 1990, or putting paper materials 
into a compactor that is in compliance with ANSI standards Z245.2 1992.
  Nonetheless, DOL treats all balers and compactors the same, and 
considers the placement of materials into these machines, if performed 
by a minor, to be a clear-cut violation of HO 12. Each violation can 
result in a fine of $10,000 against an employer.
  If DOL could produce injury data showing that workers are at risk 
when loading materials into a machine that meets current ANSI 
standards, I might agree that the current interpretation and 
enforcement of HO 12 is warranted. However, DOL has acknowledged that 
it has no injury data for balers that meet the ANSI standard.
  Despite the complete lack of evidence that workers are at risk in 
these situations, DOL has cited numerous supermarkets throughout the 
United States and has assessed several million dollars in fines against 
grocery owners in recent years.
  It is difficult to understand the logic behind this kind of 
enforcement when, in fact, a review of 8,000 compensation cases 
involving injuries over the past 7 years by the Waste Equipment 
Technology Association failed to find a single injury attributable to a 
baler that meets current ANSI safety standards.
  The present, rigid interpretation of HO 12 is bad regulatory policy 
and should not continue. It benefits no one, especially workers. Worker 
protection is not enhanced by issuing large fines against employers 
that use balers meeting current safety standards.
  Such a policy also is clearly inconsistent with the goal of creating 
employment opportunities for young people. Because so many grocers have 
been fined by DOL for loading violations, the industry has become less 
inclined to hire younger workers.
  Originally, DOL applied this interpretation of HO 12 to cardboard 
balers. As burdensome and objectionable as this policy has been, 
concerning cardboard balers, DOL more recently went a step farther and 
now is applying the same interpretation to compactors, a similar piece 
of equipment that retail establishments use to recycle paper materials.
  Without the benefit of formal rulemaking and the opportunity for 
interested parties to file comments, DOL extended the jurisdiction of 
HO 12 to compactors at the beginning of 1994, and employers found 
themselves subjected to fines when it was documented that a minor had 
placed materials into a compactor.
  This is one more example of the ``speed trap'' mentality of Federal 
agencies, and the Department of Labor, in particular. Balers and 
compactors are both governed by ANSI safety standards and cannot be 
engaged or operated during the loading phase. This means, to re-
emphasize, that employees loading machines meeting ANSI standards are 
not at risk.
  Clearly, DOL's position on HO 12, as it relates to cardboard balers 
and compactors, is not in step with the technology being used in the 
workplace. In view of the fact that this equipment can not be operated 
during the loading phase, there is no compelling reason to continue 
treating the placement of materials by minors a violation of HO 12.
  The old joke goes that, when something is difficult to accomplish, 
you compare it to passing an Act of Congress. If there is one process 
more intractable, it must be modernizing Federal agency regulations.
  HO 12 needs to be revised so that the placement of paper or cardboard 
materials into a baler or compactor that meets its respective ANSI 
safety standards by an employee under age 18 is no longer a violation 
of the regulation. The loading phase should be completely distinguished 
from the operating phase of the machine.
  While DOL has solicited comments on its child labor regulations, in 
general, Congress does not need to, and should not, wait any longer for 
this one, simple revision to HO 12. Throughout at least two 
administrations, DOL has promised to reconsider the rule. Their latest 
offering is the goal of issuing a new, final regulation by February 
1996, even through we have yet to see a proposed revision to the rule.
  We don't need months of agency hearings and reams of paper. I've seen 
these grocery store balers operate. What's needed is a simple, common-
sense change, and the bill I'm introducing today would make that change 
in a simple, straightforward way.
  The many young people who will not have summer jobs this year under 
DOL's status quo interpretation of HO 12 should not have to wait 
another year or more for the glacier-like process of regulatory change 
to catch up with technology.
  By promptly acting on the bill I'm introducing today, we can open up 
thousands of youth summer job opportunities without relying on 
government programs and grants.
  The jobs are there. The young people are there. All we need to do is 
remove one, unnecessary, regulatory wall between them.
  This bill would provide a narrow amendment to the Fair Labor 
Standards Act that would overrule DOL's interpretation of HO 12 in the 
limited and appropriate way I've described. My bill would not change 
the critically important safety focus of the regulation. In fact, I 
agree that DOL should remain vigilant and enforce the regulation in 
case when the safety of young workers is compromised by use of 
equipment that does not meet current ANSI safety standards.
  The bill would provide only that young workers would be allowed to 
operate balers and compactors that meet the current industry standards 
that ensure complete safety in their operation.
  Mr. President, I ask unanimous consent to print the text of my bill 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 744

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Compactors and Balers Safety 
     Standard Modernization''.

     SEC. 2. AUTHORITY FOR MINORS TO LOAD MATERIALS INTO BALERS 
                   AND COMPACTORS.

       In the administration of the child labor provisions of the 
     Fair Labor Standards Act of 1938, minors under 18 years of 
     age shall be permitted to--
       (1) load materials into baling equipment that is in 
     compliance with the American National Standards Institute 
     safety standard ANSI Z245.5 1990, and
       (2) load materials into a compacter that is in compliance 
     with the American National Standards Institute safety 
     standard ANSI Z245.2 1992.
     

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