Kit Bond

Mr. BOND

Mr. BOND. Mr. President, I wish to raise a problem relating to pharmacy compounding and a proposed Memorandum of Understanding from the Food and Drug Administration with state boards of pharmacy relating to compounding. Pharmacy compounding is a part of the practice of pharmacy that involves specially-tailoring a prescription drug product for a specific patient's needs. A good example is when a pharmacist takes a pill prescribed for an infant--but which that infant can't swallow--and grinds it up and mixes it into a sweet syrup that the baby is happy to take. Pharmacy compounding has been part of what pharmacists do for centuries, and it is important to preserve their ability to do this without huge regulatory hassles. Pharmacy compounding is important for many patients who need specially-designed drugs because no commercially-available product meets their specific needs. Interfering with compounding will only hurt these patients by making it more difficult to get--or even denying them--the specific pharmaceutical products they need. But the Food and Drug Administration is now threatening to create problems for many pharmacists who do a lot of pharmacy compounding-- which means problems for the customers they serve. The FDA has proposed a joint regulatory setup with states that calls on state Boards of Pharmacy to investigate pharmacists if more than 20 percent of the total prescriptions they distribute are compounded products sold out- of-state. This proposal is supposed to guard against a handful of bad actors who are mass-producing drugs but are trying to avoid FDA regulation by saying they are actually involved in pharmacy compounding. The problem is that this proposed solution will also interfere with honest pharmacies and pharmacists who are legitimately engaged in pharmacy compounding. Two types of pharmacists who are particularly at-risk of being hassled by this rule are pharmacies that are located in multi-state areas and pharmacists who specialize almost exclusively in pharmacy compounding and who are well-known for their specialty either nation- wide or region-wide. Under the regulatory setup the FDA has proposed, these pharmacies are vulnerable to automatic state investigations or other regulatory actions, even if there is no evidence that they are doing anything but legitimate pharmacy compounding.

Mr. BOND. I thank the Chairman for that comment, and would like to bring up one specific example of the unnecessary problems this proposal creates. Last week, I spoke to a woman from Kansas City, Missouri, who runs two separate pharmacies. One is a typical drug-store type pharmacy where you can go in to fill prescription drugs that came straight from the manufacturer. Her other pharmacy--which is legally separate--is exclusively involved in pharmacy compounding. The only thing this pharmacy does is specially-tailor prescription products for people in the Kansas City area. The problem is that easily over 20 percent of her compounding customers are from across the state line in Kansas City, Kansas. She also suspects that many of these Kansas customers--although she's not sure exactly how many--live more than 50 miles away from her pharmacy, meaning she might not fit in the protections the FDA tried to include for pharmacies that are selling to out-of-state customers locally. Because this pharmacy in Kansas City doesn't meet the somewhat arbitrary FDA guidelines, this woman could automatically be subject to an investigation by the state Board of Pharmacy, even though all of her pharmacy compounding is done legitimately for specific patients. I just don't believe the FDA has done a good job writing these guidelines. There must be a more sophisticated way to approach this problem that won't threaten legitimate pharmacies with unnecessary regulatory hassles. I believe Congress needs to take a stand on this issue to force FDA to reconsider their proposal.

Mr. BOND. I thank the Senator. Amendment No. 702 (Purpose: To amend the Public Health Services Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to protect consumers in managed care plans and other health coverage)

Mr. BOND

Mr. BOND. Mr. President, over the past several weeks, much of the discussion and debate in the Senate has focused on high technology and its impact on our everyday lives, particularly with regard to its pivotal role in our economy. We heard about the potential problems related to Y2K computer failures and the need to guard against unreasonable liability in the event that Main Street small businesses, through no fault of their own, become the targets of frivolous lawsuits. In short, we have been preoccupied with the dawn of the 21st century and what we can do to help sustain the robust economic growth that has been fueled by as many remarkable breakthroughs in computer technologies and computer-related services as we could possibly imagine. Last Thursday, a new reality dawned when I saw a copy of a study on electronic commerce, or e-commerce as business conducted over the Internet is known. Many Members got a jolt from the story entitled ``Net's Economic Impact Zooms.'' A study shows $301 billion was generated in revenue in 1998, and it produced 1.2 million jobs. The findings were reported in the USA Today and were drawn from a study conducted by the Center for Research and Electronic Commerce at the University of Texas and Cisco Systems. Frankly, I, too, was shocked but in good company because the figures exceeded the wildest expectations of the experts. To add a little more perspective from that study, consider that from 1995 to 1998 the new Internet economy grew 174 percent, compared to the 3.8 percent growth in the world economy as a whole. The Internet economy alone ranked among the top 20 economies worldwide. More importantly, this awe-inspiring growth, packed into just a few short years, stands almost toe to toe with the economic horsepower generated by the Industrial Revolution. The onslaught of e-commerce and the Internet puts us in the same position as the snail who was run over by a turtle. When interviewed about it, he said: It all happened so fast I never saw it coming. We are working hard to see if we can work with small businesses to help them see it coming. E-commerce is leading a new business revolution, from Wall Street to Main Street. In my view, there simply is no more potent force at work in the economy with the equal potential to propel nearly every business into the 21st century. As chairman of the Senate Committee on Small Business, it is my pleasure to work with my colleagues on both sides of the aisle to take care of and to be concerned about whether small, independent, family- owned, and home-based businesses are adequately prepared to be full partners in the remarkable growth potential that the Internet economy holds. Some folks may assume that the rapid development of new technologies has given Main Street America the tools to compete more effectively, but the unanswered question is whether the technologies readily available to small businesses are truly up to the challenge. Yesterday, in the Senate Committee on Small Business, we held a forum entitled ``e-commerce: Barriers and Opportunities for Small Business.'' We had a blue-chip panel of experts in high-tech computer and software companies and business leaders representing over 20 trade groups to identify and target barriers keeping Main Street businesses from expanding into e-commerce. We were joined by several of the companies that are leading the charge in pushing back the rise of the Internet economy, including an Internet service provider from my home State of Missouri, Primary Network of St. Louis. It was an exciting and informative session considering the potential growth e-commerce will undoubtedly spark for many years to come. One of the participating companies, CyberCash, unveiled new research specifically for yesterday's forum projecting e-commerce business will generate another million jobs over the next 2 years. Those are conservative estimates. Another study from the firm, Cyber Dialogue, shows that many small businesses are already taking advantage of e-commerce-based markets. That study says over 427,000 small businesses added web sites and sold $19 billion worth of products and services over the Internet in the last 12 months, a 67-percent increase since early 1998. Unfortunately, not all the news was good. According to the American City Business Journals and the Network of City Business Journals, only 10 percent of small businesses have a web site today and only 32 percent have access to the Internet. That suggests both a disconnect and, at the same time, an incredible opportunity for Main Street America and for the suppliers of the equipment and services. What is more, we were reminded that for many small businesses you have to be prepared to deal with a 24-hour-a-day, 7-day-a-week business. Some small businesses have difficulty raising the capital and acquiring the knowledge to survive in such a dynamic business area. Research has shown that even major companies have been slow to realize the potential, and many are now working hard to regain market shares they lost. Today, thanks to the cutting-edge expertise and the information provided at yesterday's forum, we are a little wiser about the Internet economy. We know that e-commerce can be economic TNT. I think Congress has a duty to make sure that as many independent, family-owned and home-based businesses as possible are not at risk of being left behind in this worldwide business revolution. I am deeply grateful to the occupant of the Chair. His subcommittee of the Senate Committee on Appropriations has approved a $1 million earmark we asked for to allow the Small Business Administration's Office of Advocacy to begin a study of the potential of e-commerce for small business. We are going to ask the Office of Advocacy to develop a web site to help small businesses who want to do business with the Federal Government. Make no mistake, the Internet economy is a train that has already left the station and it is picking up speed by the minute. I look forward to working with my colleagues, both in the committee and in this broader body, to help Main Street America climb on board. I look forward to pursuing this effort. We are outlining just a few steps we will take on the Senate Committee on Small Business. We welcome ideas, participation and suggestions from other colleagues. We invite all Members of the Senate to join in making sure that the smallest businesses in the United States have access to this tremendous engine of economic growth. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, I rise today in recognition of the Advanced Technical Center in Mexico, Missouri. Back in 1997, several community and state leaders approached me regarding funding for the Advanced Technical Center, which at that time existed only on paper and in the minds of these leaders. I immediately had a certain affection for this project. First and foremost, this project would be located in my hometown of Mexico, Missouri. Second, the local leaders came to me with one of the most comprehensive partnerships that I have ever had the pleasure to work with. The partners included Linn State Technical College, the University of Missouri, Moberly Area Community College, the Mexico Area Vocational and Technical School, the City of Mexico, and the State of Missouri. Third, the Advanced Technical Center would provide students with exceptional educational opportunities through highly specialized and advanced technical education and training at the certificate and degree levels in both emerging and traditional technologies. In the fall of 1997, the Senate approved and the President signed the appropriation bill providing $1 million in Federal funds for the Advanced Technical Center in Mexico, Missouri. The federal support recognized that the key to staying competitive in today's global marketplace is investing in education and training of our current and future workers. The federal funds, in conjunction with the local and state funds, made this project a reality. This Friday, June 18, 1999, the Advanced Technical Center will celebrate its Grand Opening. I am looking forward to being a part of the celebration. But, more importantly, I am proud to have been a participant in the successful partnership that has led to the creation of a model, state-of-the-art technical training and learning facility in my hometown of Mexico, MO.

Mr. BOND

Mr. BOND. Mr. President, I rise today to recognize the 90th birthday of Ms. Katherine Dunham. Ms. Dunham has made major contributions in the areas of Dance, Choreography, Musical Composition, Poetry, Anthropology, and has been a champion for the causes of Human Rights and World Peace. Over the course of her career, she has won more than 70 international awards including being selected as a Kennedy Center Honoree. For the past 31 years, Ms. Dunham has lived in East St. Louis, where she has used her talents to enrich the lives of the regions' youth. Mr. President, I ask my colleagues to join with me in wishing Ms. Katherine Dunham a very special 90th birthday.

Mr. BOND

Mr. BOND. Mr. President, I rise today to address the amendment to the Y2K Act sponsored by Senator Gregg and which cosponsored. This is an important amendment that will waive Federal civil money penalties for blameless small businesses that have in good faith attempted to correct their Y2K problems, but find themselves inadvertently in violation of a Federal regulation or rule despite such efforts. Most experts that have studied the Y2K problem agree that regardless of how diligent a business is at fixing its Y2K problems, unknowable difficulties are still likely to arise that may place the operations of such businesses at risk. This amendment will ensure that the government does not further punish small businesses that have attempted to fix their Y2K problems, but are nevertheless placed in financial peril because of these problems. As chairman of the Senate Committee on small Business, I have paid particular attention to the problems that small businesses are facing regarding the Y2K problem. Small businesses are trying to become Y2K complaint, but face many obstacles in doing so. One of the major obstacles is capital. Small businesses are the most vulnerable sector of our business community, as many of them do not have a significant amount of excess cash flow. Yet, a great number of small businesses are already incurring significant costs to become Y2K compliant. Earlier this year, Congress passed Y2K legislation that I authored to provide small businesses with the means to fix their own computer systems. Even small businesses that take advantage of that program, however, will see decreased cash flow from their efforts to correct Y2K problems. The last thing, therefore, this government should do is levy civil money penalties on small businesses that find themselves inadvertently confronted with Y2K problems. Many of these businesses will already have had their operations disrupted and may be in danger of going out of business entirely. The Federal Government should not push them over the edge. This amendment has been carefully crafted so that only those small businesses that are subject to civil money penalties through no fault of their own are granted a waiver. Under this amendment, a small business would only be eligible for a waiver of civil money penalties if it had not violated the applicable rule or regulation in the last 3 years. This provision will help to ensure that businesses that have continuing violations or that have a history of violating Federal rules and regulations will not be let off the hook. Small businesses must also demonstrate to the government agency levying the penalties that the business had previously made a good faith effort to correct its Y2K problems. We must not provide disincentives to businesses so that they do not fix their Y2K problems now. This amendment does not provide such a disincentive. In addition, to receive relief, a small business must show that the violation of the Federal rule or regulation was unavoidable or occurred as a result of efforts to prevent the disruption of critical functions or services that could result in harm to life or property. The amendment also provides that, upon identification of a violation, the small business concern must have initiated reasonable and timely efforts to correct it. Finally, in order to receive the relief provided by this amendment, a small business must have submitted notice, within seven business days, to the appropriate Federal agency. What is clear from these requirements is that the amendment will only apply to conscientious small businesses that have tried in good faith to prepare for the Y2K problem and that promptly correct inadvertent violations of a Federal rule or regulation that nevertheless occur as a result of such problem. It is critically important that these innocent victims not be punished by the Federal Government for a problem that confronts us all.

Mr. BOND

Mr. BOND. Mr. President, the Department of Defense is currently drafting proposed regulations to establish a procedure on how military bases are to solicit and select bids from financial institutions to provide banking services on domestic military bases. The regulations are likely to be issued in June of this year. I understand that the regulations may establish a presumption in favor of bids received from local banks over the bids received from any other bank. It is important that these new regulations not prevent base commanders from approving a bid from a financial institution that specializes in providing banking services to military personnel, if its bid would provide lower cost and more convenient banking services than a bid submitted by a local bank. There are several financial institutions in this country that have made it their business to provide banking services to our armed forces. Their ability to provide affordable and convenient banking services to our military personnel is evident from the bids they have won to establish branches at bases across the country. The Department of Defense should hold an open and competitive bidding process for the establishment of bank branches on military installations and should not shut out these specialized banks from the process. I do not suggest that the location of a bank not be a consideration in the selection process. However, it should not be the primary criterion. The cost and convenience of banking services for our military personnel should be the overriding factor in determining the bid that is selected, regardless of whether it is a bid from a local bank or a specialized military bank. I intend to follow this regulation closely as it is developed. If it is not written in a manager that best serves the interests of our military personnel, I may seek a legislative change of this policy.

Mr. BOND

Mr. BOND. Surely.

Mr. BOND. Admiral Nathman says: The OT-IIB Report has done an excellent job of further quantifying and qualifying known issues with the F/A-18E/F. The Navy Developmental and Operational Test process is structured to identify issues prior to production to avoid costly production modifications. The OT-IIB Report has revalidated that process, confirming that no such issues exist. The F/A-18E/F Hornet Program remains a model program, on cost, on schedule, under budget and meeting or exceeding all performance parameters. I think we can take the word of the person who has the responsibility for operational program review. We have people who do this for a living and who look at these programs full-time. This is what they are saying about the program. The F/A-18 multiyear contract will be a fixed price incentive contract. It is a capped program in application. But the agency retains contract administration flexibility, and the contractor maintains inherent cost control incentives. The statutory cap being proposed would undoubtedly increase contract administration costs. In an era where we are experiencing vexing retention problems, I see no need to add additional burdens to a major acquisition program intended to give our warfighters the best equipment available. The viability of the Navy's tactical aviation program is directly tied to the success of this program, and any effort to tie up this program with needless administrative controls is counterproductive. The amendment also contains no cost exemptions that would exclude costs beyond the control of the contractor, such as allowance for new technology built into later models or changes in aircraft quantity. To date, the F-18E/F has flown 4,665 hours during more than 3,100 flights with no mishaps. The aircraft just finished the Engineering, Manufacturing, and Development phase and is scheduled to enter the Operational Test and Evaluation Phase, or OPEVAL, this week. It is anticipated that OPEVAL will be complete, looking to have a decision on full rate production by March 2000.

Mr. BOND. Mr. President, I only need about 2 minutes to finish up all of my efforts on both of these, if I could finish.

Mr. BOND. Mr. President, I thank the Chair and I thank the manager of this bill for giving me the opportunity to rise in strongest opposition to the amendment offered by my colleague from Wisconsin. This is becoming an annual ritual where the Senator from Wisconsin seeks to undermine the Navy's No. 1 procurement priority against the will of the administration, the Department of Defense, and at the expense of our Navy warfighters. There are quite a few problems with this amendment and the one that he will offer to follow it. But on this first one, it is absolutely not necessary. A fixed-price contract is already in place. So submitting an amendment that purports to do what is already being done is redundant. Cost caps are normally reserved for problem programs to control cost overruns in the development phase. The F-18 E/F program of today is a model program which has consistently come in under budget. It is a well controlled program with cost incentives in place. The attacks on this program can best be summed up by the words: Don't confuse me with the facts, I have my prejudices, and I have my viewpoints that I am going to argue, regardless of what the facts are. Because the facts are that the F-18 E/F procurement program is under budget and it is ahead of schedule. It absolutely amazes me that the Senator from Wisconsin would seek one more time to hamper the program by adding further administrative cost controls for a program that has already been reviewed by the Senate Armed Services Committee, the House Armed Services Committee, and the Senate Appropriations Committee. All three of these bodies reviewed the F-18 program and found no need to add further administrative constraints to this successful program. There is a report out, that was put out a year ago by Rear Admiral Nathman, the ``N88 Position on OT-IIB.'' This report answers all of the contentions raised by the Senator from Wisconsin. I ask unanimous consent that this summary be printed in the Record. We will have it available for anybody who wants to read it, the specific responses to all the points raised. They have been available to the Senator from Wisconsin, and all of us, for over a year.

Mr. BOND. Let me reiterate that the F/A-18 program is under budget and ahead of schedule. Why don't we just ask the men and women who have flown them? Admiral Johnson, Chief of Naval Operations, came before us. He represents, and is responsible for, the men and women who fly these aircraft. He has flown one, and has given overwhelming, enthusiastic, and unqualified support for the Super Hornet. Now, we have hearings in this body for a reason; that is, to listen to the people who have the expertise and the experience. These people have told us that the E/F is the best thing we have for the Navy, and they want them. They know it is ahead of schedule, and under budget, with improved performance. Why do we even bother with hearings if we do not pay attention? I say, with respect to the second amendment, this is an attempt to set up the GAO as a decision making authority in the Defense Department. Constitutionally they are not authorized to do so. We have a director of OPEVAL, who is appointed by the President with advice and consent of the Senate, to make these decisions. I believe in legislative oversight. I believe in the GAO having a responsibility to raise questions. The people who have the responsibility in the executive branch have answered these questions. I think it is time to quit hampering the program, trying to kill or cripple a program that is providing us the best tactical aircraft for the Navy's carriers. I urge my colleagues to join in what I trust will be a tabling motion to table both of the amendments or to vote against them if they are not tabled. I thank the Chair and the chairman of the subcommittee for giving me this opportunity.

Mr. BOND. I will make brief comments about the second amendment, and then I will conclude.

Mr. BOND. Mr. President, I ask if I might be accorded 2 more minutes.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce ``The Small Business Advocacy Review Panel Technical Amendments Act of 1999.'' I am pleased to be joined by Senator Kerry, the Ranking Member on the Small Business Committee, which I chair. Our bill is simple and straightforward. It clarifies and amends certain provisions of law enacted as part of my ``Red Tape Reduction Act,'' the Small Business Regulatory Enforcement Fairness Act of 1996. In 1996, this body led the way toward enactment of this important law. With a unanimous vote, we took a major step to ensure that small businesses are treated fairly by federal agencies. Like the Regulatory Flexibility Act, which it amended, the Red Tape Reduction Act is a remedial statute, designed to redress the fact that uniform federal regulations impose disproportionate impacts on small entities, including small business, small not-for-profits and small governments. A recent study conducted for the Office of Advocacy of the Small Business Administration documented, yet again, that small businesses continue to face higher regulatory compliance costs than their big-business counterparts. With the vast majority of businesses in this nation being small enterprises, it only makes sense for the rulemaking process to ensure that the concerns of such small entities get a fair airing early in the development of a federal regulation. The bill Senator Kerry and I are introducing focuses on Section 244 of the Small Business Regulatory Enforcement Fairness Act of 1996, which amended chapter 6 of title 5, United States Code (commonly known as the Regulatory Flexibility Act). As a result, each ``covered agency'' is required to convene a Small Business Advocacy Review Panel (Panel) to receive advice and comments from small entities. Specifically, under section 609(b), each covered agency is to convene a Panel of federal employees, representing the Office of Information and Regulatory Affairs within the Office of Management and Budget, the Chief Counsel of Advocacy of the Small Business Administration, and the covered agency promulgating the regulation, to receive input from small entities prior to publishing an initial Regulatory Flexibility analysis for a proposed rule with a significant economic impact on a substantial number of small entities. The Panel, which convenes for 60 days, produces a report containing comments from the small entities and the Panel's own recommendations. The report is provided to the head of the agency, who reviews the report and, where appropriate, modifies the proposed rule, initial regulatory analysis or the decision on whether the rule significantly impacts small entities. The Panel report becomes a part of the rulemaking record. Consistent with the overall purpose of the Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act, the objective of the Panel process is to minimize the adverse impacts and increase the benefits to small entities affected by the agency's actions. Consequently, the true proof of each Panel's effectiveness in reducing the regulatory burden on small entities is not known until the agency issues the proposed and final rules. So far, the results are encouraging. Under current law, the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) are the only agencies currently covered by the Panel process. Our bill adds the Internal Revenue Service (IRS) as a covered agency. In 1996, the Red Tape Reduction Act expressly included the IRS under the Regulatory Flexibility Act; however, the Treasury Department has interpreted the language in the law in a manner that essentially writes them out of the law. The Small Business Advocacy Review Panel Technical Amendments Act of 1999 clarifies which interpretative rules involving the internal revenue code are to be subject to compliance with the Regulatory Flexibility Act, for those rules with a significant economic impact on a substantial number of small entities, the IRS would be required to convene a Small Business Advocacy Review Panel. If the Treasury Department and the IRS had implemented the Red Tape Reduction Act as Congress originally intended, the regulatory burdens on small businesses could have been reduced, and small businesses could have been saved considerable trouble in fighting unwarranted rulemaking actions. For instance, with input from the small business community early in the process, the IRS' 1997 temporary regulations on the uniform capitalization rules could have had taken into consideration the adverse effects that inventory accounting would have on farming businesses, and especially nursery growers. Similarly, if the IRS had conducted an initial Regulatory Flexibility, it would have learned of the enormous problems surrounding its limited partner regulations prior to issuing the proposal in January 1997. These regulations, which became known as the ``stealth tax regulations,'' would have raised self-employment taxes on countless small businesses operated as limited partnerships or limited liability companies, and also would have imposed burdensome new recordkeeping and collection of information requirements. Specifically, the bill strikes the language in section 603 of title 5 that included IRS interpretative rules under the Regulatory Flexibility Act, ``but only to the extent that such interpretative rules impose on small entities a collection of information requirement.'' The Treasury Department has misconstrued this language in two ways. First, unless the IRS imposes a requirement on small businesses to complete a new OMB-approved form, the Treasury says Reg Flex does not apply. Second, in the limited circumstances where the IRS has acknowledged imposing a new reporting requirement, the Treasury has limited its analysis of the impact on small businesses to the burden imposed by the form. As a result, the Treasury Department and the IRS have turned Reg Flex compliance into an unnecessary, second Paperwork Reduction Act. To address this problem, our bill revises the critical sentence in Section 603 to read as follows: In the case of an interpretative rule involving the internal revenue laws of the United States, this chapter applies to interpretative rules (including proposed, temporary and final regulations) published in the Federal Register for codification in the Code of Federal Regulations. Coverage of the IRS under the Panel process and the technical changes I have just described are strongly supported by the Small Business Legislative Council, the National Association for the Self-Employed, and many other organizations representing small businesses. Even more significantly, these changes have the support of the Chief Counsel for Advocacy. I ask unanimous consent to include in the Record following this statement copies of letters and statements from these small business advocates. The remaining provisions of our bill address the mechanics of convening a Panel and the selection of the small entity representatives invited to submit advice and recommendations to the Panel. While these provisions are very similar to the legislation introduced in the other body (H.R. 1882) by our colleagues Representatives Talent, Velazquez, Kelly, Bartlett, and Ewing, Senator Kerry has expressed some specific concerns regarding the potential for certain provisions to be misconstrued. I have agreed to work with him to address his concerns in report language and, if necessary, with minor revisions to the bill text. Our mutual goal is to ensure that the views of small entities are brought forth through the Panel process and taken to heart by the ``covered agency'' and other federal agencies represented on the Panel--in short, to continue the success that EPA and OSHA have shown this process has for small businesses. I thank the Senator from Massachusetts for his support, and ask unanimous consent that the Small Business Advocacy Review Panel Technical Amendments Act of 1999 be printed, following this statement. Mr. President, I ask unanimous consent that the bill and additional material be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce ``The Small Business Advocacy Review Panel Technical Amendments Act of 1999.'' I am pleased to be joined by Senator Kerry, the Ranking Member on the Small Business Committee, which I chair. Our bill is simple and straightforward. It clarifies and amends certain provisions of law enacted as part of my ``Red Tape Reduction Act,'' the Small Business Regulatory Enforcement Fairness Act of 1996. In 1996, this body led the way toward enactment of this important law. With a unanimous vote, we took a major step to ensure that small businesses are treated fairly by federal agencies. Like the Regulatory Flexibility Act, which it amended, the Red Tape Reduction Act is a remedial statute, designed to redress the fact that uniform federal regulations impose disproportionate impacts on small entities, including small business, small not-for-profits and small governments. A recent study conducted for the Office of Advocacy of the Small Business Administration documented, yet again, that small businesses continue to face higher regulatory compliance costs than their big-business counterparts. With the vast majority of businesses in this nation being small enterprises, it only makes sense for the rulemaking process to ensure that the concerns of such small entities get a fair airing early in the development of a federal regulation. The bill Senator Kerry and I are introducing focuses on Section 244 of the Small Business Regulatory Enforcement Fairness Act of 1996, which amended chapter 6 of title 5, United States Code (commonly known as the Regulatory Flexibility Act). As a result, each ``covered agency'' is required to convene a Small Business Advocacy Review Panel (Panel) to receive advice and comments from small entities. Specifically, under section 609(b), each covered agency is to convene a Panel of federal employees, representing the Office of Information and Regulatory Affairs within the Office of Management and Budget, the Chief Counsel of Advocacy of the Small Business Administration, and the covered agency promulgating the regulation, to receive input from small entities prior to publishing an initial Regulatory Flexibility analysis for a proposed rule with a significant economic impact on a substantial number of small entities. The Panel, which convenes for 60 days, produces a report containing comments from the small entities and the Panel's own recommendations. The report is provided to the head of the agency, who reviews the report and, where appropriate, modifies the proposed rule, initial regulatory analysis or the decision on whether the rule significantly impacts small entities. The Panel report becomes a part of the rulemaking record. Consistent with the overall purpose of the Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act, the objective of the Panel process is to minimize the adverse impacts and increase the benefits to small entities affected by the agency's actions. Consequently, the true proof of each Panel's effectiveness in reducing the regulatory burden on small entities is not known until the agency issues the proposed and final rules. So far, the results are encouraging. Under current law, the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) are the only agencies currently covered by the Panel process. Our bill adds the Internal Revenue Service (IRS) as a covered agency. In 1996, the Red Tape Reduction Act expressly included the IRS under the Regulatory Flexibility Act; however, the Treasury Department has interpreted the language in the law in a manner that essentially writes them out of the law. The Small Business Advocacy Review Panel Technical Amendments Act of 1999 clarifies which interpretative rules involving the internal revenue code are to be subject to compliance with the Regulatory Flexibility Act, for those rules with a significant economic impact on a substantial number of small entities, the IRS would be required to convene a Small Business Advocacy Review Panel. If the Treasury Department and the IRS had implemented the Red Tape Reduction Act as Congress originally intended, the regulatory burdens on small businesses could have been reduced, and small businesses could have been saved considerable trouble in fighting unwarranted rulemaking actions. For instance, with input from the small business community early in the process, the IRS' 1997 temporary regulations on the uniform capitalization rules could have had taken into consideration the adverse effects that inventory accounting would have on farming businesses, and especially nursery growers. Similarly, if the IRS had conducted an initial Regulatory Flexibility, it would have learned of the enormous problems surrounding its limited partner regulations prior to issuing the proposal in January 1997. These regulations, which became known as the ``stealth tax regulations,'' would have raised self-employment taxes on countless small businesses operated as limited partnerships or limited liability companies, and also would have imposed burdensome new recordkeeping and collection of information requirements. Specifically, the bill strikes the language in section 603 of title 5 that included IRS interpretative rules under the Regulatory Flexibility Act, ``but only to the extent that such interpretative rules impose on small entities a collection of information requirement.'' The Treasury Department has misconstrued this language in two ways. First, unless the IRS imposes a requirement on small businesses to complete a new OMB-approved form, the Treasury says Reg Flex does not apply. Second, in the limited circumstances where the IRS has acknowledged imposing a new reporting requirement, the Treasury has limited its analysis of the impact on small businesses to the burden imposed by the form. As a result, the Treasury Department and the IRS have turned Reg Flex compliance into an unnecessary, second Paperwork Reduction Act. To address this problem, our bill revises the critical sentence in Section 603 to read as follows: In the case of an interpretative rule involving the internal revenue laws of the United States, this chapter applies to interpretative rules (including proposed, temporary and final regulations) published in the Federal Register for codification in the Code of Federal Regulations. Coverage of the IRS under the Panel process and the technical changes I have just described are strongly supported by the Small Business Legislative Council, the National Association for the Self-Employed, and many other organizations representing small businesses. Even more significantly, these changes have the support of the Chief Counsel for Advocacy. I ask unanimous consent to include in the Record following this statement copies of letters and statements from these small business advocates. The remaining provisions of our bill address the mechanics of convening a Panel and the selection of the small entity representatives invited to submit advice and recommendations to the Panel. While these provisions are very similar to the legislation introduced in the other body (H.R. 1882) by our colleagues Representatives Talent, Velazquez, Kelly, Bartlett, and Ewing, Senator Kerry has expressed some specific concerns regarding the potential for certain provisions to be misconstrued. I have agreed to work with him to address his concerns in report language and, if necessary, with minor revisions to the bill text. Our mutual goal is to ensure that the views of small entities are brought forth through the Panel process and taken to heart by the ``covered agency'' and other federal agencies represented on the Panel--in short, to continue the success that EPA and OSHA have shown this process has for small businesses. I thank the Senator from Massachusetts for his support, and ask unanimous consent that the Small Business Advocacy Review Panel Technical Amendments Act of 1999 be printed, following this statement. Mr. President, I ask unanimous consent that the bill and additional material be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, it is with great pleasure that I am introducing the ``National Conference on Small Business Act.'' This bill is designed to create a permanent independent commission that will carry-on the extraordinary work that has been accomplished by three White House Conferences on Small Business. For the past 15 years, small businesses have been the fastest growing sector of the U.S. economy. When large businesses were restructuring and laying off significant numbers of workers, small businesses not only filled the gap, but their growth actually caused a net increase in new jobs. Today, small businesses employ 55% of all workers in the United States and they generate 50% of the gross domestic product. Were it not for small businesses, our country could not have experienced the sustained economic upsurge that has been ongoing since 1992. Because small businesses play such a significant role in our economy, in both rural towns and bustling inner cities, I believe it is important that the Federal government sponsor a national conference every four years to highlight the successes of small businesses and to focus national attention on the problems that may be hindering the ability of small businesses to start up and grow. Small business ownership is, has been, and will continue to be the dream of millions of Americans. Countries from all over the world send delegations to the United States to study why our system of small business ownership is so successful, all the while looking for a way to duplicate our success in their countries. Because we see and experience the successes of small businesses on a daily basis, it is easy to lose sight of the very special thing we have going for us in the United States--where each of us can have the opportunity to own and run our own business. The ``National Conference on Small Business Act'' is designed to capture and focus our attention on small business every four years. In this way, we will take the opportunity to study what is happening throughout the United States to small businesses. In one sense, the bill is designed to put small business on a pinnacle so we can appreciate what they have accomplished. At the same time, and just as important, every four years we will have an opportunity to learn from small businesses in each state what is not going well for them--such as, actions by the Federal government that hinder small business growth or state and local regulations that are a deterrent to starting a business. My bill creates an independent, bipartisan National Commission on Small Business, which will be made up of 8 small business advocates and the Small Business Administration's Chief Counsel for Advocacy. Every four years, during the first year following a presidential election, the President will name two National Commissioners. In the U.S. Senate and the House of Representatives, the Majority Leader of each body will name two National Commissioners and the Minority Leaders will each name one. Widespread participation from small businesses in each state will contribute to the work leading up to the National Conference. Under the bill, the National Conference will take place one year after the National Commissioners are appointed. The first act of the Commissioners will be to request that each Governor and each U.S. Senator name a small business delegate and alternate delegate from their respective states to the National Convention. Each U.S. Representative will name a small business delegate and alternative from his or her Congressional district. And the President will name a delegate and alternate from each state. The small business delegates will play a major role leading up to the National Conference on Small Business. There will be at least one meeting of the delegates at their respective State Conferences. We will be looking to the small business delegates to develop and highlight issues of critical concern to small businesses. The work at the state level by the small business delegates will need to be thorough and thoughtful to make the National Conference a success. My goal will be for the small business delegates to think broadly, that is, to think ``out of the box.'' Their attention should include but not be restricted to the traditional issues associated with small business concerns, such as access to capital, tax reform and regulatory reform. In my role as Chairman of the Committee on Small Business, I will urge the delegates to focus on a wide array of issues that impact significantly on small businesses, including the importance of a solid education and the need for skilled, trained workers. Once the small business delegates are selected, the National Commission on Small Business will serve as a resource to the delegates for issue development and for planning the State Conferences. The National Commission will have a modest staff, including an Executive Director, that will work full time to make the State and National Conferences successes. A major resource to the National Commission and its staff will be the Chief Counsel for Advocacy from SBA. The Chief Counsel and the Office of Advocacy will serve as a major resource to the National Commission, and in turn, to the small business delegates, by providing them with both substantive background information and other administrative materials in support of the State and National Conferences. Mr. President, small businesses generally do not have the resources to maintain full time representatives to lobby our Federal government. They are too busy running their businesses to devote much attention to educating government officials as to what is going well, what is going poorly, and what needs improvement for the small business community. The National Conference on Small Business will give small businesses an opportunity every four years to make its mark on the Congress and the Executive Branch. I urge each of my colleagues to review this proposal, and I hope they will agree to join me as cosponsors of the ``National Conference on Small Business Act.'' I ask unanimous consent that the full text of the bill and the section-by-section analysis be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, it is with great pleasure that I am introducing the ``National Conference on Small Business Act.'' This bill is designed to create a permanent independent commission that will carry-on the extraordinary work that has been accomplished by three White House Conferences on Small Business. For the past 15 years, small businesses have been the fastest growing sector of the U.S. economy. When large businesses were restructuring and laying off significant numbers of workers, small businesses not only filled the gap, but their growth actually caused a net increase in new jobs. Today, small businesses employ 55% of all workers in the United States and they generate 50% of the gross domestic product. Were it not for small businesses, our country could not have experienced the sustained economic upsurge that has been ongoing since 1992. Because small businesses play such a significant role in our economy, in both rural towns and bustling inner cities, I believe it is important that the Federal government sponsor a national conference every four years to highlight the successes of small businesses and to focus national attention on the problems that may be hindering the ability of small businesses to start up and grow. Small business ownership is, has been, and will continue to be the dream of millions of Americans. Countries from all over the world send delegations to the United States to study why our system of small business ownership is so successful, all the while looking for a way to duplicate our success in their countries. Because we see and experience the successes of small businesses on a daily basis, it is easy to lose sight of the very special thing we have going for us in the United States--where each of us can have the opportunity to own and run our own business. The ``National Conference on Small Business Act'' is designed to capture and focus our attention on small business every four years. In this way, we will take the opportunity to study what is happening throughout the United States to small businesses. In one sense, the bill is designed to put small business on a pinnacle so we can appreciate what they have accomplished. At the same time, and just as important, every four years we will have an opportunity to learn from small businesses in each state what is not going well for them--such as, actions by the Federal government that hinder small business growth or state and local regulations that are a deterrent to starting a business. My bill creates an independent, bipartisan National Commission on Small Business, which will be made up of 8 small business advocates and the Small Business Administration's Chief Counsel for Advocacy. Every four years, during the first year following a presidential election, the President will name two National Commissioners. In the U.S. Senate and the House of Representatives, the Majority Leader of each body will name two National Commissioners and the Minority Leaders will each name one. Widespread participation from small businesses in each state will contribute to the work leading up to the National Conference. Under the bill, the National Conference will take place one year after the National Commissioners are appointed. The first act of the Commissioners will be to request that each Governor and each U.S. Senator name a small business delegate and alternate delegate from their respective states to the National Convention. Each U.S. Representative will name a small business delegate and alternative from his or her Congressional district. And the President will name a delegate and alternate from each state. The small business delegates will play a major role leading up to the National Conference on Small Business. There will be at least one meeting of the delegates at their respective State Conferences. We will be looking to the small business delegates to develop and highlight issues of critical concern to small businesses. The work at the state level by the small business delegates will need to be thorough and thoughtful to make the National Conference a success. My goal will be for the small business delegates to think broadly, that is, to think ``out of the box.'' Their attention should include but not be restricted to the traditional issues associated with small business concerns, such as access to capital, tax reform and regulatory reform. In my role as Chairman of the Committee on Small Business, I will urge the delegates to focus on a wide array of issues that impact significantly on small businesses, including the importance of a solid education and the need for skilled, trained workers. Once the small business delegates are selected, the National Commission on Small Business will serve as a resource to the delegates for issue development and for planning the State Conferences. The National Commission will have a modest staff, including an Executive Director, that will work full time to make the State and National Conferences successes. A major resource to the National Commission and its staff will be the Chief Counsel for Advocacy from SBA. The Chief Counsel and the Office of Advocacy will serve as a major resource to the National Commission, and in turn, to the small business delegates, by providing them with both substantive background information and other administrative materials in support of the State and National Conferences. Mr. President, small businesses generally do not have the resources to maintain full time representatives to lobby our Federal government. They are too busy running their businesses to devote much attention to educating government officials as to what is going well, what is going poorly, and what needs improvement for the small business community. The National Conference on Small Business will give small businesses an opportunity every four years to make its mark on the Congress and the Executive Branch. I urge each of my colleagues to review this proposal, and I hope they will agree to join me as cosponsors of the ``National Conference on Small Business Act.'' I ask unanimous consent that the full text of the bill and the section-by-section analysis be printed in the Record.

Mr. BOND

Mr. BOND. One always is impressed with the ability of Hollywood and their obfuscation. We have heard some responses from the Hollywood community. They said this is a massive tax bill. That is not what the purpose was. We amended the amendment so it does not even refer directly to taxes. The Senator from Vermont mentioned and gave a wonderful rendition of ``Gone With The Wind'' and ``Star Wars.'' We are not worried about ``Star Wars.'' We are not worried about ``Gone With The Wind.'' We are worried about parents who cannot stop all of the mayhem and violence and murder that is being marketed to their kids, to their kids' friends, to their kids' neighbors every time they turn around. We think it is time that somebody looked at how we hold Hollywood accountable. I am asking not that we investigate. I believe there is enough evidence of these teenage killers, citing the fact that they have been inspired by movies, to know that something has to be done. My good friend from California said, we are regulating content. I believe she was one of the leaders who argued for regulating the content of tobacco advertising and said we are going to eliminate tobacco advertising. That is content. That is regulation. That is regulation of speech. Incidentally, you can regulate what is going to children. We do regulate speech. We do not allow pornography to go to kids. We do not allow tobacco advertising to go to them. I will tell you something, when I see ``Basketball Diaries,'' with Leonardo DiCaprio as a teenage hero walking into a classroom in a black trenchcoat, with a gun, and murdering his fellow students, I see there is a message that Hollywood has sent to our kids. If I could regulate it, if I could stop it, I would like to stop it. I want to get a national debate going and ask and see how we can stop this filth being targeted at our kids. Does anyone think ``Basketball Diaries'' is designed to attract older movie viewers like me? I do not think so. That is targeted directly to kids. How do we deal with that? That is what the Domenici-Bond amendment asks. All of the obfuscation and all of the misleading arguments put up by the good folks in Hollywood are not going to take attention away from the fact that they are responsible. Just in the last couple days the President of CBS said he was going to withdraw a violent drama called ``Falcone.'' I quote Leslie Moonves. While it's not fair to blame the media for the rampage, Moonves said that ``anyone who thinks the media has nothing to do with this is an idiot.'' I suggest that tells the tale. I yield the remainder of my time to the Senator from Utah. Mr. HATCH addressed the Chair.

Mr. BOND. I send a modified amendment to the desk on behalf of myself and Senator Domenici, and I ask for its immediate consideration.

Mr. BOND. I ask unanimous consent reading of the amendment be dispensed with.

Mr. BOND. Mr. President, we have heard a lot about gun shows, pawn shops, and ammo clips these past few days. We have been told that if we just tweak the law a little here, or add another provision making something else illegal that somehow people who gun down others in cold blood won't do it anymore. It's as if wishing would make it so. Thirty years ago we had very few gun laws, and surprisingly, no high school shooting sprees to document every few days, every few weeks, or every few months. But thirty years ago we also had stricter discipline in schools, no school officials worried about lawsuits if they expelled a violent child, and parents who also exerted more control. Now we have a new gun law a year. We have school officials who fear lawsuits, and federal law which seems designed to keep violent kids in classrooms, rather than removed--although I hope the Frist-Ashcroft amendment will make some improvements. And we have an industry--in the name of entertainment--that produces violence and violent pornography at such a pace that no one has any idea of the breadth and width of exposure our kids now have to it. Movies, television, videos, music, computer games. Killing, maiming, and destruction--all in the name of entertainment. Why is anyone surprised in this new topsey-turvy world, that some students plan mass murders rather than planning their graduation party. Today I thought it time to inject a little dose of reality into these proceedings, and get us started down a road which I believe needs to be explored. My amendment empanels an independent commission to study the motion picture industry--from top to bottom--to see if the federal government is subsidizing, facilitating or otherwise encouraging the production of violent, or pornographic materials. And if so, to make recommendations to Congress and the President to promote accountability in the motion picture industry in order to reduce juvenile access to violent, pornographic, or other harmful material in motion pictures. Simply put, we want to discourage, not encourage access to these materials. At the outset, let's make it clear that a great deal of what kids see on the big screen is not harmful and it is done by talented people who are just as concerned about our young people as anyone else. However, there are hundreds, if not thousands of releases each year that have profound effects on teens who see them. Let us be very clear about one other thing before we continue, because we have head a lot about the gun industry and their so-called political power. Mr. President, they don't hold a candle to the movie industry. Hollywood has the money, the glamour, the lifestyle of the rich and famous. They have Beverly Hills, they generate publicity for a living, and they have access to the Lincoln Bedroom. In fact, the NRA actually brought in a famous actor in order to have some hope of getting a fair hearing for its position. But the most disturbing, and least discussed these past few days, is exactly who it is in this country that has glamourized guns and violence. It is certainly not everyone's favorite bogeyman the NRA. It is not the biathletes who compete in the Olympics. Quite simply, it is the entertainment industry. Guns, gore, and violence, targeted not at soccer moms--but to their sons. And worse yet, it is not just gun use, but gun misuse which is glorified. Gun-toting murders as heros, out to right some perceived wrong. Who even knew what an Uzi or Tech 9 was until they saw it in some show? I ask unanimous consent to have printed in the Record a May 11, 1999, article by Michael Atkinson entitled ``The Movies Made Me Do It.''

Mr. BOND. Mr. President, it outlines ``copycat'' acts of violence who fashion their criminal actions--murder and rape--off brilliant ``how to'' works of theater such as ``Natural Born Killers'' and ``Basketball Diaries.'' We know that merchants of violence profit handsomely from some products which hurt our children and cost our society. Who for a second believes that the 40,000 murders that our children witness on the TV screen during their childhoods does not have some terrible numbing effect. We can't stop Hollywood from producing the insanity, but we can attempt to discourage it and to help them share in the burden that their ``profiteering at any cost'' imposes on society. Now I don't believe we need any more studies outlining the numbing effects that movie and television violence have on our children. What we need to know is--are the American taxpayers subsidizing this numbing down of American youth? And if so, what can and should we do about it? That is why our Commission looks to people who are independent of the power and influence of the motion picture industry. Clearly, advertising is directed at attracting all audiences including our young. These wealthy and talented industry people have a right to produce this material but we should not extend them every courtesy when it comes to polluting the minds of our young. There is always parental responsibility, but that does not excuse others from acting responsibly as well. Does it, or does it not, take a village to raise a child? Last I looked, Hollywood is part of our village. So where is the responsibility of those who produce the harmful material? Though the power of the motion picture industry is great, we should take a turn listening to parents instead of actors and show leadership instead of cowardice. Some may object on behalf of the wealthy merchants of carnage and smut saying they have a constitutional right to pollute the minds of our children and have no responsibility as an artist or producer to use their power to try and help our nation's parents. But I think they are wrong. Short-sighted and wrong. Thus if we adopt the Bond-Domenici amendment, we will be saying it is time that parents, and grandparents--not just Hollywood moguls--will have an opportunity to participate in the debate on how best to protect our children. And if this notion offends the Hollywood crowd and their ubiquitous presence in Washington--so be it. We should make quite certain that the public is not contributing or facilitating the production of this sort of material and not facilitating its marketing to our young people. Of, that if we are, people understand it and decide it is good use of national resources. Now there are other thoughtful amendments to this underlying bill which call on Clinton Administration agencies to study advertising or anti-trust provisions. My amendment is designed to get the best minds outside of the Clinton Administration and Hollywood--and if you have any serious questions why, I think this past weekend's multi-million fund-raising trip to Beverly Hills answers those immediately. It is with a great sense of frustration that I come to you and that is because I am tired of telling parents that there is nothing we can do to help shield their kids beyond relying on the good will and tender mercies of the same ones making blood money off the trash. If the government can't do anything about it at this time, I think it is worth letting someone on the outside see if it is possible to bring some discipline and responsibility to those who are producing and marketing the insanity. As you all know, not everyone in the film industry is proud of what their colleagues produce for the public. I have no intention of painting with a broad brush, but the ones without discipline--the ones that don't care about our children, should not be shielded from scrutiny just because they may be some of the best people to invite to parties, vacations and fund-raisers. The Commission is proposed to be made up of 12 members appointed by the President, the Majority Leader and the Speaker and review the following: (1) How the government, through the tax code or otherwise, subsidizes, facilitates or otherwise reduces the cost of the production of violent, pornographic, or harmful materials and changes necessary to curtail such assistance; (2) How the movie industry markets to children and how such marketing can be regulated; (3) What standard of civil and criminal liability currently exists and what standard is sufficient to allow victims to seek legal redress against motion picture productions in cases where content leads to destructive behavior; (4) Whether federal regulation of content is appropriate; (5) What other federal action might be taken to reduce the quantity of and juvenile access to movies containing violent, pornographic, or harmful materials. The amendment requires that a majority report be made within a year of enactment and requires that a minimum number of parents be appointed to the commission. Further, it authorizes a budget for professional staff to assist on these very complex issues. This would be a powerful commission with a broad mandate that could recommend that we make merchants of death liable for their work, that we make the polluter pay; or outline ways to discourage advertising to our children. We may not enact their recommendations but I think it is time we hear the truth from parents--parents without connections to Hollywood. It is a balanced commission and the President will get his opportunity to make appointments. He must appoint a parent of a child but he can also appoint a first amendment absolutist and he can appoint Oliver Stone to the commission if he so desires. I know Members on both sides of the aisle share my frustration. They too have had parents tell them that each year it gets harder and harder to keep the violent images out of their kids lives. Not only movies and videos, but television, CDs, video games, radio, and even print ads. The images are starker, the violence more pronounced, the mayhem more graphic. No parent can keep it all out because it comes from everywhere. What I am saying here today is that it is time to start holding people responsible for their choices, and that at a minimum, we should know if the parents of America are paying taxes to subsidize the filth they then try to keep out of their homes. The Bond-Domenici amendment is the right thing to do. Mr. President, I yield 4 minutes to the Senator from New Mexico.

Mr. BOND. Mr. President, I ask for the yeas and nays.