S6688 CONGRESSIONAL RECORD— SENATE May 15, 1995 

By Mr. SIMPSON: 

S. 805. A bill to improve the rural electrification programs under the Rural Electrification Act of 1936, to improve Federal 

rural development programs administered by 

the Department of Agriculture, to provide 

for exclusive State jurisdiction over retail 

electric service areas, to prohibit certain 

practices in the restraint of trade, and for 

other purposes; to the Committee on Agriculture, Nutrition, and Forestry. 

f 

STATEMENTS ON INTRODUCED 

BILLS AND JOINT RESOLUTIONS 

By Mr. COCHRAN: 

S. 800. A bill to provide for hearing 

care services by audiologists to Federal 

civilian employees; to the Committee 

on Governmental Affairs. 

THE HEARING CARE FOR FEDERAL EMPLOYEES

ACT

Mr. COCHRAN. Mr. President, today 

I am introducing legislation to include 

audiology services in the Federal Employee Health Benefits Program 

[FEHBP]. 

This bill would amend the statute 

governing the Federal Employees 

Health Benefits Program by requiring 

FEHBP insurance carriers to guarantee 

direct access to, and reimbursement 

for, audiologist-provided hearing care 

services when hearing care is covered 

under a FEHBP plan. 

The statute governing FEHBP, title 

5, United States Code, section 

8902(k)(1), allows direct access to services provided by optometrists, clinical 

psychologists and nurse midwives, yet 

fails to allow direct access to services 

provided by audiologists in FEHBP 

plans covering hearing care services. 

The legislation I am introducing 

today would remedy this situation by 

permitting direct access to audiology 

services in FEHBP plans covering hearing care services. This measure will not 

increase health care costs since it 

would not mandate any new insurance 

benefits. On the contrary, the bill 

should reduce costs of hearing care by 

facilitating direct access to health care 

providers who are uniquely qualified to 

diagnose the extent and causes of hearing impairment. 

I hope my colleagues will carefully 

consider this legislation and join me in 

support of its enactment. 

By Mr. HOLLINGS: 

S. 802. A bill to authorize the Secretary of Transportation to issue a certificate of documentation and coastwise trade endorsement for the vessel 

Royal Affaire; to the Committee on 

Commerce, Science, and Transportation. 

TRADING PRIVILEGES LEGISLATION

∑ Mr. HOLLINGS. Mr. President, I am 

introducing a bill today to direct the 

vessel Royal Affaire, official No. 649292, 

to be accorded coastwise trading privileges and to be issued a certificate of 

documentation under section 12103 of 

title 46, United States Code. 

The Royal Affaire was constructed in 

Auckland, New Zealand, in 1980. The 

vessel, a sailboat, is 76.3 feet in length, 

20.3 feet in breadth, and 8.8 feet in 

depth and is self-propelled. 

The vessel was purchased by Homer 

C. Burrous of Charleston, SC, in 1989 

for approximately $900,000, with the intention of chartering the vessel for 

cruises in and out of St. Thomas and 

other foreign ports in the Caribbean. 

Since purchasing the vessel in 1989, the 

owner has had the vessel refitted in a 

U.S. shipyard at a cost of over $800,000. 

Mr. Burrous would like to utilize the 

vessel to conduct coastal cruises. However, because the vessel was built in 

New Zealand, it does not meet the requirements for a coastwise license endorsement in the United States. 

The owner of the Royal Affaire is 

seeking a waiver of the existing law because he wishes to use the vessel for 

coastal cruises. His desired intentions 

for the vessel’s use will not adversely 

affect the coastwise trade in U.S. waters. If he is granted this waiver, it is 

his intention to comply fully with U.S. 

documentation and safety requirements. The purpose of the legislation I 

am introducing is to allow the Royal 

Affaire to engage in the coastwise trade 

and fisheries of the United States.∑ 

By Mr. MCCAIN: 

S. 803. A bill to amend the Defense 

Base Closure and Realignment Act of 

1990 in order to revise the process for 

disposal of property located at installations closed under that act pursuant to 

the 1995 base closure round; to the 

Committee on Armed Services. 

THE BASE TRANSITION ACCELERATION ACT

∑ Mr. MCCAIN. Mr. President, today I 

am introducing legislation that will finally ensure that fairness and discipline are exercised during the conveyance and land transfer portion of 

the 1995 BRAC round. The Base Transition Acceleration Act will do three 

things: eliminate the ability of special 

interests, under the existing process, to 

impose endless delays and reap unfair 

benefits; appropriately place control of 

the redevelopment process in the hands 

of the communities affected by the 

BRAC; and speed the economic recovery of those communities adversely impacted by the closing of a military installation in their midst. 

Mr. President, the end of the cold 

war provided a unique opportunity for 

this Nation to safely down-size our 

Armed Forces. Doing so required the 

execution of a two-phase plan; first, reduce the numbers of military personnel; and then, slash infrastructure 

to a level appropriate for the new size 

of the force. Toward that end, since 

1986 we have reduced our military force 

structure by nearly 40 percent. Infrastructure, however, has been trimmed 

by only about 15 percent. 

We asked the services to reduce their 

numbers, they succeeded. We attempted to create an apolitical mechanism through which excess infrastructure might be designated for closure; 

we failed, failed for two reasons—Government redtape and interference from 

special interest groups. 

Since 1988, a new Federal bureaucracy has grown up around the base closure process. Interagency squabbles 

and turf battles among DOD, EPA, Interior, HHS, GSA, and many other entities have caused excessive delays in 

Federal screening, issuance of conflicting and unhelpful regulations, and 

inordinately intrusive review of redevelopment proposals. The result has 

been increased costs to the Federal 

Government and communities alike—

including costs to DOD to maintain 

idle military facilities in caretaker 

status. 

The Base Transition Acceleration 

Act legislation eliminates this excessive Federal regulation. The legislation 

strictly limits the timeframe for Federal property screening and empowers 

a single agency, DOD, to quickly and 

effectively manage the process. At the 

same time, it removes the Federal Government from the process of formulating redevelopment plans and places 

that responsibility within the purview 

of the communities themselves. 

Unfortunately, the problems associated with the BRAC process are not 

limited to those created between the 

Federal agencies. Each additional hand 

that enters the process brings further 

complication and added time. With 

every new round of the BRAC, more 

new hands enter the process. A cottage 

industry of consultants has evolved 

and flourished since 1988 when the first 

round of base closures were ordered. 

Special interests are inserting themselves with increasing frequency into 

the military property disposal process. 

Each of these competing interests 

has sought the assistance of their 

elected representatives or their sponsor 

agency, and in most cases received it. 

The result should come as a surprise to 

on one; this ostensibly apolitical process has become excessively politicized. 

This proposed legislation takes great 

strides to correct this problem and to 

restore fairness to the community redevelopment process. 

Over the past year or so, I, along 

with most other Members of the Senate, have talked extensively with constituents who are deeply troubled by 

the current round of base closing deliberations. Their anxiety is certainly not 

difficult to understand. The reasons for 

their concern are, however, dramatically different from those expressed in 

earlier rounds. 

During the first three rounds, community concerns tended to center 

around the simple question of whether 

a base in their community would be ordered closed. This time, the issues are 

far more complex. Not only do our constituents ask whether the base will 

close, they now ask other, more difficult questions. They want to know 

how to avoid a prolonged transition period. They want to know whether to 

hire consultants. They want to know 

how to handle special interest groups. 

They want to know how to deal with 

the bloated base closure bureaucracy. 

Most of all, they want to know when 

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May 15, 1995 CONGRESSIONAL RECORD— SENATE S6689 

they will be able to get their lives back 

on track. 

These questions represent valid concerns—concerns based in horrific example after horrific example of costly and 

lengthy legal and political battles 

among Federal, State, and local governments, special interest groups, and 

community members. 

Mr. President, the simple fact remains—until a reuse decision is made 

and property is conveyed to the new 

owners for redevelopment, the affected 

community suffers economically and 

emotionally. 

This legislation is simple and 

straightforward. It will significantly 

reduce the need for communities to 

employ expensive consulting firms because it will eliminate the redtape of 

excessive regulations for closing military bases. It will allow DOD to quickly realize the savings from relinquishing excess military infrastructure. And most importantly, it will relieve the economic stress on local communities and allow them to quickly redevelop these former bases in the manner best suited to the community’s 

needs.∑ 

By Mr. BRADLEY: 

S. 804. A bill to amend the Internal 

Revenue Code of 1986 to increase the 

excise taxes and tobacco products, and 

to use a portion of the resulting revenues to fund a trust fund for tobacco 

diversification, and for other purposes; 

to the Committee on Finance. 

THE TOBACCO CONSUMPTION REDUCTION AND

HEALTH IMPROVEMENT ACT OF 1995

Mr. BRADLEY. Mr. President, I came 

to the floor this afternoon to submit a 

revised version of my bill to increase 

the Federal excise tax on tobacco products. My original bill would take the 

current tax level for all types of tobacco products and multiply it by 5.167. 

This would raise the tax on a pack of 

cigarettes from 24 cents a pack to $1.24 

a pack. My revised bill goes one step 

further to help Americans—particularly children and teenagers—achieve a 

tobacco-free future. 

Mr. President, I have been on this 

floor many times talking about the 

dangers of tobacco use. I have repeatedly stated that tobacco use kills well 

over 400,000 Americans every year—

more than alcohol, heroin, crack, automobile and airplane accidents, homicides, suicides, and AIDS combined. 

And I have sought to bring attention to 

the fact that each year a growing number of teenagers start smoking, despite 

the fact that selling cigarettes to minors is illegal. Virtually all new users 

of tobacco are teenagers or younger, 

and every 30 seconds a child in the 

United States smokes for the first 

time. 

Yet there is another aspect of the tobacco story which has not received 

much attention on the floor of this 

body. Generally, when people think 

about the dangers of tobacco use, they 

think about cigarettes. They think 

about the lung cancer, the emphysema, 

and the heart disease which cigarettes 

cause in those who use them. And they 

realize that these health impacts are 

not limited to those who actually 

smoke the cigarettes. Rather, environmental tobacco smoke—smoke from 

other people’s cigarettes—causes tens 

of thousands of deaths each year. 

But as grave as the impacts of cigarette smoking are, they are only part 

of the story of the death and destruction which tobacco products wreak on 

our society. There is another, less wellknown yet still devastating side to the 

tobacco story. And that is the tale of 

smokeless tobacco products. 

The use of smokeless tobacco—namely snuff and chew—is skyrocketing in 

the United States. Between 1986 and 

1990, sales of snuff grew by close to 50 

percent. This increase follows several 

decades of decline in sales and use. 

Part of this increase can be attributed 

to increased social pressures placed on 

smokers, due largely to concerns about 

second-hand smoke. And part of it has 

been fueled by perception that smokeless products are a safe alternative to 

smoking. 

But the belief that snuff and chew 

are safe is absolutely false. Let me 

state this very clearly: smokeless tobacco can kill you. It kills in different 

ways than cigarettes do, but it kills 

nonetheless. Smokeless tobacco causes 

mouth cancer. It causes gum cancer. It 

causes throat cancer. These are just a 

few of the oral problems smokeless tobacco can cause. And the threat of developing these diseases, and of dying of 

them, is very real. Long-term snuff 

users are 50 times more likely to develop gum cancer and four times more 

likely to develop mouth cancer than 

nonusers. Nearly 30,000 new cases of 

oral cancer are diagnosed each year in 

the United States. Half of those people 

are dead within 5 years. 

Smokeless tobacco products are also 

highly addictive. A typical dose of 

snuff contains two to three times as 

much nicotine, the addictive substance 

in tobacco, as a single cigarette. Because of these health risks, snuff is 

banned in a growing number of countries, including the United Kingdom, 

France, Spain, Belgium, Holland, Germany, Denmark, Australia, and New 

Zealand. 

Despite these health risks, the use of 

smokeless tobacco is skyrocketing in 

the United States. So who are these 

new smokeless users—those individuals 

who are heading down a path of addiction, cancer, and death? For the most 

part, they are children. The average 

age of new smokeless users is 91⁄2 years 

old. Two-thirds of smokeless users 

start their habit before they are even 

12 years old. It is now estimated that 3 

million Americans under age 21 use 

smokeless tobacco, including 1 out of 

every 5 high school males. 

Why is this happening? A large part 

of the explanation lies in the tobacco 

companies’ aggressive marketing toward youth. But another part of the explanation is the cost of smokeless tobacco relative to cigarettes. Despite its 

dangers, smokeless tobacco is taxed at 

only about one-tenth the rate of cigarettes, making it a cheap alternative 

to cigarettes. And since kids are the 

most price-sensitive of all tobacco 

users, it is not surprising that they are 

turning to smokeless tobacco in ever 

growing numbers. 

My bill proposes to remove this price 

incentive for kids and adults to use 

smokeless tobacco. It does this by setting the Federal excise tax on tins of 

snuff and pouches of chew at the exact 

same dollar amount as on a pack of 

cigarettes. This means that the Federal taxes on these smokeless products 

will increase from their current level 

of less than 3 cents per container to 

$1.24 per container. In the previous 

version of my bill, I would have increased the tax on smokeless products 

by a factor of 5. While this is a significant increase, it is not enough to eliminate the incentive for cigarette smokers to switch rather than quit, or to 

discourage kids from ever starting the 

tobacco habit. 

Mr. President, I have spoken earlier 

this session about the many benefits 

which would be achieved by increasing 

the Federal tobacco tax. It will save 

billions of dollars in health care costs, 

not only for the Federal Government 

but for private insurers and citizens 

across the country. It will save countless lives. It will decrease unnecessary 

suffering. And it will discourage millions of children and teenagers from 

ever becoming addicted to tobacco. 

These changes to my earlier bill will 

make these benefits even more pronounced. Smokeless tobacco must no 

longer be seen as a safe and cheap alternative to cigarettes. Raising the excise tax will discourage children and 

teenagers from ever starting to use 

smokeless tobacco, and it will discourage adults from considering smokeless 

as a safe alternative to quitting tobacco use entirely. 

Mr. President, my tobacco tax bill, 

and the changes I am adding to it, are 

good health policy. They are good economic policy. And they are key to 

helping our children and teenagers 

achieve a tobacco-free future. I urge 

my colleagues to join me in support of 

this bill. 

Mr. President, 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. 804 

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 ‘‘Tobacco 

Consumption Reduction and Health Improvement Act of 1995’’. 

SEC. 2. INCREASE IN TAXES ON TOBACCO PRODUCTS. 

(a) IN GENERAL.— 

(1) CIGARS.—Subsection (a) of section 5701 

of the Internal Revenue Code of 1986 (relating to rate of tax on cigars) is amended— 

(A) by striking ‘‘$1.125 cents per thousand 

(93.75 cents per thousand on cigars removed 

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S6690 CONGRESSIONAL RECORD— SENATE May 15, 1995 

during 1991 and 1992)’’ in paragraph (1) and 

inserting ‘‘$5.8125 per thousand’’; and 

(B) by striking paragraph (2) and inserting 

the following new paragraph: 

‘‘(2) LARGE CIGARS.—On cigars weighing 

more than 3 pounds per thousand, a tax equal 

to 65.875 percent of the price for which sold 

but not more than $155 per thousand.’’

(2) CIGARETTES.—Subsection (b) of section 

5701 of such Code (relating to rate of tax on 

cigarettes) is amended—

(A) by striking ‘‘$12 per thousand ($10 per 

thousand on cigarettes removed during 1991 

and 1992)’’ in paragraph (1) and inserting ‘‘$62 

per thousand’’; and 

(B) by striking ‘‘$25.20 per thousand ($21 

per thousand on cigarettes removed during 

1991 and 1992)’’ in paragraph (2) and inserting 

‘‘$130.20 per thousand’’. 

(3) CIGARETTE PAPERS.—Subsection (c) of 

section 5701 of such Code (relating to rate of 

tax on cigarette papers) is amended by striking ‘‘0.75 cent (0.625 cent on cigarette papers 

removed during 1991 or 1992)’’ and inserting 

‘‘3.875 cents’’. 

(4) CIGARETTE TUBES.—Subsection (d) of 

section 5701 of such Code (relating to rate of 

tax on cigarette tubes) is amended by striking ‘‘1.5 cents (1.25 cents on cigarette tubes 

removed during 1991 or 1992)’’ and inserting 

‘‘7.75 cents’’. 

(5) SNUFF.—Paragraph (1) of section 5701(e) 

of such Code (relating to rate of tax on 

smokeless tobacco) is amended by striking 

‘‘36 cents (30 cents on snuff removed during 

1991 or 1992)’’ and inserting ‘‘$16.53’’. 

(6) CHEWING TOBACCO.—Paragraph (2) of section 5701(e) of such Code is amended by striking ‘‘12 cents (10 cents on chewing tobacco 

removed during 1991 or 1992)’’ and inserting 

‘‘$6.61’’. 

(7) PIPE TOBACCO.—Subsection (f) of section 

5701 of such Code (relating to rate of tax on 

pipe tobacco) is amended by striking ‘‘67.5 

cents (56.25 cents on chewing tobacco removed during 1991 or 1992)’’ and inserting 

‘‘$3.4875’’. 

(8) EFFECTIVE DATE.—The amendments 

made by this subsection shall apply with respect to cigars, cigarettes, cigarette paper, 

cigarette tubes, snuff, chewing tobacco, and 

pipe tobacco removed after December 31, 

1995. 

(b) IMPOSITION OF EXCISE TAX ON MANUFACTURE OR IMPORTATION OF ROLL-YOUR-OWN TOBACCO.—

(1) IN GENERAL.—Section 5701 of the Internal Revenue Code of 1986 (relating to rate of 

tax) is amended by redesignating subsection 

(g) as subsection (h) and by inserting after 

subsection (f) the following new subsection: 

‘‘(g) ROLL-YOUR-OWN TOBACCO.—On rollyour-own tobacco, manufactured in or imported into the United States, there shall be 

imposed a tax of $20.67 per pound (and a proportionate tax at the like rate on all fractional parts of a pound).’’

(2) ROLL-YOUR-OWN TOBACCO.—Section 5702 

of such Code (relating to definitions) is 

amended by adding at the end the following 

new subsection: 

‘‘(p) ROLL-YOUR-OWN TOBACCO.—The term 

‘roll-your-own tobacco’ means any tobacco 

which, because of its appearance, type, packaging, or labeling, is suitable for use and 

likely to be offered to, or purchased by, consumers as tobacco for making cigarettes.’’

(3) TECHNICAL AMENDMENTS.—

(A) Subsection (c) of section 5702 of such 

Code is amended by striking ‘‘and pipe tobacco’’ and inserting ‘‘pipe tobacco, and rollyour-own tobacco’’. 

(B) Subsection (d) of section 5702 of such 

Code is amended—

(i) in the material preceding paragraph (1), 

by striking ‘‘or pipe tobacco’’ and inserting 

‘‘pipe tobacco, or roll-your-own tobacco’’, 

and 

(ii) by striking paragraph (1) and inserting 

the following new paragraph: 

‘‘(1) a person who produces cigars, cigarettes, smokeless tobacco, pipe tobacco, or 

roll-your-own tobacco solely for the person’s 

own personal consumption or use, and’’. 

(C) The chapter heading for chapter 52 of 

such Code is amended to read as follows: 

‘‘CHAPTER 52—TOBACCO PRODUCTS AND 

CIGARETTE PAPERS AND TUBES’’. 

(D) The table of chapters for subtitle E of 

such Code is amended by striking the item 

relating to chapter 52 and inserting the following new item: 

‘‘CHAPTER 52. Tobacco products and cigarette 

papers and tubes.’’

(4) EFFECTIVE DATE.—

(A) IN GENERAL.—The amendments made 

by this subsection shall apply to roll-yourown tobacco removed (as defined in section 

5702(p) of the Internal Revenue Code of 1986, 

as added by this subsection) after December 

31, 1995. 

(B) TRANSITIONAL RULE.—Any person who—

(i) on the date of the enactment of this Act 

is engaged in business as a manufacturer of 

roll-your-own tobacco or as an importer of 

tobacco products or cigarette papers and 

tubes, and 

(ii) before January 1, 1996, submits an application under subchapter B of chapter 52 of 

such Code to engage in such business, 

may, notwithstanding such subchapter B, 

continue to engage in such business pending 

final action on such application. Pending 

such final action, all provisions of such chapter 52 shall apply to such applicant in the 

same manner and to the same extent as if 

such applicant were a holder of a permit 

under such chapter 52 to engage in such business. 

(c) FLOOR STOCKS.—

(1) IMPOSITION OF TAX.—On cigars, cigarettes, cigarette paper, cigarette tubes, 

snuff, chewing tobacco, pipe tobacco, and 

roll-your-own tobacco manufactured in or 

imported into the United States which is removed before January 1, 1996, and held on 

such date for sale by any person, there shall 

be imposed the following taxes: 

(A) SMALL CIGARS.—On cigars, weighing 

not more than 3 pounds per thousand, $4.6875 

per thousand. 

(B) LARGE CIGARS.—On cigars, weighing 

more than 3 pounds per thousand, a tax equal 

to 53.125 percent of the price for which sold, 

but not more than $125 per thousand. 

(C) SMALL CIGARETTES.—On cigarettes, 

weighing not more than 3 pounds per thousand, $50 per thousand. 

(D) LARGE CIGARETTES.—On cigarettes, 

weighing more than 3 pounds per thousand, 

$105 per thousand; except that, if more than 

61⁄2 inches in length, they shall be taxable at 

the rate prescribed for cigarettes weighing 

not more than 3 pounds per thousand, counting each 23⁄4 inches, or fraction thereof, of 

the length of each as one cigarette. 

(E) CIGARETTE PAPERS.—On cigarette papers, 3.125 cents for each 50 papers or fractional part thereof; except that, if cigarette 

papers measure more than 61⁄2 inches in 

length, they shall be taxable at the rate prescribed, counting each 23⁄4 inches, or fraction 

thereof, of the length of each as one cigarette paper. 

(F) CIGARETTE TUBES.—On cigarette tubes, 

6.25 cents for each 50 tubes or fractional part 

thereof; except that, if cigarette tubes measure more than 61⁄2 inches in length, they 

shall be taxable at the rate prescribed, 

counting each 23⁄4 inches, or fraction thereof, 

of the length of each as one cigarette tube. 

(G) SNUFF.—On snuff, $16.17 per pound and 

a proportionate tax at the like rate on all 

fractional parts of a pound. 

(H) CHEWING TOBACCO.—On chewing tobacco, $6.49 per pound and a proportionate 

tax at the like rate on all fractional parts of 

a pound. 

(I) PIPE TOBACCO.—On pipe tobacco, $2.8125 

per pound and a proportionate tax at the like 

rate on all fractional parts of a pound. 

(J) ROLL-YOUR-OWN TOBACCO.—On roll-yourown tobacco, $20.67 per pound and a proportionate tax at the like rate on all fractional 

parts of a pound. 

(2) LIABILITY FOR TAX AND METHOD OF PAYMENT.—

(A) LIABILITY FOR TAX.—A person holding 

cigars, cigarettes, cigarette paper, cigarette 

tubes, snuff, chewing tobacco, pipe tobacco, 

and roll-your-own tobacco on January 1, 

1996, to which any tax imposed by paragraph 

(1) applies shall be liable for such tax. 

(B) METHOD OF PAYMENT.—The tax imposed 

by paragraph (1) shall be treated as a tax imposed under section 5701 of the Internal Revenue Code of 1986 and shall be due and payable on February 15, 1996, in the same manner as the tax imposed under such section is 

payable with respect to cigars, cigarettes, 

cigarette paper, cigarette tubes, snuff, chewing tobacco, pipe tobacco, and roll-your-own 

tobacco removed on January 1, 1996. 

(3) DEFINITIONS.—For purposes of this subsection, the terms ‘‘cigar’’, ‘‘cigarette’’, 

‘‘cigarette paper’’, ‘‘cigarette tubes’’, 

‘‘snuff’’, ‘‘chewing tobacco’’, ‘‘pipe tobacco’’, 

and ‘‘roll-your-own tobacco’’ shall have the 

meaning given to such terms by subsections 

(a), (b), (e), and (g), paragraphs (2) and (3) of 

subsection (n), and subsections (o) and (p) of 

section 5702 of the Internal Revenue Code of 

1986, respectively. 

(4) EXCEPTION FOR RETAIL STOCKS.—The 

taxes imposed by paragraph (1) shall not 

apply to cigars, cigarettes, cigarette paper, 

cigarette tubes, snuff, chewing tobacco, pipe 

tobacco, and roll-your-own tobacco in retail 

stocks held on January 1, 1996, at the place 

where intended to be sold at retail. 

(5) FOREIGN TRADE ZONES.—Notwithstanding the Act of June 18, 1934 (19 U.S.C. 

81a et seq.) or any other provision of law—

(A) cigars, cigarettes, cigarette paper, cigarette tubes, snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco—

(i) on which taxes imposed by Federal law 

are determined, or customs duties are liquidated, by a customs officer pursuant to a 

request made under the first proviso of section 3(a) of the Act of June 18, 1934 (19 U.S.C. 

81c(a)) before January 1, 1996, and 

(ii) which are entered into the customs territory of the United States on or after January 1, 1996, from a foreign trade zone, and 

(B) cigars, cigarettes, cigarette paper, cigarette tubes, snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco which—

(i) are placed under the supervision of a 

customs officer pursuant to the provisions of 

the second proviso of section 3(a) of the Act 

of June 18, 1934 (19 U.S.C. 81c(a)) before January 1, 1996, and 

(ii) are entered into the customs territory 

of the United States on or after January 1, 

1996, from a foreign trade zone, 

shall be subject to the tax imposed by paragraph (1) and such cigars, cigarettes, cigarette paper, cigarette tubes, snuff, chewing 

tobacco, pipe tobacco, and roll-your-own tobacco shall, for purposes of paragraph (1), be 

treated as being held on January 1, 1996, for 

sale. 

(d) ESTABLISHMENT OF TRUST FUND.—

(1) IN GENERAL.—Subchapter A of chapter 

98 of the Internal Revenue Code of 1986 (relating to trust fund code) is amended by adding at the end the following new section: 

‘‘SEC. 9512. TOBACCO CONVERSION TRUST FUND. 

‘‘(a) CREATION OF TRUST FUND.—There is 

established in the Treasury of the United 

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May 15, 1995 CONGRESSIONAL RECORD— SENATE S6691 

States a trust fund to be known as the ‘Tobacco Conversion Trust Fund’ (hereafter referred to in this section as the ‘Trust Fund’), 

consisting of such amounts as may be appropriated or credited to the Trust Fund as provided in this section or section 9602(b). 

‘‘(b) TRANSFERS TO TRUST FUND.—The Secretary shall transfer to the Trust Fund an 

amount equivalent to 3 percent of the net increase in revenues received in the Treasury 

attributable to the amendments made to section 5701 by subsections (a) and (b) of section 

2 and the provisions contained in section 2(c) 

of the Tobacco Consumption Reduction and 

Health Improvement Act of 1995, as estimated by the Secretary. 

‘‘(c) DISTRIBUTION OF AMOUNTS IN TRUST

FUND.—Amounts in the Trust Fund shall be 

available to the Secretary of Agriculture, as 

provided by appropriation Acts, for making 

expenditures for purposes of—

‘‘(1) providing assistance to farmers in converting from tobacco to other crops and improving the access of such farmers to markets for other crops, and 

‘‘(2) providing grants or loans to communities, and persons involved in the production or manufacture of tobacco or tobacco 

products, to support economic diversification plans that provide economic alternatives to tobacco to such communities and 

persons. 

The assistance referred to in paragraph (1) 

may include government purchase of tobacco 

allotments for purposes of retiring such allotments from allotment holders and farmers who choose to terminate their involvement in tobacco production.’’

(2) CLERICAL AMENDMENT.—The table of 

sections for such subchapter A is amended by 

adding at the end the following new item: 

‘‘Sec. 9512. Tobacco Conversion Trust Fund.’’

By Mr. SIMPSON: 

S. 805. A bill to improve the rural 

electrification programs under the 

Rural Electrification Act of 1936, to improve Federal rural development programs administered by the Department 

of Agriculture, to provide for exclusive 

State jurisdiction over retail electric 

service areas, to prohibit certain practices in the restraint of trade, and for 

other purposes; to the Committee on 

Agriculture, Nutrition, and Forestry. 

RURAL ELECTRIC LEGISLATION

Mr. SIMPSON. Mr. President, today I 

am introducing legislation that will 

improve the Nation’s Rural Electric 

Program by putting some common 

sense back into the way we use taxpayers’ money to fund rural electric 

and rural development loans. The 

Rural Electrification and Rural Economic Development Improvement Act 

of 1995 would amend a law that clearly 

has not evolved in step with the industry. 

The fact is, the growth of our Nation’s population has greatly changed—

and continues to change—the nature of 

electric service areas. People are moving into previously underpopulated 

areas and our current statutes do not 

address that growth. There was once a 

widespread need for Government incentives in order to provide ‘‘affordable’’

electric service to consumers in many 

areas, but that need too, has changed. 

Many areas of our country which are 

no longer rural are still being served by 

Government-subsidized utilities, even 

though commercial utilities are willing 

to provide the service. The result is a 

current policy which puts the U.S. 

Government right into the fray. We 

end up with a policy that subsidizes 

one competitor over another and we 

charge the bill to the taxpayers. That 

terrible market distortion is the product of an outdated rural electric policy 

that must be changed. 

Since I arrived in the Senate in 1978, 

I have watched the current REA system transfer billions of dollars in interest subsidies from taxpayers to rural 

electric borrowers. Today, many of 

those borrowers are perfectly capable 

of competing in the open-market without Government subsidies. 

Certainly not all of the borrowers 

can compete. There are, indeed, many 

troubled cooperatives that need assistance. That is why the objective of this 

bill is to pare down the bloated system 

so that we can continue to fund hardship loans. Nobody wants to pass legislation that will push electric rates 

through the roof. I certainly do not, 

and that will not happen with this bill. 

My aim is to get the healthy borrowers ‘‘off the dole’’ so we can focus 

scarce funds on the hardship cases. 

That should be very clear from the beginning. I do not propose eliminating 

the Rural Utilities Service [RUS] or 

the subsidized loan program. But we 

should target assistance to the co-ops 

that really are incapable of providing 

affordable electric service in an open 

market. And we should offer healthy 

borrowers a nonpunitive road to the 

free market. Indeed, that is something 

many of them need. 

There are a great number of co-ops 

out there—both distributors and power 

suppliers—that are locked in to high 

cost Government loans. On top of that, 

many of those distributors are stuck 

with expensive power supply contracts. 

The co-ops cannot shop around because 

they are loaded down with Government-financed debt they cannot afford 

to privatize. So they must continue 

on—unable to openly compete—forced 

to purchase more expensive power and 

to offset it with Government interest 

subsidies, while their neighbors, the 

profit-driven corporations, become 

more efficient and more competitive. 

I trust my colleagues will agree that 

we should make every effort to get the 

‘‘biggest bang for our buck.’’ That has 

been one of the catch phrases of this 

Congress. And it applies to every Government program, not just the Rural 

Utilities Service. This week, members 

of the Budget Committee are confronting the difficult choices essential 

to balancing the budget by 2002. This 

means they must identify over $30 billion in cuts each year, for 7 years, more 

than 10 times the painful cuts we just 

passed in the rescissions bill. Everyone 

had best be prepared to take their 

lumps as we debate reductions in agricultural research, the arts, education, 

transportation and a host of other important areas—this electric program 

should not be exempted. 

The overall size of the program is 

staggering. Current outstanding loans 

exceed $20 billion for distribution cooperatives—they call them ‘‘discos’’—

they danced through $20 billion and 

over $40 billion for power supply coops—the generation and transmission 

facilities, or G&T’s. This is a behemoth 

of a Government business. The legislation I am introducing would save taxpayers millions of dollars on interest 

subsidies alone without repealing the 

program. 

As I say often; borrowers that really 

need loans should like this bill. Under 

current law, some of them must wait 

years to get loans because available 

funds are allocated on a ‘‘first-come, 

first-served’’ basis and there is not 

enough to go around. According to the 

latest rural electric survey there is a 

$405 million loan backlog this year. 

That will increase to more than $500 

million next year and we still do not 

allow the RUS to prioritize the money, 

if you are in the back of the line, you 

just have to wait. 

And please hear this. The system is 

clogged because any entity that has 

ever received an REA-approved loan remains eligible for rural electric loans—

forever. Hear that. It is a deal. It is 

‘‘once a borrower always a borrower’’

and there is no end in sight. Even if a 

co-op is fully able to obtain marketrate credit elsewhere, it can keep coming right back to suckle at the teat of 

the Federal treasury’s low-interest 

loan program again and again, even 

sometimes when they have not paid up 

on the previous one. That is not appropriate and it is not fair and it is not 

just. My bill would subject RUS borrowers to the very same ‘‘credit elsewhere’’ test that all other agricultural 

borrowers must face. 

For example, under current law, the 

Farmer’s Home Administration can 

only give a loan to a farmer who is unable to obtain ‘‘reasonable credit elsewhere.’’ Farmer’s Home is ‘‘the lender 

of last resort.’’ But RUS is instead a 

‘‘lender of first resort.’’ If Congress is 

serious about privatizing unnecessary 

Government lending, then we must put 

a realistic means-test on RUS loans. 

Some of the co-ops will tell you they 

already have a means-test, but let me 

tell you what that is. In 1992, we limited cheap Government financing for 

the really wealthy co-ops to 70 percent 

of their total debt-load. That is not a 

means-test. There is a big difference 

between 70 percent and a ‘‘credit elsewhere’’ test. 

I believe we should retain the current 

three-tiered financing system that includes hardship loans, direct loans and 

guaranteed loans. I believe that applicants should only receive such assistance when they cannot get ‘‘credit 

elsewhere.’’ Then, they can come to the 

Government either for low-interest 

hardship loans, ‘‘at-cost’’ direct loans 

or a Government guarantee of up to 90 

percent. 

Under my legislation, the RUS would 

review the borrower’s books every 2 

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S6692 CONGRESSIONAL RECORD— SENATE May 15, 1995 

years. If a borrower’s circumstances 

have improved they would then be allowed to prepay their Government 

loans, without penalty, in order to 

move into the commercial credit market. 

The budget savings in the legislation 

would come from a reduction in interest subsidies and administrative costs. 

In fiscal year 1995, the 5 percent hardship loan subsidy cost the taxpayers 

$10 million, but ‘‘municipal rate’’ direct loans cost over $46 million. On top 

of that, we spent $30 million on administration. Those interest subsidies provided $74 million in hardship loans and 

$536 million in direct loans from the revolving fund. 

My proposal would save over $60 million by using the treasury interest rate 

for non-hardship direct loans. With direct loans at treasury rate interest, we 

would save over $60 million next year. 

Some of that money would go to increasing the appropriation for hardship 

loans to $25 million, which should more 

than double the availability of truly 

necessary loans. 

The National Rural Electric Cooperative Association—the NRECA—will 

surely mobilize to fight this bill. Oh, 

you bet they will. Its representatives 

will come to the hill saying that this 

legislation is going to destroy their industry, it will be a tragic portrait right 

straight out of ‘‘The Grapes of Wrath.’’

But I say that this bill will not cause 

rural America to wither up and die. 

Those images are an absolute fiction. 

The reality is that the REA has accomplished its mission in many areas 

of our country. Proof of that lies in the 

simple fact that competition exists for 

electric service in many co-op territories. I would ask again, why should 

the Government continue to subsidize 

electric loans when private industry is 

ready and willing to provide reasonable 

service? 

The NRECA will also say that their 

competitors are trying to gobble up 

their choice customers. I have heard 

that one. To that, I would suggest that 

healthy co-ops should take advantage 

of this bill and privatize their debt. Investors are out there who want to put 

money into the co-ops because many of 

them have rapidly growing residential 

service areas that are a great investment. Those co-ops should be going 

head-to-head with their competitors on 

an even playing field. 

On the issue of annexation and territorial predation, I believe the leading 

role should be played by the State public service commissions. When there 

are difficult—perhaps even ancestral—

disputes over territorial rights, State 

regulatory commissions are far better 

suited to make appropriate determinations than is the Federal Government. 

Local decisions should be made at the 

local level. 

The NRECA will also point a finger 

at tax incentives that are enjoyed by 

their profit-driven competitors. They 

will call that an unfair advantage. But 

these electric co-ops do not pay any 

Federal income taxes. They claim they 

do, indirectly, and that is true. When a 

cooperative distributes dividends to its 

members, the members must pay tax 

on that income. But any ‘‘Joe Citizen’’

who owns stock in a power company 

must also pay income tax on the dividends. 

The argument that investor-owned 

utilities have an unfair tax advantage 

is senseless. If the co-ops really want 

the same tax incentives, then we would 

have to start taxing them. I do not 

think they want that. 

Another very important part of the 

bill would improve the delivery of rural 

development funds, specifically low-interest ‘‘water and waste disposal’’

loans. We want to ensure that priority 

here is being given to nonprofit organizations whose projects are included in 

a local, regional, or statewide development plan. This would assist in the coordination of rural development efforts 

and it is consistent with the desire to 

eliminate duplicative spending. 

Another item that needs correction 

is a provision that—since 1987—has allowed electric borrowers to invest up 

to 15 percent of their total plant value 

in rural development projects without 

RUS approval—and without regard to 

their Federal debt status. 

The problem with this is that a co-op 

which is receiving interest subsidies on 

its Federal debt could actually invest 

any excess capital—up to 15 percent of 

its plant value—in ‘‘rural development 

projects.’’ In theory, the taxpayers subsidize the RUS loans so that borrowers 

can plug low-interest funds into rural 

development. But a 1992 USDA inspector general’s report uncovered a different picture. Of the more than $8 billion that had been invested by electric 

borrowers, less than 1 percent actually 

went to rural development investments. 

The inspector general found a disturbing trend in which borrowers took 

their Government interest subsidies 

right to ‘‘market-rate Wall Street’’ and 

invested hundreds of millions of dollars 

not in rural development, but in mutual funds. My bill would reduce that 

limitation to 3 percent. I believe excess 

capital should be used to pay off taxpayer-subsidized debt before it is used 

to enrich the cooperatives. 

Mr. President, I come from a State 

that has been magnificently served by 

the REA over the years. One of the 

first national directors of REA was one 

J.C. ‘‘Kid’’ Nichols, a Wyoming businessman who was a dear and lifelong 

friend of mine. He was there when the 

agency first embarked upon its mission 

in this country, a mission to bring 

electricity and lights to rural America. 

It was a stunning thing to see. 

But if we are to better the lot of 

rural Americans—and we all know that 

rural America can use some real help—

we need to be honest about how far we 

have come to where we are and how we 

can change where we are going. And 

change we must—with responsibility 

and with courage. The task we face is 

great because we have to deal with a 

massive national debt, an ever-dwindling Federal trough, and the wants of 

voracious voters. 

The rural electric program is a microcosm of everything that is right—

and wrong—with our country. On the 

one hand, the REA wired our homes for 

sound and light. It surely did that for 

the folks near my hometown of Cody, 

WY. And it changed the lives of rural 

people forever. On the other hand, we 

have allowed the program to grow so 

big and so far-reaching that we have 

lost sight of why it was created in the 

first place: it was to give rural Americans what the rest of the country had—

electric power. Mr. President, that mission has been accomplished and the 

country has changed. Why does this 

program plod along—year after year—

untouched by all sensibility and reason? 

I have often said you show me where 

we need power lines in rural America 

today, and I will be right here to appropriate and assist in getting the money 

to do that in every way, discussing 

density, discussing all the geographical 

aspects, all the rest. But I have been 

watching this issue like a hawk for a 

lot of years. 

I am pleased to offer this bill. I believe that it will save the integrity of 

the program. I will say it again. Congress must take its deficit cutting task 

seriously, and this legislation would be 

an important part of that. 

Mr. President, 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. 805 

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 ‘‘Rural Electrification and Rural Economic Development 

Improvement Act of 1995’’. 

SEC. 2. FINDINGS. 

Congress finds that—

(1) the Rural Electrification Administration was created to facilitate the electrification of rural America by providing low-interest loans to electric cooperative associations 

and other entities for the purpose of constructing and improving rural electric systems; 

(2) more than 99 percent of the residents in 

rural areas of the United States now have affordable and reliable electric service; 

(3) a large volume of loans, at subsidized 

interest rates, continue to be made under the 

Rural Electrification Act of 1936 to electric 

cooperative borrowers who could obtain financing at reasonable rates and terms from 

a source other than the Federal Government 

and these borrowers have become significant 

and successful participants in an increasingly competitive electric utility industry; 

(4) the Federal Government should make 

electric loans only to entities that cannot 

otherwise obtain funding at reasonable rates 

and terms; 

(5) the Rural Electrification Act of 1936 authorizes low-interest and zero-interest loans 

and grants to be made to borrowers under 

the Act for the purpose of rural economic development; 

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May 15, 1995 CONGRESSIONAL RECORD— SENATE S6693 

(6) these rural economic development programs do not provide benefits to most rural 

Americans since the majority of these residents receive electric utility service from entities that do not receive financing under the 

Rural Electrification Act of 1963; 

(7) borrowers under the Rural Electrification Act of 1936 are directly eligible for some 

rural development programs under the Consolidated Farm and Rural Development Act 

of 1972; 

(8) the limited funds made available each 

year for all rural economic development programs should not favor these individuals who 

reside in rural areas that are served by borrowers under the Rural Electrification Act of 

1936; and 

(9) borrowers under the Rural Electrification Act of 1936 should not have a competitive advantage in serving customers in rural 

areas of the United States. 

TITLE I—IMPROVEMENTS TO THE RURAL 

ELECTRIFICATION LOAN PROGRAMS 

SEC. 101. REFERENCES TO THE RURAL ELECTRIFICATION ACT OF 1936. 

As used in this title, the term ‘‘the Act’’

shall mean ‘‘the Rural Electrification Act of 

1936’’ (7 U.S.C. 901 et seq.). 

SEC. 102. CONFORMING AMENDMENT. 

The Act is amended by striking ‘‘TITLE 

I—RURAL ELECTRIFICATION’’ immediately prior to section 1 (7 U.S.C. 901). 

SEC. 103. OBJECTIVE OF THE ACT; INVESTIGATIONS AND REPORTS. 

Effective October 1, 1995, section 2 of the 

Act (7 U.S.C. 902) is amended to read as follows: 

‘‘SEC. 2. OBJECTIVE OF THE ACT; INVESTIGATIONS AND REPORTS. 

‘‘(a) The objective of this Act is to authorize and empower the Secretary to make 

loans for the purposes of (1) furnishing and 

improving electric energy services in rural 

areas of the several States and Territories of 

the United States, (2) assisting rural electric 

borrowers to implement demand side management practices, energy conservation programs, and on-grid and off-grid renewable 

energy systems, and (3) furnishing and improving telephone service in such areas. 

‘‘(b) The Secretary may make, or cause to 

be made, studies, investigations, and reports 

concerning the availability of adequate electric and telephone services in rural areas of 

the United States and its Territories and to 

publish and disseminate information with respect thereto.’’. 

SEC. 104. APPLICATION OF STATE LAWS OR ORDINANCES CONCERNING ELECTRIC 

SERVICE. 

The Act is amended by adding, after section 2 (7 U.S.C. 902), the following new sections: 

‘‘SEC. 2A. STATE REGULATION OF ELECTRIC 

UTILITY SERVICE. 

‘‘Nothing contained in this Act shall be 

construed to deprive any State commission, 

board, or other agency of jurisdiction, under 

any State law, now or hereafter effective, to 

regulate electric service. 

‘‘SEC. 2B. APPLICATION OF STATE LAW. 

‘‘(a) Nothing in this Act is intended to prevent a State or political subdivision thereof 

from enacting and enforcing a law or ordinance concerning the curtailment, limitation, or geographic area of service provided 

by an electric borrower under this Act if 

such law or ordinance provides for the just 

compensation of the borrower for any condemnation, forfeiture, or involuntary sale of 

a facility, property, right, or franchise of the 

borrower that secures a loan made under this 

Act. Any such condemnation, forfeiture, or 

involuntary sale shall not be construed as 

interfering with the purposes of this Act. 

‘‘(b)(1) Not later than 30 days after a borrower receives such compensation, the Secretary shall require the borrower to use the 

proceeds of such compensation to prepay, 

without penalty, all or any portion of the 

outstanding balance on any loan that was 

made or guaranteed under this Act for which 

the Secretary holds a mortgage to, or other 

security interest in, the facility, property, 

right, or franchise for which the compensation was provided. 

‘‘(2) The Secretary shall also permit the 

borrower to use any proceeds of such compensation, in excess of the amount needed to 

prepay a loan under paragraph (1), to prepay, 

without penalty, all or any portion of any 

other loan of the borrower made under this 

Act.’’. 

SEC. 105. REPEAL OF AUTHORITY FOR TREASURY 

LOANS. 

Section 3 of the Act (7 U.S.C. 903) is repealed. 

SEC. 106. REPEAL OF AUTHORIZATION FOR 2 

PERCENT INTEREST RATE ELECTRIC 

LOANS. 

Section 4 of the Act (7 U.S.C. 904) is repealed. 

SEC. 107. REPEAL OF AUTHORIZATION FOR 2 

PERCENT ELECTRICAL AND PLUMBING EQUIPMENT LOANS. 

Section 5 of the Act (7 U.S.C. 905) is repealed. 

SEC. 108. AUTHORIZATION OF APPROPRIATIONS; 

REPEAL OF REQUIREMENT FOR TESTIMONY; FEES FOR NON-FINANCIAL 

ASSISTANCE AND SERVICES. 

Section 6 of the Act (7 U.S.C. 906) is amended to read as follows: 

‘‘SEC. 6. AUTHORIZATION OF APPROPRIATIONS: 

USER FEES FOR NON-FINANCIAL ASSISTANCE AND SERVICES. 

‘‘(a)(1) Except as provided for in paragraph 

(2), there are hereby authorized to be appropriated, out of any money in the Treasury 

not otherwise appropriated, such funds as 

necessary for the purpose of administering 

this Act and for the purpose of making the 

studies, investigations, publications, and reports provided for in section 2. 

‘‘(2) For each of the fiscal years 1996 

through 2000, the amount authorized to be 

appropriated under paragraph (1), or otherwise made available pursuant to this Act, for 

the purpose of administering the rural electric program, shall not exceed $15,000,000. 

‘‘(b)(1) Effective October 1, 1995, the Secretary shall establish a schedule of fees to be 

charged for non-financial assistance and 

services provided by the Secretary to loan 

applicants, borrowers, and others pursuant 

to this Act. Such assistance and services 

shall include, but not be limited to, those relating to accounting, personnel training, engineering, management, auditing, data processing and information system support, duplication of documents, consolidations, and 

compliance with the provisions of other Federal laws or State laws. 

‘‘(2) In establishing the schedule of fees 

under paragraph (1), the Secretary shall ensure that the amount of each fee shall be sufficient to cover the reasonable cost of the assistance or service provided, as determined 

by the Secretary. 

‘‘(3) The recipient of any non-financial 

service or assistance provided by the Secretary shall pay to the Secretary the amount 

of the fee as established in the fee schedule 

for such service or assistance at such time as 

the Secretary may require. All fees paid to 

the Secretary pursuant to this subsection 

shall be deposited in the Treasury and shall 

be available to the Secretary, without fiscal 

year limitation, to pay the cost of providing 

such non-financial assistance and services 

pursuant to this Act.’’. 

SEC. 109. CONFORMING AMENDMENTS. 

Section 7 of the Act (7 U.S.C. 907) is amended by—

(a) in the first sentence, striking out ‘‘from 

the sums authorized in section 3 of this Act’’, 

and inserting in lieu thereof ‘‘from funds 

made available for the purposes of this Act’’; 

and 

(b) in the second sentence, by striking out 

‘‘No borrower of funds under sections 4 or 

201’’ and inserting in lieu thereof ‘‘No borrower liable for the repayment of any telephone loan made under section 201, and, except as otherwise provided for in section 2B 

or any other provision of this Act, no borrower who is liable on any rural electric loan 

made under this Act’’. 

SEC. 110. REPEAL OF OBSOLETE PROVISION RELATING TO TRANSFER OF CERTAIN 

FUNCTIONS. 

(a) Section 8 of the Act (7 U.S.C. 908) is repealed. 

(b) Any action made pursuant to section 8 

prior to its repeal by subsection (a) shall remain valid and in effect unless otherwise revoked. 

SEC. 111. EXPENDITURES FOR PERSONAL SERVICES, SUPPLIES, AND EQUIPMENT. 

Section 11 of the Act (7 U.S.C. 911) is 

amended by adding after ‘‘from sums appropriated pursuant to section 6’’ the following: 

‘‘or from funds otherwise made available for 

the purposes of administering this Act’’. 

SEC. 112. PAYMENT DEFERRAL AUTHORITY. 

Section 12 of the Act (7 U.S.C. 912) is 

amended to read as follows: 

‘‘SEC. 12. EXTENSION OF TIME FOR REPAYMENT OF LOANS.—The Secretary may extend 

the payment of interest or principal of any 

loan made under this Act if the Secretary determines that the borrower is experiencing a 

financial hardship. Any payment of interest 

or principal shall not be extended for more 

than 5 years after the date on which such 

was originally due, and interest shall accrue 

on the amount of any such payment at the 

rate of interest on the underlying loan, 

which interest shall become due and payable 

at the same time as the payment for which 

the extension was made.’’. 

SEC. 113. DEFINITION OF RURAL AREA. 

Section 13 of the Act (7 U.S.C. 913) is 

amended by adding at the end thereof the 

following: ‘‘Any determination with respect 

to whether an area is a rural area, under the 

preceding sentence, shall be made at the 

time the application is filed, and, under no 

circumstances, shall any previous determination that the area was rural for the purposes of this Act be used to make such determination.’’. 

SEC. 114. GENERAL PROHIBITIONS; ORIGINATION 

FEES; USE OF CONSULTANTS. 

Section 18 of the Act (7 U.S.C. 918) is 

amended by—

(a) in subsection (a), striking out ‘‘reduce 

any loan or loan advance’’ and inserting in 

lieu thereof ‘‘reduce any rural telephone loan 

or loan advance’’; 

(b) in subsection (b), after ‘‘connection 

with any’’, inserting ‘‘telephone’’; and 

(c) striking out subsection (c). 

SEC. 115. AUTHORIZATION OF LOANS TO RURAL 

ELECTRIC PROVIDERS. 

Effective October 1, 1995, the Act is amended by adding after section 18 (7 U.S.C. 918), a 

new Title I as follows: 

‘‘TITLE I—RURAL ELECTRIFICATION 

LOANS. 

‘‘SEC. 101. LIMITATION ON AUTHORITY TO

MAKE, INSURE, AND GUARANTEE ELECTRIC

LOANS.—No electric loan shall be made, insured, or guaranteed, under this Act after 

September 30, 1995, except as authorized in 

sections 102 and 103. 

‘‘SEC. 102. DIRECT ELECTRIC LOANS.—(a) 

The Secretary is authorized and empowered 

to make loans to corporations, States, Territories, and subdivisions and agencies thereof, 

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S6694 CONGRESSIONAL RECORD— SENATE May 15, 1995 

municipalities, peoples’ utility districts, and 

cooperative, nonprofit, or limited-dividend 

associations, organized under the laws of any 

State or Territory of the United States, for 

the purpose of financing the construction 

and operation of generating plants, electric 

transmission and distribution lines or systems for the furnishing of electric energy to 

persons in rural areas and for furnishing and 

improving electric service to persons in rural 

areas, including assisting electric borrowers 

to implement demand side management, energy conservation programs, and on-grid and 

off-grid renewable energy systems. 

‘‘(b) Loans made under this section shall be 

on such terms and conditions relating to the 

expenditure of the money loaned and the security therefore as the Secretary shall determine. 

‘‘(c)(1) The Secretary shall prioritize the 

making of loans authorized by this section 

to ensure that eligible applicants with the 

greatest need for Federal assistance shall 

have the highest priority for available loan 

funds. 

‘‘(2) In establishing such priorities, the 

Secretary shall consider the following indicators of need: 

‘‘(A) The net income before interest of the 

applicant; 

‘‘(B) The weighted average of per capita 

personal income for the area served or to be 

served by the applicant; 

‘‘(C) The weighted average unemployment 

rate of the area served or to be served by the 

applicant; 

‘‘(D) An average annual rate of growth in 

the total kilowatt hour sales of the applicant 

during the five year period preceding the 

date on which the application is made; 

‘‘(E) The rate of disparity, measured as the 

difference between the residential rate of the 

applicant and the average residential rate in 

the State for all electric utilities, including 

utilities that are not borrowers under this 

Act; 

‘‘(F) The rate level, measured by the average revenue per kilowatt hour that is sold by 

the applicant to residential and farm consumers; 

‘‘(G) The cost of power per kilowatt hour 

purchased or generated by the applicant; 

‘‘(H) The total kilowatt hour sales per mile 

of distribution and transmission line, excluding large commercial and industrial consumers and sales for resale; and 

‘‘(I) The value of distribution and transmission plants in service per kilowatt hours 

of electricity sold. 

’‘(d)(1)(A) The Secretary shall not make 

any loan under this section if the Secretary 

determines that the applicant is capable of 

producing net income before interest of more 

than 500 percent of the interest requirements 

on all of the outstanding and proposed loans 

of the applicant for which the final maturity 

is greater than one year. 

‘‘(B) If the Secretary determines that the 

applicant is capable of producing net income 

before interest of more than 200 percent of 

the interest requirement of all of the outstanding and proposed loans of the applicant 

for which the final maturity is greater than 

one year, the Secretary shall require the applicant to secure at least 10 percent of the 

total financing required for the proposed 

project with a loan from a commercial, cooperative, or other legally organized non-governmental lending institution, which loan 

may not be guaranteed under section 103. 

‘‘(2) The Secretary shall not make a loan 

under this section unless the Secretary determines that the applicant is capable of producing income sufficient to repay the loan in 

accordance to its terms within the agreed 

time, pay interest on the loan as it becomes 

due, and repay all other outstanding and proposed indebtedness of the applicant, together 

with any interest thereon, as payments become due. 

‘‘(3)(A) The Secretary shall not make any 

loan under this section unless the Secretary 

determines that the applicant is unable to 

obtain all or any part of the funds needed by 

the applicant elsewhere, including from (i) 

general funds of the applicant that are in excess of an amount needed for a reasonable reserve, or (ii) loans (with or without a guarantee under section 103) from commercial, 

cooperative, or other legally organized lending institutions at reasonable rates and 

terms for loans for similar purposes and periods of time. 

‘‘(B) The Secretary shall require the applicant to certify in writing that the applicant 

is unable to obtain sufficient credit elsewhere to finance all or any part of the actual 

needs of the applicant at reasonable rates 

and terms, taking into consideration prevailing rates for loans and obligations for 

similar purposes and periods of time. 

‘‘(4) The Secretary shall not make a loan 

under this section unless the Secretary determines that the security for the loan will 

be adequate to ensure full payment of the 

loan. 

‘‘(5) The Secretary shall not make any loan 

under this section unless the applicant has 

agreed to comply with the requirements of 

the graduation program established under 

section 105. 

‘‘(6) The Secretary shall not make any loan 

under this section unless all additional requirements of section 104 have been met. 

‘‘(e) The term of each loan made under this 

section shall be determined by the Secretary 

and shall not exceed 35 years, or the expected 

useful life of the assets being financed, 

whichever is less. 

‘‘(f)(1) Except as provided for in paragraph 

(2), the rate of interest on loans under this 

section shall be equal to the then current 

costs of money to the Government of the 

United States for obligations of comparable 

maturity. 

‘‘(2)(A) If the Secretary determines that 

the applicant is not capable of producing net 

income before interest of more than 200 percent of the interest requirements on all of 

the outstanding and proposed loans of the 

applicant for which the final maturity is 

greater than one year, the rate of interest on 

the loan shall be the rate established under 

paragraph (1) but not more than 5 percent 

per year, except as provided under subparagraph (B). 

‘‘(B) For any loan whose term is 10 years or 

more and whose interest rate is limited to 5 

percent per year under subparagraph (A), the 

Secretary shall review the financial status of 

the borrower every 2 years, and, if the Secretary determines that the borrower is capable of producing net income before interest 

of more than 200 percent of the interest requirements on all of the outstanding and 

proposed loans of the applicant for which the 

final maturity is greater than one year, the 

5 percent limitation shall no longer apply to 

the loan and the rate for the remaining term 

of the loan shall be the original rate established under paragraph (1). 

‘‘(g) The Secretary shall charge a loan 

origination fee of one percent of the amount 

of the loan if the Secretary determines that 

the applicant is capable of producing net income before interest of more than 200 percent of the interest requirements on all of 

the outstanding and proposed loans of the 

applicant for which the final maturity is 

greater than one year. 

‘‘(h) The Secretary may provide a borrower 

the right to make payment in full on a loan 

made under this section in advance of final 

maturity on terms consistent with those 

provided for commercial loans for similar 

purposes and maturities. 

‘‘SEC. 103. GUARANTEES OF ELECTRIC LOANS

FROM NON-GOVERNMENTAL SOURCES OF CREDIT’ LIEN ACCOMMODATIONS.—(a)(1) To the extent set out in Paragraph (2), the Secretary 

is authorized and empowered, to guarantee 

loans that are made by commercial, cooperative, or other legally-organized non-governmental lending institutions to any entity, 

and for any purpose, described in section 

102(a). 

‘‘(2) The Secretary shall guarantee only 

the payment of that portion of the principal 

of the loan, and that portion of the interest 

thereon, that the lender requires as a condition for making the loan. The amount of any 

such guarantee shall not exceed 90 percent of 

the principal of the loan and the interest 

thereon. 

‘‘(3) The Secretary shall not guarantee any 

loan to an entity that the Secretary determines is capable of producing income before 

interest of more than 600 percent of the interest requirements on all of the outstanding 

and proposed loans of the entity for which 

the final maturity is greater than one year. 

‘‘(4) The Secretary shall impose such fees 

and charges to cover the administrative expense related to any guarantee made under 

this section as the Secretary determines reasonable. 

‘‘(5) Any contract of guarantee executed by 

the Secretary under this section shall be an 

obligation supported by the full faith and 

credit of the United States and incontestable 

except for fraud or misrepresentation of 

which the holder of the guarantee had actual 

knowledge at the time it become a holder. 

‘‘(6) The Secretary shall not guarantee any 

loan under this section unless all additional 

requirements of section 104 have been met. 

‘‘(b) In order to encourage non-governmental lenders to make loans to eligible entities, or to provide a greater portion of the 

credit needs of an applicant for a loan under 

section 102, the Secretary is authorized to 

share the Government’s lien on the loan applicant’s or borrower’s assets or to subordinate the Government’s lien on the property 

to be financed by the lender. The Secretary 

shall not offer such accommodation or subordination unless the Secretary determines 

that the security for all loans made or guaranteed under this Act, the payment of which 

the borrower is liable, will remain reasonably adequate. 

‘‘SEC. 104. ADDITIONAL REQUIREMENTS AND

PROVISIONS RELATING TO LOANS AND GUARANTEES.—(a) The Secretary shall not make any 

loan under section 102 or guarantee any loan 

under section 103—

‘‘(1) if all or any part of the loan to be 

made or guaranteed will be used to expand 

the service territory of the applicant or borrower, as the case may be, into an area in 

which consumers are being served by another 

utility; 

‘‘(2) if the applicant or the borrower, as the 

case may be, has not agreed to follow generally accepted accounting procedures and 

management practices; 

‘‘(3) if the applicant or borrower, as the 

case may be, is prohibited by a charter, 

bylaw, statute, or regulation, or is otherwise 

prohibited, from disposing of any or all of 

the property of the applicant or borrower by 

a vote greater than a majority of the membership of the applicant or borrower voting 

in person or by proxy; and 

‘‘(4) if the applicant or borrower fails to 

agree to provide to the Secretary a complete 

and current set of all residential, commercial, or industrial tariffs or rate schedules, 

power sale agreement, and transmission 

agreements, and any subsequent changes 

made thereto, and any additional power sale 

and transmission agreements entered into by 

the borrower, during the term of the loan; 

any such tariffs, schedules, and agreements 

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May 15, 1995 CONGRESSIONAL RECORD— SENATE S6695 

provided to the Secretary shall be deemed 

public information and shall be made available within 10 working days of receipt of a 

verbal, written or electronically transmitted 

request reasonably describing the information sought. 

‘‘(b) The Secretary shall ensure that funds 

shall not be advanced under any loan made 

section 102 or guaranteed under section 103 

unless the approval of any State or Federal 

agency required with respect to the project 

to be financed by the loan, or its financing, 

has been obtained and remains in effect. 

‘‘(c) If the Secretary determines that the 

level of general funds of an applicant or borrower is in excess of that needed for a reasonable reserve, the Secretary shall reduce 

(A) the amount of the loan request in the 

case of an applicant under section 102, (B) 

the amount of any advance on a loan made 

under section 102, or (C) the amount of any 

guarantee under section 103. 

‘‘(d) Loans may be made under section 102, 

or guaranteed under section 103, only to the 

extent that electrical service to consumers 

in rural areas will be provided or improved 

by the facility being financed. 

‘‘SEC. 105. GRADUATION PROGRAM.—(a) The 

Secretary shall establish a program under 

which at least once every 2 years each loan 

made under section 102 shall be reviewed to 

determine whether the borrower (1) is able to 

repay all or any part of the loan with general 

funds in excess of that needed for a reasonable reserve, or (2) may be able to obtain 

credit from a commercial, cooperative, or 

other legally organized non-governmental 

lending institution in an amount sufficient 

to meet all or any part of the credit needs of 

the borrower at reasonable rates and terms, 

taking into consideration prevailing rates 

for loans and obligations for similar purposes 

and periods of time. 

‘‘(b)(1) To the extent that the Secretary determines that the borrower is able to repay 

all or any part of the loan from general 

funds, the borrower shall make payment in 

full or in part on the loan, without penalty, 

at such time as the Secretary may require 

prior to the final maturity date of the loan. 

‘‘(2) If the Secretary determines that the 

borrower may be able to meet all or any part 

of its credit needs from other lenders, with 

or without a loan guarantee under section 

103, the borrower shall be required to—

‘‘(A) apply for and accept credit from such 

lenders, and purchase any stock necessary in 

connection with the loan if the source is a 

cooperative lending institution; and 

‘‘(B) use the proceeds of such credit to 

make payment, in full or in part, without 

penalty, on any loan made to the borrower 

under section 102 at such time as the Secretary may require prior to the final maturity date of such loan. 

‘‘SEC. 106. FAILURE TO COMPLY WITH THE

ACT.—If a borrower of a loan made under section 102 fails to comply with any provision of 

this Act, or any agreement between the borrower and the Secretary made pursuant 

thereto, including, but not limited to, the 

provisions of section 104(a)(6) and section 105, 

the amount outstanding on the loan shall become due and payable upon receipt of a written notice of such failure issued by the Secretary to the borrower. Such notice shall be 

given to the borrower as soon as possible 

after such failure to comply with the Act occurs. 

‘‘SEC. 107. LIMITATION ON AUTHORIZATION

FOR APPROPRIATIONS.—In the case of each fiscal year 1996 through 2000, there are authorized to be appropriated to the Secretary for 

the cost, as defined in Section 502 of the Congressional Budget Act of 1974, of loans made 

and guaranteed under this title, $25,000,000.’’. 

SEC. 116. CONFORMING AMENDMENT. 

Section 201 of the Act (7 U.S.C. 921) is 

amended, in the first sentence, by—

(a) striking out ‘‘section 3 of’’; and 

(b) striking out ‘‘as are provided in section 

4 of this Act’’ and inserting ‘‘as was provided 

in section 4 of this Act prior to its repeal.’’. 

SEC. 117. RURAL ELECTRIFICATION AND TELEPHONE REVOLVING FUND. 

Section 301 of the Act (7 U.S.C. 931) is 

amended by—

(a) redesignating subsection (a) as subsection (b); 

(b) adding a new subsection (a) as follows: 

‘‘(a) The provisions of this title shall be applicable only to rural electric loans made 

prior to October 1, 1995, and to rural telephone loans.’’; and 

(c) in subsection (b), as redesignated, 

(1) in paragraph (1), striking out ‘‘under 

sections 4, 5, and 201 of this Act’’ and inserting in lieu thereof ‘‘under sections 4 and 5, 

prior to their repeal, and section 201 of this 

Act’’; 

(2) in paragraph (2), striking out ‘‘under 

sections 4, 5, and 201’’ and inserting in lieu 

thereof ‘‘under sections 4 and 5, prior to 

their repeal, and section 201 of this Act’’; and 

(3) in paragraph (3)—

(A) striking out ‘‘notwithstanding section 

3(a) of title I’’; and 

(B) striking out ‘‘held under titles I and II 

of this Act’’ and inserting in lieu thereof 

‘‘held under sections 2 through 18 of this Act, 

prior to the amendments made thereto by 

the ‘‘Rural Electrification and Rural Economic Development Improvement Act of 

1995, and title II of this Act’’. 

SEC. 118. CONFORMING AMENDMENTS. 

Section 302 of the Act (7 U.S.C. 932) is 

amended by—

(a) in subsection (a), striking out ‘‘under 

sections 4, 5, and 201 of this Act’’ and inserting in lieu thereof ‘‘under sections 4 and 5, 

prior to their repeal, and section 201 of this 

Act’’; and 

(b) in subsection (b)—

(1) in paragraph (1), striking our ‘‘under 

sections 4, 5, and 201 of this Act’’ and inserting in lieu thereof ‘‘under sections 4 and 5, 

prior to their repeal, and section 201 of this 

Act’’; and 

(2) in paragraph (2), adding after ‘‘pursuant 

to section 3(a) of this Act’’ the following: 

‘‘prior to its repeal’’. 

SEC. 119. COST OF MONEY RATES FOR CERTAIN 

ELECTRIC BORROWERS. 

Section 305(c)(2) of the Act (7 U.S.C. 

935(c)(2)) is amended to read as follows: 

‘‘(2) COST OF MONEY LOANS.—

‘‘The Secretary shall make insured electric 

loans, to the extent of qualifying applications, to eligible applicants that do not meet 

the requirements for hardship loans under 

paragraph (1) at the rate of interest equal to 

then current cost of money to the Government of the United States for loans of similar maturity.’’. 

SEC. 120. LIMITATION OF TERMS OF LOANS. 

Section 305(c) of the Act (7 U.S.C. 935(c)) is 

amended by adding at the end thereof a new 

paragraph (4) as follows: 

‘‘(4) LIMITATION ON TERMS OF LOANS.—

‘‘The term of any loan made under this 

subsection may not exceed the expected useful life of the assets being financed or 35 

years, whichever is less.’’. 

SEC. 121. ACCOMMODATION AND SUBORDINATION OF LIENS TO ASSIST CERTAIN 

BORROWERS IN ACQUIRING CREDIT 

AFTER OCTOBER 1, 1996. 

Effective October 1, 1995, section 306 of the 

Act (7 U.S.C. 936) is amended by—

(a) Adding ‘‘(a)’’ before the first sentence; 

and 

(b) Adding at the end thereof a new subsection (b) as follows: 

‘‘(b) In order to assist borrowers with outstanding electric loans made under this Act 

prior to October 1, 1995, who are not eligible 

for loans under section 102 to meet their further credit needs from commercial, cooperative, or other legally organized lending institutions, the Secretary is authorized to share 

the Government’s lien on the borrower’s assets or to subordinate the Government’s lien 

on the property to be financed by the lender 

to the extent that the Secretary determines 

that the security for all loans of the borrower made or guaranteed under this Act 

will remain reasonably adequate.’’. 

SEC. 122. REPEAL OF AUTHORIZATION TO REFINANCE FEDERAL FINANCING BANK 

LOANS. 

Section 306C of the Act (7 U.S.C. 936c) is repealed. 

SEC. 123. REPEAL OF REQUIREMENT FOR SPECIAL TREATMENT OF CERTAIN 

ELECTRIC BORROWERS. 

Section 306E of the Act (7 U.S.C. 936e) is repealed. 

SEC. 124. REPEAL OF 30 PERCENT LIMITATION 

ON REQUIRED FINANCING FROM 

OTHER SOURCES. 

Section 307 of the Act (7 U.S.C. 937) is 

amended by striking out the last sentence 

thereof. 

SEC. 125. REPEAL OF AUTHORIZATION TO REFINANCE CERTAIN RURAL DEVELOPMENT LOANS. 

Section 310 of the Act (7 U.S.C. 940) is repealed. 

SEC. 126. USE OF FUNDS. 

Section 312 of the Act (7 U.S.C. 940b) is repealed. 

SEC. 127. REPEAL OF CUSHION OF CREDIT PAYMENTS PROGRAM. 

Section 313 of the Act (7 U.S.C. 940c) is repealed. 

SEC. 128. REPEAL OF CERTAIN AUTHORIZATIONS 

FOR APPROPRIATIONS. 

Section 314 of the Act (7 U.S.C. 940d) is 

amended in subsection (b) by—

(a) striking out paragraphs (1) and (2); and 

(b) renumbering paragraphs (3) and (4) as 

paragraphs (1) and (2), respectively. 

TITLE II—PRESERVATION OF EXCLUSIVE 

STATE JURISDICTION OVER RETAIL 

ELECTRIC SERVICE TERRITORIES. 

SEC. 201. AMENDMENT TO THE FEDERAL POWER 

ACT OF 1935. 

Section 201 of the Federal Power Act of 

1935 (16 U.S.C. 824) is amended by adding at 

the end thereof the following new subsection: 

‘‘(h) EXCLUSIVE STATE JURISDICTION OVER

ALLOCATION OF RETAIL ELECTRIC SERVICE

TERRITORIES.—

‘‘Notwithstanding any other provision of 

law, the regulation and allocation of service 

territories or service areas to providers of 

electric service shall be subject only to State 

law and shall not be subject to the requirements of this Act, or any other provision of 

Federal law. No Executive agency (as defined 

in section 105 of title 5, United States Code) 

shall have authority to preempt or interfere 

with the operation of any law of a State or 

a political subdivision of a State relating to 

a service territory or service area allocation 

to providers of electric service.’’. 

TITLE III—IMPROVEMENTS TO THE DELIVERY OF RURAL DEVELOPMENT PROGRAMS 

SEC. 301. ELIGIBILITY FOR WATER AND WASTE 

LOAN AND GRANT PROGRAMS. 

The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended 

by—

(1) in subsection (a) of section 306 (7 U.S.C. 

1926(a)), striking out the second sentence; 

and 

(2) in section 365 (7 U.S.C. 2008), striking 

out subsection (h). 

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S6696 CONGRESSIONAL RECORD— SENATE May 15, 1995 

SEC. 302. REGULATIONS UNDER SECTION 370 OF 

THE CONSOLIDATED FARM AND 

RURAL DEVELOPMENT ACT. 

If the Secretary of Agriculture has not 

issued final or interim final regulations to 

ensure compliance with the provisions of 

section 370(a) of the Consolidated Farm and 

Rural Development Act (7 U.S.C. 2008e) on or 

before September 30, 1995, the Secretary 

shall not make any loan, loan advance, or 

grant for rural development purposes under 

any provision of such Act or any loan, loan 

advance, or grant under any provision of the 

Rural Electrification Act of 1936 until such 

regulations are issued. 

SEC. 303. ADMINISTRATION OF RURAL DEVELOPMENT PROGRAMS. 

The Consolidated Farm and Rural Development Act of 1972 (7 U.S.C. 1921 et seq.) is 

amended by adding at the end therefore the 

following new section: 

‘‘SEC. 372. ADMINISTRATION OF RURAL DEVELOPMENT PROGRAMS. 

‘‘Notwithstanding any other provision of 

law, in administering all rural development 

programs and activities, other than rural development programs relating to rural businesses and industry development, the Secretary shall give priority, in the awarding of 

all loans and grants (including, but not limited to, grants and loans provided under 

Title V of the Rural Electrification Act of 

1936), to rural development projects that are 

included in a local, regional, or State-wide 

development plan and the Secretary shall 

give the highest priority to public bodies and 

nonprofit entities that operate on a nonprofit basis.’’. 

SEC. 304. EQUAL ACCESS TO FEDERAL RURAL DEVELOPMENT FUNDS. 

Section 502 of the Rural Electrification Act 

of 1936 (7 U.S.C. 950aa–1) is amended—

(a) in paragraph (1) of subsection (b)—

(1) in the first sentence, by striking out 

‘‘Borrowers under this Act’’ and inserting in 

lieu thereof ‘‘Borrowers under this Act and 

all nonprofit entities’’; and 

(2) by striking out the second sentence. 

(b) in section (b), by adding at the end 

thereof the following new paragraph: 

‘‘(4) PREFERENCE FOR NONPROFIT ENTITIES.—In reviewing applications for assistance, the Secretary shall give the highest 

priority to those applications and 

preapplications submitted by nonprofit entities that operate on a nonprofit basis.’’; and 

(c) in subsection (e), by striking out the 

second sentence. 

SEC. 305. ELIMINATION OF DUPLICATIVE PROGRAMS. 

Section 2322 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 

1926–1) is repealed. 

f 

ADDITIONAL COSPONSORS 

S. 158

At the request of Mr. BREAUX, his 

name was added as a cosponsor of S. 

158, a bill to provide for the energy security of the Nation through encouraging the production of domestic oil 

and gas resources in deep water on the 

Outer Continental Shelf in the Gulf of 

Mexico, and for other purposes. 

S. 256

At the request of Mr. DOLE, the name 

of the Senator from New York [Mr. 

MOYNIHAN] was added as a cosponsor of 

S. 256, a bill to amend title 10, United 

States Code, to establish procedures for 

determining the status of certain missing members of the Armed Forces and 

certain civilians, and for other purposes. 

S. 494

At the request of Mr. KYL, the name 

of the Senator from Mississippi [Mr. 

LOTT] was added as a cosponsor of S. 

494, a bill to balance the Federal budget by fiscal year 2002 through the establishment of Federal spending limits. 

S. 650

At the request of Mr. SHELBY, the 

names of the Senator from New Hampshire [Mr. GREGG], the Senator from Indiana [Mr. COATS], the Senator from 

Mississippi [Mr. LOTT], and the Senator 

from Mississippi [Mr. COCHRAN] were 

added as cosponsors of S. 650, a bill to 

increase the amount of credit available 

to fuel local, regional, and national 

economic growth by reducing the regulatory burden imposed upon financial 

institutions, and for other purposes. 

SENATE CONCURRENT RESOLUTION 3

At the request of Mr. SIMON, the 

names of the Senator from Missouri 

[Mr. ASHCROFT] and the Senator from 

Connecticut [Mr. LIEBERMAN] were 

added as cosponsors of Senate Concurrent Resolution 3, a concurrent resolution relative to Taiwan and the United 

Nations. 

f 

AMENDMENTS SUBMITTED 

THE ALASKA POWER ADMINISTRATION SALE ACT TRANS-ALASKA 

PIPELINE AMENDMENT ACT OF 

1995 

MURKOWSKI AMENDMENT NO. 1078 

Mr. MURKOWSKI proposed an 

amendment to the bill (S. 395) to authorize and direct the Secretary of Energy to sell the Alaska Power Administration, and for other purposes; as follows: 

Strike the text of Title II and insert the 

following text: 

TITLE II 

SEC. 201. SHORT TITLE. 

This Title may be cited as ‘‘Trans-Alaska 

Pipeline Amendment Act of 1995’’. 

SEC. 202. TAPS ACT AMENDMENTS. 

Section 203 of the Act entitled the ‘‘TransAlaska Pipeline Authorization Act,’’ as 

amended (43 U.S.C. 1652), is amended by inserting the following new subsection (f): 

(f) EXPORTS OF ALASKAN NORTH SLOPE

OIL.—

(1) Subject to paragraphs (2) through (6), of 

this subsection and notwithstanding any 

other provision of law (including any regulation), any oil transported by pipeline over 

right-of-way granted pursuant to this section may be exported after October 31, 1995 

unless the President finds that exportation 

of this oil is not in the national interest. In 

evaluating whether the proposed exportation 

is in the national interest, the President—

(A) shall determine whether the proposed 

exportation would diminish the total quantity or quality of petroleum available to the 

United States; and 

(B) shall conduct and complete an appropriate environmental review of the proposed 

exportation, including consideration of appropriate measures to mitigate any potential 

adverse effect on the environment, within 

four months after the date of enactment of 

this subsection. 

The President shall make his national interest determination within five months after 

the date of enactment of this subsection or 

30 days after completion of the environmental review, whichever is earlier. The 

President may make his determination subject to such terms and conditions (other 

than a volume limitation) as are necessary 

or appropriate to ensure that the exportation is consistent with the national interest. 

(2) Except in the case of oil exported to a 

country pursuant to a bilateral international 

oil supply agreement entered into by the 

United States with the country before June 

25, 1979, or to a country pursuant to the 

International Emergency Oil Sharing Plan of 

the International Energy Agency, any oil 

transported by pipeline over right-of-way 

granted pursuant to this section, shall, when 

exported, be transported by a vessel documented under the laws of the United States 

and owned by a citizen of the United States 

(as determined in accordance with section 2 

of the Shipping Act, 1916 (46 U.S.C. App. 802)). 

(3) Nothing in this subsection shall restrict 

the authority of the President under the 

Constitution, the International Emergency 

Economic Powers Act (50 U.S.C. 1701 et seq.), 

or the National Emergencies Act (50 U.S.C. 

1601 et seq.) to prohibit exportation of the 

oil. 

(4) The Secretary of Commerce shall issue 

any rules necessary for implementation of 

the President’s national interest determination within 30 days of the date of such determination by the President. The Secretary of 

Commerce shall consult with the Secretary 

of Energy in administering the provisions of 

this subsection. 

(5) If the Secretary of Commerce finds that 

anticompetitive activity by a person exporting crude oil under authority of this subsection has caused sustained material crude 

oil supply shortages or sustained crude oil 

prices significantly above world market levels and further finds that these supply shortages or price increases have caused sustained 

material adverse employment effects in the 

United States, the Secretary of Commerce 

may recommend to the President appropriate action against such person, which 

may include modification of the authorization to export crude oil. 

(6) Administrative action with respect to 

an authorization under this subsection is not 

subject to sections 551 and 553 through 559 of 

title 5, United States Code. 

SEC. 203. ANNUAL REPORT. 

Section 103(f) of the Energy Policy and 

Conservation Act (42 U.S.C. 6212(f)) is amended by adding at the end thereof the following: 

‘‘In the first quarter report for each new 

calendar year, the President shall indicate 

whether independent refiners in Petroleum 

Administration for Defense District V have 

been unable to secure adequate supplies of 

crude oil as a result of exports of Alaskan 

North Slope crude oil in the prior calendar 

year and shall make such recommendations 

to the Congress as may be appropriate.’’. 

SEC. 204. GAO REPORT. 

The Comptroller General of the United 

States shall conduct a review of energy production in California and Alaska and the effects of Alaskan North Slope crude oil exports, if any, on consumers, independent refiners, and shipbuilding and ship repair yards 

on the West Coast. The Comptroller General 

shall commence this review four years after 

the date of enactment of this Act and, within 

one year after commencing the review, shall 

provide a report to the Committee on Energy 

and Natural Resources in the Senate and the 

Committee on Resources in the House of 

Representatives. The report shall contain a 

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