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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - July 17, 1998)

Text of this article available as: TXT PDF [Pages S8482-S8512] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. BRYAN (for himself and Mr. McCain): S. 2326. A bill to require the Federal Trade Commission to prescribe regulations to protect the privacy of personal information collected from and about children on the Internet, to provide greater parental control over the collection and use of that information, and for other purposes; to the Committee on Commerce, Science, and Transportation. the children's online privacy protection act of 1998 Mr. BRYAN. Mr. President, today the chairman of the Senate Commerce Committee and I are introducing ``the Children's Online Privacy Protection Act of 1998.'' Commercial Web sites are currently collecting and disseminating personal information collected from children that may compromise their safety and most certainly invades their privacy. This legislation will ensure that commercial Web sites that collect and use personal information from children will have safeguards in place to protect you and your family. The Internet is quickly becoming an significant force in the lives of our children as it moves swiftly into homes and classrooms around the country. Currently more than 3 million children under the age of 18 are online and the number is expected to grow to 15 million by the turn of the century. I think all would agree that proficiency with the Internet is a critical and vital skill that will be necessary for academic achievement in the next century. The benefits of the Internet are extraordinary. Reference information such as news, weather, sports, stock quotes, movie reviews, encyclopedia and online airline fares are readily available. Users can conduct transactions such as stock trading, make travel arrangements, bank, and shop online. Millions of people communicate through electronic mail to family and friends around the world, and others use the public message boards to make new friends and share common interests. As an educational and entertainment tool, users can learn about virtually any topic or take a college course. Unfortunately, the same marvelous advances in computer and telecommunication technology that allow our children to reach out to new resources of knowledge and cultural experiences are also leaving them unwittingly vulnerable to exploitation and harm by deceptive marketers and criminals. Earlier this spring, I held several meetings in Nevada with educators and parents' representatives to alert them of some of the deceptive practices found on the Internet. Representatives of the FBI and Federal Trade Commission informed Nevadans about some of the Internet's pitfalls. I found it extremely informative and enlightening and to some extent frightening. You may be startled to learn what information other people are collecting about you and your family may have a profound impact upon their privacy and, indeed, their safety. Once what may seem to be harmless information has made its way onto the Internet, there is no way of knowing what uses may be put to that information. Senator McCain and I wrote to the FTC asking them to investigate online privacy issues. Recently, the FTC completed the survey of a number of web sites and found that 89 percent of children's sites collect personal information from children, and less than 10 percent of the sites provide for parental control over the collection and use of this personal information. I was, frankly, surprised to learn the kinds of information these web sites are collecting from our children. Some were asking where the child went to school, what sports he or she liked, what siblings they had, their pet's name, what kind of time they had after school alone without the supervision of parents. Others were collecting personal financial information like what the family income was, does the family own stocks or certificates of deposit, did their grandparents give them any financial gifts? Web sites were using games, contests, and offers of free merchandise to entice children to give them exceedingly personal and private information about themselves and their families. Some even used cartoon characters who asked children for personal information, such as a child's name and address and e-mail address, date of birth, telephone number, and Social Security number. [[Page S8483]] Much of this information appears to be harmless, but companies are attempting to build a wealth of information about you and your family without an adult's approval--a profile that will enable them to target and to entice your children to purchase a range of products. The Internet gives marketers the capability of interacting with your children and developing a relationship without your knowledge. Where can this interactive relationship go? Will your child be receiving birthday cards and communications with online cartoon characters for particular products? Senator McCain and I believe there must be safeguards against the online collecting of information from children without a parent's knowledge or consent. If a child answers a phone and starts answering questions, a parent automatically becomes suspicious and asks who they are talking to. When a child is on the Internet, parents often have no knowledge of whom their child is interacting. That is why we are introducing legislation that would require the FTC to come up with rules to govern these kind of activities. The FTC's rules would require commercial web sites to: (1) Provide notice of its personal information collection and use practices; (2) Obtain parental consent for the collection, use or disclosure of personnel information from children 12 and under; (3) Provide parents with an opportunity to opt-out of the collection and/or use of personal information collected from children 13 to 16; (4) Provide parents access to his or her child's personal information; (5) Establish and maintain reasonable procedures to ensure the confidentiality, security, accuracy, and integrity of personal information on children. The FTC must come up with these rules within 1 year. The FTC may provide incentives for industry self-regulatory efforts including safe harbors for industry created guidelines. The bill permits States' attorneys general to enforce the act. I believe these represent reasonable steps we should take to protect our privacy. Although time is short in this session, I hope we can find a way to enact these commonsense proposals this Congress. Most people who use online services have positive experiences. The fact that deceptive acts may be committed on the Internet, is not a reason to avoid using the service. To tell children to stop using the Internet would be like telling them to forgo attending college because students are sometimes victimized on campus. A better strategy is for children to learn how to be street smart in order to better safeguard themselves from potentially deceptive situations. The Internet offers unlimited potential for assisting our child's growth and development. However, we must not send our children off on this adventure without proper guidance and supervision. Mr. President, in my judgment, the legislation offered today by the senior Senator from Arizona and I provides those reasonable guidelines. I hope colleagues will join with me in making sure this legislation is enacted in this situation. ______ By Mr. COATS (for himself and Mr. Lieberman): S. 2327. A bill to provide grants to grassroots organizations in certain cities to develop youth intervention models; to the Committee on the Judiciary. national youth crime prevention demonstration act Mr. COATS. Mr. President, America currently struggles with a disturbing and growing trend of youth violence. Between 1985 and 1994, the arrest rate for murders by juveniles increased 150 percent, while the rate for adults during this time increased 11 percent. Every day, in our communities and in the media, we see horrific examples of this crime. A 13-year-old girl murders her 3-year-old nephew and dumps him in the trash. A 13-year-old boy is stabbed to death while sitting on his back porch. A group of teenagers hails a cab and, after the driver takes them to their destination, they shoot him dead in an armed robbery. I did not have to look far for these examples. Each occurred in Indiana, a State generally known as a safe State, a good place to raise a family, not a dangerous place, yet a State where arrests for violent juvenile crimes have skyrocketed 19 percent in the early 1990's. Juvenile violence is no longer a stranger in any ZIP code. Yet, the problem is expected to grow worse. Crime experts who study demographics warn of a coming crime wave based on the number of children who currently are younger than 10 years old. These experts warn that if current trends are not changed, we might someday look back at our current juvenile crime epidemic as ``the good old days.'' This spiraling upward trend in youth crime and violence is cause for grave concern. So one might ask, what is driving this epidemic? Over 30 years ago, our colleague Daniel Patrick Moynihan, then an official in the Johnson administration, wrote that when a community's families are shattered, crime, violence and rage ``are not only to be expected, they are virtually inevitable.'' He wrote those words in 1965. Since then, arrests of violent juvenile criminals have tripled. Last Congress, the Subcommittee on Children and Families, which I chair, held a hearing about the role of government in combating juvenile crime. The experts were clear: while government efforts are important, they are also fundamentally limited and incomplete. Government is ultimately powerless to form the human conscience that chooses between right and wrong. Locking away juveniles might prevent them from committing further crimes, but it does not address the fact that violence is symptomatic of a much deeper, moral and spiritual void in our Nation. In the battle against violent crime, solid families are America's strongest line of defense. But government can be an effective tool if it joins private institutions (families, churches, schools, community groups, and non- profit organizations) in preventing and confronting juvenile crime with the moral ideals that defeat despair and nurture lives. Today, I rise to introduce the National Youth Crime Prevention Act which will empower local communities to address the rising trend in youth violence. Specifically, this legislation authorizes the Attorney General to award $5 million annually for five years to the National Center for Neighborhood Enterprise to conduct national demonstration projects in eight cities. These projects would aim to end youth crime, violence and family disintegration by building neighborhood capacity and linking proven grassroots organizations within low-income neighborhoods with sources from the public sector, including local housing authorities, law enforcement agencies, and other public entities. The demonstration projects will take place in Washington, DC; Detroit, Michigan; Hartford, Connecticut; Indianapolis, Indiana; Chicago, Illinois; San Antonio, Texas; Dallas, Texas; and Los Angeles, California. With these funds, the National Center for Neighborhood Enterprise will work with the grassroots organizations in the demonstration cities to establish Violence Free Zone Initiatives. These initiatives would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. To be eligible for the grants, the nonprofit organizations within the demonstration cities must have experience in crime prevention and youth mediation projects and must have a history of cultivating cooperative relationships with other local organizations, housing facilities and law enforcement agencies. Funds may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services, local agency partnerships and activities to further community objectives in reducing youth crime and violence. The success of this approach has already been demonstrated. Last year, The National Center for Neighborhood Enterprise assisted The Alliance for Concerned Men in creating a ``Violence Free Zone'' in Benning Terrace in Southeast DC. The Alliance of Concerned Men brokered peace treaties among the gangs that inhabit, and frequently dominate, the city's public [[Page S8484]] housing complexes. Benning Terrace in Southeast Washington, known to the DC police department as one of the most dangerous areas of the city, has not had a single murder since the Alliance's peace treaty went into effect early last year. Subsequently, the National Center for Neighborhood Enterprise brought the Alliance, the youths, and the DC Housing Receiver together to develop and implement a plan for jobs and life skills training for the young people and the community itself. Grassroots organizations are the key to implementing the most effective innovative strategies to address community problems. Their efforts help restore hardpressed inner-city neighborhoods by developing the social, human and economic capital that is key to real, long-term renewal of urban communities. The National Youth Crime Prevention Demonstration Act will provide critical assistance to our Nation's inner-cities as they combat the rising trend in youth violence by linking proven grassroots organizations with established public sector entities. Mr. President, I urge my colleagues to support this important legislation, and I ask unanimous consent that the text of the National Youth Crime Prevention Demonstration Act be printed in the Record. There being no objection, the bill was ordered to be printed in the Record, as follows: S. 2327 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``National Youth Crime Prevention Demonstration Act''. SEC. 2. PURPOSES. The purposes of this Act are as follows: (1) To establish a demonstration project that establishes violence-free zones that would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. (2) To document best practices based on successful grassroots interventions in cities, including Washington, District of Columbia; Boston, Massachusetts; Hartford, Connecticut; and other cities to develop methodologies for widespread replication. (3) To increase the efforts of the Department of Justice, the Department of Housing and Urban Development, and other agencies in supporting effective neighborhood mediating approaches. SEC. 3. ESTABLISHMENT OF NATIONAL YOUTH CRIME PREVENTION DEMONSTRATION PROJECT. The Attorney General shall, subject to appropriations, award a grant to the National Center for Neighborhood Enterprise (referred to in this Act as the ``National Center'') to enable the National Center to award grants to grassroots entities in the following 8 cities: (1) Washington, District of Columbia. (2) Detroit, Michigan. (3) Hartford, Connecticut. (4) Indianapolis, Indiana. (5) Chicago (and surrounding metropolitan area), Illinois. (6) San Antonio, Texas. (7) Dallas, Texas. (8) Los Angeles, California. SEC. 4. ELIGIBILITY. (a) In General.--To be eligible to receive a grant under this Act, a grassroots entity referred to in section 3 shall submit an application to the National Center to fund intervention models that establish violence-free zones. (b) Selection Criteria.--In awarding grants under this Act, the National Center shall consider-- (1) the track record of a grassroots entity and key participating individuals in youth group mediation and crime prevention; (2) the engagement and participation of a grassroots entity with other local organizations; and (3) the ability of a grassroots entity to enter into partnerships with local housing authorities, law enforcement agencies, and other public entities. SEC. 5. USES OF FUNDS. (a) In General.--Funds received under this Act may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services and local agency partnerships, and activities to further community objectives in reducing youth crime and violence. (b) Guidelines.--The National Center will identify local lead grassroots entities in each designated city which include the Alliance of Concerned Men of Washington in the District of Columbia; the Hartford Youth Peace Initiative in Hartford, Connecticut; the Family Help-Line in Los Angeles, California; the Victory Fellowship in San Antonio, Texas; and similar grassroots entities in other designated cities. (c) Technical Assistance.--The National Center, in cooperation with the Attorney General, shall also provide technical assistance for startup projects in other cities. SEC. 6. REPORTS. The National Center shall submit a report to the Attorney General evaluating the effectiveness of grassroots agencies and other public entities involved in the demonstration project. SEC. 7. DEFINITIONS. For purposes of this Act-- (1) the term ``grassroots entity'' means a not-for-profit community organization with demonstrated effectiveness in mediating and addressing youth violence by empowering at-risk youth to become agents of peace and community restoration; and (2) the term ``National Center for Neighborhood Enterprise'' is a not-for-profit organization incorporated in the District of Columbia. SEC. 8. AUTHORIZATION OF APPROPRIATIONS. (a) In General.--There are authorized to be appropriated to carry out this Act-- (1) $5,000,000 for fiscal year 1999; (2) $5,000,000 for fiscal year 2000; (3) $5,000,000 for fiscal year 2001; (4) $5,000,000 for fiscal year 2002; and (5) $5,000,000 for fiscal year 2003. (b) Reservation.--The National Center for Neighborhood Enterprise may use not more than 20 percent of the amounts appropriated pursuant to subsection (a) in any fiscal year for administrative costs, technical assistance and training, comprehensive support services, and evaluation of participating grassroots organizations. ______ By Mr. JEFFORDS (for himself, Mr. Bingaman, and Mr. Graham): S. 2329. A bill to amend the Internal Revenue Code of 1986 to enhance the portability of retirement benefits, and for other purposes; to the Committee on Finance. the retirement portability account (rap) act. Mr. JEFFORDS. Mr. President, today I am introducing S. 2329, the Retirement Portability Account (RAP) Act. This bill is a close companion to H.R. 3503 introduced by our colleagues Earl Pomeroy of North Dakota and Jim Kolbe of Arizona earlier this year. In addition, it contains certain elements of H.R. 3788, the Portman-Cardin bill, which relate to increased pension portability. Generally this bill is intended to be a further iteration of the concepts embodied in both of those bills. It standardizes the rules in the Internal Revenue Code (IRC) which regulate how portable a worker's retirement savings account is, and while it does not make portability of pension benefits perfect, it greatly improves the status quo. Consistent with ``greatly improving the status quo'', this bill contains no mandates. No employer will be ``required'' to accept rollovers from other plans. A rollover will occur when the employee offers, and the employer agrees to accept, a rollover from another plan. Under current law, it is not possible for an individual to move an accumulated retirement savings account from a section 401(k) (for- profit) plan to a section 457 (state and local government) deferred compensation plan, to an Individual Retirement Account (IRA), then to a section 403(b) (non-profit organization) plan and ultimately back into a section 401(k) plan, without violating various restrictions on the movement of their money. The RAP Act will make it possible for workers to take their retirement savings with them when they change jobs regardless of the type of employer for which they work. This bill will also help make IRAs more portable and will improve the uses of conduit IRAs. Conduit IRAs are individual retirement accounts to which certain distributions from a qualified retirement plan or from another individual retirement account have been transferred. RAP changes the rules regulating these IRAs so that workers leaving the for-profit, non-profit or governmental field can use a conduit IRA as a parking spot for a pre-retirement distribution. These special accounts are needed by many workers until they have another employer-sponsored plan in which to rollover their savings. In many instances, this bill will allow an individual to rollover an IRA consisting exclusively of tax-deductible contributions into a retirement plan at his or her new place of employment, thus helping the individual consolidate retirement savings in a single account. Under certain circumstances, the RAP Act will also allow workers to rollover any after-tax contributions made at his or her previous workplace, into a new retirement plan. [[Page S8485]] Current law requires a worker who changes jobs to face a deadline of 60 days within which to roll over any retirement savings benefits either into an Individual Retirement Account, or into the retirement plan of his or her new employer. Failure to meet the deadline can result in both income and excise taxes being imposed on the account. We believe that this deadline should be waived under certain circumstances and we have outlined them in the bill. Consistent with the Pomeroy- Kolbe bill, in case of a Presidentially-declared natural disaster or military service in a combat zone, the Treasury Department will have the authority to disallow imposition of any tax penalty for the account holder. Consistent with the additional change proposed by the Portman- Cardin bill, however, we have included a waiver of tax penalties in the case of undue hardship, such as a serious personal injury or illness and we have given the Department of the Treasury the authority to waive this deadline, as well. The Retirement Account Portability bill will also change two complicated rules which harm both plan sponsors and plan participants; one dealing with certain business sales (the so-called ``same desk'' rule) and the other dealing with retirement plan distribution options. Each of these rules has impeded true portability of pensions and we believe they ought to be changed. In addition, this bill will extend the Pension Benefit Guaranty Corporation's (PBGC) Missing Participant program to defined benefit multiemployer pension plans. Under current law, the PBGC has jurisdiction over both single-employer and multiemployer defined benefit pension plans. A few years ago, the agency initiated a program to locate missing participants from terminated, single-employer plans. The program attempts to locate individuals who are due a benefit, but who have not filed for benefits due to them, or who have attempted to find their former employer but failed to receive their benefits. This bill expands the missing participant program to multiemployer pension plans. I know of no reason why individuals covered by a multiemployer pension plans should not have the same protections as participants of single-employer pension plans and this change will help more former employees receive all the benefits to which they are entitled. This bill does not expand the missing participants program to defined contribution plans. Supervision of defined contribution plans is outside the statutory jurisdiction of the PBGC and I have not heard strong arguments for including those plans within the jurisdiction of the agency. In a particularly important provision, the Retirement Account Portability bill will allow public school teachers and other state and local employees who move between different states and localities to use their savings in their section 403(b) plan or section 457 deferred compensation arrangement to purchase ``service credit'' in the plan in which they are currently participating, and thus obtain greater pension benefits in the plan in which they conclude their career. However, the bill does not allow the use of a lump sum cash-out from a defined benefit plan to be rolled over to a section 403(b) or section 457 plan. As a final note, this bill, this bill does not reduce the vesting schedule from the current five year cliff vesting (or seven year graded) to a three year cliff or six year graded vesting schedule. I am not necessarily against the shorter vesting schedules, but I feel that this abbreviated vesting schedule makes a dramatic change to tax law without removing some of the disincentives to maintaining a pension plan that businesses--especially small businesses--desperately need. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record. There being no objection, the summary was ordered to be printed in the Record, as follows: Increasing Portability for Pension Plan Participants: Facilitating Rollovers Under current law, an ``eligible rollover distribution'' may be either (1) rolled over by the distributee into an ``eligible retirement plan'' if such rollover occurs within 60 days of the distribution, or (2) directly rolled over by the distributing plan to an ``eligible retirement plan.'' An ``eligible rollover distribution'' does not include any distribution which is required under section 401(a)(9) or any distribution which is part of a series of substantially equal periodic payments made for life, life expectancy or over a period of ten years or more. An ``eligible retirement plan'' is another section 401 plan, a section 403(a) plan or an IRA. (If the distributee is a surviving spouse of a participant, ``eligible retirement plans'' consist only of IRAs.) Under these rules, for example, amounts distributed from a section 401(k) plan may not be rolled over to a section 403(b) arrangement. In the case of a section 403(b) arrangement, distributions which would be eligible rollover distributions except for the fact that they are distributed from a section 403(b) arrangement may be rolled over to another section 403(b) arrangement or an IRA. Under these rules, amounts distributed from a section 403(b) may not be rolled over into a section 401(k) plan. When an ``eligible rollover distribution'' is made, the plan administrator must provide a written notice to the distributee explaining the availability of a direct rollover to another plan or an IRA, that failure to exercise that option will result in 20% being withheld from the distribution and that amounts not directly rolled over may be rolled over by the distributee within 60 days. Under ``conduit IRA'' rules, an amount may be rolled over from a section 401 or 403(a) plan to an IRA and subsequently rolled over to a section 401 or 403(a) plan if amounts in the IRA are attributable only to rollovers from section 401 or 403(a) plans. Also under conduit IRA rules, an amount may be rolled over from a section 403(b) arrangement to an IRA and subsequently rolled over to a section 403(b) arrangement if amounts in the IRA are attributable only to rollovers from section 403(b) arrangements. In the case of a section 457 deferred compensation plan, distributions may not be rolled over by a distributee; however, amounts may be transferred from one section 457 plan to another section 457 plan without giving rise to income to the plan participant. A participant in a section 457 plan is taxed on plan benefits that are not transferred when such benefits are paid or when they are made available. In contrast, a participant in a qualified plan or a section 403(b) arrangement is only taxed on plan benefits that are actually distributed. Under this proposal, ``eligible rollover distributions'' from a section 401 plan could be rolled over to another section 401 plan, a section 403(a) plan, a section 403(b) arrangement, a section 457 deferred compensation plan maintained by a state or local government or an IRA. Likewise, ``eligible rollover distributions'' from a section 403(b) arrangement could be rolled over to the same broad array of plans and IRAs. Thus, an eligible rollover distribution from a section 401(k) plan could be rolled over to a section 403(b) arrangement and vice versa. (As under current law, if the distributee is a surviving spouse of a participant, the distribution could only be rolled over into an IRA.) Eligible rollover distributions from all section 457 deferred compensation plans could be rolled over to the same broad array of plans and IRAs; however, the rules regarding the mandatory 20% withholding would not apply to the section 457 plans. A section 457 plan maintained by a government would be made an eligible retirement plan for purposes of accepting rollovers from section 401(k), section 403(b) and other plans. The written notice required to be provided when an ``eligible rollover distribution'' is made would be expanded to apply to section 457 plans and to include a description of restrictions and tax consequences which will be different if the plan to which amounts are transferred is a different type of plan from the distribution plan. Participants who mix amounts eligible for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. A participant in a section 457 plan would only be taxed on plan benefits that are not transferred or rolled over when they are actually paid. These changes would take effect for distributions made after December 31, 1998. The reason for this expansion of current law rules permitting rollovers is to allow plan participants to put all of their retirement plan savings in one vehicle if they change jobs. Given the increasing mobility of the American workforce, it is important to make pension savings portable for those who change employment. This proposal contains no mandates requiring employers to accept rollovers from their new employees. A rollover occurs when the employee makes an offer to move his/her money and the employer accepts the funds. Because of the rule that taxes section 457 plan participants on benefits made available, section 457 plans cannot provide plan participants with the flexibility to change benefit payments to fit their changing needs. There is no policy justification for this lack of flexibility. rollovers of individual retirement accounts to qualified plans Under current law, a taxpayer is not permitted to roll amounts held in an individual retirement account (IRA) (other than a conduit IRA), to a section 401 plan, a 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Currently, the maximum direct IRA contribution is $2,000. Since 1986, generally only individuals with income below certain limits are able to fully deduct [[Page S8486]] IRA contributions. For others, IRA contributions have been nondeductible or partially deductible in some or all years. To the extent that IRA contributions are non-deductible, they have ``basis'' which is not taxed the second time upon distribution from the IRA. The burden of maintaining records of IRA basis has been the taxpayer's, since only the taxpayer has had the information to determine his or her basis at the outset and as an ongoing matter. IRAs are generally subject to different regulatory schemes than other retirement savings plans, such as section 401(k)s or section 457 deferred compensation plans, although the 10 percent tax penalty on early distributions applies to both qualified plans and IRAs. For example, one cannot take a loan from an IRA, although a recent change in law will make it easier to make a penalty-free withdrawal from an IRA to finance a first-time home purchase or higher-education expenses. Under the bill, rollovers of contributory IRAs would be permitted if and only if the individual has never made any nondeductible contributions to his or her IRA and has never had a Roth IRA. The IRA may then be rolled over into a section 401 plan, a section 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Since the vast majority of IRAs contain only deductible contributions, this change will allow many individuals to consolidate their retirement savings into one account. For those who have both nondeductible and deductible contributions, they may still have two accounts, one containing the majority of funds consolidated in one place and one containing the nondeductible IRA contributions. Once IRA money is rolled over into a plan however, the IRA contributions would become plan money and subject to the rules of the plan except that participants who mix amounts for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. Employers will not be required to accept rollovers for IRAs. These changes would apply to distributions after December 31, 1998. The reasons for this change is to take another step toward increased portability of retirement savings. While this proposal would not guarantee that all retirement savings would be completely portable, it will increase the extent to which such savings are portable and fungible. Other rules and requirements affecting IRAs and their differences and similarities to plan money will continue to be the subject of Congressional scrutiny. rollovers of after-tax contributions and rollovers not made within 60 days of receipt Under current law, employees are allowed to make after-tax contributions to IRAs, 401(k) plans, and other plans. They are not permitted to roll over distributions of those after- tax contributions to an IRA or another plan. Rollovers from qualified plans to an IRA (or from an IRA to another IRA) must occur within 60 days of the initial distribution. Income tax withholding rules apply to certain distributions that are not direct trustee-to-trustee transfers from the qualified plan to an IRA or another plan. The proposal would allow after-tax contributions to be included in a rollover contribution to an IRA or other types of retirement plans, but it does not require the receiving trustee to track or report the basis. That requirement would be the responsibility of the taxpayer, as in the case of nondeductible IRA contributions. The IRS is given the authority to extend the 60-day period where the failure to comply with such requirements is attributable to casualty, disaster or other events beyond the reasonable control of the individual subject to such requirements. These changes would generally apply to distributions made after December 31, 1998. The hardship exception to the 60-day rollover period would apply to such 60-day periods expiring after the date of enactment. These changes are warranted because after-tax savings in retirement plans enhance retirement security and are particularly attractive to low and middle income taxpayers. Allowing such distributions to be rolled over to an IRA or a plan will increase the chances that those amounts would be retained until needed for retirement. Often individuals, particularly widows, widowers and individuals with injuries of illnesses, miss the 60-day window. In other instances, individuals miss the 60-day rollover period because of the failure of third parties to perform as directed. Finally, victims of casualty or natural disaster should not be penalized. A failure to satisfy the 60-day rule, by even one day can result in catastrophic tax consequences for a taxpayer that can include immediate taxation of the individual's entire retirement savings (often in a high tax bracket), a 10% early distribution tax, and a substantial depletion of retirement savings. By giving the IRS the authority to provide relief from the 60-day requirement for failures outside the control of the individual, the proposal would give individuals in these situations the ability to retain their retirement savings in an IRA or a qualified plan. Treatment of Forms of Distribution Under current law, section 411(d)(6), the ``anti-cutback'' rule generally provides that when a participant's benefits are transferred from one plan to another, the transferee plan must preserve all forms of distribution that were available under the transferor plan. Under this proposal, an employee may elect to waive his or her section 411(d)(6) rights and transfer benefits from one defined contribution plan to another defined contribution plan without requiring the transferee plan to preserve the optional forms of benefits under the transferor plan if certain requirements are satisfied to ensure the protection of participants' interests. This proposal would also apply to plan mergers and other transactions having the effect of a direct transfer, including consolidation of benefits attributable to different employers within a multiple employer plan. These changes would apply to transfers after December 31, 1998. The requirement that a defined contribution plan preserve all forms of distribution included in transferor plans significantly increases the cost of plan administration, particularly for employers that make numerous business acquisitions. The requirements also causes confusion among plan participants who can have separate parts of their retirement benefits subject to sharply different plan provision and requirements. The increased cost for the plan and the confusion for the participant brought about by the requirement to preserve all forms of distribution are based on a rule intended to protect a participant's right not to have an arbitrary benefit reduction. The current rule sweeps too broadly since it protects both significant and insignificant rights. Where a participant determines the rights to be insignificant and wants to consolidate his or her retirement benefits, there is no reason not to permit his consolidation. This consolidation increases portability and reduces administrative costs. Rationalization of Restrictions on Distributions, The ``Same Desk'' Rule Generally, under current law, distributions from 401(k) plans are limited to separation from service, death, disability, age 59\1/2\, hardship, plan termination without maintenance of another plan, and certain corporate transactions. The term ``separation from service'' has been interpreted to include a ``same desk'' rule. Under the ``same desk'' rule, distributions to a terminated employee are not permitted if the employee continues performing the same functions for a successor employer (such as a joint venture owned in part by the former employer or the buyer in a business acquisition). The same desk rule also applies to section 403(b) arrangements and section 457 plans, but does not apply to other types of plans such as defined benefit plans. Under this proposal, the ``same desk rule'' would be eliminated by replacing ``separation from service'' with ``severance from employment''. Conforming changes would be mad in the comparable provisions of section 403(b) arrangements and eligible deferred compensation plans under section 457. This change would apply to distributions after December 31, 1998. Under this proposal, affected employees would be able to roll over their 401(k) account balance to an IRA or to their new employer's 401(k) plan. Modifying the same desk rule so that all of a worker's retirement funds can be transferred to the new employer after a business sale has taken place will allow the employee to keep his or her retirement nest egg in a single place. It will also coordinate the treatment of defined benefit plan benefits with the treatment of 401(k) plans in these types of transactions. Employees do not understand why their 401(k) account must remain with the former employer until they terminate employment with their new employer, especially since this restriction does not apply to other plans in which they participate. The corporate transaction exception provides some relief from the same desk rule but is inapplicable in numerous cases. Purchase of Service Credit in Governmental Defined Benefit Plans Under current law, employees of State and local governments often have the option of purchasing service credits in their State defined benefit plans in order to make up for the time spent in another State or district. These employees cannot currently use the money they have saved in their section 403(b) arrangements or section 457 plans to purchase these service credits. This proposal would permit State and local government employees the option to use the funds in their section 403(b) arrangements or section 457 deferred compensation plans to purchase service credits. These changes would apply to trustee-to-trustee transfers after December 31, 1998. This change will permit employees of State and local governments, particularly teachers, who often move between States and school districts in the course of their careers, to buy a larger defined benefit pension with the savings they have accumulated in a section 403(b) arrangement or section 457 deferred compensation plan. The greater number of years of credit that they purchase would reflect a full career of employment rather than two or more shorter periods of employment in different States or districts. Allowing the more flexible use of existing account balances in 403(b) arrangements or section 457 plans will allow more of these employees to purchase service credits and earn a full defined benefit pension. Missing Participants Program Under current law in the case of certain terminated single employer defined benefit plans, the Pension Benefit Guaranty Corporation (PBGC) will act as a clearinghouse for benefits due to participants who cannot [[Page S8487]] be located (``missing participants''). Under the program, when a plan is terminated and is unable to locate former workers who are entitled to benefits, the terminating plan is allowed to transfer these benefits to the PBGC which then attempts to locate the employees in question. The missing participants program is limited to certain defined benefit plans. This proposal would expand the PBGC's missing participant program to cover multiemployer defined benefit pension plans. The program would not apply to governmental plans or to church plans not covered by the PBGC, however. If a plan covered by the new program has missing participants when the plan terminates, at the option of the plan (or employer, in the case of a single employer plan), the missing participants' benefits could be transferred to the PBGC along with related information. This change would take effect with respect to distributions from t4erminating multiemployer plans that occur after the PBGC has adopted final regulations implementing the provision. By permitting sponsors the option of transferring pension funds to the PBGC, the chances that a missing participant will be able to recover benefits could be increased. Disregarding Rollovers for Purposes of the Cash Out Amount Under current law, if a terminated participant has a vested accrued benefit of $5,000 or less, the plan may distribute such benefit in a lump sum without the consent of the participant or the participant's spouse. This $5,000 cash-out limit is not indexed for inflation. In applying the $5,000 cash-out rule, the plan sponsor is under regulations required to look back to determine if an individual's account every exceeded $5,000 at the time of any prior distribution. Rollover amounts count in determining the maximum balance which can be involuntarily cashed out. This proposal would allow a plan sponsor to disregard rollover amounts in determining eligibility for the cash-out rule, that is, whether a participant's vested accrued benefit exceeds $5,000. This proposal would apply to distributions after December 31, 1998. The reason for this change is to remove a possible reason for employers to refuse to accept rollovers. Plan Amendments Under current law, there is generally a short period of time to make plan amendments that reflect the amendments to the law. In addition, the anti-cutback rules can have the unintentioned effect of preventing an employer from amending its plan to reflect a change in the law. Amendments to a plan or annuity contract made pursuant to any amendment made by this bill are not required to be made before the last day of the first plan year beginning on or after January 1, 2001. In the case of a governmental plan, the date for amendments is extended to the first plan year beginning on or after January 1, 2003. Operational compliance would, of course be required with respect to all plans as of the applicable effective date of any amendment made by this Act. In addition, timely amendments to a plan or annuity contract made pursuant to any amendment made by this Act shall be deemed to satisfy the anti-cutback rules. The reason for this change is that plan sponsors need an appropriate amount of time to make changes to their plan documents. ______ By Mr. LOTT (for Mr. Nickles, for himself, Mr. Frist, Ms. Collins, Mr. Jeffords, Mr. Roth, Mr. Santorum, Mr. Hagel, Mr. Gramm, Mr. Coats, Mr. Lott, Mr. Mack, Mr. Craig, Mr. Coverdell, Mr. Abraham, Mr. Allard, Mr. Ashcroft, Mr. Bennett, Mr. Bond, Mr. Brownback, Mr. Burns, Mr. Cochran, Mr. Domenici, Mr. Enzi, Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Grassley, Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. Hutchison, Mr. Inhofe, Mr. Kempthorne, Mr. Lugar, Mr. McCain, Mr. Murkowski, Mr. Roberts, Mr. Sessions, Mr. Shelby, Mr. Smith of New Hampshire, Mr. Smith of Oregon, Ms. Snowe, Mr. Thomas, Mr. Thompson, Mr. Thurmond, and Mr. Warner): S. 2330. A bill to improve the access and choice of patients to quality, affordable health care; read the first time. PATIENTS' BILL OF RIGHTS Mr. NICKLES. Mr. President, today I am introducing the Republican Patients' Bill of Rights. Joining me in this effort are 46 of my colleagues who recognize the importance of ensuring that all Americans are able to not only receive the care they have been promised, but also receive the highest quality of care available. The foundation of this proposal was to address some of the very real concerns that consumers have about their health care needs. We know that many Americans have believed they were denied coverage that their plans were supposed to cover. We recognize that some individuals fear that their health care plans will not give them access to specialists when they need them. We know that some Americans think their health care plans care more about cost than they do about quality. In contrast, we also know that many Americans are happy and satisfied with their health care plan. We know that 81 percent of managed care enrollees are satisfied with their current health care plan. Another recent analysis suggest that 79 percent of consumers in HMOs would recommend their coverage. In addition Americans are leery of Washington solutions and increased federal intervention. Last January, the Leader asked me to put together a group of colleagues to address the issue of health care quality. For the past seven months, Senators Frist, Collins, Hagel, Roth, Jeffords, Coats, Santorum, and Gramm worked tirelessly to put together a responsible, credible package that would preserve what is best about our Nation's health care while at the same time determine ways to improve upon-- without stifling--the quality of care our nation delivers. We set out to rationally examine the issues and develop reasonable solutions without injuring patient access to affordable, high quality care. This was no easy task. We spent month after month talking to experts who understand the difficulty and complexity of our system. We met with representatives from all aspects of the industry including the Mayo Clinic, the Henry Ford Health Systems, the American Medical Association, the American Hospital Association, the National Committee for Quality Assurance, the Joint Commission on the Accreditation of Healthcare Organizations, Corporate Medical Directors, Commissioners from the President's Quality Commission, Purchasers, Families USA, the Employee Benefit Research Institute and many others. After many, many months of dissecting serious questions about our system we determined that there were indeed some areas in which we could improve patient access and quality. We have put together an innovative plan that will answer the problems that exist in the industry while at the same time preserving affordability, which is of utmost importance. Mr. President, I think you agree that if someone loses their health insurance because a politician playing doctor drives prices to an unaffordable level, you have hardly given them more rights or better quality health care. We are proud of what we have been able to accomplish. For the first time, patients can choose to be unencumbered in their relationship with their doctor. They will be able to choose their own doctor and get the middle man out of the way. There will be no corporate bureaucrat, no government bureaucrat and no lawyer standing between a patient and their doctor. Mr. President, the bill we introduce today: Protects consumers in employer-sponsored plans that are exempt from state regulation. People enrolled in such plans will have the right to: Choose their doctors. Our bill contains both ``point-of-service'' and ``continuity of care'' requirements that will enhance consumer choice. See their ob-gyns and pediatricians without referral. Our bill will give patients direct access to pediatricians and ob-gyns without prior referral from a ``gatekeeper.'' Have a ``prudent layperson'' standard applied to their claims for emergency care. The GOP alternative will require health plans to cover--without prior authorization--emergency care that a ``prudent layperson'' would consider medically necessary. Communicate openly with their doctors without ``gag'' clauses. Holds health plans accountable for their decisions. Extends to enrollees in ERISA health plans and their doctors the right to appeal adverse coverage decisions to a physician who was not involved in the initial coverage determination. Allows enrollees to appeal adverse coverage determinations to independent medical experts who have no affiliation with the health plan. Determinations by these experts will be binding on the health plan. Requires health plans to disclose to enrollees consumer information, including what's covered, what's not, [[Page S8488]] how much they'll have to pay in deductibles and coinsurance, and how to appeal adverse coverage decisions to independent medical experts. Guarantees consumers access to their medical records. Requires health care providers, health plans, employers, health and life insurers, and schools and universities to permit an individual to inspect, copy and amend his or her own medical information. Requires health care providers, health plans, health oversight agencies, public health authorities, employers, health and life insurers, health researchers, law enforcement officials, and schools and universities to establish appropriate safeguards to protect the confidentiality, security, accuracy and integrity of protected health information and notify enrollees of these safeguards. Protects patients from genetic discrimination in health insurance. Prohibits health plans from collecting or using predictive genetic information about a patient to deny health insurance coverage or set premium rates. Promotes quality improvement by supporting research to give patients and physicians better information regarding quality. Establishes the Agency for Healthcare Quality Research (AHQR), whose purpose is to foster overall improvement in healthcare quality and bridge the gap between what we know and what we do in healthcare today. The Agency is built on the platform of the current Agency for Health Care Policy and Research, but is refocused and enhanced to become the hub and driving force of federal efforts to improve the quality of healthcare in all practice environments--not just managed care. The role of the Agency is not to mandate a national definition of quality, but to support the science necessary to provide information to patients regarding the quality of the care they receive, to allow physicians to compare their quality outcomes with their peers, and to enable employers and individuals to be prudent purchasers based on quality. Supports research, screening, treatment, education, and data collection activities to improve the health of women. Promotes basic and clinical research for osteoporosis; breast and ovarian cancer; and aging processes regarding women. Expands research efforts into the underlying causes and prevention of cardiovascular diseases in women--the leading cause of death among American women. Supports data collection through the National Center for Health Statistics and the National Program of Cancer Registries, which are the leading sources of national data on the health status of women in the U.S. Supports the National Breast and Cervical Cancer Early Detection Program, which provides for regular screening for breast and cervical cancers to underserved women. Requires that the length of hospital stay after a mastectomy, lumpectomy or lymph node dissection be determined only by the physician, in consultation with the patient, and without the need to obtain authorization from the health plan. If a plan covers mastectomies, it also must cover breast reconstruction after a mastectomy. Makes health insurance more accessible and affordable by: Allowing self-employed people to deduct the full amount of their health care premiums. Making medical savings accounts available to everyone. Reforming cafeteria plans to let consumers save for future health care costs. Mr. President, this bill is a comprehensive bill of rights that will benefit all Americans, and I am proud to join with so many of my colleagues in introducing it. Mr. President, I want to take a moment to address some criticisms that have been made of our bill. These criticisms highlight some significant differences between our bill and the health care bill introduced by Senate Democrats. Mr. President, our bill does differ significantly from the Senate Democrats' bill. Our bill is the ``Patients' Bill of Rights.'' Theirs is the ``Lawyers' Right to Bill.'' Our bill lets doctors decide whether care is medically necessary. Theirs lets lawyers decide. Our bill empowers an independent medical expert to order an insurance company to pay for medically necessary care so that patients suffer no harm. Theirs allows trial lawyers to sue health plans after harm is done. Mr. President, when my insurance company tells me that they won't cover a service for my family, I want the ability to appeal that decision to a doctor who doesn't work for my insurance company. And I want that appeal handled promptly, so that my family receives the benefit. That is what our bill requires. The Democrats' bill creates new ways for trial lawyers to make money. According to a June 1998 study by Multinational Business Services, the Democrats' bill would create 56 new Federal causes of action--56 new reasons to sue people in Federal court. That's fine for trial lawyers, but it doesn't do much for patients. Patients want their claim disputes handled promptly and fairly. According to a study by the General Accounting Office, it takes an average of 25 months--more than two years--to resolve a malpractice suit. One cause that the GAO studied took 11 years to resolve! I'm sure the lawyers who handled that case did quite well for themselves. But what about the patient? Under our bill, patients can appeal directly to an outside medical expert for a prompt review of their claim--without having to incur any legal expenses. In medical malpractice litigation, patients receive an average of only 43 cents of every dollar awarded. The rest goes to lawyers and court fees. Our bill assures that health care dollars are used to serve patients. Their bill diverts these dollars away from patients and into the pockets of trial lawyers. Another big difference between our bill and the one introduced by Senate Democrats is that their bill takes a ``big government'' approach to health reform. Mr. President, it was just four years ago that we debated Clintoncare on the Senate floor. President Clinton wanted government-run health care for all Americans. He wanted it then; he wants it still. Just last September, President Clinton told the Service Employees Union that he was ``glad'' that he had pushed for the federal government to take over health care. ``Now if what I tried to do before won't work,'' the President said, ``maybe we can do it another way. A step at a time until we eventually finish this.'' The Democrats' bill would take us a step closer to the President's dream of a health care system run by federal bureaucrats and trial lawyers. The study I cited earlier by Multinational Business Services found that their bill would impose 359 new federal mandates, 59 new sets of Federal regulations, and require the government to hire 3,828 new federal bureaucrats. Our bill relies on State Insurance Commissioners to protect those Americans who are enrolled in state-regulated plans. We protect the unprotected by providing new federal safeguards to the 48 million Americans who are enrolled in plans that the states are not permitted to regulate. Their bill imposes a risky and complicated scheme that relies on federal bureaucrats at the Health Care Financing Administration (HCFA) to enforce patients' rights in states that do not conform to the federal mandates in their bill. HCFA is the agency that oversees the federal Medicare and Medicaid programs. Last year, in the Balanced Budget Act, Congress created new consumer protections for Medicare beneficiaries--a ``Patients' Bill of Rights'' for the 38.5 million senior citizens and disabled Americans who rely on Medicare for their health care. We asked HCFA to protect those rights. How have they done? I regret to say, Mr. President, that they have not done very well at all. On July 16, a GAO witness testified before the Ways and Means Committee on how well HCFA was doing in enforcing the Medicare patients' bill of rights. According to GAO, HCFA has ``missed 25 percent of the implementation deadlines, including the quality-of-care medical review process for skilled nursing facilities. It is clear [[Page S8489]] that HCFA will continue to miss implementation deadlines as it attempts to balance the resource demands generated by the Balanced Budget Act with other competing objectives.'' Mr. President, I won't

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - July 17, 1998)

Text of this article available as: TXT PDF [Pages S8482-S8512] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. BRYAN (for himself and Mr. McCain): S. 2326. A bill to require the Federal Trade Commission to prescribe regulations to protect the privacy of personal information collected from and about children on the Internet, to provide greater parental control over the collection and use of that information, and for other purposes; to the Committee on Commerce, Science, and Transportation. the children's online privacy protection act of 1998 Mr. BRYAN. Mr. President, today the chairman of the Senate Commerce Committee and I are introducing ``the Children's Online Privacy Protection Act of 1998.'' Commercial Web sites are currently collecting and disseminating personal information collected from children that may compromise their safety and most certainly invades their privacy. This legislation will ensure that commercial Web sites that collect and use personal information from children will have safeguards in place to protect you and your family. The Internet is quickly becoming an significant force in the lives of our children as it moves swiftly into homes and classrooms around the country. Currently more than 3 million children under the age of 18 are online and the number is expected to grow to 15 million by the turn of the century. I think all would agree that proficiency with the Internet is a critical and vital skill that will be necessary for academic achievement in the next century. The benefits of the Internet are extraordinary. Reference information such as news, weather, sports, stock quotes, movie reviews, encyclopedia and online airline fares are readily available. Users can conduct transactions such as stock trading, make travel arrangements, bank, and shop online. Millions of people communicate through electronic mail to family and friends around the world, and others use the public message boards to make new friends and share common interests. As an educational and entertainment tool, users can learn about virtually any topic or take a college course. Unfortunately, the same marvelous advances in computer and telecommunication technology that allow our children to reach out to new resources of knowledge and cultural experiences are also leaving them unwittingly vulnerable to exploitation and harm by deceptive marketers and criminals. Earlier this spring, I held several meetings in Nevada with educators and parents' representatives to alert them of some of the deceptive practices found on the Internet. Representatives of the FBI and Federal Trade Commission informed Nevadans about some of the Internet's pitfalls. I found it extremely informative and enlightening and to some extent frightening. You may be startled to learn what information other people are collecting about you and your family may have a profound impact upon their privacy and, indeed, their safety. Once what may seem to be harmless information has made its way onto the Internet, there is no way of knowing what uses may be put to that information. Senator McCain and I wrote to the FTC asking them to investigate online privacy issues. Recently, the FTC completed the survey of a number of web sites and found that 89 percent of children's sites collect personal information from children, and less than 10 percent of the sites provide for parental control over the collection and use of this personal information. I was, frankly, surprised to learn the kinds of information these web sites are collecting from our children. Some were asking where the child went to school, what sports he or she liked, what siblings they had, their pet's name, what kind of time they had after school alone without the supervision of parents. Others were collecting personal financial information like what the family income was, does the family own stocks or certificates of deposit, did their grandparents give them any financial gifts? Web sites were using games, contests, and offers of free merchandise to entice children to give them exceedingly personal and private information about themselves and their families. Some even used cartoon characters who asked children for personal information, such as a child's name and address and e-mail address, date of birth, telephone number, and Social Security number. [[Page S8483]] Much of this information appears to be harmless, but companies are attempting to build a wealth of information about you and your family without an adult's approval--a profile that will enable them to target and to entice your children to purchase a range of products. The Internet gives marketers the capability of interacting with your children and developing a relationship without your knowledge. Where can this interactive relationship go? Will your child be receiving birthday cards and communications with online cartoon characters for particular products? Senator McCain and I believe there must be safeguards against the online collecting of information from children without a parent's knowledge or consent. If a child answers a phone and starts answering questions, a parent automatically becomes suspicious and asks who they are talking to. When a child is on the Internet, parents often have no knowledge of whom their child is interacting. That is why we are introducing legislation that would require the FTC to come up with rules to govern these kind of activities. The FTC's rules would require commercial web sites to: (1) Provide notice of its personal information collection and use practices; (2) Obtain parental consent for the collection, use or disclosure of personnel information from children 12 and under; (3) Provide parents with an opportunity to opt-out of the collection and/or use of personal information collected from children 13 to 16; (4) Provide parents access to his or her child's personal information; (5) Establish and maintain reasonable procedures to ensure the confidentiality, security, accuracy, and integrity of personal information on children. The FTC must come up with these rules within 1 year. The FTC may provide incentives for industry self-regulatory efforts including safe harbors for industry created guidelines. The bill permits States' attorneys general to enforce the act. I believe these represent reasonable steps we should take to protect our privacy. Although time is short in this session, I hope we can find a way to enact these commonsense proposals this Congress. Most people who use online services have positive experiences. The fact that deceptive acts may be committed on the Internet, is not a reason to avoid using the service. To tell children to stop using the Internet would be like telling them to forgo attending college because students are sometimes victimized on campus. A better strategy is for children to learn how to be street smart in order to better safeguard themselves from potentially deceptive situations. The Internet offers unlimited potential for assisting our child's growth and development. However, we must not send our children off on this adventure without proper guidance and supervision. Mr. President, in my judgment, the legislation offered today by the senior Senator from Arizona and I provides those reasonable guidelines. I hope colleagues will join with me in making sure this legislation is enacted in this situation. ______ By Mr. COATS (for himself and Mr. Lieberman): S. 2327. A bill to provide grants to grassroots organizations in certain cities to develop youth intervention models; to the Committee on the Judiciary. national youth crime prevention demonstration act Mr. COATS. Mr. President, America currently struggles with a disturbing and growing trend of youth violence. Between 1985 and 1994, the arrest rate for murders by juveniles increased 150 percent, while the rate for adults during this time increased 11 percent. Every day, in our communities and in the media, we see horrific examples of this crime. A 13-year-old girl murders her 3-year-old nephew and dumps him in the trash. A 13-year-old boy is stabbed to death while sitting on his back porch. A group of teenagers hails a cab and, after the driver takes them to their destination, they shoot him dead in an armed robbery. I did not have to look far for these examples. Each occurred in Indiana, a State generally known as a safe State, a good place to raise a family, not a dangerous place, yet a State where arrests for violent juvenile crimes have skyrocketed 19 percent in the early 1990's. Juvenile violence is no longer a stranger in any ZIP code. Yet, the problem is expected to grow worse. Crime experts who study demographics warn of a coming crime wave based on the number of children who currently are younger than 10 years old. These experts warn that if current trends are not changed, we might someday look back at our current juvenile crime epidemic as ``the good old days.'' This spiraling upward trend in youth crime and violence is cause for grave concern. So one might ask, what is driving this epidemic? Over 30 years ago, our colleague Daniel Patrick Moynihan, then an official in the Johnson administration, wrote that when a community's families are shattered, crime, violence and rage ``are not only to be expected, they are virtually inevitable.'' He wrote those words in 1965. Since then, arrests of violent juvenile criminals have tripled. Last Congress, the Subcommittee on Children and Families, which I chair, held a hearing about the role of government in combating juvenile crime. The experts were clear: while government efforts are important, they are also fundamentally limited and incomplete. Government is ultimately powerless to form the human conscience that chooses between right and wrong. Locking away juveniles might prevent them from committing further crimes, but it does not address the fact that violence is symptomatic of a much deeper, moral and spiritual void in our Nation. In the battle against violent crime, solid families are America's strongest line of defense. But government can be an effective tool if it joins private institutions (families, churches, schools, community groups, and non- profit organizations) in preventing and confronting juvenile crime with the moral ideals that defeat despair and nurture lives. Today, I rise to introduce the National Youth Crime Prevention Act which will empower local communities to address the rising trend in youth violence. Specifically, this legislation authorizes the Attorney General to award $5 million annually for five years to the National Center for Neighborhood Enterprise to conduct national demonstration projects in eight cities. These projects would aim to end youth crime, violence and family disintegration by building neighborhood capacity and linking proven grassroots organizations within low-income neighborhoods with sources from the public sector, including local housing authorities, law enforcement agencies, and other public entities. The demonstration projects will take place in Washington, DC; Detroit, Michigan; Hartford, Connecticut; Indianapolis, Indiana; Chicago, Illinois; San Antonio, Texas; Dallas, Texas; and Los Angeles, California. With these funds, the National Center for Neighborhood Enterprise will work with the grassroots organizations in the demonstration cities to establish Violence Free Zone Initiatives. These initiatives would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. To be eligible for the grants, the nonprofit organizations within the demonstration cities must have experience in crime prevention and youth mediation projects and must have a history of cultivating cooperative relationships with other local organizations, housing facilities and law enforcement agencies. Funds may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services, local agency partnerships and activities to further community objectives in reducing youth crime and violence. The success of this approach has already been demonstrated. Last year, The National Center for Neighborhood Enterprise assisted The Alliance for Concerned Men in creating a ``Violence Free Zone'' in Benning Terrace in Southeast DC. The Alliance of Concerned Men brokered peace treaties among the gangs that inhabit, and frequently dominate, the city's public [[Page S8484]] housing complexes. Benning Terrace in Southeast Washington, known to the DC police department as one of the most dangerous areas of the city, has not had a single murder since the Alliance's peace treaty went into effect early last year. Subsequently, the National Center for Neighborhood Enterprise brought the Alliance, the youths, and the DC Housing Receiver together to develop and implement a plan for jobs and life skills training for the young people and the community itself. Grassroots organizations are the key to implementing the most effective innovative strategies to address community problems. Their efforts help restore hardpressed inner-city neighborhoods by developing the social, human and economic capital that is key to real, long-term renewal of urban communities. The National Youth Crime Prevention Demonstration Act will provide critical assistance to our Nation's inner-cities as they combat the rising trend in youth violence by linking proven grassroots organizations with established public sector entities. Mr. President, I urge my colleagues to support this important legislation, and I ask unanimous consent that the text of the National Youth Crime Prevention Demonstration Act be printed in the Record. There being no objection, the bill was ordered to be printed in the Record, as follows: S. 2327 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``National Youth Crime Prevention Demonstration Act''. SEC. 2. PURPOSES. The purposes of this Act are as follows: (1) To establish a demonstration project that establishes violence-free zones that would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. (2) To document best practices based on successful grassroots interventions in cities, including Washington, District of Columbia; Boston, Massachusetts; Hartford, Connecticut; and other cities to develop methodologies for widespread replication. (3) To increase the efforts of the Department of Justice, the Department of Housing and Urban Development, and other agencies in supporting effective neighborhood mediating approaches. SEC. 3. ESTABLISHMENT OF NATIONAL YOUTH CRIME PREVENTION DEMONSTRATION PROJECT. The Attorney General shall, subject to appropriations, award a grant to the National Center for Neighborhood Enterprise (referred to in this Act as the ``National Center'') to enable the National Center to award grants to grassroots entities in the following 8 cities: (1) Washington, District of Columbia. (2) Detroit, Michigan. (3) Hartford, Connecticut. (4) Indianapolis, Indiana. (5) Chicago (and surrounding metropolitan area), Illinois. (6) San Antonio, Texas. (7) Dallas, Texas. (8) Los Angeles, California. SEC. 4. ELIGIBILITY. (a) In General.--To be eligible to receive a grant under this Act, a grassroots entity referred to in section 3 shall submit an application to the National Center to fund intervention models that establish violence-free zones. (b) Selection Criteria.--In awarding grants under this Act, the National Center shall consider-- (1) the track record of a grassroots entity and key participating individuals in youth group mediation and crime prevention; (2) the engagement and participation of a grassroots entity with other local organizations; and (3) the ability of a grassroots entity to enter into partnerships with local housing authorities, law enforcement agencies, and other public entities. SEC. 5. USES OF FUNDS. (a) In General.--Funds received under this Act may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services and local agency partnerships, and activities to further community objectives in reducing youth crime and violence. (b) Guidelines.--The National Center will identify local lead grassroots entities in each designated city which include the Alliance of Concerned Men of Washington in the District of Columbia; the Hartford Youth Peace Initiative in Hartford, Connecticut; the Family Help-Line in Los Angeles, California; the Victory Fellowship in San Antonio, Texas; and similar grassroots entities in other designated cities. (c) Technical Assistance.--The National Center, in cooperation with the Attorney General, shall also provide technical assistance for startup projects in other cities. SEC. 6. REPORTS. The National Center shall submit a report to the Attorney General evaluating the effectiveness of grassroots agencies and other public entities involved in the demonstration project. SEC. 7. DEFINITIONS. For purposes of this Act-- (1) the term ``grassroots entity'' means a not-for-profit community organization with demonstrated effectiveness in mediating and addressing youth violence by empowering at-risk youth to become agents of peace and community restoration; and (2) the term ``National Center for Neighborhood Enterprise'' is a not-for-profit organization incorporated in the District of Columbia. SEC. 8. AUTHORIZATION OF APPROPRIATIONS. (a) In General.--There are authorized to be appropriated to carry out this Act-- (1) $5,000,000 for fiscal year 1999; (2) $5,000,000 for fiscal year 2000; (3) $5,000,000 for fiscal year 2001; (4) $5,000,000 for fiscal year 2002; and (5) $5,000,000 for fiscal year 2003. (b) Reservation.--The National Center for Neighborhood Enterprise may use not more than 20 percent of the amounts appropriated pursuant to subsection (a) in any fiscal year for administrative costs, technical assistance and training, comprehensive support services, and evaluation of participating grassroots organizations. ______ By Mr. JEFFORDS (for himself, Mr. Bingaman, and Mr. Graham): S. 2329. A bill to amend the Internal Revenue Code of 1986 to enhance the portability of retirement benefits, and for other purposes; to the Committee on Finance. the retirement portability account (rap) act. Mr. JEFFORDS. Mr. President, today I am introducing S. 2329, the Retirement Portability Account (RAP) Act. This bill is a close companion to H.R. 3503 introduced by our colleagues Earl Pomeroy of North Dakota and Jim Kolbe of Arizona earlier this year. In addition, it contains certain elements of H.R. 3788, the Portman-Cardin bill, which relate to increased pension portability. Generally this bill is intended to be a further iteration of the concepts embodied in both of those bills. It standardizes the rules in the Internal Revenue Code (IRC) which regulate how portable a worker's retirement savings account is, and while it does not make portability of pension benefits perfect, it greatly improves the status quo. Consistent with ``greatly improving the status quo'', this bill contains no mandates. No employer will be ``required'' to accept rollovers from other plans. A rollover will occur when the employee offers, and the employer agrees to accept, a rollover from another plan. Under current law, it is not possible for an individual to move an accumulated retirement savings account from a section 401(k) (for- profit) plan to a section 457 (state and local government) deferred compensation plan, to an Individual Retirement Account (IRA), then to a section 403(b) (non-profit organization) plan and ultimately back into a section 401(k) plan, without violating various restrictions on the movement of their money. The RAP Act will make it possible for workers to take their retirement savings with them when they change jobs regardless of the type of employer for which they work. This bill will also help make IRAs more portable and will improve the uses of conduit IRAs. Conduit IRAs are individual retirement accounts to which certain distributions from a qualified retirement plan or from another individual retirement account have been transferred. RAP changes the rules regulating these IRAs so that workers leaving the for-profit, non-profit or governmental field can use a conduit IRA as a parking spot for a pre-retirement distribution. These special accounts are needed by many workers until they have another employer-sponsored plan in which to rollover their savings. In many instances, this bill will allow an individual to rollover an IRA consisting exclusively of tax-deductible contributions into a retirement plan at his or her new place of employment, thus helping the individual consolidate retirement savings in a single account. Under certain circumstances, the RAP Act will also allow workers to rollover any after-tax contributions made at his or her previous workplace, into a new retirement plan. [[Page S8485]] Current law requires a worker who changes jobs to face a deadline of 60 days within which to roll over any retirement savings benefits either into an Individual Retirement Account, or into the retirement plan of his or her new employer. Failure to meet the deadline can result in both income and excise taxes being imposed on the account. We believe that this deadline should be waived under certain circumstances and we have outlined them in the bill. Consistent with the Pomeroy- Kolbe bill, in case of a Presidentially-declared natural disaster or military service in a combat zone, the Treasury Department will have the authority to disallow imposition of any tax penalty for the account holder. Consistent with the additional change proposed by the Portman- Cardin bill, however, we have included a waiver of tax penalties in the case of undue hardship, such as a serious personal injury or illness and we have given the Department of the Treasury the authority to waive this deadline, as well. The Retirement Account Portability bill will also change two complicated rules which harm both plan sponsors and plan participants; one dealing with certain business sales (the so-called ``same desk'' rule) and the other dealing with retirement plan distribution options. Each of these rules has impeded true portability of pensions and we believe they ought to be changed. In addition, this bill will extend the Pension Benefit Guaranty Corporation's (PBGC) Missing Participant program to defined benefit multiemployer pension plans. Under current law, the PBGC has jurisdiction over both single-employer and multiemployer defined benefit pension plans. A few years ago, the agency initiated a program to locate missing participants from terminated, single-employer plans. The program attempts to locate individuals who are due a benefit, but who have not filed for benefits due to them, or who have attempted to find their former employer but failed to receive their benefits. This bill expands the missing participant program to multiemployer pension plans. I know of no reason why individuals covered by a multiemployer pension plans should not have the same protections as participants of single-employer pension plans and this change will help more former employees receive all the benefits to which they are entitled. This bill does not expand the missing participants program to defined contribution plans. Supervision of defined contribution plans is outside the statutory jurisdiction of the PBGC and I have not heard strong arguments for including those plans within the jurisdiction of the agency. In a particularly important provision, the Retirement Account Portability bill will allow public school teachers and other state and local employees who move between different states and localities to use their savings in their section 403(b) plan or section 457 deferred compensation arrangement to purchase ``service credit'' in the plan in which they are currently participating, and thus obtain greater pension benefits in the plan in which they conclude their career. However, the bill does not allow the use of a lump sum cash-out from a defined benefit plan to be rolled over to a section 403(b) or section 457 plan. As a final note, this bill, this bill does not reduce the vesting schedule from the current five year cliff vesting (or seven year graded) to a three year cliff or six year graded vesting schedule. I am not necessarily against the shorter vesting schedules, but I feel that this abbreviated vesting schedule makes a dramatic change to tax law without removing some of the disincentives to maintaining a pension plan that businesses--especially small businesses--desperately need. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record. There being no objection, the summary was ordered to be printed in the Record, as follows: Increasing Portability for Pension Plan Participants: Facilitating Rollovers Under current law, an ``eligible rollover distribution'' may be either (1) rolled over by the distributee into an ``eligible retirement plan'' if such rollover occurs within 60 days of the distribution, or (2) directly rolled over by the distributing plan to an ``eligible retirement plan.'' An ``eligible rollover distribution'' does not include any distribution which is required under section 401(a)(9) or any distribution which is part of a series of substantially equal periodic payments made for life, life expectancy or over a period of ten years or more. An ``eligible retirement plan'' is another section 401 plan, a section 403(a) plan or an IRA. (If the distributee is a surviving spouse of a participant, ``eligible retirement plans'' consist only of IRAs.) Under these rules, for example, amounts distributed from a section 401(k) plan may not be rolled over to a section 403(b) arrangement. In the case of a section 403(b) arrangement, distributions which would be eligible rollover distributions except for the fact that they are distributed from a section 403(b) arrangement may be rolled over to another section 403(b) arrangement or an IRA. Under these rules, amounts distributed from a section 403(b) may not be rolled over into a section 401(k) plan. When an ``eligible rollover distribution'' is made, the plan administrator must provide a written notice to the distributee explaining the availability of a direct rollover to another plan or an IRA, that failure to exercise that option will result in 20% being withheld from the distribution and that amounts not directly rolled over may be rolled over by the distributee within 60 days. Under ``conduit IRA'' rules, an amount may be rolled over from a section 401 or 403(a) plan to an IRA and subsequently rolled over to a section 401 or 403(a) plan if amounts in the IRA are attributable only to rollovers from section 401 or 403(a) plans. Also under conduit IRA rules, an amount may be rolled over from a section 403(b) arrangement to an IRA and subsequently rolled over to a section 403(b) arrangement if amounts in the IRA are attributable only to rollovers from section 403(b) arrangements. In the case of a section 457 deferred compensation plan, distributions may not be rolled over by a distributee; however, amounts may be transferred from one section 457 plan to another section 457 plan without giving rise to income to the plan participant. A participant in a section 457 plan is taxed on plan benefits that are not transferred when such benefits are paid or when they are made available. In contrast, a participant in a qualified plan or a section 403(b) arrangement is only taxed on plan benefits that are actually distributed. Under this proposal, ``eligible rollover distributions'' from a section 401 plan could be rolled over to another section 401 plan, a section 403(a) plan, a section 403(b) arrangement, a section 457 deferred compensation plan maintained by a state or local government or an IRA. Likewise, ``eligible rollover distributions'' from a section 403(b) arrangement could be rolled over to the same broad array of plans and IRAs. Thus, an eligible rollover distribution from a section 401(k) plan could be rolled over to a section 403(b) arrangement and vice versa. (As under current law, if the distributee is a surviving spouse of a participant, the distribution could only be rolled over into an IRA.) Eligible rollover distributions from all section 457 deferred compensation plans could be rolled over to the same broad array of plans and IRAs; however, the rules regarding the mandatory 20% withholding would not apply to the section 457 plans. A section 457 plan maintained by a government would be made an eligible retirement plan for purposes of accepting rollovers from section 401(k), section 403(b) and other plans. The written notice required to be provided when an ``eligible rollover distribution'' is made would be expanded to apply to section 457 plans and to include a description of restrictions and tax consequences which will be different if the plan to which amounts are transferred is a different type of plan from the distribution plan. Participants who mix amounts eligible for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. A participant in a section 457 plan would only be taxed on plan benefits that are not transferred or rolled over when they are actually paid. These changes would take effect for distributions made after December 31, 1998. The reason for this expansion of current law rules permitting rollovers is to allow plan participants to put all of their retirement plan savings in one vehicle if they change jobs. Given the increasing mobility of the American workforce, it is important to make pension savings portable for those who change employment. This proposal contains no mandates requiring employers to accept rollovers from their new employees. A rollover occurs when the employee makes an offer to move his/her money and the employer accepts the funds. Because of the rule that taxes section 457 plan participants on benefits made available, section 457 plans cannot provide plan participants with the flexibility to change benefit payments to fit their changing needs. There is no policy justification for this lack of flexibility. rollovers of individual retirement accounts to qualified plans Under current law, a taxpayer is not permitted to roll amounts held in an individual retirement account (IRA) (other than a conduit IRA), to a section 401 plan, a 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Currently, the maximum direct IRA contribution is $2,000. Since 1986, generally only individuals with income below certain limits are able to fully deduct [[Page S8486]] IRA contributions. For others, IRA contributions have been nondeductible or partially deductible in some or all years. To the extent that IRA contributions are non-deductible, they have ``basis'' which is not taxed the second time upon distribution from the IRA. The burden of maintaining records of IRA basis has been the taxpayer's, since only the taxpayer has had the information to determine his or her basis at the outset and as an ongoing matter. IRAs are generally subject to different regulatory schemes than other retirement savings plans, such as section 401(k)s or section 457 deferred compensation plans, although the 10 percent tax penalty on early distributions applies to both qualified plans and IRAs. For example, one cannot take a loan from an IRA, although a recent change in law will make it easier to make a penalty-free withdrawal from an IRA to finance a first-time home purchase or higher-education expenses. Under the bill, rollovers of contributory IRAs would be permitted if and only if the individual has never made any nondeductible contributions to his or her IRA and has never had a Roth IRA. The IRA may then be rolled over into a section 401 plan, a section 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Since the vast majority of IRAs contain only deductible contributions, this change will allow many individuals to consolidate their retirement savings into one account. For those who have both nondeductible and deductible contributions, they may still have two accounts, one containing the majority of funds consolidated in one place and one containing the nondeductible IRA contributions. Once IRA money is rolled over into a plan however, the IRA contributions would become plan money and subject to the rules of the plan except that participants who mix amounts for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. Employers will not be required to accept rollovers for IRAs. These changes would apply to distributions after December 31, 1998. The reasons for this change is to take another step toward increased portability of retirement savings. While this proposal would not guarantee that all retirement savings would be completely portable, it will increase the extent to which such savings are portable and fungible. Other rules and requirements affecting IRAs and their differences and similarities to plan money will continue to be the subject of Congressional scrutiny. rollovers of after-tax contributions and rollovers not made within 60 days of receipt Under current law, employees are allowed to make after-tax contributions to IRAs, 401(k) plans, and other plans. They are not permitted to roll over distributions of those after- tax contributions to an IRA or another plan. Rollovers from qualified plans to an IRA (or from an IRA to another IRA) must occur within 60 days of the initial distribution. Income tax withholding rules apply to certain distributions that are not direct trustee-to-trustee transfers from the qualified plan to an IRA or another plan. The proposal would allow after-tax contributions to be included in a rollover contribution to an IRA or other types of retirement plans, but it does not require the receiving trustee to track or report the basis. That requirement would be the responsibility of the taxpayer, as in the case of nondeductible IRA contributions. The IRS is given the authority to extend the 60-day period where the failure to comply with such requirements is attributable to casualty, disaster or other events beyond the reasonable control of the individual subject to such requirements. These changes would generally apply to distributions made after December 31, 1998. The hardship exception to the 60-day rollover period would apply to such 60-day periods expiring after the date of enactment. These changes are warranted because after-tax savings in retirement plans enhance retirement security and are particularly attractive to low and middle income taxpayers. Allowing such distributions to be rolled over to an IRA or a plan will increase the chances that those amounts would be retained until needed for retirement. Often individuals, particularly widows, widowers and individuals with injuries of illnesses, miss the 60-day window. In other instances, individuals miss the 60-day rollover period because of the failure of third parties to perform as directed. Finally, victims of casualty or natural disaster should not be penalized. A failure to satisfy the 60-day rule, by even one day can result in catastrophic tax consequences for a taxpayer that can include immediate taxation of the individual's entire retirement savings (often in a high tax bracket), a 10% early distribution tax, and a substantial depletion of retirement savings. By giving the IRS the authority to provide relief from the 60-day requirement for failures outside the control of the individual, the proposal would give individuals in these situations the ability to retain their retirement savings in an IRA or a qualified plan. Treatment of Forms of Distribution Under current law, section 411(d)(6), the ``anti-cutback'' rule generally provides that when a participant's benefits are transferred from one plan to another, the transferee plan must preserve all forms of distribution that were available under the transferor plan. Under this proposal, an employee may elect to waive his or her section 411(d)(6) rights and transfer benefits from one defined contribution plan to another defined contribution plan without requiring the transferee plan to preserve the optional forms of benefits under the transferor plan if certain requirements are satisfied to ensure the protection of participants' interests. This proposal would also apply to plan mergers and other transactions having the effect of a direct transfer, including consolidation of benefits attributable to different employers within a multiple employer plan. These changes would apply to transfers after December 31, 1998. The requirement that a defined contribution plan preserve all forms of distribution included in transferor plans significantly increases the cost of plan administration, particularly for employers that make numerous business acquisitions. The requirements also causes confusion among plan participants who can have separate parts of their retirement benefits subject to sharply different plan provision and requirements. The increased cost for the plan and the confusion for the participant brought about by the requirement to preserve all forms of distribution are based on a rule intended to protect a participant's right not to have an arbitrary benefit reduction. The current rule sweeps too broadly since it protects both significant and insignificant rights. Where a participant determines the rights to be insignificant and wants to consolidate his or her retirement benefits, there is no reason not to permit his consolidation. This consolidation increases portability and reduces administrative costs. Rationalization of Restrictions on Distributions, The ``Same Desk'' Rule Generally, under current law, distributions from 401(k) plans are limited to separation from service, death, disability, age 59\1/2\, hardship, plan termination without maintenance of another plan, and certain corporate transactions. The term ``separation from service'' has been interpreted to include a ``same desk'' rule. Under the ``same desk'' rule, distributions to a terminated employee are not permitted if the employee continues performing the same functions for a successor employer (such as a joint venture owned in part by the former employer or the buyer in a business acquisition). The same desk rule also applies to section 403(b) arrangements and section 457 plans, but does not apply to other types of plans such as defined benefit plans. Under this proposal, the ``same desk rule'' would be eliminated by replacing ``separation from service'' with ``severance from employment''. Conforming changes would be mad in the comparable provisions of section 403(b) arrangements and eligible deferred compensation plans under section 457. This change would apply to distributions after December 31, 1998. Under this proposal, affected employees would be able to roll over their 401(k) account balance to an IRA or to their new employer's 401(k) plan. Modifying the same desk rule so that all of a worker's retirement funds can be transferred to the new employer after a business sale has taken place will allow the employee to keep his or her retirement nest egg in a single place. It will also coordinate the treatment of defined benefit plan benefits with the treatment of 401(k) plans in these types of transactions. Employees do not understand why their 401(k) account must remain with the former employer until they terminate employment with their new employer, especially since this restriction does not apply to other plans in which they participate. The corporate transaction exception provides some relief from the same desk rule but is inapplicable in numerous cases. Purchase of Service Credit in Governmental Defined Benefit Plans Under current law, employees of State and local governments often have the option of purchasing service credits in their State defined benefit plans in order to make up for the time spent in another State or district. These employees cannot currently use the money they have saved in their section 403(b) arrangements or section 457 plans to purchase these service credits. This proposal would permit State and local government employees the option to use the funds in their section 403(b) arrangements or section 457 deferred compensation plans to purchase service credits. These changes would apply to trustee-to-trustee transfers after December 31, 1998. This change will permit employees of State and local governments, particularly teachers, who often move between States and school districts in the course of their careers, to buy a larger defined benefit pension with the savings they have accumulated in a section 403(b) arrangement or section 457 deferred compensation plan. The greater number of years of credit that they purchase would reflect a full career of employment rather than two or more shorter periods of employment in different States or districts. Allowing the more flexible use of existing account balances in 403(b) arrangements or section 457 plans will allow more of these employees to purchase service credits and earn a full defined benefit pension. Missing Participants Program Under current law in the case of certain terminated single employer defined benefit plans, the Pension Benefit Guaranty Corporation (PBGC) will act as a clearinghouse for benefits due to participants who cannot [[Page S8487]] be located (``missing participants''). Under the program, when a plan is terminated and is unable to locate former workers who are entitled to benefits, the terminating plan is allowed to transfer these benefits to the PBGC which then attempts to locate the employees in question. The missing participants program is limited to certain defined benefit plans. This proposal would expand the PBGC's missing participant program to cover multiemployer defined benefit pension plans. The program would not apply to governmental plans or to church plans not covered by the PBGC, however. If a plan covered by the new program has missing participants when the plan terminates, at the option of the plan (or employer, in the case of a single employer plan), the missing participants' benefits could be transferred to the PBGC along with related information. This change would take effect with respect to distributions from t4erminating multiemployer plans that occur after the PBGC has adopted final regulations implementing the provision. By permitting sponsors the option of transferring pension funds to the PBGC, the chances that a missing participant will be able to recover benefits could be increased. Disregarding Rollovers for Purposes of the Cash Out Amount Under current law, if a terminated participant has a vested accrued benefit of $5,000 or less, the plan may distribute such benefit in a lump sum without the consent of the participant or the participant's spouse. This $5,000 cash-out limit is not indexed for inflation. In applying the $5,000 cash-out rule, the plan sponsor is under regulations required to look back to determine if an individual's account every exceeded $5,000 at the time of any prior distribution. Rollover amounts count in determining the maximum balance which can be involuntarily cashed out. This proposal would allow a plan sponsor to disregard rollover amounts in determining eligibility for the cash-out rule, that is, whether a participant's vested accrued benefit exceeds $5,000. This proposal would apply to distributions after December 31, 1998. The reason for this change is to remove a possible reason for employers to refuse to accept rollovers. Plan Amendments Under current law, there is generally a short period of time to make plan amendments that reflect the amendments to the law. In addition, the anti-cutback rules can have the unintentioned effect of preventing an employer from amending its plan to reflect a change in the law. Amendments to a plan or annuity contract made pursuant to any amendment made by this bill are not required to be made before the last day of the first plan year beginning on or after January 1, 2001. In the case of a governmental plan, the date for amendments is extended to the first plan year beginning on or after January 1, 2003. Operational compliance would, of course be required with respect to all plans as of the applicable effective date of any amendment made by this Act. In addition, timely amendments to a plan or annuity contract made pursuant to any amendment made by this Act shall be deemed to satisfy the anti-cutback rules. The reason for this change is that plan sponsors need an appropriate amount of time to make changes to their plan documents. ______ By Mr. LOTT (for Mr. Nickles, for himself, Mr. Frist, Ms. Collins, Mr. Jeffords, Mr. Roth, Mr. Santorum, Mr. Hagel, Mr. Gramm, Mr. Coats, Mr. Lott, Mr. Mack, Mr. Craig, Mr. Coverdell, Mr. Abraham, Mr. Allard, Mr. Ashcroft, Mr. Bennett, Mr. Bond, Mr. Brownback, Mr. Burns, Mr. Cochran, Mr. Domenici, Mr. Enzi, Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Grassley, Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. Hutchison, Mr. Inhofe, Mr. Kempthorne, Mr. Lugar, Mr. McCain, Mr. Murkowski, Mr. Roberts, Mr. Sessions, Mr. Shelby, Mr. Smith of New Hampshire, Mr. Smith of Oregon, Ms. Snowe, Mr. Thomas, Mr. Thompson, Mr. Thurmond, and Mr. Warner): S. 2330. A bill to improve the access and choice of patients to quality, affordable health care; read the first time. PATIENTS' BILL OF RIGHTS Mr. NICKLES. Mr. President, today I am introducing the Republican Patients' Bill of Rights. Joining me in this effort are 46 of my colleagues who recognize the importance of ensuring that all Americans are able to not only receive the care they have been promised, but also receive the highest quality of care available. The foundation of this proposal was to address some of the very real concerns that consumers have about their health care needs. We know that many Americans have believed they were denied coverage that their plans were supposed to cover. We recognize that some individuals fear that their health care plans will not give them access to specialists when they need them. We know that some Americans think their health care plans care more about cost than they do about quality. In contrast, we also know that many Americans are happy and satisfied with their health care plan. We know that 81 percent of managed care enrollees are satisfied with their current health care plan. Another recent analysis suggest that 79 percent of consumers in HMOs would recommend their coverage. In addition Americans are leery of Washington solutions and increased federal intervention. Last January, the Leader asked me to put together a group of colleagues to address the issue of health care quality. For the past seven months, Senators Frist, Collins, Hagel, Roth, Jeffords, Coats, Santorum, and Gramm worked tirelessly to put together a responsible, credible package that would preserve what is best about our Nation's health care while at the same time determine ways to improve upon-- without stifling--the quality of care our nation delivers. We set out to rationally examine the issues and develop reasonable solutions without injuring patient access to affordable, high quality care. This was no easy task. We spent month after month talking to experts who understand the difficulty and complexity of our system. We met with representatives from all aspects of the industry including the Mayo Clinic, the Henry Ford Health Systems, the American Medical Association, the American Hospital Association, the National Committee for Quality Assurance, the Joint Commission on the Accreditation of Healthcare Organizations, Corporate Medical Directors, Commissioners from the President's Quality Commission, Purchasers, Families USA, the Employee Benefit Research Institute and many others. After many, many months of dissecting serious questions about our system we determined that there were indeed some areas in which we could improve patient access and quality. We have put together an innovative plan that will answer the problems that exist in the industry while at the same time preserving affordability, which is of utmost importance. Mr. President, I think you agree that if someone loses their health insurance because a politician playing doctor drives prices to an unaffordable level, you have hardly given them more rights or better quality health care. We are proud of what we have been able to accomplish. For the first time, patients can choose to be unencumbered in their relationship with their doctor. They will be able to choose their own doctor and get the middle man out of the way. There will be no corporate bureaucrat, no government bureaucrat and no lawyer standing between a patient and their doctor. Mr. President, the bill we introduce today: Protects consumers in employer-sponsored plans that are exempt from state regulation. People enrolled in such plans will have the right to: Choose their doctors. Our bill contains both ``point-of-service'' and ``continuity of care'' requirements that will enhance consumer choice. See their ob-gyns and pediatricians without referral. Our bill will give patients direct access to pediatricians and ob-gyns without prior referral from a ``gatekeeper.'' Have a ``prudent layperson'' standard applied to their claims for emergency care. The GOP alternative will require health plans to cover--without prior authorization--emergency care that a ``prudent layperson'' would consider medically necessary. Communicate openly with their doctors without ``gag'' clauses. Holds health plans accountable for their decisions. Extends to enrollees in ERISA health plans and their doctors the right to appeal adverse coverage decisions to a physician who was not involved in the initial coverage determination. Allows enrollees to appeal adverse coverage determinations to independent medical experts who have no affiliation with the health plan. Determinations by these experts will be binding on the health plan. Requires health plans to disclose to enrollees consumer information, including what's covered, what's not, [[Page S8488]] how much they'll have to pay in deductibles and coinsurance, and how to appeal adverse coverage decisions to independent medical experts. Guarantees consumers access to their medical records. Requires health care providers, health plans, employers, health and life insurers, and schools and universities to permit an individual to inspect, copy and amend his or her own medical information. Requires health care providers, health plans, health oversight agencies, public health authorities, employers, health and life insurers, health researchers, law enforcement officials, and schools and universities to establish appropriate safeguards to protect the confidentiality, security, accuracy and integrity of protected health information and notify enrollees of these safeguards. Protects patients from genetic discrimination in health insurance. Prohibits health plans from collecting or using predictive genetic information about a patient to deny health insurance coverage or set premium rates. Promotes quality improvement by supporting research to give patients and physicians better information regarding quality. Establishes the Agency for Healthcare Quality Research (AHQR), whose purpose is to foster overall improvement in healthcare quality and bridge the gap between what we know and what we do in healthcare today. The Agency is built on the platform of the current Agency for Health Care Policy and Research, but is refocused and enhanced to become the hub and driving force of federal efforts to improve the quality of healthcare in all practice environments--not just managed care. The role of the Agency is not to mandate a national definition of quality, but to support the science necessary to provide information to patients regarding the quality of the care they receive, to allow physicians to compare their quality outcomes with their peers, and to enable employers and individuals to be prudent purchasers based on quality. Supports research, screening, treatment, education, and data collection activities to improve the health of women. Promotes basic and clinical research for osteoporosis; breast and ovarian cancer; and aging processes regarding women. Expands research efforts into the underlying causes and prevention of cardiovascular diseases in women--the leading cause of death among American women. Supports data collection through the National Center for Health Statistics and the National Program of Cancer Registries, which are the leading sources of national data on the health status of women in the U.S. Supports the National Breast and Cervical Cancer Early Detection Program, which provides for regular screening for breast and cervical cancers to underserved women. Requires that the length of hospital stay after a mastectomy, lumpectomy or lymph node dissection be determined only by the physician, in consultation with the patient, and without the need to obtain authorization from the health plan. If a plan covers mastectomies, it also must cover breast reconstruction after a mastectomy. Makes health insurance more accessible and affordable by: Allowing self-employed people to deduct the full amount of their health care premiums. Making medical savings accounts available to everyone. Reforming cafeteria plans to let consumers save for future health care costs. Mr. President, this bill is a comprehensive bill of rights that will benefit all Americans, and I am proud to join with so many of my colleagues in introducing it. Mr. President, I want to take a moment to address some criticisms that have been made of our bill. These criticisms highlight some significant differences between our bill and the health care bill introduced by Senate Democrats. Mr. President, our bill does differ significantly from the Senate Democrats' bill. Our bill is the ``Patients' Bill of Rights.'' Theirs is the ``Lawyers' Right to Bill.'' Our bill lets doctors decide whether care is medically necessary. Theirs lets lawyers decide. Our bill empowers an independent medical expert to order an insurance company to pay for medically necessary care so that patients suffer no harm. Theirs allows trial lawyers to sue health plans after harm is done. Mr. President, when my insurance company tells me that they won't cover a service for my family, I want the ability to appeal that decision to a doctor who doesn't work for my insurance company. And I want that appeal handled promptly, so that my family receives the benefit. That is what our bill requires. The Democrats' bill creates new ways for trial lawyers to make money. According to a June 1998 study by Multinational Business Services, the Democrats' bill would create 56 new Federal causes of action--56 new reasons to sue people in Federal court. That's fine for trial lawyers, but it doesn't do much for patients. Patients want their claim disputes handled promptly and fairly. According to a study by the General Accounting Office, it takes an average of 25 months--more than two years--to resolve a malpractice suit. One cause that the GAO studied took 11 years to resolve! I'm sure the lawyers who handled that case did quite well for themselves. But what about the patient? Under our bill, patients can appeal directly to an outside medical expert for a prompt review of their claim--without having to incur any legal expenses. In medical malpractice litigation, patients receive an average of only 43 cents of every dollar awarded. The rest goes to lawyers and court fees. Our bill assures that health care dollars are used to serve patients. Their bill diverts these dollars away from patients and into the pockets of trial lawyers. Another big difference between our bill and the one introduced by Senate Democrats is that their bill takes a ``big government'' approach to health reform. Mr. President, it was just four years ago that we debated Clintoncare on the Senate floor. President Clinton wanted government-run health care for all Americans. He wanted it then; he wants it still. Just last September, President Clinton told the Service Employees Union that he was ``glad'' that he had pushed for the federal government to take over health care. ``Now if what I tried to do before won't work,'' the President said, ``maybe we can do it another way. A step at a time until we eventually finish this.'' The Democrats' bill would take us a step closer to the President's dream of a health care system run by federal bureaucrats and trial lawyers. The study I cited earlier by Multinational Business Services found that their bill would impose 359 new federal mandates, 59 new sets of Federal regulations, and require the government to hire 3,828 new federal bureaucrats. Our bill relies on State Insurance Commissioners to protect those Americans who are enrolled in state-regulated plans. We protect the unprotected by providing new federal safeguards to the 48 million Americans who are enrolled in plans that the states are not permitted to regulate. Their bill imposes a risky and complicated scheme that relies on federal bureaucrats at the Health Care Financing Administration (HCFA) to enforce patients' rights in states that do not conform to the federal mandates in their bill. HCFA is the agency that oversees the federal Medicare and Medicaid programs. Last year, in the Balanced Budget Act, Congress created new consumer protections for Medicare beneficiaries--a ``Patients' Bill of Rights'' for the 38.5 million senior citizens and disabled Americans who rely on Medicare for their health care. We asked HCFA to protect those rights. How have they done? I regret to say, Mr. President, that they have not done very well at all. On July 16, a GAO witness testified before the Ways and Means Committee on how well HCFA was doing in enforcing the Medicare patients' bill of rights. According to GAO, HCFA has ``missed 25 percent of the implementation deadlines, including the quality-of-care medical review process for skilled nursing facilities. It is clear [[Page S8489]] that HCFA will continue to miss implementation deadlines as it attempts to balance the resource demands generated by the Balanced Budget Act with other competing objectives.'' Mr. Presiden

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - July 17, 1998)

Text of this article available as: TXT PDF [Pages S8482-S8512] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. BRYAN (for himself and Mr. McCain): S. 2326. A bill to require the Federal Trade Commission to prescribe regulations to protect the privacy of personal information collected from and about children on the Internet, to provide greater parental control over the collection and use of that information, and for other purposes; to the Committee on Commerce, Science, and Transportation. the children's online privacy protection act of 1998 Mr. BRYAN. Mr. President, today the chairman of the Senate Commerce Committee and I are introducing ``the Children's Online Privacy Protection Act of 1998.'' Commercial Web sites are currently collecting and disseminating personal information collected from children that may compromise their safety and most certainly invades their privacy. This legislation will ensure that commercial Web sites that collect and use personal information from children will have safeguards in place to protect you and your family. The Internet is quickly becoming an significant force in the lives of our children as it moves swiftly into homes and classrooms around the country. Currently more than 3 million children under the age of 18 are online and the number is expected to grow to 15 million by the turn of the century. I think all would agree that proficiency with the Internet is a critical and vital skill that will be necessary for academic achievement in the next century. The benefits of the Internet are extraordinary. Reference information such as news, weather, sports, stock quotes, movie reviews, encyclopedia and online airline fares are readily available. Users can conduct transactions such as stock trading, make travel arrangements, bank, and shop online. Millions of people communicate through electronic mail to family and friends around the world, and others use the public message boards to make new friends and share common interests. As an educational and entertainment tool, users can learn about virtually any topic or take a college course. Unfortunately, the same marvelous advances in computer and telecommunication technology that allow our children to reach out to new resources of knowledge and cultural experiences are also leaving them unwittingly vulnerable to exploitation and harm by deceptive marketers and criminals. Earlier this spring, I held several meetings in Nevada with educators and parents' representatives to alert them of some of the deceptive practices found on the Internet. Representatives of the FBI and Federal Trade Commission informed Nevadans about some of the Internet's pitfalls. I found it extremely informative and enlightening and to some extent frightening. You may be startled to learn what information other people are collecting about you and your family may have a profound impact upon their privacy and, indeed, their safety. Once what may seem to be harmless information has made its way onto the Internet, there is no way of knowing what uses may be put to that information. Senator McCain and I wrote to the FTC asking them to investigate online privacy issues. Recently, the FTC completed the survey of a number of web sites and found that 89 percent of children's sites collect personal information from children, and less than 10 percent of the sites provide for parental control over the collection and use of this personal information. I was, frankly, surprised to learn the kinds of information these web sites are collecting from our children. Some were asking where the child went to school, what sports he or she liked, what siblings they had, their pet's name, what kind of time they had after school alone without the supervision of parents. Others were collecting personal financial information like what the family income was, does the family own stocks or certificates of deposit, did their grandparents give them any financial gifts? Web sites were using games, contests, and offers of free merchandise to entice children to give them exceedingly personal and private information about themselves and their families. Some even used cartoon characters who asked children for personal information, such as a child's name and address and e-mail address, date of birth, telephone number, and Social Security number. [[Page S8483]] Much of this information appears to be harmless, but companies are attempting to build a wealth of information about you and your family without an adult's approval--a profile that will enable them to target and to entice your children to purchase a range of products. The Internet gives marketers the capability of interacting with your children and developing a relationship without your knowledge. Where can this interactive relationship go? Will your child be receiving birthday cards and communications with online cartoon characters for particular products? Senator McCain and I believe there must be safeguards against the online collecting of information from children without a parent's knowledge or consent. If a child answers a phone and starts answering questions, a parent automatically becomes suspicious and asks who they are talking to. When a child is on the Internet, parents often have no knowledge of whom their child is interacting. That is why we are introducing legislation that would require the FTC to come up with rules to govern these kind of activities. The FTC's rules would require commercial web sites to: (1) Provide notice of its personal information collection and use practices; (2) Obtain parental consent for the collection, use or disclosure of personnel information from children 12 and under; (3) Provide parents with an opportunity to opt-out of the collection and/or use of personal information collected from children 13 to 16; (4) Provide parents access to his or her child's personal information; (5) Establish and maintain reasonable procedures to ensure the confidentiality, security, accuracy, and integrity of personal information on children. The FTC must come up with these rules within 1 year. The FTC may provide incentives for industry self-regulatory efforts including safe harbors for industry created guidelines. The bill permits States' attorneys general to enforce the act. I believe these represent reasonable steps we should take to protect our privacy. Although time is short in this session, I hope we can find a way to enact these commonsense proposals this Congress. Most people who use online services have positive experiences. The fact that deceptive acts may be committed on the Internet, is not a reason to avoid using the service. To tell children to stop using the Internet would be like telling them to forgo attending college because students are sometimes victimized on campus. A better strategy is for children to learn how to be street smart in order to better safeguard themselves from potentially deceptive situations. The Internet offers unlimited potential for assisting our child's growth and development. However, we must not send our children off on this adventure without proper guidance and supervision. Mr. President, in my judgment, the legislation offered today by the senior Senator from Arizona and I provides those reasonable guidelines. I hope colleagues will join with me in making sure this legislation is enacted in this situation. ______ By Mr. COATS (for himself and Mr. Lieberman): S. 2327. A bill to provide grants to grassroots organizations in certain cities to develop youth intervention models; to the Committee on the Judiciary. national youth crime prevention demonstration act Mr. COATS. Mr. President, America currently struggles with a disturbing and growing trend of youth violence. Between 1985 and 1994, the arrest rate for murders by juveniles increased 150 percent, while the rate for adults during this time increased 11 percent. Every day, in our communities and in the media, we see horrific examples of this crime. A 13-year-old girl murders her 3-year-old nephew and dumps him in the trash. A 13-year-old boy is stabbed to death while sitting on his back porch. A group of teenagers hails a cab and, after the driver takes them to their destination, they shoot him dead in an armed robbery. I did not have to look far for these examples. Each occurred in Indiana, a State generally known as a safe State, a good place to raise a family, not a dangerous place, yet a State where arrests for violent juvenile crimes have skyrocketed 19 percent in the early 1990's. Juvenile violence is no longer a stranger in any ZIP code. Yet, the problem is expected to grow worse. Crime experts who study demographics warn of a coming crime wave based on the number of children who currently are younger than 10 years old. These experts warn that if current trends are not changed, we might someday look back at our current juvenile crime epidemic as ``the good old days.'' This spiraling upward trend in youth crime and violence is cause for grave concern. So one might ask, what is driving this epidemic? Over 30 years ago, our colleague Daniel Patrick Moynihan, then an official in the Johnson administration, wrote that when a community's families are shattered, crime, violence and rage ``are not only to be expected, they are virtually inevitable.'' He wrote those words in 1965. Since then, arrests of violent juvenile criminals have tripled. Last Congress, the Subcommittee on Children and Families, which I chair, held a hearing about the role of government in combating juvenile crime. The experts were clear: while government efforts are important, they are also fundamentally limited and incomplete. Government is ultimately powerless to form the human conscience that chooses between right and wrong. Locking away juveniles might prevent them from committing further crimes, but it does not address the fact that violence is symptomatic of a much deeper, moral and spiritual void in our Nation. In the battle against violent crime, solid families are America's strongest line of defense. But government can be an effective tool if it joins private institutions (families, churches, schools, community groups, and non- profit organizations) in preventing and confronting juvenile crime with the moral ideals that defeat despair and nurture lives. Today, I rise to introduce the National Youth Crime Prevention Act which will empower local communities to address the rising trend in youth violence. Specifically, this legislation authorizes the Attorney General to award $5 million annually for five years to the National Center for Neighborhood Enterprise to conduct national demonstration projects in eight cities. These projects would aim to end youth crime, violence and family disintegration by building neighborhood capacity and linking proven grassroots organizations within low-income neighborhoods with sources from the public sector, including local housing authorities, law enforcement agencies, and other public entities. The demonstration projects will take place in Washington, DC; Detroit, Michigan; Hartford, Connecticut; Indianapolis, Indiana; Chicago, Illinois; San Antonio, Texas; Dallas, Texas; and Los Angeles, California. With these funds, the National Center for Neighborhood Enterprise will work with the grassroots organizations in the demonstration cities to establish Violence Free Zone Initiatives. These initiatives would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. To be eligible for the grants, the nonprofit organizations within the demonstration cities must have experience in crime prevention and youth mediation projects and must have a history of cultivating cooperative relationships with other local organizations, housing facilities and law enforcement agencies. Funds may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services, local agency partnerships and activities to further community objectives in reducing youth crime and violence. The success of this approach has already been demonstrated. Last year, The National Center for Neighborhood Enterprise assisted The Alliance for Concerned Men in creating a ``Violence Free Zone'' in Benning Terrace in Southeast DC. The Alliance of Concerned Men brokered peace treaties among the gangs that inhabit, and frequently dominate, the city's public [[Page S8484]] housing complexes. Benning Terrace in Southeast Washington, known to the DC police department as one of the most dangerous areas of the city, has not had a single murder since the Alliance's peace treaty went into effect early last year. Subsequently, the National Center for Neighborhood Enterprise brought the Alliance, the youths, and the DC Housing Receiver together to develop and implement a plan for jobs and life skills training for the young people and the community itself. Grassroots organizations are the key to implementing the most effective innovative strategies to address community problems. Their efforts help restore hardpressed inner-city neighborhoods by developing the social, human and economic capital that is key to real, long-term renewal of urban communities. The National Youth Crime Prevention Demonstration Act will provide critical assistance to our Nation's inner-cities as they combat the rising trend in youth violence by linking proven grassroots organizations with established public sector entities. Mr. President, I urge my colleagues to support this important legislation, and I ask unanimous consent that the text of the National Youth Crime Prevention Demonstration Act be printed in the Record. There being no objection, the bill was ordered to be printed in the Record, as follows: S. 2327 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``National Youth Crime Prevention Demonstration Act''. SEC. 2. PURPOSES. The purposes of this Act are as follows: (1) To establish a demonstration project that establishes violence-free zones that would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. (2) To document best practices based on successful grassroots interventions in cities, including Washington, District of Columbia; Boston, Massachusetts; Hartford, Connecticut; and other cities to develop methodologies for widespread replication. (3) To increase the efforts of the Department of Justice, the Department of Housing and Urban Development, and other agencies in supporting effective neighborhood mediating approaches. SEC. 3. ESTABLISHMENT OF NATIONAL YOUTH CRIME PREVENTION DEMONSTRATION PROJECT. The Attorney General shall, subject to appropriations, award a grant to the National Center for Neighborhood Enterprise (referred to in this Act as the ``National Center'') to enable the National Center to award grants to grassroots entities in the following 8 cities: (1) Washington, District of Columbia. (2) Detroit, Michigan. (3) Hartford, Connecticut. (4) Indianapolis, Indiana. (5) Chicago (and surrounding metropolitan area), Illinois. (6) San Antonio, Texas. (7) Dallas, Texas. (8) Los Angeles, California. SEC. 4. ELIGIBILITY. (a) In General.--To be eligible to receive a grant under this Act, a grassroots entity referred to in section 3 shall submit an application to the National Center to fund intervention models that establish violence-free zones. (b) Selection Criteria.--In awarding grants under this Act, the National Center shall consider-- (1) the track record of a grassroots entity and key participating individuals in youth group mediation and crime prevention; (2) the engagement and participation of a grassroots entity with other local organizations; and (3) the ability of a grassroots entity to enter into partnerships with local housing authorities, law enforcement agencies, and other public entities. SEC. 5. USES OF FUNDS. (a) In General.--Funds received under this Act may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services and local agency partnerships, and activities to further community objectives in reducing youth crime and violence. (b) Guidelines.--The National Center will identify local lead grassroots entities in each designated city which include the Alliance of Concerned Men of Washington in the District of Columbia; the Hartford Youth Peace Initiative in Hartford, Connecticut; the Family Help-Line in Los Angeles, California; the Victory Fellowship in San Antonio, Texas; and similar grassroots entities in other designated cities. (c) Technical Assistance.--The National Center, in cooperation with the Attorney General, shall also provide technical assistance for startup projects in other cities. SEC. 6. REPORTS. The National Center shall submit a report to the Attorney General evaluating the effectiveness of grassroots agencies and other public entities involved in the demonstration project. SEC. 7. DEFINITIONS. For purposes of this Act-- (1) the term ``grassroots entity'' means a not-for-profit community organization with demonstrated effectiveness in mediating and addressing youth violence by empowering at-risk youth to become agents of peace and community restoration; and (2) the term ``National Center for Neighborhood Enterprise'' is a not-for-profit organization incorporated in the District of Columbia. SEC. 8. AUTHORIZATION OF APPROPRIATIONS. (a) In General.--There are authorized to be appropriated to carry out this Act-- (1) $5,000,000 for fiscal year 1999; (2) $5,000,000 for fiscal year 2000; (3) $5,000,000 for fiscal year 2001; (4) $5,000,000 for fiscal year 2002; and (5) $5,000,000 for fiscal year 2003. (b) Reservation.--The National Center for Neighborhood Enterprise may use not more than 20 percent of the amounts appropriated pursuant to subsection (a) in any fiscal year for administrative costs, technical assistance and training, comprehensive support services, and evaluation of participating grassroots organizations. ______ By Mr. JEFFORDS (for himself, Mr. Bingaman, and Mr. Graham): S. 2329. A bill to amend the Internal Revenue Code of 1986 to enhance the portability of retirement benefits, and for other purposes; to the Committee on Finance. the retirement portability account (rap) act. Mr. JEFFORDS. Mr. President, today I am introducing S. 2329, the Retirement Portability Account (RAP) Act. This bill is a close companion to H.R. 3503 introduced by our colleagues Earl Pomeroy of North Dakota and Jim Kolbe of Arizona earlier this year. In addition, it contains certain elements of H.R. 3788, the Portman-Cardin bill, which relate to increased pension portability. Generally this bill is intended to be a further iteration of the concepts embodied in both of those bills. It standardizes the rules in the Internal Revenue Code (IRC) which regulate how portable a worker's retirement savings account is, and while it does not make portability of pension benefits perfect, it greatly improves the status quo. Consistent with ``greatly improving the status quo'', this bill contains no mandates. No employer will be ``required'' to accept rollovers from other plans. A rollover will occur when the employee offers, and the employer agrees to accept, a rollover from another plan. Under current law, it is not possible for an individual to move an accumulated retirement savings account from a section 401(k) (for- profit) plan to a section 457 (state and local government) deferred compensation plan, to an Individual Retirement Account (IRA), then to a section 403(b) (non-profit organization) plan and ultimately back into a section 401(k) plan, without violating various restrictions on the movement of their money. The RAP Act will make it possible for workers to take their retirement savings with them when they change jobs regardless of the type of employer for which they work. This bill will also help make IRAs more portable and will improve the uses of conduit IRAs. Conduit IRAs are individual retirement accounts to which certain distributions from a qualified retirement plan or from another individual retirement account have been transferred. RAP changes the rules regulating these IRAs so that workers leaving the for-profit, non-profit or governmental field can use a conduit IRA as a parking spot for a pre-retirement distribution. These special accounts are needed by many workers until they have another employer-sponsored plan in which to rollover their savings. In many instances, this bill will allow an individual to rollover an IRA consisting exclusively of tax-deductible contributions into a retirement plan at his or her new place of employment, thus helping the individual consolidate retirement savings in a single account. Under certain circumstances, the RAP Act will also allow workers to rollover any after-tax contributions made at his or her previous workplace, into a new retirement plan. [[Page S8485]] Current law requires a worker who changes jobs to face a deadline of 60 days within which to roll over any retirement savings benefits either into an Individual Retirement Account, or into the retirement plan of his or her new employer. Failure to meet the deadline can result in both income and excise taxes being imposed on the account. We believe that this deadline should be waived under certain circumstances and we have outlined them in the bill. Consistent with the Pomeroy- Kolbe bill, in case of a Presidentially-declared natural disaster or military service in a combat zone, the Treasury Department will have the authority to disallow imposition of any tax penalty for the account holder. Consistent with the additional change proposed by the Portman- Cardin bill, however, we have included a waiver of tax penalties in the case of undue hardship, such as a serious personal injury or illness and we have given the Department of the Treasury the authority to waive this deadline, as well. The Retirement Account Portability bill will also change two complicated rules which harm both plan sponsors and plan participants; one dealing with certain business sales (the so-called ``same desk'' rule) and the other dealing with retirement plan distribution options. Each of these rules has impeded true portability of pensions and we believe they ought to be changed. In addition, this bill will extend the Pension Benefit Guaranty Corporation's (PBGC) Missing Participant program to defined benefit multiemployer pension plans. Under current law, the PBGC has jurisdiction over both single-employer and multiemployer defined benefit pension plans. A few years ago, the agency initiated a program to locate missing participants from terminated, single-employer plans. The program attempts to locate individuals who are due a benefit, but who have not filed for benefits due to them, or who have attempted to find their former employer but failed to receive their benefits. This bill expands the missing participant program to multiemployer pension plans. I know of no reason why individuals covered by a multiemployer pension plans should not have the same protections as participants of single-employer pension plans and this change will help more former employees receive all the benefits to which they are entitled. This bill does not expand the missing participants program to defined contribution plans. Supervision of defined contribution plans is outside the statutory jurisdiction of the PBGC and I have not heard strong arguments for including those plans within the jurisdiction of the agency. In a particularly important provision, the Retirement Account Portability bill will allow public school teachers and other state and local employees who move between different states and localities to use their savings in their section 403(b) plan or section 457 deferred compensation arrangement to purchase ``service credit'' in the plan in which they are currently participating, and thus obtain greater pension benefits in the plan in which they conclude their career. However, the bill does not allow the use of a lump sum cash-out from a defined benefit plan to be rolled over to a section 403(b) or section 457 plan. As a final note, this bill, this bill does not reduce the vesting schedule from the current five year cliff vesting (or seven year graded) to a three year cliff or six year graded vesting schedule. I am not necessarily against the shorter vesting schedules, but I feel that this abbreviated vesting schedule makes a dramatic change to tax law without removing some of the disincentives to maintaining a pension plan that businesses--especially small businesses--desperately need. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record. There being no objection, the summary was ordered to be printed in the Record, as follows: Increasing Portability for Pension Plan Participants: Facilitating Rollovers Under current law, an ``eligible rollover distribution'' may be either (1) rolled over by the distributee into an ``eligible retirement plan'' if such rollover occurs within 60 days of the distribution, or (2) directly rolled over by the distributing plan to an ``eligible retirement plan.'' An ``eligible rollover distribution'' does not include any distribution which is required under section 401(a)(9) or any distribution which is part of a series of substantially equal periodic payments made for life, life expectancy or over a period of ten years or more. An ``eligible retirement plan'' is another section 401 plan, a section 403(a) plan or an IRA. (If the distributee is a surviving spouse of a participant, ``eligible retirement plans'' consist only of IRAs.) Under these rules, for example, amounts distributed from a section 401(k) plan may not be rolled over to a section 403(b) arrangement. In the case of a section 403(b) arrangement, distributions which would be eligible rollover distributions except for the fact that they are distributed from a section 403(b) arrangement may be rolled over to another section 403(b) arrangement or an IRA. Under these rules, amounts distributed from a section 403(b) may not be rolled over into a section 401(k) plan. When an ``eligible rollover distribution'' is made, the plan administrator must provide a written notice to the distributee explaining the availability of a direct rollover to another plan or an IRA, that failure to exercise that option will result in 20% being withheld from the distribution and that amounts not directly rolled over may be rolled over by the distributee within 60 days. Under ``conduit IRA'' rules, an amount may be rolled over from a section 401 or 403(a) plan to an IRA and subsequently rolled over to a section 401 or 403(a) plan if amounts in the IRA are attributable only to rollovers from section 401 or 403(a) plans. Also under conduit IRA rules, an amount may be rolled over from a section 403(b) arrangement to an IRA and subsequently rolled over to a section 403(b) arrangement if amounts in the IRA are attributable only to rollovers from section 403(b) arrangements. In the case of a section 457 deferred compensation plan, distributions may not be rolled over by a distributee; however, amounts may be transferred from one section 457 plan to another section 457 plan without giving rise to income to the plan participant. A participant in a section 457 plan is taxed on plan benefits that are not transferred when such benefits are paid or when they are made available. In contrast, a participant in a qualified plan or a section 403(b) arrangement is only taxed on plan benefits that are actually distributed. Under this proposal, ``eligible rollover distributions'' from a section 401 plan could be rolled over to another section 401 plan, a section 403(a) plan, a section 403(b) arrangement, a section 457 deferred compensation plan maintained by a state or local government or an IRA. Likewise, ``eligible rollover distributions'' from a section 403(b) arrangement could be rolled over to the same broad array of plans and IRAs. Thus, an eligible rollover distribution from a section 401(k) plan could be rolled over to a section 403(b) arrangement and vice versa. (As under current law, if the distributee is a surviving spouse of a participant, the distribution could only be rolled over into an IRA.) Eligible rollover distributions from all section 457 deferred compensation plans could be rolled over to the same broad array of plans and IRAs; however, the rules regarding the mandatory 20% withholding would not apply to the section 457 plans. A section 457 plan maintained by a government would be made an eligible retirement plan for purposes of accepting rollovers from section 401(k), section 403(b) and other plans. The written notice required to be provided when an ``eligible rollover distribution'' is made would be expanded to apply to section 457 plans and to include a description of restrictions and tax consequences which will be different if the plan to which amounts are transferred is a different type of plan from the distribution plan. Participants who mix amounts eligible for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. A participant in a section 457 plan would only be taxed on plan benefits that are not transferred or rolled over when they are actually paid. These changes would take effect for distributions made after December 31, 1998. The reason for this expansion of current law rules permitting rollovers is to allow plan participants to put all of their retirement plan savings in one vehicle if they change jobs. Given the increasing mobility of the American workforce, it is important to make pension savings portable for those who change employment. This proposal contains no mandates requiring employers to accept rollovers from their new employees. A rollover occurs when the employee makes an offer to move his/her money and the employer accepts the funds. Because of the rule that taxes section 457 plan participants on benefits made available, section 457 plans cannot provide plan participants with the flexibility to change benefit payments to fit their changing needs. There is no policy justification for this lack of flexibility. rollovers of individual retirement accounts to qualified plans Under current law, a taxpayer is not permitted to roll amounts held in an individual retirement account (IRA) (other than a conduit IRA), to a section 401 plan, a 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Currently, the maximum direct IRA contribution is $2,000. Since 1986, generally only individuals with income below certain limits are able to fully deduct [[Page S8486]] IRA contributions. For others, IRA contributions have been nondeductible or partially deductible in some or all years. To the extent that IRA contributions are non-deductible, they have ``basis'' which is not taxed the second time upon distribution from the IRA. The burden of maintaining records of IRA basis has been the taxpayer's, since only the taxpayer has had the information to determine his or her basis at the outset and as an ongoing matter. IRAs are generally subject to different regulatory schemes than other retirement savings plans, such as section 401(k)s or section 457 deferred compensation plans, although the 10 percent tax penalty on early distributions applies to both qualified plans and IRAs. For example, one cannot take a loan from an IRA, although a recent change in law will make it easier to make a penalty-free withdrawal from an IRA to finance a first-time home purchase or higher-education expenses. Under the bill, rollovers of contributory IRAs would be permitted if and only if the individual has never made any nondeductible contributions to his or her IRA and has never had a Roth IRA. The IRA may then be rolled over into a section 401 plan, a section 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Since the vast majority of IRAs contain only deductible contributions, this change will allow many individuals to consolidate their retirement savings into one account. For those who have both nondeductible and deductible contributions, they may still have two accounts, one containing the majority of funds consolidated in one place and one containing the nondeductible IRA contributions. Once IRA money is rolled over into a plan however, the IRA contributions would become plan money and subject to the rules of the plan except that participants who mix amounts for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. Employers will not be required to accept rollovers for IRAs. These changes would apply to distributions after December 31, 1998. The reasons for this change is to take another step toward increased portability of retirement savings. While this proposal would not guarantee that all retirement savings would be completely portable, it will increase the extent to which such savings are portable and fungible. Other rules and requirements affecting IRAs and their differences and similarities to plan money will continue to be the subject of Congressional scrutiny. rollovers of after-tax contributions and rollovers not made within 60 days of receipt Under current law, employees are allowed to make after-tax contributions to IRAs, 401(k) plans, and other plans. They are not permitted to roll over distributions of those after- tax contributions to an IRA or another plan. Rollovers from qualified plans to an IRA (or from an IRA to another IRA) must occur within 60 days of the initial distribution. Income tax withholding rules apply to certain distributions that are not direct trustee-to-trustee transfers from the qualified plan to an IRA or another plan. The proposal would allow after-tax contributions to be included in a rollover contribution to an IRA or other types of retirement plans, but it does not require the receiving trustee to track or report the basis. That requirement would be the responsibility of the taxpayer, as in the case of nondeductible IRA contributions. The IRS is given the authority to extend the 60-day period where the failure to comply with such requirements is attributable to casualty, disaster or other events beyond the reasonable control of the individual subject to such requirements. These changes would generally apply to distributions made after December 31, 1998. The hardship exception to the 60-day rollover period would apply to such 60-day periods expiring after the date of enactment. These changes are warranted because after-tax savings in retirement plans enhance retirement security and are particularly attractive to low and middle income taxpayers. Allowing such distributions to be rolled over to an IRA or a plan will increase the chances that those amounts would be retained until needed for retirement. Often individuals, particularly widows, widowers and individuals with injuries of illnesses, miss the 60-day window. In other instances, individuals miss the 60-day rollover period because of the failure of third parties to perform as directed. Finally, victims of casualty or natural disaster should not be penalized. A failure to satisfy the 60-day rule, by even one day can result in catastrophic tax consequences for a taxpayer that can include immediate taxation of the individual's entire retirement savings (often in a high tax bracket), a 10% early distribution tax, and a substantial depletion of retirement savings. By giving the IRS the authority to provide relief from the 60-day requirement for failures outside the control of the individual, the proposal would give individuals in these situations the ability to retain their retirement savings in an IRA or a qualified plan. Treatment of Forms of Distribution Under current law, section 411(d)(6), the ``anti-cutback'' rule generally provides that when a participant's benefits are transferred from one plan to another, the transferee plan must preserve all forms of distribution that were available under the transferor plan. Under this proposal, an employee may elect to waive his or her section 411(d)(6) rights and transfer benefits from one defined contribution plan to another defined contribution plan without requiring the transferee plan to preserve the optional forms of benefits under the transferor plan if certain requirements are satisfied to ensure the protection of participants' interests. This proposal would also apply to plan mergers and other transactions having the effect of a direct transfer, including consolidation of benefits attributable to different employers within a multiple employer plan. These changes would apply to transfers after December 31, 1998. The requirement that a defined contribution plan preserve all forms of distribution included in transferor plans significantly increases the cost of plan administration, particularly for employers that make numerous business acquisitions. The requirements also causes confusion among plan participants who can have separate parts of their retirement benefits subject to sharply different plan provision and requirements. The increased cost for the plan and the confusion for the participant brought about by the requirement to preserve all forms of distribution are based on a rule intended to protect a participant's right not to have an arbitrary benefit reduction. The current rule sweeps too broadly since it protects both significant and insignificant rights. Where a participant determines the rights to be insignificant and wants to consolidate his or her retirement benefits, there is no reason not to permit his consolidation. This consolidation increases portability and reduces administrative costs. Rationalization of Restrictions on Distributions, The ``Same Desk'' Rule Generally, under current law, distributions from 401(k) plans are limited to separation from service, death, disability, age 59\1/2\, hardship, plan termination without maintenance of another plan, and certain corporate transactions. The term ``separation from service'' has been interpreted to include a ``same desk'' rule. Under the ``same desk'' rule, distributions to a terminated employee are not permitted if the employee continues performing the same functions for a successor employer (such as a joint venture owned in part by the former employer or the buyer in a business acquisition). The same desk rule also applies to section 403(b) arrangements and section 457 plans, but does not apply to other types of plans such as defined benefit plans. Under this proposal, the ``same desk rule'' would be eliminated by replacing ``separation from service'' with ``severance from employment''. Conforming changes would be mad in the comparable provisions of section 403(b) arrangements and eligible deferred compensation plans under section 457. This change would apply to distributions after December 31, 1998. Under this proposal, affected employees would be able to roll over their 401(k) account balance to an IRA or to their new employer's 401(k) plan. Modifying the same desk rule so that all of a worker's retirement funds can be transferred to the new employer after a business sale has taken place will allow the employee to keep his or her retirement nest egg in a single place. It will also coordinate the treatment of defined benefit plan benefits with the treatment of 401(k) plans in these types of transactions. Employees do not understand why their 401(k) account must remain with the former employer until they terminate employment with their new employer, especially since this restriction does not apply to other plans in which they participate. The corporate transaction exception provides some relief from the same desk rule but is inapplicable in numerous cases. Purchase of Service Credit in Governmental Defined Benefit Plans Under current law, employees of State and local governments often have the option of purchasing service credits in their State defined benefit plans in order to make up for the time spent in another State or district. These employees cannot currently use the money they have saved in their section 403(b) arrangements or section 457 plans to purchase these service credits. This proposal would permit State and local government employees the option to use the funds in their section 403(b) arrangements or section 457 deferred compensation plans to purchase service credits. These changes would apply to trustee-to-trustee transfers after December 31, 1998. This change will permit employees of State and local governments, particularly teachers, who often move between States and school districts in the course of their careers, to buy a larger defined benefit pension with the savings they have accumulated in a section 403(b) arrangement or section 457 deferred compensation plan. The greater number of years of credit that they purchase would reflect a full career of employment rather than two or more shorter periods of employment in different States or districts. Allowing the more flexible use of existing account balances in 403(b) arrangements or section 457 plans will allow more of these employees to purchase service credits and earn a full defined benefit pension. Missing Participants Program Under current law in the case of certain terminated single employer defined benefit plans, the Pension Benefit Guaranty Corporation (PBGC) will act as a clearinghouse for benefits due to participants who cannot [[Page S8487]] be located (``missing participants''). Under the program, when a plan is terminated and is unable to locate former workers who are entitled to benefits, the terminating plan is allowed to transfer these benefits to the PBGC which then attempts to locate the employees in question. The missing participants program is limited to certain defined benefit plans. This proposal would expand the PBGC's missing participant program to cover multiemployer defined benefit pension plans. The program would not apply to governmental plans or to church plans not covered by the PBGC, however. If a plan covered by the new program has missing participants when the plan terminates, at the option of the plan (or employer, in the case of a single employer plan), the missing participants' benefits could be transferred to the PBGC along with related information. This change would take effect with respect to distributions from t4erminating multiemployer plans that occur after the PBGC has adopted final regulations implementing the provision. By permitting sponsors the option of transferring pension funds to the PBGC, the chances that a missing participant will be able to recover benefits could be increased. Disregarding Rollovers for Purposes of the Cash Out Amount Under current law, if a terminated participant has a vested accrued benefit of $5,000 or less, the plan may distribute such benefit in a lump sum without the consent of the participant or the participant's spouse. This $5,000 cash-out limit is not indexed for inflation. In applying the $5,000 cash-out rule, the plan sponsor is under regulations required to look back to determine if an individual's account every exceeded $5,000 at the time of any prior distribution. Rollover amounts count in determining the maximum balance which can be involuntarily cashed out. This proposal would allow a plan sponsor to disregard rollover amounts in determining eligibility for the cash-out rule, that is, whether a participant's vested accrued benefit exceeds $5,000. This proposal would apply to distributions after December 31, 1998. The reason for this change is to remove a possible reason for employers to refuse to accept rollovers. Plan Amendments Under current law, there is generally a short period of time to make plan amendments that reflect the amendments to the law. In addition, the anti-cutback rules can have the unintentioned effect of preventing an employer from amending its plan to reflect a change in the law. Amendments to a plan or annuity contract made pursuant to any amendment made by this bill are not required to be made before the last day of the first plan year beginning on or after January 1, 2001. In the case of a governmental plan, the date for amendments is extended to the first plan year beginning on or after January 1, 2003. Operational compliance would, of course be required with respect to all plans as of the applicable effective date of any amendment made by this Act. In addition, timely amendments to a plan or annuity contract made pursuant to any amendment made by this Act shall be deemed to satisfy the anti-cutback rules. The reason for this change is that plan sponsors need an appropriate amount of time to make changes to their plan documents. ______ By Mr. LOTT (for Mr. Nickles, for himself, Mr. Frist, Ms. Collins, Mr. Jeffords, Mr. Roth, Mr. Santorum, Mr. Hagel, Mr. Gramm, Mr. Coats, Mr. Lott, Mr. Mack, Mr. Craig, Mr. Coverdell, Mr. Abraham, Mr. Allard, Mr. Ashcroft, Mr. Bennett, Mr. Bond, Mr. Brownback, Mr. Burns, Mr. Cochran, Mr. Domenici, Mr. Enzi, Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Grassley, Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. Hutchison, Mr. Inhofe, Mr. Kempthorne, Mr. Lugar, Mr. McCain, Mr. Murkowski, Mr. Roberts, Mr. Sessions, Mr. Shelby, Mr. Smith of New Hampshire, Mr. Smith of Oregon, Ms. Snowe, Mr. Thomas, Mr. Thompson, Mr. Thurmond, and Mr. Warner): S. 2330. A bill to improve the access and choice of patients to quality, affordable health care; read the first time. PATIENTS' BILL OF RIGHTS Mr. NICKLES. Mr. President, today I am introducing the Republican Patients' Bill of Rights. Joining me in this effort are 46 of my colleagues who recognize the importance of ensuring that all Americans are able to not only receive the care they have been promised, but also receive the highest quality of care available. The foundation of this proposal was to address some of the very real concerns that consumers have about their health care needs. We know that many Americans have believed they were denied coverage that their plans were supposed to cover. We recognize that some individuals fear that their health care plans will not give them access to specialists when they need them. We know that some Americans think their health care plans care more about cost than they do about quality. In contrast, we also know that many Americans are happy and satisfied with their health care plan. We know that 81 percent of managed care enrollees are satisfied with their current health care plan. Another recent analysis suggest that 79 percent of consumers in HMOs would recommend their coverage. In addition Americans are leery of Washington solutions and increased federal intervention. Last January, the Leader asked me to put together a group of colleagues to address the issue of health care quality. For the past seven months, Senators Frist, Collins, Hagel, Roth, Jeffords, Coats, Santorum, and Gramm worked tirelessly to put together a responsible, credible package that would preserve what is best about our Nation's health care while at the same time determine ways to improve upon-- without stifling--the quality of care our nation delivers. We set out to rationally examine the issues and develop reasonable solutions without injuring patient access to affordable, high quality care. This was no easy task. We spent month after month talking to experts who understand the difficulty and complexity of our system. We met with representatives from all aspects of the industry including the Mayo Clinic, the Henry Ford Health Systems, the American Medical Association, the American Hospital Association, the National Committee for Quality Assurance, the Joint Commission on the Accreditation of Healthcare Organizations, Corporate Medical Directors, Commissioners from the President's Quality Commission, Purchasers, Families USA, the Employee Benefit Research Institute and many others. After many, many months of dissecting serious questions about our system we determined that there were indeed some areas in which we could improve patient access and quality. We have put together an innovative plan that will answer the problems that exist in the industry while at the same time preserving affordability, which is of utmost importance. Mr. President, I think you agree that if someone loses their health insurance because a politician playing doctor drives prices to an unaffordable level, you have hardly given them more rights or better quality health care. We are proud of what we have been able to accomplish. For the first time, patients can choose to be unencumbered in their relationship with their doctor. They will be able to choose their own doctor and get the middle man out of the way. There will be no corporate bureaucrat, no government bureaucrat and no lawyer standing between a patient and their doctor. Mr. President, the bill we introduce today: Protects consumers in employer-sponsored plans that are exempt from state regulation. People enrolled in such plans will have the right to: Choose their doctors. Our bill contains both ``point-of-service'' and ``continuity of care'' requirements that will enhance consumer choice. See their ob-gyns and pediatricians without referral. Our bill will give patients direct access to pediatricians and ob-gyns without prior referral from a ``gatekeeper.'' Have a ``prudent layperson'' standard applied to their claims for emergency care. The GOP alternative will require health plans to cover--without prior authorization--emergency care that a ``prudent layperson'' would consider medically necessary. Communicate openly with their doctors without ``gag'' clauses. Holds health plans accountable for their decisions. Extends to enrollees in ERISA health plans and their doctors the right to appeal adverse coverage decisions to a physician who was not involved in the initial coverage determination. Allows enrollees to appeal adverse coverage determinations to independent medical experts who have no affiliation with the health plan. Determinations by these experts will be binding on the health plan. Requires health plans to disclose to enrollees consumer information, including what's covered, what's not, [[Page S8488]] how much they'll have to pay in deductibles and coinsurance, and how to appeal adverse coverage decisions to independent medical experts. Guarantees consumers access to their medical records. Requires health care providers, health plans, employers, health and life insurers, and schools and universities to permit an individual to inspect, copy and amend his or her own medical information. Requires health care providers, health plans, health oversight agencies, public health authorities, employers, health and life insurers, health researchers, law enforcement officials, and schools and universities to establish appropriate safeguards to protect the confidentiality, security, accuracy and integrity of protected health information and notify enrollees of these safeguards. Protects patients from genetic discrimination in health insurance. Prohibits health plans from collecting or using predictive genetic information about a patient to deny health insurance coverage or set premium rates. Promotes quality improvement by supporting research to give patients and physicians better information regarding quality. Establishes the Agency for Healthcare Quality Research (AHQR), whose purpose is to foster overall improvement in healthcare quality and bridge the gap between what we know and what we do in healthcare today. The Agency is built on the platform of the current Agency for Health Care Policy and Research, but is refocused and enhanced to become the hub and driving force of federal efforts to improve the quality of healthcare in all practice environments--not just managed care. The role of the Agency is not to mandate a national definition of quality, but to support the science necessary to provide information to patients regarding the quality of the care they receive, to allow physicians to compare their quality outcomes with their peers, and to enable employers and individuals to be prudent purchasers based on quality. Supports research, screening, treatment, education, and data collection activities to improve the health of women. Promotes basic and clinical research for osteoporosis; breast and ovarian cancer; and aging processes regarding women. Expands research efforts into the underlying causes and prevention of cardiovascular diseases in women--the leading cause of death among American women. Supports data collection through the National Center for Health Statistics and the National Program of Cancer Registries, which are the leading sources of national data on the health status of women in the U.S. Supports the National Breast and Cervical Cancer Early Detection Program, which provides for regular screening for breast and cervical cancers to underserved women. Requires that the length of hospital stay after a mastectomy, lumpectomy or lymph node dissection be determined only by the physician, in consultation with the patient, and without the need to obtain authorization from the health plan. If a plan covers mastectomies, it also must cover breast reconstruction after a mastectomy. Makes health insurance more accessible and affordable by: Allowing self-employed people to deduct the full amount of their health care premiums. Making medical savings accounts available to everyone. Reforming cafeteria plans to let consumers save for future health care costs. Mr. President, this bill is a comprehensive bill of rights that will benefit all Americans, and I am proud to join with so many of my colleagues in introducing it. Mr. President, I want to take a moment to address some criticisms that have been made of our bill. These criticisms highlight some significant differences between our bill and the health care bill introduced by Senate Democrats. Mr. President, our bill does differ significantly from the Senate Democrats' bill. Our bill is the ``Patients' Bill of Rights.'' Theirs is the ``Lawyers' Right to Bill.'' Our bill lets doctors decide whether care is medically necessary. Theirs lets lawyers decide. Our bill empowers an independent medical expert to order an insurance company to pay for medically necessary care so that patients suffer no harm. Theirs allows trial lawyers to sue health plans after harm is done. Mr. President, when my insurance company tells me that they won't cover a service for my family, I want the ability to appeal that decision to a doctor who doesn't work for my insurance company. And I want that appeal handled promptly, so that my family receives the benefit. That is what our bill requires. The Democrats' bill creates new ways for trial lawyers to make money. According to a June 1998 study by Multinational Business Services, the Democrats' bill would create 56 new Federal causes of action--56 new reasons to sue people in Federal court. That's fine for trial lawyers, but it doesn't do much for patients. Patients want their claim disputes handled promptly and fairly. According to a study by the General Accounting Office, it takes an average of 25 months--more than two years--to resolve a malpractice suit. One cause that the GAO studied took 11 years to resolve! I'm sure the lawyers who handled that case did quite well for themselves. But what about the patient? Under our bill, patients can appeal directly to an outside medical expert for a prompt review of their claim--without having to incur any legal expenses. In medical malpractice litigation, patients receive an average of only 43 cents of every dollar awarded. The rest goes to lawyers and court fees. Our bill assures that health care dollars are used to serve patients. Their bill diverts these dollars away from patients and into the pockets of trial lawyers. Another big difference between our bill and the one introduced by Senate Democrats is that their bill takes a ``big government'' approach to health reform. Mr. President, it was just four years ago that we debated Clintoncare on the Senate floor. President Clinton wanted government-run health care for all Americans. He wanted it then; he wants it still. Just last September, President Clinton told the Service Employees Union that he was ``glad'' that he had pushed for the federal government to take over health care. ``Now if what I tried to do before won't work,'' the President said, ``maybe we can do it another way. A step at a time until we eventually finish this.'' The Democrats' bill would take us a step closer to the President's dream of a health care system run by federal bureaucrats and trial lawyers. The study I cited earlier by Multinational Business Services found that their bill would impose 359 new federal mandates, 59 new sets of Federal regulations, and require the government to hire 3,828 new federal bureaucrats. Our bill relies on State Insurance Commissioners to protect those Americans who are enrolled in state-regulated plans. We protect the unprotected by providing new federal safeguards to the 48 million Americans who are enrolled in plans that the states are not permitted to regulate. Their bill imposes a risky and complicated scheme that relies on federal bureaucrats at the Health Care Financing Administration (HCFA) to enforce patients' rights in states that do not conform to the federal mandates in their bill. HCFA is the agency that oversees the federal Medicare and Medicaid programs. Last year, in the Balanced Budget Act, Congress created new consumer protections for Medicare beneficiaries--a ``Patients' Bill of Rights'' for the 38.5 million senior citizens and disabled Americans who rely on Medicare for their health care. We asked HCFA to protect those rights. How have they done? I regret to say, Mr. President, that they have not done very well at all. On July 16, a GAO witness testified before the Ways and Means Committee on how well HCFA was doing in enforcing the Medicare patients' bill of rights. According to GAO, HCFA has ``missed 25 percent of the implementation deadlines, including the quality-of-care medical review process for skilled nursing facilities. It is clear [[Page S8489]] that HCFA will continue to miss implementation deadlines as it attempts to balance the resource demands generated by the Balanced Budget Act with other competing objectives.'' Mr. President, I won't

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - July 17, 1998)

Text of this article available as: TXT PDF [Pages S8482-S8512] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. BRYAN (for himself and Mr. McCain): S. 2326. A bill to require the Federal Trade Commission to prescribe regulations to protect the privacy of personal information collected from and about children on the Internet, to provide greater parental control over the collection and use of that information, and for other purposes; to the Committee on Commerce, Science, and Transportation. the children's online privacy protection act of 1998 Mr. BRYAN. Mr. President, today the chairman of the Senate Commerce Committee and I are introducing ``the Children's Online Privacy Protection Act of 1998.'' Commercial Web sites are currently collecting and disseminating personal information collected from children that may compromise their safety and most certainly invades their privacy. This legislation will ensure that commercial Web sites that collect and use personal information from children will have safeguards in place to protect you and your family. The Internet is quickly becoming an significant force in the lives of our children as it moves swiftly into homes and classrooms around the country. Currently more than 3 million children under the age of 18 are online and the number is expected to grow to 15 million by the turn of the century. I think all would agree that proficiency with the Internet is a critical and vital skill that will be necessary for academic achievement in the next century. The benefits of the Internet are extraordinary. Reference information such as news, weather, sports, stock quotes, movie reviews, encyclopedia and online airline fares are readily available. Users can conduct transactions such as stock trading, make travel arrangements, bank, and shop online. Millions of people communicate through electronic mail to family and friends around the world, and others use the public message boards to make new friends and share common interests. As an educational and entertainment tool, users can learn about virtually any topic or take a college course. Unfortunately, the same marvelous advances in computer and telecommunication technology that allow our children to reach out to new resources of knowledge and cultural experiences are also leaving them unwittingly vulnerable to exploitation and harm by deceptive marketers and criminals. Earlier this spring, I held several meetings in Nevada with educators and parents' representatives to alert them of some of the deceptive practices found on the Internet. Representatives of the FBI and Federal Trade Commission informed Nevadans about some of the Internet's pitfalls. I found it extremely informative and enlightening and to some extent frightening. You may be startled to learn what information other people are collecting about you and your family may have a profound impact upon their privacy and, indeed, their safety. Once what may seem to be harmless information has made its way onto the Internet, there is no way of knowing what uses may be put to that information. Senator McCain and I wrote to the FTC asking them to investigate online privacy issues. Recently, the FTC completed the survey of a number of web sites and found that 89 percent of children's sites collect personal information from children, and less than 10 percent of the sites provide for parental control over the collection and use of this personal information. I was, frankly, surprised to learn the kinds of information these web sites are collecting from our children. Some were asking where the child went to school, what sports he or she liked, what siblings they had, their pet's name, what kind of time they had after school alone without the supervision of parents. Others were collecting personal financial information like what the family income was, does the family own stocks or certificates of deposit, did their grandparents give them any financial gifts? Web sites were using games, contests, and offers of free merchandise to entice children to give them exceedingly personal and private information about themselves and their families. Some even used cartoon characters who asked children for personal information, such as a child's name and address and e-mail address, date of birth, telephone number, and Social Security number. [[Page S8483]] Much of this information appears to be harmless, but companies are attempting to build a wealth of information about you and your family without an adult's approval--a profile that will enable them to target and to entice your children to purchase a range of products. The Internet gives marketers the capability of interacting with your children and developing a relationship without your knowledge. Where can this interactive relationship go? Will your child be receiving birthday cards and communications with online cartoon characters for particular products? Senator McCain and I believe there must be safeguards against the online collecting of information from children without a parent's knowledge or consent. If a child answers a phone and starts answering questions, a parent automatically becomes suspicious and asks who they are talking to. When a child is on the Internet, parents often have no knowledge of whom their child is interacting. That is why we are introducing legislation that would require the FTC to come up with rules to govern these kind of activities. The FTC's rules would require commercial web sites to: (1) Provide notice of its personal information collection and use practices; (2) Obtain parental consent for the collection, use or disclosure of personnel information from children 12 and under; (3) Provide parents with an opportunity to opt-out of the collection and/or use of personal information collected from children 13 to 16; (4) Provide parents access to his or her child's personal information; (5) Establish and maintain reasonable procedures to ensure the confidentiality, security, accuracy, and integrity of personal information on children. The FTC must come up with these rules within 1 year. The FTC may provide incentives for industry self-regulatory efforts including safe harbors for industry created guidelines. The bill permits States' attorneys general to enforce the act. I believe these represent reasonable steps we should take to protect our privacy. Although time is short in this session, I hope we can find a way to enact these commonsense proposals this Congress. Most people who use online services have positive experiences. The fact that deceptive acts may be committed on the Internet, is not a reason to avoid using the service. To tell children to stop using the Internet would be like telling them to forgo attending college because students are sometimes victimized on campus. A better strategy is for children to learn how to be street smart in order to better safeguard themselves from potentially deceptive situations. The Internet offers unlimited potential for assisting our child's growth and development. However, we must not send our children off on this adventure without proper guidance and supervision. Mr. President, in my judgment, the legislation offered today by the senior Senator from Arizona and I provides those reasonable guidelines. I hope colleagues will join with me in making sure this legislation is enacted in this situation. ______ By Mr. COATS (for himself and Mr. Lieberman): S. 2327. A bill to provide grants to grassroots organizations in certain cities to develop youth intervention models; to the Committee on the Judiciary. national youth crime prevention demonstration act Mr. COATS. Mr. President, America currently struggles with a disturbing and growing trend of youth violence. Between 1985 and 1994, the arrest rate for murders by juveniles increased 150 percent, while the rate for adults during this time increased 11 percent. Every day, in our communities and in the media, we see horrific examples of this crime. A 13-year-old girl murders her 3-year-old nephew and dumps him in the trash. A 13-year-old boy is stabbed to death while sitting on his back porch. A group of teenagers hails a cab and, after the driver takes them to their destination, they shoot him dead in an armed robbery. I did not have to look far for these examples. Each occurred in Indiana, a State generally known as a safe State, a good place to raise a family, not a dangerous place, yet a State where arrests for violent juvenile crimes have skyrocketed 19 percent in the early 1990's. Juvenile violence is no longer a stranger in any ZIP code. Yet, the problem is expected to grow worse. Crime experts who study demographics warn of a coming crime wave based on the number of children who currently are younger than 10 years old. These experts warn that if current trends are not changed, we might someday look back at our current juvenile crime epidemic as ``the good old days.'' This spiraling upward trend in youth crime and violence is cause for grave concern. So one might ask, what is driving this epidemic? Over 30 years ago, our colleague Daniel Patrick Moynihan, then an official in the Johnson administration, wrote that when a community's families are shattered, crime, violence and rage ``are not only to be expected, they are virtually inevitable.'' He wrote those words in 1965. Since then, arrests of violent juvenile criminals have tripled. Last Congress, the Subcommittee on Children and Families, which I chair, held a hearing about the role of government in combating juvenile crime. The experts were clear: while government efforts are important, they are also fundamentally limited and incomplete. Government is ultimately powerless to form the human conscience that chooses between right and wrong. Locking away juveniles might prevent them from committing further crimes, but it does not address the fact that violence is symptomatic of a much deeper, moral and spiritual void in our Nation. In the battle against violent crime, solid families are America's strongest line of defense. But government can be an effective tool if it joins private institutions (families, churches, schools, community groups, and non- profit organizations) in preventing and confronting juvenile crime with the moral ideals that defeat despair and nurture lives. Today, I rise to introduce the National Youth Crime Prevention Act which will empower local communities to address the rising trend in youth violence. Specifically, this legislation authorizes the Attorney General to award $5 million annually for five years to the National Center for Neighborhood Enterprise to conduct national demonstration projects in eight cities. These projects would aim to end youth crime, violence and family disintegration by building neighborhood capacity and linking proven grassroots organizations within low-income neighborhoods with sources from the public sector, including local housing authorities, law enforcement agencies, and other public entities. The demonstration projects will take place in Washington, DC; Detroit, Michigan; Hartford, Connecticut; Indianapolis, Indiana; Chicago, Illinois; San Antonio, Texas; Dallas, Texas; and Los Angeles, California. With these funds, the National Center for Neighborhood Enterprise will work with the grassroots organizations in the demonstration cities to establish Violence Free Zone Initiatives. These initiatives would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. To be eligible for the grants, the nonprofit organizations within the demonstration cities must have experience in crime prevention and youth mediation projects and must have a history of cultivating cooperative relationships with other local organizations, housing facilities and law enforcement agencies. Funds may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services, local agency partnerships and activities to further community objectives in reducing youth crime and violence. The success of this approach has already been demonstrated. Last year, The National Center for Neighborhood Enterprise assisted The Alliance for Concerned Men in creating a ``Violence Free Zone'' in Benning Terrace in Southeast DC. The Alliance of Concerned Men brokered peace treaties among the gangs that inhabit, and frequently dominate, the city's public [[Page S8484]] housing complexes. Benning Terrace in Southeast Washington, known to the DC police department as one of the most dangerous areas of the city, has not had a single murder since the Alliance's peace treaty went into effect early last year. Subsequently, the National Center for Neighborhood Enterprise brought the Alliance, the youths, and the DC Housing Receiver together to develop and implement a plan for jobs and life skills training for the young people and the community itself. Grassroots organizations are the key to implementing the most effective innovative strategies to address community problems. Their efforts help restore hardpressed inner-city neighborhoods by developing the social, human and economic capital that is key to real, long-term renewal of urban communities. The National Youth Crime Prevention Demonstration Act will provide critical assistance to our Nation's inner-cities as they combat the rising trend in youth violence by linking proven grassroots organizations with established public sector entities. Mr. President, I urge my colleagues to support this important legislation, and I ask unanimous consent that the text of the National Youth Crime Prevention Demonstration Act be printed in the Record. There being no objection, the bill was ordered to be printed in the Record, as follows: S. 2327 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``National Youth Crime Prevention Demonstration Act''. SEC. 2. PURPOSES. The purposes of this Act are as follows: (1) To establish a demonstration project that establishes violence-free zones that would involve successful youth intervention models in partnership with law enforcement, local housing authorities, private foundations, and other public and private partners. (2) To document best practices based on successful grassroots interventions in cities, including Washington, District of Columbia; Boston, Massachusetts; Hartford, Connecticut; and other cities to develop methodologies for widespread replication. (3) To increase the efforts of the Department of Justice, the Department of Housing and Urban Development, and other agencies in supporting effective neighborhood mediating approaches. SEC. 3. ESTABLISHMENT OF NATIONAL YOUTH CRIME PREVENTION DEMONSTRATION PROJECT. The Attorney General shall, subject to appropriations, award a grant to the National Center for Neighborhood Enterprise (referred to in this Act as the ``National Center'') to enable the National Center to award grants to grassroots entities in the following 8 cities: (1) Washington, District of Columbia. (2) Detroit, Michigan. (3) Hartford, Connecticut. (4) Indianapolis, Indiana. (5) Chicago (and surrounding metropolitan area), Illinois. (6) San Antonio, Texas. (7) Dallas, Texas. (8) Los Angeles, California. SEC. 4. ELIGIBILITY. (a) In General.--To be eligible to receive a grant under this Act, a grassroots entity referred to in section 3 shall submit an application to the National Center to fund intervention models that establish violence-free zones. (b) Selection Criteria.--In awarding grants under this Act, the National Center shall consider-- (1) the track record of a grassroots entity and key participating individuals in youth group mediation and crime prevention; (2) the engagement and participation of a grassroots entity with other local organizations; and (3) the ability of a grassroots entity to enter into partnerships with local housing authorities, law enforcement agencies, and other public entities. SEC. 5. USES OF FUNDS. (a) In General.--Funds received under this Act may be used for youth mediation, youth mentoring, life skills training, job creation and entrepreneurship, organizational development and training, development of long-term intervention plans, collaboration with law enforcement, comprehensive support services and local agency partnerships, and activities to further community objectives in reducing youth crime and violence. (b) Guidelines.--The National Center will identify local lead grassroots entities in each designated city which include the Alliance of Concerned Men of Washington in the District of Columbia; the Hartford Youth Peace Initiative in Hartford, Connecticut; the Family Help-Line in Los Angeles, California; the Victory Fellowship in San Antonio, Texas; and similar grassroots entities in other designated cities. (c) Technical Assistance.--The National Center, in cooperation with the Attorney General, shall also provide technical assistance for startup projects in other cities. SEC. 6. REPORTS. The National Center shall submit a report to the Attorney General evaluating the effectiveness of grassroots agencies and other public entities involved in the demonstration project. SEC. 7. DEFINITIONS. For purposes of this Act-- (1) the term ``grassroots entity'' means a not-for-profit community organization with demonstrated effectiveness in mediating and addressing youth violence by empowering at-risk youth to become agents of peace and community restoration; and (2) the term ``National Center for Neighborhood Enterprise'' is a not-for-profit organization incorporated in the District of Columbia. SEC. 8. AUTHORIZATION OF APPROPRIATIONS. (a) In General.--There are authorized to be appropriated to carry out this Act-- (1) $5,000,000 for fiscal year 1999; (2) $5,000,000 for fiscal year 2000; (3) $5,000,000 for fiscal year 2001; (4) $5,000,000 for fiscal year 2002; and (5) $5,000,000 for fiscal year 2003. (b) Reservation.--The National Center for Neighborhood Enterprise may use not more than 20 percent of the amounts appropriated pursuant to subsection (a) in any fiscal year for administrative costs, technical assistance and training, comprehensive support services, and evaluation of participating grassroots organizations. ______ By Mr. JEFFORDS (for himself, Mr. Bingaman, and Mr. Graham): S. 2329. A bill to amend the Internal Revenue Code of 1986 to enhance the portability of retirement benefits, and for other purposes; to the Committee on Finance. the retirement portability account (rap) act. Mr. JEFFORDS. Mr. President, today I am introducing S. 2329, the Retirement Portability Account (RAP) Act. This bill is a close companion to H.R. 3503 introduced by our colleagues Earl Pomeroy of North Dakota and Jim Kolbe of Arizona earlier this year. In addition, it contains certain elements of H.R. 3788, the Portman-Cardin bill, which relate to increased pension portability. Generally this bill is intended to be a further iteration of the concepts embodied in both of those bills. It standardizes the rules in the Internal Revenue Code (IRC) which regulate how portable a worker's retirement savings account is, and while it does not make portability of pension benefits perfect, it greatly improves the status quo. Consistent with ``greatly improving the status quo'', this bill contains no mandates. No employer will be ``required'' to accept rollovers from other plans. A rollover will occur when the employee offers, and the employer agrees to accept, a rollover from another plan. Under current law, it is not possible for an individual to move an accumulated retirement savings account from a section 401(k) (for- profit) plan to a section 457 (state and local government) deferred compensation plan, to an Individual Retirement Account (IRA), then to a section 403(b) (non-profit organization) plan and ultimately back into a section 401(k) plan, without violating various restrictions on the movement of their money. The RAP Act will make it possible for workers to take their retirement savings with them when they change jobs regardless of the type of employer for which they work. This bill will also help make IRAs more portable and will improve the uses of conduit IRAs. Conduit IRAs are individual retirement accounts to which certain distributions from a qualified retirement plan or from another individual retirement account have been transferred. RAP changes the rules regulating these IRAs so that workers leaving the for-profit, non-profit or governmental field can use a conduit IRA as a parking spot for a pre-retirement distribution. These special accounts are needed by many workers until they have another employer-sponsored plan in which to rollover their savings. In many instances, this bill will allow an individual to rollover an IRA consisting exclusively of tax-deductible contributions into a retirement plan at his or her new place of employment, thus helping the individual consolidate retirement savings in a single account. Under certain circumstances, the RAP Act will also allow workers to rollover any after-tax contributions made at his or her previous workplace, into a new retirement plan. [[Page S8485]] Current law requires a worker who changes jobs to face a deadline of 60 days within which to roll over any retirement savings benefits either into an Individual Retirement Account, or into the retirement plan of his or her new employer. Failure to meet the deadline can result in both income and excise taxes being imposed on the account. We believe that this deadline should be waived under certain circumstances and we have outlined them in the bill. Consistent with the Pomeroy- Kolbe bill, in case of a Presidentially-declared natural disaster or military service in a combat zone, the Treasury Department will have the authority to disallow imposition of any tax penalty for the account holder. Consistent with the additional change proposed by the Portman- Cardin bill, however, we have included a waiver of tax penalties in the case of undue hardship, such as a serious personal injury or illness and we have given the Department of the Treasury the authority to waive this deadline, as well. The Retirement Account Portability bill will also change two complicated rules which harm both plan sponsors and plan participants; one dealing with certain business sales (the so-called ``same desk'' rule) and the other dealing with retirement plan distribution options. Each of these rules has impeded true portability of pensions and we believe they ought to be changed. In addition, this bill will extend the Pension Benefit Guaranty Corporation's (PBGC) Missing Participant program to defined benefit multiemployer pension plans. Under current law, the PBGC has jurisdiction over both single-employer and multiemployer defined benefit pension plans. A few years ago, the agency initiated a program to locate missing participants from terminated, single-employer plans. The program attempts to locate individuals who are due a benefit, but who have not filed for benefits due to them, or who have attempted to find their former employer but failed to receive their benefits. This bill expands the missing participant program to multiemployer pension plans. I know of no reason why individuals covered by a multiemployer pension plans should not have the same protections as participants of single-employer pension plans and this change will help more former employees receive all the benefits to which they are entitled. This bill does not expand the missing participants program to defined contribution plans. Supervision of defined contribution plans is outside the statutory jurisdiction of the PBGC and I have not heard strong arguments for including those plans within the jurisdiction of the agency. In a particularly important provision, the Retirement Account Portability bill will allow public school teachers and other state and local employees who move between different states and localities to use their savings in their section 403(b) plan or section 457 deferred compensation arrangement to purchase ``service credit'' in the plan in which they are currently participating, and thus obtain greater pension benefits in the plan in which they conclude their career. However, the bill does not allow the use of a lump sum cash-out from a defined benefit plan to be rolled over to a section 403(b) or section 457 plan. As a final note, this bill, this bill does not reduce the vesting schedule from the current five year cliff vesting (or seven year graded) to a three year cliff or six year graded vesting schedule. I am not necessarily against the shorter vesting schedules, but I feel that this abbreviated vesting schedule makes a dramatic change to tax law without removing some of the disincentives to maintaining a pension plan that businesses--especially small businesses--desperately need. Mr. President, I ask unanimous consent that a summary of the bill be printed in the Record. There being no objection, the summary was ordered to be printed in the Record, as follows: Increasing Portability for Pension Plan Participants: Facilitating Rollovers Under current law, an ``eligible rollover distribution'' may be either (1) rolled over by the distributee into an ``eligible retirement plan'' if such rollover occurs within 60 days of the distribution, or (2) directly rolled over by the distributing plan to an ``eligible retirement plan.'' An ``eligible rollover distribution'' does not include any distribution which is required under section 401(a)(9) or any distribution which is part of a series of substantially equal periodic payments made for life, life expectancy or over a period of ten years or more. An ``eligible retirement plan'' is another section 401 plan, a section 403(a) plan or an IRA. (If the distributee is a surviving spouse of a participant, ``eligible retirement plans'' consist only of IRAs.) Under these rules, for example, amounts distributed from a section 401(k) plan may not be rolled over to a section 403(b) arrangement. In the case of a section 403(b) arrangement, distributions which would be eligible rollover distributions except for the fact that they are distributed from a section 403(b) arrangement may be rolled over to another section 403(b) arrangement or an IRA. Under these rules, amounts distributed from a section 403(b) may not be rolled over into a section 401(k) plan. When an ``eligible rollover distribution'' is made, the plan administrator must provide a written notice to the distributee explaining the availability of a direct rollover to another plan or an IRA, that failure to exercise that option will result in 20% being withheld from the distribution and that amounts not directly rolled over may be rolled over by the distributee within 60 days. Under ``conduit IRA'' rules, an amount may be rolled over from a section 401 or 403(a) plan to an IRA and subsequently rolled over to a section 401 or 403(a) plan if amounts in the IRA are attributable only to rollovers from section 401 or 403(a) plans. Also under conduit IRA rules, an amount may be rolled over from a section 403(b) arrangement to an IRA and subsequently rolled over to a section 403(b) arrangement if amounts in the IRA are attributable only to rollovers from section 403(b) arrangements. In the case of a section 457 deferred compensation plan, distributions may not be rolled over by a distributee; however, amounts may be transferred from one section 457 plan to another section 457 plan without giving rise to income to the plan participant. A participant in a section 457 plan is taxed on plan benefits that are not transferred when such benefits are paid or when they are made available. In contrast, a participant in a qualified plan or a section 403(b) arrangement is only taxed on plan benefits that are actually distributed. Under this proposal, ``eligible rollover distributions'' from a section 401 plan could be rolled over to another section 401 plan, a section 403(a) plan, a section 403(b) arrangement, a section 457 deferred compensation plan maintained by a state or local government or an IRA. Likewise, ``eligible rollover distributions'' from a section 403(b) arrangement could be rolled over to the same broad array of plans and IRAs. Thus, an eligible rollover distribution from a section 401(k) plan could be rolled over to a section 403(b) arrangement and vice versa. (As under current law, if the distributee is a surviving spouse of a participant, the distribution could only be rolled over into an IRA.) Eligible rollover distributions from all section 457 deferred compensation plans could be rolled over to the same broad array of plans and IRAs; however, the rules regarding the mandatory 20% withholding would not apply to the section 457 plans. A section 457 plan maintained by a government would be made an eligible retirement plan for purposes of accepting rollovers from section 401(k), section 403(b) and other plans. The written notice required to be provided when an ``eligible rollover distribution'' is made would be expanded to apply to section 457 plans and to include a description of restrictions and tax consequences which will be different if the plan to which amounts are transferred is a different type of plan from the distribution plan. Participants who mix amounts eligible for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. A participant in a section 457 plan would only be taxed on plan benefits that are not transferred or rolled over when they are actually paid. These changes would take effect for distributions made after December 31, 1998. The reason for this expansion of current law rules permitting rollovers is to allow plan participants to put all of their retirement plan savings in one vehicle if they change jobs. Given the increasing mobility of the American workforce, it is important to make pension savings portable for those who change employment. This proposal contains no mandates requiring employers to accept rollovers from their new employees. A rollover occurs when the employee makes an offer to move his/her money and the employer accepts the funds. Because of the rule that taxes section 457 plan participants on benefits made available, section 457 plans cannot provide plan participants with the flexibility to change benefit payments to fit their changing needs. There is no policy justification for this lack of flexibility. rollovers of individual retirement accounts to qualified plans Under current law, a taxpayer is not permitted to roll amounts held in an individual retirement account (IRA) (other than a conduit IRA), to a section 401 plan, a 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Currently, the maximum direct IRA contribution is $2,000. Since 1986, generally only individuals with income below certain limits are able to fully deduct [[Page S8486]] IRA contributions. For others, IRA contributions have been nondeductible or partially deductible in some or all years. To the extent that IRA contributions are non-deductible, they have ``basis'' which is not taxed the second time upon distribution from the IRA. The burden of maintaining records of IRA basis has been the taxpayer's, since only the taxpayer has had the information to determine his or her basis at the outset and as an ongoing matter. IRAs are generally subject to different regulatory schemes than other retirement savings plans, such as section 401(k)s or section 457 deferred compensation plans, although the 10 percent tax penalty on early distributions applies to both qualified plans and IRAs. For example, one cannot take a loan from an IRA, although a recent change in law will make it easier to make a penalty-free withdrawal from an IRA to finance a first-time home purchase or higher-education expenses. Under the bill, rollovers of contributory IRAs would be permitted if and only if the individual has never made any nondeductible contributions to his or her IRA and has never had a Roth IRA. The IRA may then be rolled over into a section 401 plan, a section 403(a) plan, a 403(b) arrangement or a section 457 deferred compensation plan. Since the vast majority of IRAs contain only deductible contributions, this change will allow many individuals to consolidate their retirement savings into one account. For those who have both nondeductible and deductible contributions, they may still have two accounts, one containing the majority of funds consolidated in one place and one containing the nondeductible IRA contributions. Once IRA money is rolled over into a plan however, the IRA contributions would become plan money and subject to the rules of the plan except that participants who mix amounts for special capital gains and averaging treatment with amounts not so eligible would lose such treatment. Employers will not be required to accept rollovers for IRAs. These changes would apply to distributions after December 31, 1998. The reasons for this change is to take another step toward increased portability of retirement savings. While this proposal would not guarantee that all retirement savings would be completely portable, it will increase the extent to which such savings are portable and fungible. Other rules and requirements affecting IRAs and their differences and similarities to plan money will continue to be the subject of Congressional scrutiny. rollovers of after-tax contributions and rollovers not made within 60 days of receipt Under current law, employees are allowed to make after-tax contributions to IRAs, 401(k) plans, and other plans. They are not permitted to roll over distributions of those after- tax contributions to an IRA or another plan. Rollovers from qualified plans to an IRA (or from an IRA to another IRA) must occur within 60 days of the initial distribution. Income tax withholding rules apply to certain distributions that are not direct trustee-to-trustee transfers from the qualified plan to an IRA or another plan. The proposal would allow after-tax contributions to be included in a rollover contribution to an IRA or other types of retirement plans, but it does not require the receiving trustee to track or report the basis. That requirement would be the responsibility of the taxpayer, as in the case of nondeductible IRA contributions. The IRS is given the authority to extend the 60-day period where the failure to comply with such requirements is attributable to casualty, disaster or other events beyond the reasonable control of the individual subject to such requirements. These changes would generally apply to distributions made after December 31, 1998. The hardship exception to the 60-day rollover period would apply to such 60-day periods expiring after the date of enactment. These changes are warranted because after-tax savings in retirement plans enhance retirement security and are particularly attractive to low and middle income taxpayers. Allowing such distributions to be rolled over to an IRA or a plan will increase the chances that those amounts would be retained until needed for retirement. Often individuals, particularly widows, widowers and individuals with injuries of illnesses, miss the 60-day window. In other instances, individuals miss the 60-day rollover period because of the failure of third parties to perform as directed. Finally, victims of casualty or natural disaster should not be penalized. A failure to satisfy the 60-day rule, by even one day can result in catastrophic tax consequences for a taxpayer that can include immediate taxation of the individual's entire retirement savings (often in a high tax bracket), a 10% early distribution tax, and a substantial depletion of retirement savings. By giving the IRS the authority to provide relief from the 60-day requirement for failures outside the control of the individual, the proposal would give individuals in these situations the ability to retain their retirement savings in an IRA or a qualified plan. Treatment of Forms of Distribution Under current law, section 411(d)(6), the ``anti-cutback'' rule generally provides that when a participant's benefits are transferred from one plan to another, the transferee plan must preserve all forms of distribution that were available under the transferor plan. Under this proposal, an employee may elect to waive his or her section 411(d)(6) rights and transfer benefits from one defined contribution plan to another defined contribution plan without requiring the transferee plan to preserve the optional forms of benefits under the transferor plan if certain requirements are satisfied to ensure the protection of participants' interests. This proposal would also apply to plan mergers and other transactions having the effect of a direct transfer, including consolidation of benefits attributable to different employers within a multiple employer plan. These changes would apply to transfers after December 31, 1998. The requirement that a defined contribution plan preserve all forms of distribution included in transferor plans significantly increases the cost of plan administration, particularly for employers that make numerous business acquisitions. The requirements also causes confusion among plan participants who can have separate parts of their retirement benefits subject to sharply different plan provision and requirements. The increased cost for the plan and the confusion for the participant brought about by the requirement to preserve all forms of distribution are based on a rule intended to protect a participant's right not to have an arbitrary benefit reduction. The current rule sweeps too broadly since it protects both significant and insignificant rights. Where a participant determines the rights to be insignificant and wants to consolidate his or her retirement benefits, there is no reason not to permit his consolidation. This consolidation increases portability and reduces administrative costs. Rationalization of Restrictions on Distributions, The ``Same Desk'' Rule Generally, under current law, distributions from 401(k) plans are limited to separation from service, death, disability, age 59\1/2\, hardship, plan termination without maintenance of another plan, and certain corporate transactions. The term ``separation from service'' has been interpreted to include a ``same desk'' rule. Under the ``same desk'' rule, distributions to a terminated employee are not permitted if the employee continues performing the same functions for a successor employer (such as a joint venture owned in part by the former employer or the buyer in a business acquisition). The same desk rule also applies to section 403(b) arrangements and section 457 plans, but does not apply to other types of plans such as defined benefit plans. Under this proposal, the ``same desk rule'' would be eliminated by replacing ``separation from service'' with ``severance from employment''. Conforming changes would be mad in the comparable provisions of section 403(b) arrangements and eligible deferred compensation plans under section 457. This change would apply to distributions after December 31, 1998. Under this proposal, affected employees would be able to roll over their 401(k) account balance to an IRA or to their new employer's 401(k) plan. Modifying the same desk rule so that all of a worker's retirement funds can be transferred to the new employer after a business sale has taken place will allow the employee to keep his or her retirement nest egg in a single place. It will also coordinate the treatment of defined benefit plan benefits with the treatment of 401(k) plans in these types of transactions. Employees do not understand why their 401(k) account must remain with the former employer until they terminate employment with their new employer, especially since this restriction does not apply to other plans in which they participate. The corporate transaction exception provides some relief from the same desk rule but is inapplicable in numerous cases. Purchase of Service Credit in Governmental Defined Benefit Plans Under current law, employees of State and local governments often have the option of purchasing service credits in their State defined benefit plans in order to make up for the time spent in another State or district. These employees cannot currently use the money they have saved in their section 403(b) arrangements or section 457 plans to purchase these service credits. This proposal would permit State and local government employees the option to use the funds in their section 403(b) arrangements or section 457 deferred compensation plans to purchase service credits. These changes would apply to trustee-to-trustee transfers after December 31, 1998. This change will permit employees of State and local governments, particularly teachers, who often move between States and school districts in the course of their careers, to buy a larger defined benefit pension with the savings they have accumulated in a section 403(b) arrangement or section 457 deferred compensation plan. The greater number of years of credit that they purchase would reflect a full career of employment rather than two or more shorter periods of employment in different States or districts. Allowing the more flexible use of existing account balances in 403(b) arrangements or section 457 plans will allow more of these employees to purchase service credits and earn a full defined benefit pension. Missing Participants Program Under current law in the case of certain terminated single employer defined benefit plans, the Pension Benefit Guaranty Corporation (PBGC) will act as a clearinghouse for benefits due to participants who cannot [[Page S8487]] be located (``missing participants''). Under the program, when a plan is terminated and is unable to locate former workers who are entitled to benefits, the terminating plan is allowed to transfer these benefits to the PBGC which then attempts to locate the employees in question. The missing participants program is limited to certain defined benefit plans. This proposal would expand the PBGC's missing participant program to cover multiemployer defined benefit pension plans. The program would not apply to governmental plans or to church plans not covered by the PBGC, however. If a plan covered by the new program has missing participants when the plan terminates, at the option of the plan (or employer, in the case of a single employer plan), the missing participants' benefits could be transferred to the PBGC along with related information. This change would take effect with respect to distributions from t4erminating multiemployer plans that occur after the PBGC has adopted final regulations implementing the provision. By permitting sponsors the option of transferring pension funds to the PBGC, the chances that a missing participant will be able to recover benefits could be increased. Disregarding Rollovers for Purposes of the Cash Out Amount Under current law, if a terminated participant has a vested accrued benefit of $5,000 or less, the plan may distribute such benefit in a lump sum without the consent of the participant or the participant's spouse. This $5,000 cash-out limit is not indexed for inflation. In applying the $5,000 cash-out rule, the plan sponsor is under regulations required to look back to determine if an individual's account every exceeded $5,000 at the time of any prior distribution. Rollover amounts count in determining the maximum balance which can be involuntarily cashed out. This proposal would allow a plan sponsor to disregard rollover amounts in determining eligibility for the cash-out rule, that is, whether a participant's vested accrued benefit exceeds $5,000. This proposal would apply to distributions after December 31, 1998. The reason for this change is to remove a possible reason for employers to refuse to accept rollovers. Plan Amendments Under current law, there is generally a short period of time to make plan amendments that reflect the amendments to the law. In addition, the anti-cutback rules can have the unintentioned effect of preventing an employer from amending its plan to reflect a change in the law. Amendments to a plan or annuity contract made pursuant to any amendment made by this bill are not required to be made before the last day of the first plan year beginning on or after January 1, 2001. In the case of a governmental plan, the date for amendments is extended to the first plan year beginning on or after January 1, 2003. Operational compliance would, of course be required with respect to all plans as of the applicable effective date of any amendment made by this Act. In addition, timely amendments to a plan or annuity contract made pursuant to any amendment made by this Act shall be deemed to satisfy the anti-cutback rules. The reason for this change is that plan sponsors need an appropriate amount of time to make changes to their plan documents. ______ By Mr. LOTT (for Mr. Nickles, for himself, Mr. Frist, Ms. Collins, Mr. Jeffords, Mr. Roth, Mr. Santorum, Mr. Hagel, Mr. Gramm, Mr. Coats, Mr. Lott, Mr. Mack, Mr. Craig, Mr. Coverdell, Mr. Abraham, Mr. Allard, Mr. Ashcroft, Mr. Bennett, Mr. Bond, Mr. Brownback, Mr. Burns, Mr. Cochran, Mr. Domenici, Mr. Enzi, Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Grassley, Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. Hutchison, Mr. Inhofe, Mr. Kempthorne, Mr. Lugar, Mr. McCain, Mr. Murkowski, Mr. Roberts, Mr. Sessions, Mr. Shelby, Mr. Smith of New Hampshire, Mr. Smith of Oregon, Ms. Snowe, Mr. Thomas, Mr. Thompson, Mr. Thurmond, and Mr. Warner): S. 2330. A bill to improve the access and choice of patients to quality, affordable health care; read the first time. PATIENTS' BILL OF RIGHTS Mr. NICKLES. Mr. President, today I am introducing the Republican Patients' Bill of Rights. Joining me in this effort are 46 of my colleagues who recognize the importance of ensuring that all Americans are able to not only receive the care they have been promised, but also receive the highest quality of care available. The foundation of this proposal was to address some of the very real concerns that consumers have about their health care needs. We know that many Americans have believed they were denied coverage that their plans were supposed to cover. We recognize that some individuals fear that their health care plans will not give them access to specialists when they need them. We know that some Americans think their health care plans care more about cost than they do about quality. In contrast, we also know that many Americans are happy and satisfied with their health care plan. We know that 81 percent of managed care enrollees are satisfied with their current health care plan. Another recent analysis suggest that 79 percent of consumers in HMOs would recommend their coverage. In addition Americans are leery of Washington solutions and increased federal intervention. Last January, the Leader asked me to put together a group of colleagues to address the issue of health care quality. For the past seven months, Senators Frist, Collins, Hagel, Roth, Jeffords, Coats, Santorum, and Gramm worked tirelessly to put together a responsible, credible package that would preserve what is best about our Nation's health care while at the same time determine ways to improve upon-- without stifling--the quality of care our nation delivers. We set out to rationally examine the issues and develop reasonable solutions without injuring patient access to affordable, high quality care. This was no easy task. We spent month after month talking to experts who understand the difficulty and complexity of our system. We met with representatives from all aspects of the industry including the Mayo Clinic, the Henry Ford Health Systems, the American Medical Association, the American Hospital Association, the National Committee for Quality Assurance, the Joint Commission on the Accreditation of Healthcare Organizations, Corporate Medical Directors, Commissioners from the President's Quality Commission, Purchasers, Families USA, the Employee Benefit Research Institute and many others. After many, many months of dissecting serious questions about our system we determined that there were indeed some areas in which we could improve patient access and quality. We have put together an innovative plan that will answer the problems that exist in the industry while at the same time preserving affordability, which is of utmost importance. Mr. President, I think you agree that if someone loses their health insurance because a politician playing doctor drives prices to an unaffordable level, you have hardly given them more rights or better quality health care. We are proud of what we have been able to accomplish. For the first time, patients can choose to be unencumbered in their relationship with their doctor. They will be able to choose their own doctor and get the middle man out of the way. There will be no corporate bureaucrat, no government bureaucrat and no lawyer standing between a patient and their doctor. Mr. President, the bill we introduce today: Protects consumers in employer-sponsored plans that are exempt from state regulation. People enrolled in such plans will have the right to: Choose their doctors. Our bill contains both ``point-of-service'' and ``continuity of care'' requirements that will enhance consumer choice. See their ob-gyns and pediatricians without referral. Our bill will give patients direct access to pediatricians and ob-gyns without prior referral from a ``gatekeeper.'' Have a ``prudent layperson'' standard applied to their claims for emergency care. The GOP alternative will require health plans to cover--without prior authorization--emergency care that a ``prudent layperson'' would consider medically necessary. Communicate openly with their doctors without ``gag'' clauses. Holds health plans accountable for their decisions. Extends to enrollees in ERISA health plans and their doctors the right to appeal adverse coverage decisions to a physician who was not involved in the initial coverage determination. Allows enrollees to appeal adverse coverage determinations to independent medical experts who have no affiliation with the health plan. Determinations by these experts will be binding on the health plan. Requires health plans to disclose to enrollees consumer information, including what's covered, what's not, [[Page S8488]] how much they'll have to pay in deductibles and coinsurance, and how to appeal adverse coverage decisions to independent medical experts. Guarantees consumers access to their medical records. Requires health care providers, health plans, employers, health and life insurers, and schools and universities to permit an individual to inspect, copy and amend his or her own medical information. Requires health care providers, health plans, health oversight agencies, public health authorities, employers, health and life insurers, health researchers, law enforcement officials, and schools and universities to establish appropriate safeguards to protect the confidentiality, security, accuracy and integrity of protected health information and notify enrollees of these safeguards. Protects patients from genetic discrimination in health insurance. Prohibits health plans from collecting or using predictive genetic information about a patient to deny health insurance coverage or set premium rates. Promotes quality improvement by supporting research to give patients and physicians better information regarding quality. Establishes the Agency for Healthcare Quality Research (AHQR), whose purpose is to foster overall improvement in healthcare quality and bridge the gap between what we know and what we do in healthcare today. The Agency is built on the platform of the current Agency for Health Care Policy and Research, but is refocused and enhanced to become the hub and driving force of federal efforts to improve the quality of healthcare in all practice environments--not just managed care. The role of the Agency is not to mandate a national definition of quality, but to support the science necessary to provide information to patients regarding the quality of the care they receive, to allow physicians to compare their quality outcomes with their peers, and to enable employers and individuals to be prudent purchasers based on quality. Supports research, screening, treatment, education, and data collection activities to improve the health of women. Promotes basic and clinical research for osteoporosis; breast and ovarian cancer; and aging processes regarding women. Expands research efforts into the underlying causes and prevention of cardiovascular diseases in women--the leading cause of death among American women. Supports data collection through the National Center for Health Statistics and the National Program of Cancer Registries, which are the leading sources of national data on the health status of women in the U.S. Supports the National Breast and Cervical Cancer Early Detection Program, which provides for regular screening for breast and cervical cancers to underserved women. Requires that the length of hospital stay after a mastectomy, lumpectomy or lymph node dissection be determined only by the physician, in consultation with the patient, and without the need to obtain authorization from the health plan. If a plan covers mastectomies, it also must cover breast reconstruction after a mastectomy. Makes health insurance more accessible and affordable by: Allowing self-employed people to deduct the full amount of their health care premiums. Making medical savings accounts available to everyone. Reforming cafeteria plans to let consumers save for future health care costs. Mr. President, this bill is a comprehensive bill of rights that will benefit all Americans, and I am proud to join with so many of my colleagues in introducing it. Mr. President, I want to take a moment to address some criticisms that have been made of our bill. These criticisms highlight some significant differences between our bill and the health care bill introduced by Senate Democrats. Mr. President, our bill does differ significantly from the Senate Democrats' bill. Our bill is the ``Patients' Bill of Rights.'' Theirs is the ``Lawyers' Right to Bill.'' Our bill lets doctors decide whether care is medically necessary. Theirs lets lawyers decide. Our bill empowers an independent medical expert to order an insurance company to pay for medically necessary care so that patients suffer no harm. Theirs allows trial lawyers to sue health plans after harm is done. Mr. President, when my insurance company tells me that they won't cover a service for my family, I want the ability to appeal that decision to a doctor who doesn't work for my insurance company. And I want that appeal handled promptly, so that my family receives the benefit. That is what our bill requires. The Democrats' bill creates new ways for trial lawyers to make money. According to a June 1998 study by Multinational Business Services, the Democrats' bill would create 56 new Federal causes of action--56 new reasons to sue people in Federal court. That's fine for trial lawyers, but it doesn't do much for patients. Patients want their claim disputes handled promptly and fairly. According to a study by the General Accounting Office, it takes an average of 25 months--more than two years--to resolve a malpractice suit. One cause that the GAO studied took 11 years to resolve! I'm sure the lawyers who handled that case did quite well for themselves. But what about the patient? Under our bill, patients can appeal directly to an outside medical expert for a prompt review of their claim--without having to incur any legal expenses. In medical malpractice litigation, patients receive an average of only 43 cents of every dollar awarded. The rest goes to lawyers and court fees. Our bill assures that health care dollars are used to serve patients. Their bill diverts these dollars away from patients and into the pockets of trial lawyers. Another big difference between our bill and the one introduced by Senate Democrats is that their bill takes a ``big government'' approach to health reform. Mr. President, it was just four years ago that we debated Clintoncare on the Senate floor. President Clinton wanted government-run health care for all Americans. He wanted it then; he wants it still. Just last September, President Clinton told the Service Employees Union that he was ``glad'' that he had pushed for the federal government to take over health care. ``Now if what I tried to do before won't work,'' the President said, ``maybe we can do it another way. A step at a time until we eventually finish this.'' The Democrats' bill would take us a step closer to the President's dream of a health care system run by federal bureaucrats and trial lawyers. The study I cited earlier by Multinational Business Services found that their bill would impose 359 new federal mandates, 59 new sets of Federal regulations, and require the government to hire 3,828 new federal bureaucrats. Our bill relies on State Insurance Commissioners to protect those Americans who are enrolled in state-regulated plans. We protect the unprotected by providing new federal safeguards to the 48 million Americans who are enrolled in plans that the states are not permitted to regulate. Their bill imposes a risky and complicated scheme that relies on federal bureaucrats at the Health Care Financing Administration (HCFA) to enforce patients' rights in states that do not conform to the federal mandates in their bill. HCFA is the agency that oversees the federal Medicare and Medicaid programs. Last year, in the Balanced Budget Act, Congress created new consumer protections for Medicare beneficiaries--a ``Patients' Bill of Rights'' for the 38.5 million senior citizens and disabled Americans who rely on Medicare for their health care. We asked HCFA to protect those rights. How have they done? I regret to say, Mr. President, that they have not done very well at all. On July 16, a GAO witness testified before the Ways and Means Committee on how well HCFA was doing in enforcing the Medicare patients' bill of rights. According to GAO, HCFA has ``missed 25 percent of the implementation deadlines, including the quality-of-care medical review process for skilled nursing facilities. It is clear [[Page S8489]] that HCFA will continue to miss implementation deadlines as it attempts to balance the resource demands generated by the Balanced Budget Act with other competing objectives.'' Mr. Presiden