[Congressional Record: November 19, 1999 (Senate)] [Page S14986-S15059] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr19no99pt2-163] DISTRICT OF COLUMBIA APPROPRIATIONS ACT, 2000--CONFERENCE REPORT-- Resumed Cloture Motion The PRESIDING OFFICER. Under the previous order, pursuant to rule XXII, the Chair lays before the Senate the pending cloture motion, which the clerk will state. The legislative assistant read as follows: Cloture Motion We the undersigned Senators, in accordance with the provisions of rule XXII of the Standing Rules of the Senate, do hereby move to bring to a close debate on the conference report to accompany the District of Columbia appropriations bill. Trent Lott, Ted Stevens, Larry E. Craig, Judd Gregg, Tim Hutchinson, Don Nickles, Mike Crapo, Connie Mack, Slade Gorton, Ben Nighthorse Campbell, Arlen Specter, Pat Roberts, Chuck Hagel, Richard Shelby, Thad Cochran, and John Warner. The PRESIDING OFFICER. The question is, Is it the sense of the Senate that the conference report accompanying H.R. 3194, an act making appropriations for the government of the District of Columbia and other activities chargeable in whole or in part against revenues of said District for the fiscal year ending September 30, 2000, shall be brought to a close? The yeas and nays are required under the rule. The clerk will call the roll. The legislative clerk called the roll. Mr. NICKLES. I announce that the Senator from Oregon (Mr. Smith), the Senator from Arizona (Mr. McCain), and the Senator from Washington (Mr. Gorton) are necessarily absent. I further announce that, if present and voting, the Senator from Oregon (Mr. Smith) would vote yea. Mr. REID. I announce that the Senator from Washington (Mrs. Murray) is absent attending a funeral. The yeas and nays resulted--yeas 87, nays 9, as follows: [Rollcall Vote No. 373 Leg.] YEAS--87 Abraham Akaka Allard Ashcroft Baucus Bayh Bennett Biden Bingaman Bond Boxer Breaux Brownback Bryan Bunning Burns Byrd Campbell Chafee, L. Cleland Cochran Collins Coverdell Craig Crapo Daschle DeWine Dodd Domenici Edwards Enzi Feinstein Frist Gramm Grassley Gregg Hagel Harkin Hatch Helms Hollings Hutchinson Hutchison Inhofe Inouye Jeffords Johnson Kennedy Kerrey Kerry Kyl Landrieu Lautenberg Leahy Levin Lieberman Lincoln Lott Lugar Mack McConnell Mikulski Moynihan Murkowski Nickles Reed Reid Robb Roberts Rockefeller Roth Santorum Sarbanes Schumer Sessions Shelby Smith (NH) Snowe Specter Stevens Thomas Thompson Thurmond Torricelli Voinovich Warner Wyden NAYS--9 Conrad Dorgan Durbin Feingold Fitzgerald Graham Grams Kohl Wellstone NOT VOTING--4 Gorton McCain Murray Smith (OR) The PRESIDING OFFICER. On this vote, the ayes are 87, the nays are 9. Three-fifths of the Senators duly chosen and sworn having he voted in the affirmative, the motion is agreed to. FISHERIES RESEARCH VESSEL Mr. LOTT. Mr. President, the NOAA budget includes $51.56 million in funds to procure the first of four state-of-the-art fishery research vessels to conduct critical research on our Nation's fishery resources. This is an important step in providing for sustainable fisheries for our fishermen, U.S. trade, and U.S. consumers. It is my understanding that these ships will be some of the most technically complex research vessels in the world. It Is critical that the procurement of thee ships reflect this complexity, and that all U.S. shipbuilders with technical expertise in oceanographic research ships will have the opportunity to offer their expertise to the Government. Is it the Senator's understanding that this solicitation will be open to all U.S. shipbuilders, without set-asides that limit competition? Mr. STEVENS. The Majority Leader is correct. In providing for the first of these ships to be built, we understood that the public will benefit from free and unrestricted competition on this vessel. The demands placed on our fishery management system dictate that [[Page S14987]] we procure the most technically sophisticated ship possible from our U.S. shipbuilding industry. The only way to guarantee this result is to conduct a free and open competition among all U.S. shipbuilders and meet with Dr. Baker, the Director of NOAA, who has agreed to homeport this vessel in Kodiak. By locating it mid way between the Gulf of Alaska and the Bering Sea, it will have ready access to the Nation's two largest fisheries. Mr. CRAIG. Mr. President, my friends from Alaska, Senator Murkowski, and Nevada, Senator Reid, have worked hard to protect the mining jobs in their States and in mine, and I extend my thanks to them for working with me to keep the Department of Interior from mindlessly destroying jobs and lives by trying to rewrite the Mining Law. We want to make sure the intent of the provision on mill sites included in the Department of Interior portion of the appropriations bill is clear, and would like to ask your clarification on a few points. Mr. REID. I thank my friend from Idaho for his hard work. I want to confirm my understanding of one absolutely critical thing with respect to the language in Section 337 protecting plans of operations submitted prior to November 7, 1997. It is my understanding that the language covers revisions, modifications, and amendments to such plans that are made before such plans are fully approved by the BLM or Forest Service. If an as yet unapproved plan of operations was submitted prior to November 7, 1997 and revised earlier this year, for instance, then the proposed operation, as revised, would be protected. It is the operation, not a specific property position--whether mining claims or mill sites--that is protected. This is very important to my State and I ask the chairman to specifically confirm my understanding. Mr. STEVENS. I can say unequivocally that your understanding is correct. We all know that plans and operations are often revised by the applicant before being finally approved. Indeed, some revisions are required by the BLM or Forest Service during the plan review process. It is the clear intent of the language to protect revisions made prior to the plan's final approval. It is the operation, not a specific property position (whether mining claims or mill sites), that is protected. Anything less would be grossly inequitable and directly contrary to the clear intent of the conference. Mr. MURKOWSKI. I thank my friends from Alaska and Nevada for that clarification. It is also my understanding that the provision is intended to protect large investments made in mining operations approved by the Department of Interior under its old interpretation of the law. Frankly, it would be shameful for us to endorse the actions of a Federal agency that approves a project, allows the proponent to spend millions of dollars to develop it, and then changes its mind about what the law says and on that basis shuts the operation down. I understand that the provision would protect these enormous investments and the jobs they create from such arbitrary action by the Department of Interior. Mr. STEVENS. My friend is right. In compromising the House and Senate versions, our intention was to avoid the retroactive application of the Solicitor's opinion of November 7, 1997 and the resulting destruction of existing jobs and investments. Mr. MURKOWSKI. I thank the chairman for that clarification. Finally, as my friend knows, mining operations are large, complex undertakings, and circumstances change all the time, requiring changes in the plan of operations. Miners must ask the BLM and Forest Service to approve amendments to their plans all the time in order to keep operating. In fact, the BLM and Forest Service often require these miners to amend their plans. I'm concerned that unless these types of amendments to existing plans are protected, the provision we are adopting would be of very little value. The BLM or the Forest Service could simply require an operator of a large existing mine to amend its plan of operations, and then deny the plan amendment and shut down the operation on the basis of the Solicitor's opinion. I would like clarification that amendments to existing plans are protected by the provision. Mr. STEVENS. I assure my colleague that it was never our intent to shut down existing operations under any circumstances. Applying the opinion to these existing operations through the back door of a plan amendment would undermine the entire provision and make it meaningless. Anybody who knows the mining industry knows that plan amendments are routine. We want operators to be able to amend their plans when necessary to make them better. The provision covers such amendments, and protects them from the legal interpretation contained in the Solicitor's opinion. Mr. REID. I thank my friends from Alaska, the committee chairmen, for these important clarifications. Mr. LOTT. Mr. President, for many years I have been working with the Minority Leader, Senator Daschle, to develop and enact legislation to provide liability relief for recyclers of scrap metal and other material, under the Superfund program. I am pleased that we have been able to work together to reach a successful resolution on this issue, and that the legislation incorporates the agreement of a broad spectrum of parties. Mr. DASCHLE. I have appreciated the hard work of the Majority Leader on this issue, and I am pleased that this legislation has been included as part of the omnibus appropriations bill. I hope that this provision will serve to achieve our goal of encouraging recycling. It is also my understanding that the language of the bill is not intended to exempt from liability parties who had reason to believe that the recyclable material originated from the portion of a DOD, DOE, NRC or Agreement State-licensed facility where source, byproduct or special nuclear material, as defined in the Atomic Energy Act, was processed, utilized or managed. Is it your understanding that the agreement does not cover these materials? Mr. LOTT. Yes, that is correct. Mr. DASCHLE. Mr. President, this issue is of great significance to many of my colleagues and to members of the public. In particular, it is of great interest to the Senator from Arkansas, and I deeply appreciate her leadership on this issue. Mrs. LINCOLN. Mr. President, for the last six years I have worked in Congress to provide relief from liability to legitimate recyclers. Congress never intended to create a disincentive to recycle when it created the Superfund program, and for that reason, I am delighted that this legislation was included in the omnibus appropriations bill. In addition, I agree with Senator Daschle's clarification of the intent of this bill. I am very concerned about the possibility that this legislation could be misinterpreted to relieve from Superfund liability persons who release radioactive material to recyclers, such as those in the steel industry in my home state of Arkansas, who may be unaware of the danger of the products they are receiving, and who could in turn pass it on to consumers. I believe it is critical that we further clarify that this was not intended, and I am hopeful that the Majority Leader and the Minority Leader will work with me to do so. Mr. DASCHLE. I agree completely with the Senator from Arkansas. Since an explicit provision to this effect was inadvertently omitted, would the Majority Leader agree to address this issue through a technical correction to be enacted at the earliest possible opportunity next session? Mr. LOTT. Yes. I would be happy to work with the Minority Leader and the Senator from Arkansas early next year to pass a technical correction to this legislation to achieve this goal. Mr. MURKOWSKI. Mr. President, on November 1 of this year, the Committee on Energy and Natural Resources reported S. 623, the Dakota Water Resources Act of 1999, to the Senate. The legislation amends existing law in an effort to address the water needs of North Dakota. The legislation, as is true of most water related legislation in the arid West, is not without controversy. Proposals to divert water from the Missouri River to meet agricultural, municipal and industrial, and other needs in North Dakota have a long history. The Missouri, like the Colorado and the Columbia, serves many States and a multitude of interests, including navigation. The Missouri is also important to the management and operation [[Page S14988]] of the Mississippi. Although there are sufficient resources in each of those Basins to meet all the water related needs if the resources were developed using on-stream and off-stream storage, that development has not occurred and for various reasons, including what I believe are short sighted concerns by national organizations, are not likely to occur in the near term. That being the case, it is not surprising that whenever any Basin State manages to corral all the competing interests in its State and even obtains support from the Administration that other States that could be potentially affected want to examine the agreement and reassure themselves that this particular solution does not come at their expense. The best way to accomplish that is to bring all the parties together to allow them to review their concerns and work out whatever arrangement will best address their needs. Our Committee did just that several years ago as part of the legislation to settle the water claims of the Colorado Ute Tribes. Once we had revised the agreement in a fashion that was acceptable to the Tribes, the State of Colorado, and the other affected water users, we then had several weeks in intense discussions with the other Colorado River Basin States. I want to point to that process, because it did result in the passage of legislation that was supported by all the parties and provided for the completion of the Dolores and Animas projects. I rise today to speak and offer reassurance to the North Dakota delegation and the Missouri delegation that the Energy and Natural Resources Committee is committed to assisting these two delegations in working out their difficulties regarding S. 623, the Dakota Water Resources Act of 1999. I appreciate the hard work and good will expressed by both delegations over the past several weeks, but we have just run out of time in this session of Congress to address the concerns of all affected states. To continue these discussions, I have proposed to my colleagues that when Congress returns next year, the Energy Committee will hold a workshop or other forum so that the Senate can fully identify, discuss, and attempt to resolve the issues that have prevented this legislation from moving this year. With the assistance of my colleagues, I propose that the Energy Committee staff work with their staffs during the recess and that we convene a meeting during the first week in February to bring all the parties together. Hopefully, if we use the time well during the recess, we can identify who the technical people are who need to be involved so that the delegations will be able to have a constructive meeting. I want to note that Senator Smith, the Chairman of the Subcommittee on Water and Power, who held the hearings earlier this year on the legislation has indicated that he is also willing to assist in this process. Mr. DORGAN. I appreciate the Chairman's cooperation and assistance on this bill and his willingness to work with me in the Energy Committee to bring this legislation to the floor. His commitment to convene a workshop to resolve outstanding issues provides the basis for moving forward with this legislation, which would meet the outstanding Federal commitment to our state. As the Senator from Alaska knows, North Dakota has significant water quality and water quantity needs that must be addressed. In many parts of my state, well water in rural communities resembles weak coffee or strong tea; it is unfit for drinking and other domestic uses. Several parts of my state, including the Red River Valley, do not have access to reliable sources of water. This bill is designed to address those needs and help provide clean, reliable water to families and businesses across North Dakota. When the Senate attempted to consider this legislation in recent days, objections were registered by other Senators who had concerns about the bill. In response, Senator Conrad and I have worked with those Senators to address their concerns. I am certain that with the Chairman's assistance and that of Senator Smith we will be able to resolve these concerns expeditiously. Mr. BOND. I too, extend my thanks to the Chairman of the Energy Committee for his willingness to help us on this very complex and difficult issue. Missouri, and other States in the Missouri River Basin are dependent on the flow of the Missouri River. Any legislation that affects this flow must be thoroughly vetted by the people in our state who have the knowledge and the expertise. Since this legislation came up at the end of the session with no time for debate on the Senate floor, we appreciate the opportunity the Chairman is providing us to bring together those people from our States who know this issue well. A forum with the free exchange of ideas is an excellent way to air very serious concerns as well as explore possible solutions that can make this a win-win situation for everyone. Representatives of the Missouri Basin States are currently in deep negotiations to discuss water flow. This forum should be held in the context of those negotiations. Mr. ASHCROFT. I would like to associate myself with the remarks of my colleague from Missouri. We in Missouri are just as protective of our water as any other State in the Missouri River Basin, or for that matter, the rest of the United States. Before either of us can agree to any legislation that has the potential to affect our State, we must have the opportunity for our state experts to go over this legislation with a fine-tooth comb. I welcome the chance that the Senator from Alaska has offered and I know our state water experts will be happy to participate. As I have repeatedly stated, I am willing to work with my colleagues to try to resolve any concerns in a manner that will fully protect the interests of Missouri. Mr. CONRAD. I also appreciate the Senator's continued willingness to work with us. We will continue to work in good faith to develop a bill that can be passed by the Congress. I want to be absolutely clear that it is not our intent or that of anyone in North Dakota to harm any of our neighbors. This legislation significantly reduces the amount of irrigated acreage from that authorized by current law and completely eliminates any irrigated acreage from this project in the Hudson River drainage. We have significantly increased the levels of review by both the State Department to ensure compliance with the Boundary Water Treaty and by EPA to ensure compliance with the Clean Water Act on any trans-basin diversion that might occur. There is no guarantee that such a diversion will actually occur. I also want to make it clear that we are willing to discuss the timing, amount, and source of any diversions to ensure that the legitimate needs of our neighboring Basin States are met. The Chairman's offer is helpful and I hope that with a full and frank discussion we will be able to fully resolve all concerns. Mr. BINGAMAN. I agree with this proposal. I want to assure my colleagues that I will work with the Chairman to provide a forum to allow the North Dakota and Missouri delegations, along with adjacent states, to resolve their concerns. c-band industry Mr. STEVENS. Mr. President, I would like to engage the Senator from Utah, the chairman of the Judiciary Committee, in a colloquy. As the Senator knows, the C-Band industry is declining and the conferees correctly exempted existing C-Band consumers from numerous provisions in this bill at my request. It is my understanding the conferees sought to exempt the C-Band industry from the program exclusivity rules that we are applying in the satellite bill. Complying with the program exclusivity rules would be technically and economically unreasonable for the C-Band industry and would only deprive C-Band consumers with some of their favorite programming. Mr. HATCH. Yes, the Senator from Alaska is correct; that was the intent of the conferees. And, I appreciate the Senators concerns and pledge to work with him to ensure that when the FCC promulgates these rules, the C-Band industry is exempt and C-Band consumers are protected. Mr. STEVENS. I thank the Senator. Mr. GRASSLEY. I would like to ask the distinguished Chairman of the Committee on Finance a question regarding a tax provision which Congress adopted this summer as part of the vetoed Taxpayer Refund and Relief Act of 1999. [[Page S14989]] Mr. Chairman, section 1005 of that Act would have provided that the principles of section 482 should be used to determine whether transactions between tax-exempt organizations and related non-exempt entities give rise to unrelated business income tax. This provision was needed to insure that legitimate arms length transactions between these entities are not penalized. Unfortunately, it appears that this session will end without our having another opportunity to once again enact this vitally needed protection for the tax exempt community. As a result, I would like to ask the distinguished Chairman whether he would agree that this provision should be included as a high priority in the first tax vehicle that we adopt in the second session. Mr. ROTH. I can assure the distinguished Senator that the enactment of this provision, which has already been agreed to by both the House and Senate, is a high priority for our next tax bill. Mr. NICKLES. I want to join my distinguished colleague from Iowa in his remarks, and also thank our distinguished Chairman for his commitment to enact this provision next year. Tax exempt organizations provide critical services to our communities, and this provision will make it far easier for them to continue to perform these important functions. Mr. ROTH. I look forward to working with both the Senators from Iowa and Oklahoma next year to provide the relief that this provision would give to the many fine exempt organizations that are awaiting its enactment. nurse anesthetists Mr. HARKIN. In 1994, the Health Care Financing Administration issued a draft regulation deferring to State law on the issue of physician supervision of certified registered nurse anesthetists (CRNA's). This action was followed -in 1997 by a proposed HCFA rule deferring to State law on this issue. HCFA's rule has been subject to great scrutiny and numerous studies. Nevertheless, HCFA has to date failed to issue its final rule on the matter, and defer this issue to State law. Would the distinguished Chairman of the Senate Labor, Health and Human Services, and Education Appropriations Subcommittee agree with this assessment? Mr. SPECTER. I agree with my distinguished colleague, the ranking subcommittee member. States should have the authority to regulate CRNA's in the same manner as States regulate other health care providers. There is a wealth of information already in existence that supports the view that the issue of supervision should be left to the States, just as HCFA has proposed. Mr. HARKIN. Therefore, we agree that HCFA's proposed rule has been extensively researched and that HCFA should move forward expeditiously. Mr. GORTON. I join with my distinguished colleagues to agree that HCFA should move forward expeditiously to resolve this issue. Mr. SPECTER. Absolutely, HCFA should do what it has initially proposed several years ago and defer to State law on this issue. Mr. GORTON. I thank the Senators. I look forward to working with them both to resolve this matter. Mr. HOLLINGS. As you know, I initially objected to the movement of this legislation because of my concerns about the manner in which it preempted state law. As introduced, this bill would have nullified any ability of state legislatures to adopt the Uniform Electronic Transactions Act, (UETA), in a manner that varied from the provisions of the bill, or in a manner that reserved the right of states to adopt UETA in conformance with their consumer protection laws. When the bill was reported by the Commerce Committee, provisions were included to provide states this flexibility. Since the reporting of the bill, the preemption language has been amended to provide that to avoid adherence to the federal law, a state must adopt UETA ``in the form, or any substantially similar variation'' as provided to the states by the National Conference on Uniform State Law. Do you agree that notwithstanding this change, the purpose and intent of the preemption provisions, either pursuant to the definitions in the bill or otherwise, have not changed? And that the legislation, in its current form, is intended to permit states the flexibility of adopting and enacting UETA in a manner and form that ensures its conformance with state consumer protection laws? Mr. ABRAHAM. Yes, Senator Hollings, that is certainly the intent of the legislation in its current form, but I would note that there must be a modicum of common sense involved in this approach. It is expected that states will pass consumer protection provisions in conjunction with the Electronic Transactions Act. It is important, however, that states not use the heading of ``consumer protection'' to enact changes which are inconsistent with the spirit of UETA and which threaten to undermine the uniformity which UETA is intended to convey. I believe the current language realizes these important goals. Mr. HOLLINGS. I would like to address another change to the bill since its reporting by the Committee. As you know, the legislation has been amended to incorporate language providing that the bill applies to the business of insurance. This language has the effect of permitting the validation of insurance contracts pursuant to electronic commerce. As you know, state insurance commissioners have expressed reservations about this provision. There is concern that the provision could potentially adversely affect the ability of states to maintain their full regulatory authority over these transactions. Do you agree that insurance companies that enter into agreements via electronic commerce are still required to meet all other state insurance regulatory requirements? Mr. ABRAHAM. I agree wholeheartedly. The purpose of this section is to permit insurance companies to use electronic signatures in the same manner and extent as other market participants. Under no circumstances is the legislation intended to allow insurance companies to evade state insurance regulations. Mr. BURNS. As the sponsor of the low power television provisions contained in the Intellectual Property and Communications Omnibus Reform Act of 1999, I would like to take this opportunity to clarify one of the provisions. Specifically, I want to ensure that a qualified low power television (LPTV) station in New York City serving the Korean-American community on Channel 17 (WEBR(LP), formerly W17BM) is not prohibited from obtaining Class A licensing as a result of Sec. 5008(f)(7)(C)(ii) of the Act. As drafted, Section 5008(7)(C)(ii) requires a qualified LPTV station to demonstrate the it will not interfere with land mobile radio services operating on Channel 16 in New York City in order to obtain the Class A license. However, in 1995, the Commission authorized public safety agencies to use Channel 16 in New York City on a conditional basis pursuant to a waiver of the Commission's rules. The Order granting that waiver specifically stated that the low power television station on Channel 17 would not have any responsibility to protect land mobile televisions on adjacent Channel 16. Do you agree with my understanding of Section 5008(f)(C)(ii), namely that this section is not intended to prevent that low power station's qualification for the Class A license? Mr. HATCH. Yes, it is also my understanding that the low power station on Channel 17 in New York City should not be precluded from the Class A license due to Section 5008(f)(7)(ii). The interference that is currently permitted by the Commission is intended to continue. Is this also your understanding Senator Moynihan? Mr. MOYNIHAN. Yes, it is. Otherwise, the Channel 17 LPTV station in New York City will be permanently deprived of a Class A license, notwithstanding the fact that it exemplifies exactly the type of low power station that should have the opportunity to achieve Class A status. WEBR(LP) has a demonstrated strong commitment to the local Korean community in New York, providing locally originated programming 24 hours a day, 7 days a week. This station's worthwhile service to the community has been a benefit to the public good, and this legislation should not thwart such service from continuing. the scope of compulsory licenses for television broadcast signals Mr. HATCH. Mr. President, the measure before us contains some technical amendments to various provisions of the Copyright Act, including sections [[Page S14990]] 111 and 119, which deal with the cable and satellite compulsory licenses, respectively. It is important to emphasize that these technical amendments make no change whatsoever in the key definitional provisions of these two compulsory licenses. Section 111(f) defines ``cable systems,'' and section 119(d)(6) defines ``satellite carrier.'' Neither of these definitions is changed by the measure before us. Mr. LEAHY. Will the Senator from Utah yield for a question? Mr. HATCH. I am glad to yield to my friend from Vermont. Mr. LEAHY. I thank the Senator with whom I worked on this important legislation. Does he agree that these definitions should be interpreted in exactly the same way after enactment of this legislation as they were interpreted before its enactment? Mr. HATCH. The Senator is correct. In other words, if a facility qualified as a ``cable system'' under section 111(f) prior the enactment of this measure, it should also qualify after enactment. Conversely, if a facility did not meet the definition of ``cable system'' before this measure was enacted, it still would not meet that definition after enactment, and therefore the operations of that facility could not rely upon the cable compulsory license established by section 111. And an entity which was not entitled to claim the section 119 compulsory license because it did not meet the definition of a ``satellite carrier'' prior to enactment of the measure before us would be in exactly the same position after enactment, that is, it could not claim the satellite compulsory license under section 119. Mr. LEAHY. I appreciate that response. Mr. HATCH. I would point out that none of this is affected by the fact that in any earlier version of this legislation, there were technical amendments that would have affected these definitions. Those particular amendments do not appear in this legislation, and neither their inclusion in the earlier version nor their omission here has any legal significance. Would the Senate from Vermont agree with that statement? Mr. LEAHY. I would, and I would hope that both the Copyright Office and the courts would take the same approach. In that regard, I would ask my friend from Utah, the chairman of the Judiciary Committee, for his understanding of the current state of the law concerning the availability of these compulsory licenses to digital online communications services? Mr. HATCH. In reply to that question, I would say that certainly under current law, Internet and similar digital online communications services are not, and have never been, eligible to claim the cable or satellite compulsory licenses created by sections 111 or 119 of the Copyright Act. To my knowledge, no court, administrative agency, or authoritative commentator has ever held or even intimated to the contrary. Mr. LEAHY. Is the distinguished chairman aware of the views of the Copyright Office on this question? After all, since the Copyright Office administers these compulsory licenses, their views are of particular importance. Mr. HATCH. The Copyright Office studied this issue exhaustively in 1997 and came to the same conclusion which I have just stated. In fact, in undertaking the study, the Copyright Office asked the fundamental question whether a statutory license should be created for the Internet. The underlying assumption of the question was that there was not, and never was, a statutory license applicable to the Internet. In response, there was little or no comment challenging that assumption. And I would point out that valid exercises of the Office's statutory authority to interpret the provisions of these compulsory licensing schemes are binding on the courts. Mr. LEAHY. I recall the Copyright Office's 1997 study, entitled ``A Review of the Copyright Licensing Regimes Covering Retransmission of Broadcast Signals,'' which concluded that no existing statutory license authorizes retransmission of television broadcast signals via the Internet or any online service. We held a hearing on that report. I recently received a letter from the Register of Copyrights reaffirming this interpretation. Indeed, in that letter, dated November 10, 1999, the Register stated that ``the compulsory license for secondary transmissions of television broadcast signals by cable systems does not apply to digital online communication services,'' and specifically that ``the section 111 license does not and should not apply to Internet transmissions.'' Mr. HATCH. I also received such a letter from the Register. And along the same lines, I have received a letter on this issue from one of America's most distinguished copyright scholars, Professor Arthur Miller of Harvard Law School. Professor Miller's interpretation of the scope of eligibility for these compulsory licenses under current law appears to be very similar to the Register's, and his letter also underscores the point I was making earlier, that there is no legal significance to the fact that this legislation omits certain technical amendments to the definition of ``cable system'' and ``satellite carrier'' that appeared in earlier versions of this legislation. I ask unanimous consent that these letters be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: The Register of Copyrights of the United States of America, Washington, DC, November 10, 1999. Hon. Orrin G. Hatch, Chairman, Committee on the Judiciary, U.S. Senate, Washington, DC. Dear Senator Hatch: I am writing to you today concerning pending proposals regarding the Satellite Home Viewer Act, and particularly the compulsory copyright licenses addressed by that Act. As the director of the Copyright Office, the agency responsible for implementing the compulsory licenses, I have followed the actions of the Congress with great interest. Let me begin by thanking you for all your hard work and dedication on these issues, and by congratulating you on your success in achieving a balanced compromise. Taken as a whole, the Conference Report on H.R. 1554, the Intellectual Property and Communications Omnibus Reform Act of 1999, represents a clear step forward for the protection of intellectual property. I particularly appreciate your support for provisions that improve the ability of the Copyright Office to administer its duties and protect copyrights and related rights. I was greatly concerned when I heard the statements of Members on the floor of the House suggesting that in the final few legislative days of this session, subsection 1011(c) of the Conference Report should be amended or removed. Section 1011(c) makes unmistakable what is already true, that the compulsory license for secondary transmissions of television broadcast signals by cable systems does not apply to digital on-line communication services. It is my understanding that some services that wish to retransmit television programming over the Internet have asserted that they are entitled to do so pursuant to the compulsory license of section 111 of Title 17. I find this assertion to be without merit. The section 111 license, created 23 years ago in the Copyright Act of 1976, was tailored to a heavily-regulated industry subject to requirements such as must-carry, programming exclusivity and signal quota rules--issues that have also arisen in the context of the satellite compulsory license. Congress has properly concluded that the Internet should be largely free of regulation, but the lack of such regulation makes the Internet a poor candidate for a compulsory license that depends so heavily on such restrictions. I believe that the section 111 license does not and should not apply to Internet transmissions. I also question the desirability of permitting any existing or future compulsory license for Internet retransmission of primary television broadcast signals. In my comprehensive August 1, 1997 report to Congress, A Review of the Copyright Licensing Regimes Covering Retransmission of broadcast Signals, Internet transmissions were addressed in Chapter VIII, entitled ``Should the Cable Compulsory License Be Extended to the Internet?'' the report concluded that it was inappropriate to ``besto[w] the benefits of compulsory licensing on an industry so vastly different from the other retransmission industries now eligible for compulsory licensing under the Copyright Act.'' The report observed that ``Copyright owners, broadcasters, and cable interests alike strongly oppose . . . arguments for the Internet retransmitters' eligibility for any compulsory license. These commenters uniformly decry that the instantaneous worldwide dissemination of broadcast signals via Internet poses major issues regarding the United States and international licensing of the signals, and that it would be premature fur Congress to legislate a copyright compulsory license to benefit Internet retransmitters at this time.'' the Copyright Office believes that there would be serious international implications if the United States were to permit statutory licensing of Internet transmissions of television broadcasts. Therefore I urge that no action be taken to remove or alter section 1011(c) of the Conference Report. At this point, to do so could be construed as a statement that digital on-line communication services are eligible for [[Page S14991]] the section 111 license. Such a conclusion would be reinforced in light of section 1011(a)(1), which replaces the term ``cable system'' in section 111 of Title 17 with the term ``terrestrial system.'' In the absence of section 1011(c), section 1011(a)(1) might incorrectly be construed as implying a broadening of the section 111 license to include Internet transmissions. The Internet is unlike any other medium of communication the world has ever known. The application of copyright law to that medium is of utmost importance, and I know that you have personally invested a great deal of time and energy in recent years to assure that a balance of interests is reached. Permitting Internet retransmission of television broadcasts pursuant to the section 111 compulsory license would pose a serious threat to that balance. Please feel free to contact me if I can be of any assistance in this matter. Thank you. Sincerely, Marybeth Peters, Register of Copyrights. ____ Harvard Law School, Cambridge, MA, November 15, 1999. Hon. Orrin G. Hatch, Chairman, Judiciary Committee, U.S. Senate, Washington, DC. Hon. Henry J. Hyde, Chairman, Judiciary Committee, House of Representatives, Washington, DC. Dear Chairmen Hatch and Hyde: I am writing to you to express my views on a proposal to amend the cable and satellite compulsory licenses in Sections 111 and 119 of the Copyright Act. I have taught Copyright Law at Harvard Law School, as well as Michigan and Minnesota, for over thirty- five years and have written extensively and lectured throughout the world on this area of the law. In addition, I was very active in the legislative process that led to the Copyright Act of 1976 and was appointed by President Ford and served as a Commissioner on the Commission for New Technological Uses of Copyright Works (CONTU). The Conference Report on H.R. 1554, the Intellectual Property and Communications Omnibus Reform Act of 1999, included amendments to Sections 111 and 119 to state explicitly that digital online communication services do not fall within the definitions of ``satellite carrier'' and ``terrestrial system'' (currently ``cable system'') and, therefore, are not eligible for either compulsory license. I understand that Congress is currently considering deleting these amendments or enacting legislation that would not include them. I believe that the amendments were wholly unnecessary and that the deletion or exclusion of them will have no effect on the law, which is absolutely clear: digital online communication services are not entitled to the statutory license under either Section 111 or Section 119 of the Copyright Act. A compulsory license is an extraordinary departure from the basic principles underlying copyright law and a substantial and significant encroachment on a copyright owner's rights. Therefore, any ambiguity in the applicability of a compulsory license should be resolved against those seeking to take advantage of what was intended to be a very narrow exception to the copyright proprietor's exclusive rights. As the Fifth Circuit Court of Appeals has noted in a case involving another compulsory license: the compulsory license provision is a limited exception to the copyright holder's exclusive right to decide who shall make use of his (work). As such, it must be construed narrowly, lest the exception destroy, rather than prove, the rule. Fame Publishing Co. v. Alabama Custom Tape, Inc., 507 F.2d 667, 670 (5th Cir. 1975). In this situation, however, there is absolutely no ambiguity as to the correct construction of the cable and satellite compulsory licenses. Neither the language of the Copyright Act, nor any statement of Congressional intent at the time of their enactment, nor any judicial interpretation of Section 111 or Section 119 in any way suggests that these compulsory licenses could apply to digital online communication services. And, as far as I know, the representatives of these services have not offered any substantive argument to the contrary--with good reason. No reasonable person--or court--could interpret these statutory licenses to embrace these services. And if there was any doubt left in anyone's mind, the federal agency charged with interpreting and implementing these statutory licenses, the United States Copyright Office, has addressed this issue directly: retransmitting broadcast signals by way of the Internet is clearly outside the scope of the current compulsory licenses. In fact, the Copyright Office recommended in 1997 that Congress not even create a new compulsory license, concluding that it would be ``inappropriate for Congress to grant Internet retransmitters the benefits of compulsory licensing.'' See U.S. Copyright Office, A Review of the Copyright Licensing Regimes Covering Retransmission of Broadcast Signals (August 1, 1997), at 99 and Executive Summary at xiii. My work in the field of copyright over the past decades, especially my extensive activities in connection with the development of the legislation that became the Copyright Act of 1976, leads me to agree with the Office's conclusions that it would be far too premature to extend a compulsory license to the Internet. That conclusion seems sound given the enormous differences between the Internet and the industries embraced by the existing licensing provisions and the need to engage in extensive research and analysis regarding the potentially enormous implications of digital communications. We simply do not know enough to legislate effectively at this point. Doing so at this time--especially without hearing from numerous affected interests--would create a risk of upsetting the delicate balance between the rights of copyright proprietors and the interests of others. Thus, in any judicial action that might materialize by or against the providers of digital online communication services, the court would be bound by the Copyright Office's interpretation of the statutory licenses. See Cablevision Systems Development Co. v. Motion Picture Association of America, Inc., 836 F.2d 599, 609-610 (D.C. Cir. 1988) (deferring to the Copyright Office's interpretation of Section 111, noting Congress' grant of statutory authority to the Copyright Office to interpret the Copyrights Act, and the Supreme Court's indication that it also would defer to the Copyright Office's interpretation of the Copyright Act), Satellite Broadcasting and Communications Assoc v. Oman, 17 F.3d 344, 345 (11th Cir. 1994) (holding that valid exercises of the Copyright Office's statutory authority to interpret the provisions of the compulsory licensing scheme are binding on the court). In summary, based on the unmistakable fact that digital online communication services are ineligible for the cable and satellite compulsory licenses and the identical, unequivocal interpretation by the Copyright Office, amendments to the existing statute reiterating this legal truth are unnecessary. Consequently, the status quo with respect to who is eligible for the statutory licenses will remain undisturbed whether Congress deletes these amendments from the pending legislation or excludes them from subsequent legislation. Respectfully yours, Arthur R. Miller, Bruce Bromley Professor of Law. Mr. LEAHY. I thank my colleague from Utah for his responses. I believe this colloquy should help to clarify that this legislation leaves these crucial definitions unchanged, and also to clarify what is the current state of the law, which this legislation does not disturb. Mr. HATCH. I think the Senator from Vermont. And I would clarify one other point relating to a minor modification we made to the definition of ``unserved household'' in the distant signal satellite statutory license found in section 119 of Title 17 of the United States Code. The conferees decided to add the word ``stationary'' to the phrase ``conventional outdoor rooftop receiving antenna'' in Section 119(d)(10) of the Copyright Act. As the Chairman of the Conference Committee and of the Senate Judiciary Committee, which has jurisdiction over copyright matters, I should make clear that this change should not require any alteration in the methods used by the courts to enforce the ``unserved household'' limitation of Section 119. The new language states only that the antenna is to be ``stationary''; it does not state that the antenna is to be misoriented (i.e., pointed away from the station in question). Any interpretation that assumed misorientation would be inconsistent with the basic premise of the definition of ``unserved household,'' which defines that term in relation to an individual TV station rather than to all network affiliates in a market--and speaks to whether a household ``cannot'' receive a Grade B intensity signal from a particular station. If a household can receive a signal of Grade B intensity with a properly oriented stationary conventional antenna, it is not ``unserved'' within the meaning of Section 119. In addition, if station towers are located in different directions, conventional over-the-air antennas can be designed so as to point towards the different towers without requiring the antenna to be moved. And reading the definition of ``unserved household'' to assume misoriented antennas would mean that the ``unserved household'' limitation had no fixed meaning, since there are countless different ways in which an antenna can be misoriented, but only one way to be correctly oriented, as the Commission's rules make clear. With that clarification, I yield the floor. patent reform legislation Mrs. FEINSTEIN. I want to thank the Chairman and the Ranking Member for their tireless efforts on patent reform. I strongly support passage of S. 1798, which is included in this omnibus measure, because so many companies in California and across the nation depend on a strong and well-functioning patent system. [[Page S14992]] While S. 1798 will provide important protection for inventors and innovators and help reduce needless patent litigation, I do have some concerns regarding the compromise reached regarding the reexamination procedure set forth in Title VI. As I understand it, this section will reduce the burden of patent cases in our federal courts. However, we need to be sure that the procedure fully and fairly protects the rights of all parties, and some concerns about this process have been brought to my attention over the last few weeks. Out of deference to the Chairman and the Ranking Member of the Judiciary Committee, and being sensitive to the compromise that the House reached, I did not seek amendments to this title of the bill. Furthermore, I feel strongly that the bill should move forward without further delay, so I support its final passage. This does not mean, however, that I believe we should cease to be concerned about how the new system will function. Accordingly, I would like to receive assurances from Chairman Hatch that we will keep a close eye on how well this new reexamination system works. In particular, I would like to request that the Committee obtain an interim report from the Patent and Trademark Office under the authority specified in section 606 of S. 1798 not later than 18 months after this bill becomes effective. I would also invite Chairman Hatch to hold a hearing to consider this information, and to obtain views from people who both supported and opposed this compromise system. Mr. HATCH. I thank the Senator from California for her remarks and appreciate her support for this important legislation. I agree that Congress must closely monitor the effectiveness and fairness of the new reexamination procedure. I also believe it would be very useful to obtain the interim report she mentioned in a timely fashion and look forward to continuing to work with her on this issue. cpb list sharing provision Mr. McCONNELL. Mr. Chairman, I would like to engage with you in a colloquy concerning the Corporation for Public Broadcasting (CPB) list- sharing prohibition in the Intellectual Property and Communications Reform Act. Mr. HATCH. I would be happy to. Mr. McCONNELL. The bill amends Section 396(h) of the Communications Act to prevent public broadcasting entities that receive federal funds from renting or exchanging lists with political candidates, parties or committees. Mr. Chairman, am I correct in reading this language as providing that the list-sharing restriction only applies to the CPB and not any other organizations? Mr. HATCH. That is correct. Mr. McCONNELL. Mr. Chairman, in my view, CPB is a unique entity and its unique nature may be used by supporters of this provision to justify the restrictions on list sharing. CPB is unique because it is created, controlled and funded by the government with a legal obligation to be balanced and objective. Many non-profit organizations rely upon exchanges of lists with political organizations as a way to attract new members to their organizations to support their charitable works. A number of mainstream non-profit organizations, such as the Disabled Veterans of America, have expressed concern that this CPB provision may set a precedent for future restrictions on list sharing by other non-profit organizations. It is my understanding, however, that this list sharing restriction is not a precedent for similar restrictions on other non-profits that are not: (1) created by the federal government; (2) controlled by the federal government; (3) funded by the federal government; and (4) legally required to be balanced and objective. Thus, I do not think this provision relating to CPB is a precedent for imposing such restrictions on other non-profits. Does the Chairman agree with my assessment? Mr. HATCH. Yes, the Senator's assessment is correct. The conferees included the CPB list-sharing language in the bill because of concerns related to CPB's unique status. This provision should in no way be interpreted as precedent for restrictions on list sharing by other non- profit organizations that may receive federal funds. Mr. MURKOWSKI. Mr. President, I would like to ask a question of the senior Senator from Alaska, Mr. Stevens, in his capacity as chair of the full Committee on Appropriations, and the senior senator from Washington, Mr. Gorton, who is chair of the Interior Subcommittee, regarding clarification of a vital issue facing the State of Alaska. The Year 2000 will be the 20th anniversary of the passage of the Alaska National Interest Lands Conservation Act of 1980. ANILCA is the most far-reaching piece of legislation ever passed--in the history of the United States--in terms of creating massive set-asides for conservation purposes. Last year, in the appropriations conference report, Congress passed specific language requiring that the federal managers chosen from around the United States to oversee the implementation of ANILCA's Conservation Units receive adequate, in-depth training on its many components and ramifications. The language read as follows: The Committees agree that the Secretary of the Interior and the Secretary of Agriculture should provide comprehensive training to land managers on the history and provisions of statutes affecting land and natural resource management in Alaska, including but not limited to Revised Statute 2477, the Act of May 17, 1906 (34 Stat. 197), the Alaska Statehood Act, the Mineral Leasing Act of 1920, the White Act, the Alaska National Interest Lands Conservation Act, the Alaska Native Claims Settlement Act, and the Magnuson-Stevens Fishery Conservation and Management Act. When this language passed it was our hope that this training would also be provided to those employees who manage programs in Alaska and to employees whose jobs entail knowledge of one or more of the laws described above. I want to further clarify that it is our hope that the Secretary of the Interior and the Secretary of Agriculture would enter into an agreement with, and provide funding to, Alaska Pacific University, in conjunction with University of Washington School of Law and Northwestern School of Law, Lewis and Clark College, to develop and conduct training. I feel training in these laws very specific to Alaska is badly needed, as most federal employees arriving in the state know little about Arctic and sub-Arctic environments. Many people coming to Alaska imagine incorrectly that the statute governing Alaska's federal Parks and Refuges is identical to those they have worked with in the South 49. This, of course, is far from the truth. Because of the dimensions of ANILCA's reclassification of Alaska's lands, encompassing more than 104 million acres, an area larger that the State of California, the Congress rightfully tailored the law with a series of Alaska-specific provisions, unfamiliar to other states. The purpose of these provisions was clearly intended to ensure that these land designations protect the natural glories of Alaska's most beautiful regions but neither destroy the way of life of Alaska's Native people nor violate the promises made to all Alaskans in the Compact made between our people and the U.S. Government in the Alaska Statehood Bill. During the August recess, I held hearings in Alaska to discover how the federal managers of the federal Conservation Units in Alaska are doing in carrying out and living by the provisions required in the law. Sadly, I must report a long litany of abuses being suffered by Alaskans as individuals, as outdoor sports participants, as business owners, and as a community due to ignorance by federal managers. Much of this ignorance is through honest misunderstanding of the Statute. I, therefore, ask my honorable colleagues to respond to my query about the status of the language passed last year that would fill this void. I also want to call to your attention that Alaska Pacific University's Institute of the North has followed up on that language, and is inaugurating a semester course this coming semester addressing all of these issues on the 20th anniversary of ANILCA. All stakeholders--from conservationists to Native peoples to resource harvesters--will be part of the discussions and learning process. The University is working with Lewis and Clark's Northwestern School of Law to develop the needed legal research in this area. And while the University was invited to participate at its own expense in the one-day ANILCA training held here in Washington this spring, I believe the Interior Department and the Department of Agriculture have done no more than that to fulfill Congressional intent. [[Page S14993]] I believe a good curriculum can be developed at a cost of some $300,000, a small investment for an issue this important. The existing course can be re-formatted in a thorough but intensive week-long seminar and delivered specifically for the federal employees who constantly are rotated into Alaska to serve on the front line of this pioneering experiment in conservation and sustainable development. Mr. STEVENS. Mr. President, I agree with my colleague, the Chairman of the Committee on Energy and Natural Resources. The Senator from Alaska and the Senator from Washington will remember that I asked that the language in the conference report be inserted last year. I, too, am concerned that no action has taken place. It is my intent, as chairman of this committee, that the training called for in last year's conference report take place, and that the program led by Alaska Pacific University, in conjunction with two of the closest law schools in Washington and Oregon, take place. There are sufficient funds in the training budgets of the several Interior agencies to make this happen, and I believe it should happen in conjunction with the outside resources who are developing this curriculum. While I participated in the program held in Washington, DC, on this issue, I would hope that a greater effort is put forth in the future. Mr. GORTON. Mr. President, I concur with the Alaska Senator's intent, and I believe the Interior and Agriculture budgets are sufficient to allow the Department to contract with these schools to provide the training we called for. Each of these Alaska laws referred to in the report language last year is important, is unique, and needs appropriate training for our managers to ensure that Congressional intent is followed. Mr. MURKOWSKI. Thank you, Mr. President, and through the chair, thank you to my colleagues. We have considered making this a legal requirement in an amendment to law, but I believe this year--in the 20th anniversary of ANILCA--we should see that the training gets started. We will be following it closely in the year to come, and we appreciate the comments provided by the committee chairman and the manager of the bill. blm closure of twin falls airtanker reload base Mr. CRAIG. Mr. President, I would like to discuss with the Chairman of the Interior Appropriations Subcommittee a problem that has come up in Twin Falls in my State of Idaho. In July 1998, the Bureau of Land Management's state office closed the tanker resupply base at the Twin Falls airport, after an internal inspection indicated unsafe conditions. At the time of that closing, the BLM Shoshone and state BLM offices expressed their interest in re-opening the facility as soon as possible. Over the following months, discussions between BLM and local officials included mention of re-opening as early as during fiscal year 2000. Then, approval and timing of the project appeared to enter a twilight zone somewhere between south Idaho and Washington, DC. In February of this year, a project data sheet was produced showing a request for FY 2001. Local officials in Twin Falls were told that this delay was the result of no prioritization decision being made at the national level, and that FY 2001 was going to be the earliest year for which the request could be made. Subsequently, local officials were told both, that no final decisions had been made, and that the project had slipped to a lower priority and would be delayed at least until FY 2002. Prompt replacement of this airtanker reload base is important for several reasons. It is the only such base within 100 miles of most of the Idaho-Nevada border and is therefore situated to provide the fastest possible response in the area during the fire season. Because of the location of the airport and its clear departure paths, it offers fast, safe turnaround times. Many customers in addition to BLM need a base in this area. If the base is not re-opened soon, it will hurt airport operations and hurt the local economy. I am not suggesting to the Chairman that anyone is acting inappropriately. But I do think it is important for us to look into the matter, find out more about the decisionmaking process and what it is producing, consider what the fairest, most prompt outcome should be, and engage with BLM to arrive at that solution. Mr. GORTON. I appreciate the gentleman bringing this to the Subcommittee's attention. I certainly can understand the Senator's concern with the closure of this base and his constituents' frustration with seemingly inexplicable delays in making progress toward a re- opening. I look forward to working with the Senator and with BLM, to look into this matter and arrive at the best, earliest possible resolution. desulfurization (bds) grant Mr. STEVENS. The FY 2000 Interior Appropriations conference report provides a grant to a refinery in Alaska for a pilot project to demonstrate the effectiveness of diesel biocatalytic desulfurization technology, or BDS for short. This technology holds great promise for helping our petroleum refining industry reduce the sulfur content of diesel fuel in order to meet new EPA regulations. Would the Chairman of the Subcommittee clarify a couple of points about this grant? Mr. GORTON. Certainly. Mr. STEVENS. It is my understanding that the Chairman intends for this grant to be made available only to a refinery owned by a small business in Alaska. Is that correct? Mr. GORTON. The Senator is correct. I understand that the BDS technology is ideally suited to small refineries. Therefore, I believe that the grant should be made available only to a refinery that meets the Small Business Administration's definition of small; that is, less than 75,000 barrels per day capacity of petroleum-based inputs and less than 1,500 employees. Mr. STEVENS. Why is the BDS technology better suited to small refineries? Mr. GORTON. It has to do with the nature of the technology itself. As the Senator may know, diesel engine manufacturers currently are in the process of developing new technologies with the potential to radically reduce harmful diesel emissions, but which will require fuel with very low sulfur content in order to work effectively. To reduce the environmental impact of diesel emissions, the EPA is considering new regulations which would require significant reductions in the sulfur content of diesel fuel. Large-scale, fully-integrated refineries are capable of cost- effectively producing low-sulfur diesel fuel using the traditional technology for removing sulfur from gasoline and diesel fuel, called hydrodesulfurization, or HDS. However, small refineries do not have that capability. HDS is a highly complex, energy intensive, and expensive process. As a result, it is not well-suited to small refineries, which generally are much more simply configured and produce a smaller variety and quantity of refined products than large refineries, and therefore cannot justify the expense of building and operating HDS units. BDS, on the other hand, is a simple, efficient, and low cost technology which uses much less energy than the traditional HDS technology. A BDS unit is likely to cost 50% less to construct and operate than a traditional HDS unit. For these reasons, BDS technology is particularly well-suited to small refineries and holds great promise as a cost-effective alternative for producing low-sulfur diesel fuel. Because small refineries will be the principal users of the BDS technology if it works like we hope it will, it makes sense to first try it out at a small refinery. Therefore, we believe that the grant for a demonstration project should be directed to a small refinery. Mr. STEVENS. Thank you. Mr. CRAIG. Senator Gorton, I have in my hand a copy of an August 27 order from Judge William Dwyer instructing the parties in a lawsuit over timber sales in the Pacific Northwest to negotiate a settlement regarding a requirement to survey for 77 species of mollusks, lichens, bryophytes, salamanders and slugs prior to conducting ground disturbing activities. This lawsuit has held up over one quarter of a billion board feet of federal timber sales. Let me read a single sentence from the Judge's order: Negotiations should now be resumed, should include the defendant-interveners, and should explore short-term solutions that would reduce the impact of injunctive relief [[Page S14994]] on logging contractors and their employees while complying with the Northwest Forest Plan. I have been advised by media accounts that the settlement announced, with great fanfare, by Under Secretary Jim Lyons yesterday did not involve the ``defendant-interveners.'' Indeed, in his public comments Mr. Lyons indicates that, the defendant-interveners were excluded from discussions. Defendant-interveners have been unsuccessful in even securing basic information that the government currently has available about affected sales. Furthermore, the settlement did not ``reduce the impact of injunctive relief on logging contractors and their employees'' at all. Instead, it actually expanded the injunction by adding four more sales to the dozens that are already either enjoined by the Court, or not awarded by a decision of the Administration. Mr. Lyons gave the environmental plaintiffs more than what Judge Dwyer ordered in his original decision simply to settle the case and claim that his Northwest Forest Plan was ``back on track.'' This seems more like a capitulation, rather than a settlement. Mr. GORTON. The Senator is correct. Additionally, I also understand that the day before this ``deal'' was announced, Judge Dwyer held a status conference with all the parties, including the defendant- interveners. The government attorneys told him that no agreement had been reached, and that the next mediation session was to occur on December 2. The Judge then set December 3 for the next status conference. Apparently, this Administration has as much trouble speaking with any probity to the Judicial Branch as they have recently with the Congress. It appears that the Judge's admonition to include the ``defendant-interveners'' in the discussions was ignored. Mr. CRAIG. Senator, I also understand that Section 334 of the Interior Appropriations Bill was dropped, in part, because of concerns by the Administration that the measure would disrupt the negotiations that were underway, and could prevent the release of any of the enjoined timber sales. But, the settlement announced yesterday will not release any of the enjoined sales. To add insult to injury, Mr. Lyons is nevertheless claiming that the settlement he announced yesterday will, indeed, allow the sales to go forward. I understand that nothing could be further from the truth. These sales are still on hold while the Forest Service tries to figure out how to search for slugs, slime and salamanders. Most importantly, the Administration is not willing to commit to a time-frame to complete these surveys. I believe this is a wrong that must be corrected. Mr. GORTON. I concur with the observations of my colleague from Idaho. The sales in question have not been made available to operate. They are still subject to the impossible survey requirements that caused the injunction to begin with. That is why I would urge the Administration in the strongest terms to return to the negotiating table with the defendant-interveners and address their concerns. Specifically, there should be an agreed-upon time-frame and a date certain for the completion of the agreed-upon survey requirements. Failure to conduct a good-faith effort to complete the settlement process in the fashion ordered by the Judge should be grounds for withholding final approval of the agreement. Mr. CRAIG. I agree. It seems to me that, based upon the Administration's performance, Congress should reinstate Section 334 or some similar measure in the FY2000 Supplemental Appropriations bill and direct the Administration to release these sales immediately. The Administration's present course will keep this conflict alive interminably, and expose the taxpayers to the liability of damage claims from contract holders. Moreover, this consistent record of deceit and chicanery from the Administration must stop. We made a good faith effort to respond to the Administration's concerns over Section 334 based, in part, on its promise to negotiate a fair settlement of this legal dispute. Not only did they not do that, they now have the audacity to claim publicly that they did, and spin their announcement in the most shameful of ways. If truth is the coin of the realm, Mr. Lyons and his cohorts are hopelessly bankrupt. Mr. SMITH of New Hampshire. I would like to ask the Chairman of the Interior Appropriations subcommittee to clarify some matters concerning the President's American Heritage Rivers initiative that concerns the Interior and related agencies portion of the appropriations act. Senator Gorton, is it your understanding that there is nothing in this bill that authorizes the American Heritage Rivers initiative? Mr. GORTON. Yes, I would like to clarify that matter. There is no language whatsoever in the Interior portion that provides an authorization for the American Heritage Rivers Initiative. Mr. SMITH of New Hampshire. Thank you Mr. Chairman. In addition, is it true that there is no separate appropriation for the American Heritage Rivers initiative in the Interior portion of the bill? Mr. GORTON. Yes, it is true that there is no appropriation for the American Heritage Rivers initiative in the appropriations act. In fact, the bill includes in Title three a provision that clearly prohibits the transfer of any funds from this act to the Council on Environmental Quality (CEQ) for purposes related to the American Heritage Rivers initiative. Mr. SMITH of New Hampshire. Thank you Mr. Chairman. In addition, can you comment on some guidance that you have given the Forest Service in your statement to the managers? Mr. GORTON. Yes, certainly. The statement of the managers provides a limitation on spending for the Forest Service for purposes related to designated American Heritage Rivers. This is not an appropriation, but it provides a maximum that may be spent from funds appropriated for other purposes on any efforts that are consistent with existing authorized programs. I would also like to point out that the Interior subcommittee has questioned this initiative previously. The Committee reports accompanying the FY 1999 bill clearly stated that efforts on this initiative by agencies covered by the Interior bill must complete with, or be normal part of, the authorized program of work of the agency. intellectual property and communications Mr. SCHUMER. Mr. President, I rise today in support of the revised ``Intellectual Property and Communications Omnibus Reform Act of 1999'' (H.R. 1554). As a Member of the Judiciary Committee, I am particularly pleased that this legislation includes as Title IV, the ``American Inventors Protection Act of 1999.'' This important patent reform measure includes a series of initiatives intended to protect rights of inventors, enhance patent protections and reduce patent litigation. Perhaps most importantly, subtitle C of title IV contains the so- called ``First Inventor Defense.'' This defense provides a first inventor (or ``prior user'') with a defense in patent infringement lawsuits, whenever an inventor of a business method (i.e., a practice process or system) uses the invention but does not patent it. Currently, patent law does not provide original inventors with any protections when a subsequent user, who patents the method at a later date, files a lawsuit for infringement against the real creator of the invention. The first inventor defense will provide the financial services industry with important, needed protections in the face of the uncertainty presented by the Federal Circuit's decision in the State Street case. State Street Bank and Trust Company v. Signature Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998). In State Street, the Court did away with the so-called ``business methods'' exception to statutory patentable subject matter. Consequently, this decision has raised questions about what types of business methods may now be eligible for patent protection. In the financial services sector, this has prompted serious legal and practical concerns. It has created doubt regarding whether or not particular business methods used by this industry-- including processes, practices, and systems--might now suddenly become subject to new claims under the patent law. In terms of every day business practice, these types of activities were considered to be protected as trade secrets and were not viewed as patentable material. Mr. President, the first inventor defense strikes a fair balance between patent law and trade secret law. Specifically, this provision creates a defense for inventors who (1) acting in [[Page S14995]] good faith have reduced the subject matter to practice in the United States at least one year prior to the patent filing date (``effective filing date'') of another (typically later) inventor; and (2) commercially used the subject matter in the United States before the filing date of the patent. Commercial use does not require that the particular invention be made known to the public or be used in the public marketplace--it includes wholly internal commercial uses as well. As used in this legislation, the term ``method'' is intended to be construed broadly. The term ``method'' is defined as meaning ``a method of doing or conducting business.'' thus, ``method'' includes any internal method of doing business, a method used in the course of doing or conducting business, or a method for conducting business in the public marketplace. It includes a practice, process, activity, or system that is used in the design, formulation, testing, or manufacture of any product or service. The defense will be applicable against method claims, as well as the claims involving machines or articles the manufacturer used to practice such methods (i.e., apparatus claims). New technologies are being developed every day, which include technology that employs both methods of doing business and physical apparatus designed to carry out a method of doing business. The first inventor defense is intended to protect both method claims and apparatus claims. When viewed specifically from the standpoint of the financial services industry, the term ``method'' includes financial instruments, financial products, financial transactions, the ordering of financial information, and any system or process that transmits or transforms information with respect to investments or other types of financial transactions. In this context, it is important to point out the beneficial effects that such methods have brought to our society. These include the encouragement of home ownership, the broadened availability of capital for small businesses, and the development of a variety of pension and investment opportunities for millions of Americans. As the joint explanatory statement of the Conference Committee on H.R. 1554 notes, the provision ``focuses on methods for doing and conducting business, including methods used in connection with internal commercial operations as well as those used in connection with the sale or transfer of useful end results--whether in the form of physical products, or in the form of services, or in the form of some other useful results; for example, results produced through the manipulation of data or other inputs to produce a useful result.'' H. Rept. 106-464 p. 122. The language of the provision states that the defense is not available if the person has actually abandoned commercial use of the subject matter. As used in the legislation, abandonment refers to the cessation of use with no intent to resume. Intervals of non-use between such periodic or cyclical activities such as seasonable factors or reasonable intervals between contracts, however, should not be considered to be abandonment. As noted earlier, Mr. President, in the wake of State Street, thousands of methods and processes that have been and are used internally are now subject to the possibility of being claimed as patented inventions. Previously, the businesses that developed and used such methods and processes thought that secrecy was the only protection available. As the conference report on H.R. 1554 states: ``(U)nder established law, any of these inventions which have been in commercial use--public or secret--for more than one year cannot now be the subject of a valid U.S. patent.'' H. Rept. 106-464, p. 122. Mr. President, patent law should encourage innovation, not create barriers to the development of innovative financial products, credit vehicles, and e-commerce generally. The patent law was never intended to prevent people from doing what they are already doing. While I am very pleased that the first inventors defense is included in H.R. 1554, it should be viewed as just the first step in defining the appropriate limits and boundaries of the State Street decision. This legal defense will provide important protections for companies against unfair and unjustified patent infringement actions. But, at the same time, I believe that it is time for Congress to take a closer look at the potentially broad and, perhaps, adverse consequences of the State Street decision. I would hope that beginning early next year that the Judiciary Committee will hold hearings on the State Street issue, so that Senators can carefully evaluate its economic and competitive consequences. Mr. TORRICELLI. My college is correct. The State Street decision may have unintended consequences for the financial services community. By explicitly holding that business methods are patentable, financial service companies are finding that the techniques and ideas, that were in wide use, are being patented by others. The Prior Inventor Defense of H.R. 1554 is an important step toward protecting the financial services industry. By protecting early developers and users of a business method, the defense allows U.S. companies to commit resources to the commercialization of their inventions with confidence that a subsequent patent holder will prevail in a patent-infringement suit. Without this defense, financial services companies face unfair patent-infringement suits over the use of techniques and ideas (methods) they developed and have used for years. While I support the Prior Inventor Defense, as a member of the Judiciary Committee, I hope that we will revisit this issue next year. More must be done to address the boundaries of the State Street decision with the realities of the constantly changing and developing financial services industry. I look forward to working with Senator Schumer and my colleagues on the committee on this important issue. Mr. JEFFORDS. Mr. President, I rise today to support an extremely important provision in the budget agreement. A provision which will mean the difference for many dairy farmers around the country on whether they will stay in business or not. The dairy compromise that is included in the budget agreement will help bring stability to the price dairy farmers around the country receive for their product--as well as protect consumers and processors by helping to maintain a fresh local supply of milk. The agreement extends the very successful Northeast Dairy Compact and overturns Secretary Glickman's flawed pricing rule, saving dairy farmers around the country millions of dollars in lost income. Take one look at this chart and you will know why the dairy compromise in the budget agreement is so important to the survival of this country's dairy farmers. Why, because every farmer in every state in the red would lose money out of their pockets if Secretary Glickman's flawed pricing rule known as option 1-B were to be put in place. The dairy compromise corrects this and creates a pricing formula that is fair for both farmers and consumers. For three years the farmers in New England have had a program that works. It's called the Northeast Dairy Compact. Because the Dairy Compact pilot program has worked so well--no less than twenty-five states have approved Compacts and are now asking Congress for approval. Today, I am so pleased two of the people responsible for creating the idea of the dairy compact are here in Washington today. Bobby Starr and Dan Smith are two Vermonters that over 10 years ago put their heads together in an effort to help protect the Vermont way of life. It was my hope and the hope of the majority of the Senate that we could have expanded the compacts into other regions so other states could benefit from having a means of stabilizing prices for both their farmers and consumers. Unfortunately, this time we were not able to expand the dairy compact into other regions. However, a great deal of progress has been made as more and more states are seeing the benefits of protecting their dairy farmers and rural economies through the use of Interstate Compacts. Given the broad support for compacts among the states, we all know that the issue of regional pricing is one that will continue to be debated. I am pleased with the tremendous progress the Southern states and other Northeastern states have made to move their compacts forward. [[Page S14996]] While the debate continues, this reasonable compromise allows the Northeast Compact to continue as the pilot project for the concept of regional pricing The Northeast Dairy Compact has given farmers and consumers hope. The Compact, which was authorized by the 1996 farm bill as a three-year pilot program, has been extremely successful. The Compact has been studied, audited, and sued but has always come through with a clean bill of health. Because of the success of the Compact it has served as a model for the entire country. Mr. President, I am of course aware that some of my colleagues oppose our efforts to bring fairness to our states and farmers by continuation of the Dairy Compact pilot project. Also, unfortunately, Congress has been bombarded with misinformation from an army of lobbyists representing the national milk processors, led by the International Dairy Foods Association (IDFA) and the Milk Industry Foundation. These two groups, backed by the likes of Philip Morris, have funded several front groups to lobby against this compromise. Their handy work has been seen recently in misinformed newspaper editorials, deceiving advertisements and uninformed television ads. Yesterday Senator Leahy and I came to the floor to correct the misinformation contained in the Wall Street Journal Editorial. Mr. President, I would like to take this opportunity to set the record straight about the operation of the Northeast Compact. It is crucial that Congress understand the issues presented by dairy compacts on the merits, rather than based on misinformation. When properly armed with the facts, I believe you will conclude that the Northeast Dairy Compact has already proven to be a successful experiment and that the other states which have now adopted dairy compacts should in the future be given the opportunity to determine whether dairy compacts will in fact work for them as well. Contrary to the claims of the opposition, regional compact regulation remain open to the interstate commerce of all producer milk and processor milk products, from whatever source. Compacts establish neither ``cartels'', ``tariffs'' nor ``barriers to trade'' and are not ``economic protectionism.'' According to the opponents characterizations, dairy compacts somehow establish a ``wall'' around the regions subject to compact regulation, and thereby prohibit competition from milk produced and processed from outside the regions. These are entirely misleading characterizations. It is really quite simple and straightforward: All fluid, or beverage milk sold in a compact region is subject to uniform regulation, regardless of its source within or outside the compact region. This means that all farmers, including farmers from the Upper Midwest, providing milk for beverage sale in the region, receive the same pay prices without discrimination. It can thus be seen that there is no economic protectionism or the erection of barriers to trade. Except for uniform regulation, the market remains open to all, and the benefits of the regulations are provided without discrimination to all participating in the market, including those who participate in the market from beyond the territorial boundaries of the region. Next, I would like to address the actual and potential impact of dairy compacts on consumer prices. In short, opposition claims about the actual and possible impact of dairy compacts on consumers, including low income consumers, are unfounded and grossly distorted. Over the years, while farm milk prices have fluctuated wildly, remaining constant overall during the last ten years, consumers prices have risen sharply. The explanation for this is apparently that variations in store prices do not mirror the wild fluctuations in farm prices. In other words, when farm prices go up, the store prices go up, but when the farm prices recede, the store prices do not come back down as quickly or at the same rate. Hence, and quite logically, if you take away the fluctuations in farm prices, you take away the catalyst for unwarranted increases in store prices. When the 1996 Farm Bill granted consent to the Northeast Dairy Compact as a pilot program, Congress gave the six New England states the right under the compact clause of the Constitution to join together to help regulate the price paid to farmers for fluid milk in the New England region. The six New England states realized that in order to maintain a viable agriculture infrastructure and an adequate supply of milk for the consumers they needed to work together. When the compact passed as part of the 1996 Farm Bill, the opponents were so sure the compact would not operate as its supporters had promised, they asked the Office of Management of Budget to conduct a study on the economic effects of the Northeast Dairy Compact. The opponents of the dairy compact intended for the OMB study to discredit the dairy compact. The study did just the opposite. Instead, the OMB study proved just what we had thought--that the dairy compact works and it works well. The OMB studied the economic effects of the Northeast Dairy Compact and especially its effects on the federal food and nutrition programs. The study also examined the impacts of milk prices at various levels on utilization and shipment of milk, and on farm income both within and outside the Compact region. Here's what the study concluded: The New England retail milk prices were $.05 cents per gallon lower on average then retail milk prices nationally following the first six months of operation of the Northeast Dairy Compact. The compact over-order payments made in New England through the Compact Commission have had little impact on the price consumers pay as a result of the compact. Consumers, who are well represented on the Compact Commission, are very pleased with how the Dairy Compact has operated. The Northeast Dairy Compact has not added any costs to federal nutrition programs, such as the Women, Infants and Children (WIC) and the school lunch and breakfast program, due to compensation procedures implemented by the New England Compact Commission. A program that helps protect farmers and consumers with no cost to the federal government. The OMB study found that the Dairy Compact was economically beneficial to dairy producers. It increased their income from the milk sales about six percent. The study concluded that the retail prices in New England were lower than the national average and it increased the income of dairy producers. No wonder twenty-five states are interested in having compacts in their states. And it's no wonder why governors, state legislatures, consumers and farmers alike support the continuation of the Northeast dairy compact. Also, the OMB study concluded that there were no adverse affects for dairy farmers outside the Compact region and the study noted that some dairy producers outside the region actually received increased financial benefits through the sale of their milk into New England. The OMB study helped Congress understand just how well the compact works. The opponents of the compact did not get what they had hoped for--instead we all have benefitted, both opponents and proponents of the compact, with the facts. Despite what some of my colleagues have said, the Northeast Dairy Compact is working as it was intended to. Instead of trying to destroy an initiative that works to help dairy farmers with no cost to the federal government, I urge my colleagues from the Upper Midwest to respect the states' interest and initiative to help protect their farmers and encourage other regions of the country to explore the possibility of forming their own interstate dairy compact in the future. Mr. President, the Northeast Dairy Compact has worked well. Just think if other commodities and other important resources around the country developed a program that had no cost to the federal government and benefitted both those who produce, sell, and purchase the product. Mr. FEINGOLD. Mr. President, I rise today in strong opposition to this legislation, which would revive an arcane [[Page S14997]] and unjust federal dairy policy that has destroyed thousands of family dairy farms. Once again, the Senate is faced with dairy riders that fly in the face of recommendations from the Secretary of Agriculture, our nation's dairy farmers, and numerous taxpayer and consumer groups. It seems that political favors are more important to some in this Congress than policy decisions that help our nation's dairy farmers. During the last four years neither of these two harmful provisions-- Option 1A or the Northeast dairy compact--has won Senate approval. I ask my colleagues on the other side of the aisle: why must Senate and House leaders continue to play political games at the expense of our nation's dairy farmers? Mr. President, these backdoor deals must stop. America's dairy farmers deserve a national dairy policy that ensures that all dairy farmers receive a fair price for their milk. Unfortunately, the House and Senate leadership went into a back room, and snuck in these two riders that step up the attack on our dairy industry. These decisions were separate even from the eyes and ears of members, and most members of the Senate Agriculture committee. With the proliferation of these backroom deals, it is no wonder that the general public is frustrated with Congress. The simple fact is that neither of these two dairy riders has been approved by both chambers of Congress, or the President. I would like to make my colleagues aware of the history behind these two provisions. During the last four years, the only Senate vote explicitly on the Northeast dairy compact resulted in a resounding rejection. This year, the Senate again voted on a package containing the Northeast dairy compact, and it again failed to gain enough support to invoke cloture. Mr. President, the House has yet to take a single vote specifically on the Northeast dairy compact. Compared to the record of the House, these two votes make the Senate look like experts on the Northeast dairy compact. Furthermore, Mr. President, the 1996 farm bill required that the Northeast dairy compact expire upon implementation of USDA's reforms. Unfortunately these dairy riders seek to defy the will of Congress, and give the back of their hand to America's dairy farmers. After tens of thousands of comments, USDA came up with a modest plan to reform our 30-year-old milk marketing order structure. More than 59,000 dairy farmers from all over the United States participated in a USDA national referendum and 96% voted in favor of the United States Department of Agriculture's final rule to consolidate the current 31 federal milk marketing orders into 11, and to reform the price of Class I milk. USDA's proposal garnered nearly uniform support in each of the 11 regions, including the Southeast, Midwest, and Northeast. The second of these harmful dairy riders, would overturn these reforms. Well, Mr. President, I take the floor today to deliver a simple message: Congress should not renew a milk marketing order system that devastates family farmers, and imposes higher costs on consumers and taxpayers. There has been a great deal of confusion over the effects of these harmful dairy provisions. Some say that mandating Option 1A and a two year extension of the Northeast dairy compact simply preserves the status quo. This legislation does much more than simply extend the 60-year milk marketing system. A new forward contracting provision in this dairy rider enables processors to pay farmers much less than the federal blend price for their milk. This forward contracting provision will also make the market less competitive for all other producers by reducing demand on the open market. Since it is likely that forward contracts would be offered to only the largest producers, this provision will result in losses to small and medium-sized producers, who will become residual suppliers. Mr. President, these dairy provisions shift the attack on our nation's dairy farmers into overdrive. This harmful legislation will continue to push our nation's dairy farmers out of business, and off their land. For sixty years, dairy farmers across America have been steadily driven out of business, and disadvantaged by the very Federal dairy policy this legislation seeks to revive. In 1950, Wisconsin had over 143 thousand dairy farms. After nearly 50 years of the current dairy policy, Wisconsin is left with only 23 thousand farms. Let me repeat: 23 thousand farms. Why would anyone seek to revive a dairy policy that has destroyed over 110 thousand dairy farms in a single state? That's more than five out of six farms in the last half-century. This devastation has not been limited to Wisconsin. Since 1950, America has lost over three million dairy farms. And this trend is accelerating, since 1985, America has lost over half of its dairy producers. Day after day, season after season, we are losing small farmers at an alarming rate. While these operations disappear, we are seeing the emergence of larger dairy farms. The trend toward a few large dairy operations is mirrored in States throughout the nation. The economic losses associated with the reduction of small farms goes well beyond the impact on the individual farm families that have been forced off their land. The loss of these farms has devastated rural communities where small family-owned dairy farms are the key to economic stability. Option 1A also hurts these communities in other ways: through higher costs passed on to both consumers and taxpayers. Option 1A would increase prices for milk and cheese in virtually every state in the country. Low income families and federal nutrition programs, which rely heavily on milk and cheese, will be seriously hurt by the price increases mandated by this legislation. The poor and elderly will be especially burdened by higher costs. Under Option 1A and the Compact food stamp recipients would lose $40 million a year due to increases in beverage milk prices and another $18 million a year due to increased cheese prices. This legislation also soaks taxpayers with a milk tax by imposing higher costs on every taxpayer because we all pay for nutrition programs such as food stamps and the national school lunch program. According to USDA, Option 1A alone would increase the average beverage milk price by nearly five cents a gallon and the cost of milk used for cheese by about two cents a gallon. If we add up these costs to all of the federal nutrition programs, the costs mount up quickly. Option 1A would cost the school lunch and school breakfast programs $19 million a year in higher beverage milk prices and cheese prices. The WIC program would face over $16 million in higher cheese and milk prices. Mr. President, the loss caused by Option 1A to the three major nutrition programs is $93 million. These regressive taxes unfairly burden children and the elderly. These hidden penalties on America's children and elderly must not be allowed to continue. The fact is, we need a new national dairy policy that stops devastating small farmers, and imposing higher costs on taxpayers and consumers. During my six years in the United States Senate, and twelve years in the Wisconsin State Senate, the overwhelming message I hear from dairy farmers in Wisconsin, Minnesota and throughout the Midwest, is that we need milk marketing order reform. Congress recognized the need for a new national dairy policy, and in 1996, mandated that USDA reform the Federal milk marketing order system. Well, let's take a look at why farmers across the U.S. support USDA's reforms. This chart compares Class I milk prices under the final rule and the current pricing system. Under USDA's final rule dairy farmers in New England would receive 19.29 per hundredweight, a $.26 increase over the current system. Farmers in eastern New York and Northern New Jersey would receive $19.04 per hundredweight, an $.11 per hundredweight increase. In Northern Florida, farmers would receive $20.34, a $.97 increase over the current system. These statistics underscore the importance of USDA's reforms for dairy farmers across the nation. As this chart makes clear, USDA's reforms provide relief to America's [[Page S14998]] dairy farmers, and begin to re-institute fairness into our dairy pricing structure. Perhaps even more compelling is this simple bar graph that illustrates the national average Class I milk price that farmers receive under the final rule and the current pricing system. As you can see farmers would have received 58 cents more per hundredweight under USDA's final rule. Farmers, consumer advocates, and taxpayer groups support USDA's reforms, and oppose these harmful dairy riders. Mr. President, America's farmers demanded USDA's reforms. We should heed their call and support USDA's final rule. Unfortunately, supporters of this legislation feel that they know better than America's dairy farmers, and wish to prevent USDA's moderate reforms. Ironically, one of the few changes to Federal dairy policy over the last 60 years has accelerated the attack on small farmers. Despite the discrimination against Wisconsin dairy farmers under the Eau Claire rule, backdoor politicking during the eleventh hour of the conference committee for the 1996 farm bill, stuck America's dairy farmers with the devastatingly harmful Northeast Dairy Compact. This provision further aggravated the inequities of the Federal milk marketing order system by establishing the Northeast Interstate Dairy Compact. While the Compact may sound benign, it establishes a price fixing entity for six Northeastern States--Vermont, Maine, New Hampshire, Massachusetts, Rhode Island, and Connecticut. The Northeast Interstate Dairy Compact Commission is empowered to set minimum prices for fluid milk higher than those established under Federal milk marketing orders. Never mind that farmers in the Northeast already receive higher minimum prices under the antiquated, 60 year old Eau Claire rule. The compact not only allows these six States to set artificially high prices for their producers, it permits them to block entry of lower- priced milk from producers in competing States. Further distorting the markets are subsidies given to processors in these six States to export their higher-priced milk to non-compact States. Who can defend this system with a straight face? This compact amounts to nothing short of government-sponsored price fixing. It is outrageously unfair, and also bad policy. The compact interferes with interstate commerce and wildly distorts the marketplace by erecting artificial barriers around one specially protected region of the nation. The compact arbitrarily provides preferential price treatment for farmers in the Northeast at the expense of farmers in other regions who work just as hard, who love their homes just as much and whose products are just as good or better. It also irresponsibly encourages excess milk production in one region without establishing effective supply control. This practice flaunts basic economic principles and ignores the obvious risk that it will drive down milk prices for producers outside the compact region. Despite what some have argued, the Northeast Dairy Compact hasn't even helped small Northeast farmers. Since the Northeast first implemented its compact in 1997, small dairy farms in the Northeast, where this is supposed to help, have gone out of business at a rate of 41 percent higher than they had in the previous 2 years--41 percent higher. In fact, compacts often amount to a transfer of wealth to large farms by affording large farms a per-farm subsidy that is actually 20 times greater than the meager subsidy given to small farmers. We need to support USDA's moderate reforms, reject these harmful dairy riders and let our dairy farmers get a fair price for their milk. Mr. President, I yield the floor. Mr. KYL. Mr. President, today we are considering the District of Columbia appropriations bill, which includes not only funding for the nation's capital, but also regular appropriations for seven cabinet- level departments--the Departments of Labor, Health and Human Services, Education, State, Justice, Commerce, and Interior. The package also includes four major authorization bills covering Medicare, foreign operations, satellite television, dairy programs, and scrap-metal recycling. Mr. President, under ordinary circumstances, legislation should not be packaged this way. If I were to base my vote merely upon the process that led us to combine these measures into one huge bill, I would vote no, as I have on the other omnibus bills that have come before the Senate during the last few years. However, I think there are some important distinctions between the package before us this year and what we have seen in the past. Unlike last year, for example, when free-for-all negotiations resulted in an orgy of new spending and wholesale concessions to the White House, this year the individual parts of the bill were negotiated separately, in a largely orderly process. Unlike last year, any additional spending won by the White House was required to be offset so that net spending would not increase. With the exception of the dairy provisions, which I oppose, I have concluded that I would vote for each of the measures included here if we had the opportunity to vote on them separately. For this reason and, because on balance, I believe the good in the rest of the package outweighs the bad, I will vote aye. Mr. President, when we look back on this legislation five or 10 years from now, I think we will see one aspect of it as truly historic. The legislation, despite its shortcomings, establishes a historic new precedent against ever again raiding the Social Security trust fund for other purposes--a precedent that future Presidents and Congresses will deviate from only at their own peril. The package has been designed to avoid intentionally spending a dime of the Social Security surplus. And if our estimates turn out to be right, it will be the first time since 1960--the first time in nearly 40 years--that Congress did not tap the Social Security surplus to pay for other programs. It also means that we will be able to pay down publicly held debt by another $130 billion or so this year. Mr. President, I think everyone needs to recognize that estimates of spending and revenues can be affected by even the slightest changes in the economy, and so we will need to be prepared to adjust spending levels early next year if it appears that that is necessary to take further action to safeguard the Social Security surplus. We should even consider putting an automatic mechanism in place, as proposed in legislation I cosponsored with Senator Rod Grams, to make sure Social Security is never again tapped. In any event, it is important to recognize just how far we have come since 1995. That was the year Bill Clinton sent Congress a budget that would have spent every penny of the Social Security surplus every year for the foreseeable future, and still run $200 billion annual deficits on top of that. The President's FY96 budget submission would have resulted in actual deficits rising from about $259 billion in 1995 to roughly $289 billion this year. We did not follow the President's recommendations. We charted an entirely different course. The result: We now have a budget that sets aside the entire Social Security surplus and even runs an estimated $1 billion surplus in the government's operating budget. That is progress. Because we do not raid Social Security, we had to do a better job of setting priorities so that we could take care of those things the American people care most about, and to a large degree, I think we succeeded. This bill provides a substantial increase in funds for medical research at the National Institutes of Health. We provide even more resources for education than the President asked for, and we take a modest first step in the direction of public school choice and providing local school districts with increased flexibility in how they will use federal funds to meet the particular needs of their students. We restore funding for hospitals and nursing homes that care for Medicare patients. We also include additional resources for law enforcement, including funding for 1,000 new Border Patrol agents, and funds to combat the scourge of methamphetamine in our communities. We are able to provide more money than the President sought for the Violence [[Page S14999]] Against Women Act. And we provide money to make sure federal agencies can be better stewards of our national parks, forests, and wildlife refuges. We require that international family-planning money be used for just that--family planning, not abortion or lobbying to liberalize the abortion laws of other countries. Although the compromise provisions would allow the President to waive the limitations and provide about $15 million to groups that engage in such activity, about 96 percent of the dollars would still remain subject to the restrictions. Of course, funding these various priorities means we had to limit spending in other areas in order to keep our promise not to raid Social Security. For example, the National Endowment for the Arts does not get the increase it sought. There will not be as much foreign aid as President Clinton wanted. We cut the President's Advanced Technology Program. To make doubly sure we keep our pledge to stay out of Social Security, we include a small across-the-board spending cut to force agencies to ferret out waste and abuse. It is hard for me to conceal my disappointment in several regards. First, I regret that Congress did not protect the projected surplus in the non-Social Security part of the budget. This bill, combined with the other appropriations bills that have already been signed into law, will spend the entire $14 billion surplus that was projected in the government's operating budget --excluding Social Security--and it will bust the spending caps Congress and the President agreed to only two years ago. Second, there is still far too much wasteful spending in the budget. And third, there is so much advance funding in the bill for FY2001 that it will be difficult for us to stay within our spending targets for next year. On balance, though, it strikes me that the short-term cost of exceeding the caps and spending the relatively small non-Social Security surplus for this year is more than outweighed by the long-term discipline that will be imposed by the precedent we have set with regard to protecting Social Security. Mr. President, with that in mind, I intend to vote for this bill. A BAD DEAL FOR WORKING AMERICANS Mr. GRAMS. Mr. President, a year ago I was here in this chamber speaking on the 1998 Omnibus Appropriations legislation. I criticized the abusive process that made the entire negotiations exclusive, arbitrary, and conducted behind closed doors by only a few congressional leaders and White House staff, and few Members of the Congress had any idea what was in the bill but were asked to approve it without adequate review and amendments. I also urged the Congress not to repeat the mistake that we need to reform the process and start the process early in the year to avoid appropriations pressure. Many of my colleagues shared my views at the time and agreed that the federal budget process had become a reckless game, and it not only weakened the nation's fiscal discipline but also undermined the system of checks and balances established by the Constitution. At the beginning of the 106th Congress, I argued repeatedly in this chamber that the key to a successful budget process was to pursue comprehensive budget process reforms. I have introduced legislation to achieve these goals which includes legislation that would force us to pass a legally-binding federal budget, allow an automatic continuing resolution to kick-in to prevent government shutdown, set aside funds each year in the budget for true emergencies; strengthen the enforcement of budgetary controls; enhance accountability for Federal spending; mitigate the bias toward higher spending; modify Pay-As-You- Go (PAYGO) procedures to accommodate budget surpluses; and establish a look-back sequester mechanism to ensure the Social Security surplus will be protected. We also need to pursue biennial budgeting and getting rid of the so-called ``baseline budgeting.'' We were assured by Senate leaders that we were going to pursue real budget process reform early this year and that we would never have another omnibus spending bill in the future. Mr. President, I believe what we have before us today is a repeat of what was promised to never occur again. Once more, with inadequate time to review. The Houses passed this omnibus bill with absolutely no knowledge of what was in it. This is nearly a play-by-play of 1998 because we have not reformed our budget process. As a result, after seven Continuing Resolutions, we have before us an omnibus spending bill that is full of creative financing and earmarked pork programs. Mr. President, when will we ever learn our lessons? Mr. President, it is entirely irresponsible and reckless that Congress has over-used advanced appropriations, used directed scoring, emergency spending and many other budgetary smoke and mirrors to dodge fiscal discipline and significantly increase government spending. Like last year's omnibus bill, this legislation is heavily loaded with irresponsible and inappropriate provisions. It is severely flawed by new spending, no CBO scoring, gimmick offsets and billions of pork- barrel programs. Many last-minute spending needs were loaded into this omnibus bill just in the last few days. I still cannot even tell you what they are, since we haven't been given enough time to review it. The double whammy delivered to Minnesota dairy farmers by adding a two- year extension of the Northeast dairy compact and 1 A order reform is my main reason for opposing this bill. These outrageous last-minute additions seriously hurt Mid-West dairy farmers and are the reason why we are still here today. This omnibus bill has again proven that big government is well and alive in Washington. The bill provides a total $385 billion for just five spending bills, a significant increase over last year's levels. Congress is recklessly and irresponsibly throwing more and more taxpayers' money to help the President enlarge the government. Billions of dollars were added to the spending legislation avoiding the normal committee process, without any amendments and full debate. If hiring more police officers and more elementary school teachers is the solution to stop crime and improve education, let us have an open debate on the merits of the policy through the usual democratic process. Let's not cut deals behind the closed door in meetings by just a few. Since we established statutory spending limits, Washington has repeatedly broken them because of lack of fiscal discipline. We have done so again this year. In my judgment, this omnibus spending bill and the other appropriation bills have been enacted have spent billions of dollars more than the spending caps if we would use honest numbers to score them. To date, the Congressional Budget Office has not provided us with its estimates on this bill. Because of the CBO's inability to score the bill, we do not know what the real cost of it, or whether it stays within the 302(b) allocations. But we do know many accounting rules have been bent in putting this bill together to avoid the tighter spending caps. Let me explain: This bill relies heavily on the so-called ``directed scoring'' technique for it increased spending. Traditionally, Congress always uses the Congressional Budget Office estimates for scorekeeping. However, because the Office of Management and Budget (OMB) has more favorable estimates for some government programs than the CBO, the Congress simply directed CBO to use OMB numbers to keep score for this year's spending bills. One of these OMB estimates the CBO was directed to use is the $2.4 billion spectrum sales revenue expected to be collected next year. We all know that level of sales will not be reached. In fact, we criticized the President for using this overoptimistic number in his past budgets. Just by using the OMB's rosy estimates, without making any hard choices, Congress has increased this year's 302(b) allocations by over $17.4 billion. But the real danger is, by the end of the year, the CBO will use its own estimates to score our budget surplus or deficit. If OMB's numbers prove to be unrealistic and wrong, we end up spending the Social Security surplus we have vowed to protect and it will be too late to adjust the budget accordingly. This is the last thing we want to [[Page S15000]] do. That is why I was disappointed my bill to provide an automatic sequester triggered by spending of the Social Security surplus was not passed. This procedure is absolutely essential to ensure we keep our commitment to protect Social Security. Again and again, Washington lowers the fiscal bar and then jumps over it, or finds ways around it, at the expense of the American taxpayers, so all the spenders and those special interests who benefit at other expenses go home happy. Mr. President, abusive use of emergency spending is another gimmick applied in this omnibus spending bill, as well as in the other appropriation bills we've passed. Last year alone, Congress appropriated $35 billion for so-called emergencies. This year again, over $24 billion of emergency spending was appropriated. Since 1991, emergency spending has totaled over $145 billion. Most of these ``emergencies'' were used to fund regular government programs, not unanticipated true emergencies. Emergency spending is sought as a vehicle to add on even more spending priorities and thus to dodge fiscal discipline because emergency spending is not counted against the spending caps. This has gone too far. We need a better way to budget for emergencies. Most of this spending can be planned within our budget limits. Even natural disasters happen regularly--why not budget for them, as I proposed in my budget process legislation. Mr. President, while I agree ``advance appropriations,'' ``advance funding'' and ``forward funding'' are not uncommon practice here, it does not mean they are the right thing to do, particularly when these budget techniques are used to dodge much-needed fiscal discipline. In the past five years, ``advance appropriations'' have increased dramatically, jumping from $1.9 billion in FY 1996 to $11.6 billion in FY 2000, an increase of $9.7 billion over five years. This year, at least $19 billion was advanced into FY 2001 and outyears which will create even worse problems for us next year and in the future. I understand the upward spending pressure the Congress is facing this year and in the outyears. But I believe we should, and can, meet this challenge by prioritizing and streamlining government programs while maintaining fiscal discipline. We can reduce wasteful, unnecessary, duplicated, low-priority government programs to fund the necessary and responsible function of government. But we need a Biennial Budget, as Senator Domenici recommends, to give us time to do this. Instead of streamlining federal spending, we have thrown in more money to please big spenders without the needed analysis to ensure the spending will help us solve problems. Like last year's bill, this bill looks like a Christmas tree full of pork projects. Many are added in the last minute negotiation. But we don't know exactly what they are and how much they cost, because again we have not been given enough time to review this bill. Here are a few examples as identified by Senator McCain: An entirely new title is included in the legislation during last minute negotiations, the ``Mississippi National Forest Improvement Act of 1999,'' which had not previously been considered in the previous Senate or House bills. A half million dollars is added for the Salt Lake City Olympic tree program. It earmarked $2 million for the University of Mississippi Center for Sustainable Health Outreach and $3 million for the Center for Environmental Medicine and Toxicology at the University of Mississippi Medical Center at Jackson. An earmark of $3 million is added for the Wheeling National Heritage Area and $3 million for the Lincoln Library. It earmarked $2 million for Tupelo School District in Mississippi for technology innovation. It includes an earmark of $3 million for the Southwest Pennsylvania Heritage Area. It also earmarked $1 million for the completion of the Easter Seal Society's Early Childhood Development Project for the Mississippi River Delta Region and $1 million for the Center for Literacy and Assessment at the University of Southern Mississippi. It also includes an increase of $3.6 million for Washington State Hatchery Improvement. As the result, we've ended up spending much more money than we should have. My biggest fear, Mr. President, is this omnibus spending legislation may allow Congress and the President to spend some of the Social Security surplus by not imposing an adequate across-the-board spending reduction. Even counting all the ``directed scoring,'' ``advanced appropriations,'' every penny of the $14 billion on-budget surplus and other budgetary gimmicks, it is estimated that Congress could still dip into the Social Security surplus by nearly $5 billion. To fill that gap we need to reduce government spending by 0.97 percent across-the-board. But the agreement reached between congressional leaders and the White House allows only a 0.38 percent reduction which would result in $1.3 billion savings. Clearly, this is done just for face-saving reason, and will not ensure that the Social Security surplus is protected. The proponents of this omnibus bill may quickly point out that there are offsets to fund the new spending. But we all know most of the offsets are simply gimmicks. The best example is a $3.5 billion transfer from the Federal Reserve surplus to the Treasury. As you know, there is nothing new about this proposal and it has been around for quite a while. In the past, Chairman Greenspan called this transfer of the Fed's surplus to the Treasury ``a gimmick that has no real economic impact on the deficit.'' Because it is just an intra- governmental transfer that would not change the government's true economic and financial position. Other offsets such as a one-day delay in pay for our military and civilians will cause enormous financial hardship for millions of American families who depend on the regular paychecks to pay their mortgage, daycare for their kids, and other priorities. Many small businesses and contractors can be adversely affected by this offset as well. Again, this has proven that the victims of Washington's spending spree are the American taxpayers. Mr. President, there are many provisions in the omnibus appropriations bill I support, such as the BBA Medicare fix which includes reinstatement of Minnesota's DSH allotment, the State Department Authorization which includes payment of the U.N. arrears and my embassy security proposal, Home Satellite TV access and others. In fact I have worked hard on many of these proposals. However, I believe the dairy provisions and the general lack of fiscal discipline in the bill have far overshadowed the good provisions. Overall, it is a bad deal for working Americans in general and it is a bad deal for my fellow Minnesotans in particular. I therefore cannot in good conscience vote for this fiscally irresponsible legislation. Mr. GRASSLEY. Mr. President, I rise to express my deep disappointment at the language affecting Federal dairy policy included in the Omnibus appropriations bill before us. As the Members know, the Omnibus measure includes an extension of the Northeast Dairy Compact and language on reforming our Nation's Federal dairy policy which has been in place since the Depression. It may seem unusual to some Members that a Senator from Iowa would have an interest in this matter. While Iowa's reputation as an agriculture powerhouse is well-established and well-deserved, I think when many people think of agriculture in Iowa, they think of commodities such as soybeans or pork. However, the dairy industry is very important to Iowa as well. The total economic contribution of the dairy industry to the Iowa economy is over $1.5 billion annually. Nearly 10,000 Iowans are employed through dairy farming and processing. Furthermore, Iowa ranks 12th in the Nation in Dairy Production. So the State of Iowa has good reason to be concerned about Federal dairy policy. I have long been concerned about the impact of the Northeast Dairy Compact, which was authorized by the 1996 farm bill and which was due to sunset in October of this year, has had, and how it will affect producers in the future. I voted in 1996 to strip the language from the farm bill which allowed for the formation of the Northeast Dairy Compact. The only reason the language was included in the farm bill was political trading at the last minute. Since the inception of the Northwest Compact, it is clear that its consequences have not been good. [[Page S15001]] According to the International Dairy Foods Association, the Northeast Compact has cost New England milk consumers nearly $65 million in higher milk prices, at the same time costing child nutrition programs $9 million more. Consumers have paid a price that is too high for the Northeast Compact. We should not make more consumers suffer the same consequences. I also believe that compacts are an abuse of the Constitution. While the Constitution does allow for the formation of compacts, it is usually invoked for transportation or public works project. The Northeast Dairy Compact is the first time that compacts have been used for the purpose of price fixing for regional interests. For the most effective functioning of the U.S. economy, it must be unified. Preventing economic protectionism is at the heart of our Constitution. Renewing or expanding compacts flies in the face of that basic tenet. Furthermore, neither the Judiciary Committee or the Agriculture Committee, which have jurisdiction over such matters, has had the opportunity to review this measure. Such a committee examination is warranted and necessary. One of the things that worries me about dairy compacts is their potential effect on other commodities. Higher prices mean more milk and less demand. The key to increasing dairy producers' income is expanding demand for milk and dairy products. If we take steps to expand dairy compacts, we will be going in the opposite direction. It is also my view that compacts are contradictory to the philosop