Bob Graham

Mr. GRAHAM

Mr. GRAHAM. Mr. President, reserving the right to object, and I shall not, I just wanted to clarify, there will be agreed-upon substitute language offered for No. 183, and I wanted to clarify that the managers understand that and that will not be inconsistent with the prohibition on second-degree amendments. Mr. KEMPTHORNE addressed the Chair.

Mr. GRAHAM. Mr. President, as modified, the amendment has been reviewed by both managers, and I believe it will be accepted. I will not ask for a rollcall vote on this amendment. Mr. President, this amendment, I believe, closes the loop to the extent possible on an issue within this bill. A fundamental purpose of this bill is to identify mandates which the Federal Government might, at a future date, be proposing to impose upon States, local governments, or tribal governments, and then as the preferred option, to have the Federal Government pay the cost of those mandates. This amendment goes to the issue of how that appropriation to fund the mandate will then be allocated back to the States, local governments, or tribal governments, which had created the need for that funding in the first instance because they were the object of the mandate. There are at least two issues which I believe this amendment will deal with. One is the issue of where the mandate is imposed on a particular level of government. For instance, a mandate is imposed on school districts because of requirements made to them that relate to the educational or noneducational activities that are conducted by schools. If school districts are the level of government upon which the mandate falls, then school districts should be the level of government that receives the funds which we appropriate for the purpose of alleviating the financial impact on that unit of government of the mandate which we have imposed. A commonsense approach. Second is the distribution among units of government. We know that from time to time we will impose mandates that are not uniform across the country. They may be mandates that relate, peculiarly, for instance, to border States that have immigration problems, northern States that have heating problems, States that have specialized geological problems, such as those that would relate to earthquakes. There should be a connection between the distribution of funds and where the mandate falls. So this amendment states that if a mandate is funded in whole or in part, then the committee which has the responsibility for that particular legislation will contain in its final report a statement of whether the committee chose to allocate the money in a relationship to where the need was. They might indicate that they did not do so because of a deficiency of data upon which to make that judgment, or because they felt that the Congressional Budget Office's assessment of the locus of the need was irrational and, therefore, for good and sufficient reasons, adopted a different approach. Or should they have adopted the approach which the Congressional Budget Office utilized, how the committee has created a mechanism to allocate the funding in a direct cost among and between the respective levels of State, local, and tribal government. So, in summary, Mr. President, the purpose of this amendment is to link the mandate and the cost of that mandate to the method by which Federal funds will be allocated. I fear that if we do not have that linkage, we are going to end up with a school district--to use my first analogy--which had a mandate that costs that school district a million dollars, but because funds were not distributed in a manner consistent with how the need was assessed, they might only receive a fraction of that million dollars. So while we can say we funded the mandate on a global basis, as it relates to that school district, they are still carrying a heavy burden of an unfunded mandate. I yield the remainder of my time.

Mr. GRAHAM. I ask unanimous consent that there be 10 minutes of debate, equally divided, on the amendment.

Mr. GRAHAM

Mr. GRAHAM. I ask unanimous consent that the pending amendment be set aside for purposes of offering the two amendments which I have just sent to the desk.

Mr. GRAHAM. Thank you, Mr. President. Mr. HARKIN addressed the Chair.

Mr. GRAHAM. Mr. President, earlier I had offered two of the three amendments which I have reserved for the purposes of having them before the Senate prior to the 3 p.m. deadline tomorrow. I, therefore, ask unanimous consent that the pending amendment be set aside for the singular purpose of allowing me to offer the third amendment for consideration at a later date.

Mr. GRAHAM. Mr. President, I ask unanimous consent that the reading of the amendments be dispensed with.

Mr. GRAHAM. Mr. President, I send to the desk two amendments and ask that they be considered as offered under the unanimous-consent agreement of last week and then to be set aside.

Mr. GRAHAM. Reserving the right to object. Knowing that we have to have our amendments offered before 3 be a short window to allow those of us who only wish to offer amendments in order to meet that 3 o'clock deadline to do so and thus be assured that we will not end up inadvertently being precluded from offering our amendment? Mr. KEMPTHORNE addressed the Chair.

Mr. GRAHAM. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I want to first reaffirm my support for the objectives to S. 1 and look forward to voting for it on final passage. Many of my colleagues have discussed at length the financial impact that mandates have on their individual States or localities. I would add that mandates tie the hands of or effectively displace the priorities of political leaders in State and local government. As Office of Management and Budget Director Alice Rivlin wrote in her book entitled ``Reviving the American Dream,'' The Federal Government's own weakness has not made it any less eager to tell States and localities what to do. Indeed, when its ability to make grants declined, the Federal Government turned increasingly to mandates as a way of controlling state and local activity without having to pay the bill. Furthermore, unfunded mandates create a situation whereby voters cannot accurately ascertain where responsibility lies for certain Government actions. As Rivlin adds, Mandates add to citizen confusion about who is in charge. When the Federal Government makes rules for State and local officials to carry out, whether or not they have the resources to do so, it is not clear to voters who should be blamed, either when the regulations are laxly enforced or when the cost of compliance is high. As a result, I strongly support this legislation and offer the following amendment with Senators Mack, Bryan, and Boxer to close an important loophole in the bill with respect to immigration and its impact on State and local government. My amendment would require Congress to recognize and address the cost shift to State and local governments for any action on the floor that would delete or preempt the authorization of any Federal reimbursement program for immigration costs, such as in the Criminal Aliens Federal Responsibility Act. The amendment does not address funding levels for such programs in appropriations bills or address past immigration- related costs absorbed by State and local governments. However, the amendment would place immigration reimbursement programs in the same circumstance as Medicaid, the social services block grant, the Vocational Rehabilitation State Grants Program, child nutrition, and three other Federal programs. In this bill, if any of these programs are financially capped or the Federal Government's responsibility to provide funding to State and local government is reduced and State and local government lack the authority to amend their financial or programmatic responsibilities, then such an action would trigger the definition of an unfunded mandate in the bill. These are precisely the circumstances relating to immigration reimbursement programs such as the Criminal Aliens Federal Responsibility Act. As you will recall, the Criminal Aliens Federal Responsibility Act was successfully included in the crime bill last session by a bipartisan group of Senators in an effort to have the Federal Government address its responsibility for immigration and the costs imposed on States and localities of incarcerating criminal aliens. According to a recent report by the Urban Institute, more than 21,000 criminal illegal immigrants are incarcerated in U.S. prisons at an annual cost of $471 million. Educating undocumented immigrants is even more costly. More than 640,000 undocumented children are enrolled in primary and secondary schools in the United States at a cost of $3.1 billion a year. In a policy brief from the Governor's office this week on the impact of unfunded mandates to the State of Florida, it is estimated that State costs relating to illegal aliens including education, emergency health care, prosecution and incarceration of criminal aliens and public infrastructure. In fiscal year 1993 this unfunded mandate cost the State of Florida $884 million. An elimination of the authorization of such program would clearly reduce the Federal Government's responsibility to provide funding to State and local governments, while those entities have virtually no authority or ability to amend their financial or programmatic responsibilities. In a letter to the Congress last year, the National Governors' Association wrote, The Nation's governors have been in strong agreement that immigration policy must be based on Federal responsibility and fairness to State and local governments. As you well know, immigration policy is solely a Federal concern. Yet Federal law mandates the States to provide emergency health care and education to undocumented immigrants who reside in our States. State governments also are forced to pay for the costs of incarcerating undocumented alien criminals. Immigration is clearly much more like mandatory or entitlement programs such as Medicaid than other discretionary programs such as transportation and housing. State and local governments do not have the discretion mandatory or entitlement programs. In fact, I would argue that the status of unreimbursed Federal immigration-related costs as an unfunded mandate is actually stronger than that of programs such as Medicaid because the Federal Government's plenary role and responsibility for immigration and border control is unchallenged. In Traus versus Raich, the Supreme Court ruled in 1915 that ``[t]he authority to control immigration--to admit or exclude aliens--is vested solely in the Federal Government.'' States cannot make treaties, hire border patrol, establish naturalization policy or even set much in the way of policy with respect to providing services to illegal immigrants. Border protection and immigration are clearly Federal obligations. The implications of my amendment would be to allow Members of Congress to raise a point or order against legislation that would reduce or eliminate the authorization of Federal immigration reimbursement programs. For example, if legislation were introduced that imposes a Federal mandate that the Congressional Budget Office estimates to cost State and local governments $350 million, the author of the bill could attempt to offset such costs by eliminating the authorization for the Criminal Aliens Federal Responsibility Act. Such an action would effectively pay for a federally imposed Federal mandate by shifting the full costs and responsibility for incarcerating criminal aliens to State and local governments. Such a circumstance would certainly run counter to the intent of S. 1. My amendment would clarify this loophole and allow a point of order to be raised for creating yet another unfunded mandate. As a result, I urge the amendment's adoption.

Mr. GRAHAM. Mr. President, I rise today to offer a technical, yet extremely important, amendment to S. 1. My amendment would require committees that choose to pay for their public sector legislative mandates to report as to ``how the committee has created a mechanism to allocate the funding in a manner that is reasonably consistent with the expected direct costs to each State, local, and tribal government.'' If the Congress chooses to pay for its mandates, and I believe the strong presumption should be that it do so, certainly the intent of this bill would be to have the funding reach those State, local, and tribal governments that will be impacted by the mandate rather than allocate funding State, local, and tribal governments through a random or arbitrary process. For example, if a mandate is imposed on local school districts, it would make more sense to ensure the money reaches local school districts rather than to State education agencies. If a mandate were to have an impact on State and local government in rural areas, it would make little sense to allocate the funding to our Nation's cities. On the other hand, if a mandate were to specifically impact the cities of our country such as Philadelphia, Seattle, Louisville, Baltimore, Houston, and New York City, why would funding be allocated to the State capitals of Harrisburg, Olympia, Frankfort, Annapolis, Austin, or Albany? To do the latter would undermine the entire purpose of this bill. While Governors Ridge, Lowry, Jones, Glendening, Bush, and Pataki might love to receive such a windfall to their State budgets, the cities could very well receive the mandate but none or very little of the funding. In fact, to pay for the mandate, the committee may very well have eliminated a Federal aid program in which cities are largely the recipient. As a result, the cities could have Federal funding cut and also receive an unfunded mandate. In such a case, Congress may have had great intentions in funding the mandate but fail miserably in actually achieving such a worthy goal. Mayors, Governors, or whomever receives the hard mandate but phantom funds will be far angrier at the Congress than they ever were before we passed this legislation. Certainly such circumstances would undermine both this bill and our Nation's system of intergovernmental relations. Mr. President, I am a cosponsor of this legislation and fully intend to vote in favor of its passage. Some may argue that asking the committee to review and report how and whether its allocations are made in a reasonably consistent manner with the expected costs is unnecessary. They might argue that the various committees will do the right thing and accurately distribute funding. mandates and outdated formula allocations, more attention needs to be placed on both areas by Congress. While we have heard over the last week about problems with unfunded mandates, no attention has occurred or been placed on how the Federal Government will go about compensating State, local, and tribal governments. However, as noted before, such attention is critical and fundamental to the success of this legislation. To give you just one example, what if last year's crime bill had a requirement that all States must implement mandatory drug testing and treatment of all its imprisoned felons? If the committee or the Congressional Budget Office were to anticipate increased numbers of imprisoned felons over a period of time and therefore increased costs over a period of years, would the funding allocation reflect the anticipated growth in the individual States? It not, what would be the impact on the budgets and policy implications for States that actively attempt to put and keep violent criminals behind bars and off the streets of this Nation? The law of unintended consequences would arise. In an attempt to get people off of drugs and squelch their propensity to commit crimes by mandating drug testing and treatment, the funding formula could effectively have the contrary effect for unfairly impacted States. And finally and most importantly, what if the funding formulas are arbitrary or fail to allocate funding in a manner reasonably consistent with expected costs? I offer this specific example because, in last year's crime bill, the allocation formula for ``Residential Substance Abuse Treatment for Prisoners'' effectively allocated to some States substantially more dollars per inmate than to other States. Without compelling evidence that the former States prison inmates are more drug addicted or expensive to treat, such a formula makes no sense. If this were to happen in a circumstance of funding a mandate rather than a block grant, the impact could be devastating. To have a partially funded mandate imposed on some States while others receive several times the funding in comparison to the cost of its mandate would undermine the intent of this legislation. While funding formulas for block grants are important and should always strive to be as fair as possible, it is imperative they be consistent with the intergovernmental location and scale when funding mandates, if we are at all concerned with achieving the stated intent of this legislation. As a result, while my amendment would not require ``fair'' formulas to be established, it would require the committee to consider and explain the allocation formulas established to pay for the public sector unfunded mandates in their committee reports. Due to the importance of such allocations and need for thorough consideration by both the committees and Congress, I urge this amendment's adoption.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, the statement has been made that this is not a germane amendment. I suggest to the contrary, this goes to the very essence of why we are concerned about unfunded mandates. The basic concern is that the Federal Government has been imposing financial responsibilities on State and local governments without providing the means by which those responsibilities be discharged. What this amendment speaks to is enhancing the capacity of State and local governments to deal with those very responsibilities. It is particularly germane in the context of what I think is going to be a [[Page S1155]] surprise and disappointment to many of the supporters of this bill, of which I am one. That is that the legislation before us only deals with actions which will occur in the future. Those Governors and mayors and commissioners who have calculated the current cost of unfunded mandates to their States, to their communities, run the potential of having unrealized expectations if they think we are about to do something in this bill that is going to lower that current cost of current mandates. What we are doing with this amendment is providing some revenue to State and local communities so they can discharge their responsibilities, including those responsibilities which we have in the past imposed upon them without funding and for which we do not have any intention to provide funding under this legislation. This goes beyond, however, an issue of appropriateness to some issues of basic fairness. A constituent of mine in Bonita Springs, FL, is named Joyce Maloney. In 1994, at the hearing before the Small Business Committee that was alluded to a few moments ago, she testified and she talked about one aspect of unfairness. She talked about how when she had moved into her new home in Bonita Springs, she and her husband wanted to buy some furniture and they went down to the local furniture stores, they looked at the furniture, looked at the prices. Then someone called them up and said, ``Could I come out and see you about possibly buying your furniture through a mail order house from out of State?'' In the course of making his presentation on the furniture he indicated to them that, ``Since the furniture was to be delivered to our home in Florida, no sales tax would be applied to the sales. Beside that, he told us, the delivery charge which you are paying will offset the sales tax that you will not be required to pay.'' Of course he was defrauding Ms. Maloney because she was responsible-- not for a sales tax but for its exact equivalent, the use tax, upon her receipt. In fact, she ended up being one of the people that the Florida Department of Revenue contacted about unpaid use tax on this large furniture order. Ms. Maloney received a bill from the Florida Department of Revenue for $226.26 for unpaid use tax. She was misled. She not only was taken away as a potential customer from the local business, but she ended up having to pay a tax, a use tax, the equivalent of a sales tax, which she had been led to believe would not be her responsibility. I will just quote, before submitting for the Record the full text of Ms. Maloney's concluding paragraph: Mr. Chairman and members of the committee, it is time to correct this situation and bring about truth in the marketplace. I have no problem in paying sales tax that is due on any purchase I make. But what I despise is receiving inaccurate and fraudulent information regarding my obligation to remit sales taxes. It is time to shift the sales tax remittance burden from the consumer to the retailer so that everyone plays and pays by the same rules. I agree with Ms. Maloney. Mr. President, her letter also indicates the other major area of unfairness, and that is unfairness to the local retail community. It is very difficult for the small business person, whether they are selling furniture in Bonita Springs or whether they are selling men's garments in Hot Springs, AR, to compete when your competition starts by being able to sell 5, 6, or 7 percent below you because they are not being required to collect and remit the sales tax. Why we would countenance a system that would allow that degree of inequality and unfairness in the marketplace is beyond me, except I know why we did it up until 1992. We did it because there was an assumption that under the U.S. Constitution, test of reach of one State to assess tax in another, it was unconstitutional and unconstitutional in a form that was not susceptible to remedy for a State to require an out-of-State mail order house to remit sales taxes on items sold. But in 1992, in the case of Quill Corp. versus North Dakota, the Supreme Court held that States may not require out-of-State companies to collect use tax because to do so would impose a burden on interstate commerce. But the court went further by saying that Congress could authorize such a burden on interstate commerce, and that if it did so, States would then be allowed to make such collection. So it has been since 1992 that the U.S. Supreme Court has extended to us the opportunity to do what Senator Bumpers proposes that we do today. I hope that we will follow his leadership; that is, to authorize States, if they choose to do so, to utilize this new authority to apply their sales taxes to sales made by firms which solicit business within a State which mail items into the State but which today are not required to collect and remit the sales tax on those items. Mr. President, this is not an insignificant issue. Senator Bumpers has distributed the estimate of the Advisory Commission on Intergovernmental Relations on what the total potential additional revenue to the States and local communities would be from mail order sales using 1994 numbers. In my State of Florida alone, it is estimated that $168.9 million of sales currently is not subject to our State sales tax because they are sales from out-of-State mail order houses selling into the State of Florida. That $168 million would go a long way to funding the mandates that the Federal Government has made on the State of Florida and its communities, for which there will be no compensation under this legislation; $168 million would allow the State to better meet those standards of expectation which the Federal Government has set in transportation, in law enforcement, in environmental protection, and in a whole array of areas in which we have seen fit to impose these burdens on States and communities. I believe that this is an extremely important and germane amendment. It speaks to fundamental issues of fairness and to our responsibility as the Federal Government to treat fairly our partners in government at the State and local level, and more importantly, to treat fairly our citizens, citizens whether they are the small merchants trying to survive in an increasingly competitive market or whether they are the misled purchasers, the Ms. Maloneys of America, that they would also be treated fairly. This will provide to our communities a greater capacity to be able to accept the obligations that we have forced upon them in the past, and will continue to apply to them whether this underlying legislation is adopted or not. For those reasons, Mr. President, I commend the Senator from Arkansas for his commitment, his wisdom, and his tenacity in advocating this position. I urge my colleagues to follow his leadership. Thank you, Mr. President. Mr. BUMPERS addressed the Chair.

Mr. GRAHAM

Mr. GRAHAM. Thank you, Mr. President. I want to first express my support for the objectives of S. 1, and I look forward to voting for it on final passage. I believe that there has been a tendency, particularly during a time of restrained Federal resources, to look to the imposition of obligations on State and local government as a means of accomplishing national objectives which we at the National Government are either unable or unwilling to pay for. This will not preclude such behavior in the future, but it will require the Congress to understand what it is doing and make a discreet judgment that that is the course of action that it is willing to undertake. Having said that, I think there is going to be a surprise and disappointment, however, upon the final passage of the bill if it is in basically the form that is currently before Members. That is that many feel it is going to undo existing mandates. I have seen news accounts of Governors and other executives at the local level who have talked about the amount of savings that will be derived as a result of passage of this bill. As I read the bill and understand its processes, it is all prospective in operation. That is, it will make it more difficult to impose new unfunded mandates, but it in no way deals directly with those mandates that are already in place. That is what makes this amendment so important. What title III does is it sets up a parallel process that gives us a greater capacity to look at current unfunded mandates and, on a case- by-case basis, particularly through the reauthorization process, to begin to deal with those unfunded mandates. I recognize that the bill provides that in a reauthorization, whatever the current status of unfunded mandates is does not trigger the mechanisms of this bill. It is only if we elevate further an additional $50 million of imposition on State and local governments, will the mechanisms of this specific bill relate to existing, enhanced, enlarged, engorged, unfunded mandates. But what title III--which is what we are amending--provides is there will be a systematic look back at all of the unfunded mandates. That will provide Members the opportunity to receive a thoughtful, quantitative analysis of the unfunded mandates which are in the current law, present those to the appropriate authorization committees so that when bills are being considered at the committee level in hearings and then later considered on the floor to final adoption, we will be in a position to offer amendments that relate to those current levels of unfunded mandates. And if successful, if we believe it is appropriate and wise, to eliminate, reduce, or redirect the nature of the current unfunded mandates. The reason it is so important we pass this amendment and place that responsibility for doing that analysis of existing unfunded mandates in the Advisory Commission on Intergovernmental Relations is because it is competent to do that job; it has a high level of confidence by persons at the local, State, and Federal level. It has been in business since 1959. It is not an entity which is going to be new to this issue, as Senator Dorgan said. In fact, the ACIR has conducted some five major studies of unfunded mandates within the last 10 years. So it will bring a tremendous amount of expertise to this issue, and the ability to apply that expertise on an expedited basis. There are some very important reauthorizations which contain some of the most egregious examples of unfunded mandates that are going to be coming before this 104th Congress. It is very much in our interest that we have an entity which can quickly move to do that analysis and make that information available to Members so that during the course of the next 2 years, we will be in a position to make some thoughtful judgments in existing legislation as to whether we wish to continue existing unfunded mandates. Mr. President, for those reasons, I want to commend Senator Dorgan for having offered this amendment and I am very pleased to join with Senator Dorgan and his colleagues in its support. I urge to my colleagues its adoption.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I lend my support to the National Pastime Preservation Act submitted to the new Congress by Senator Daniel Patrick Moynihan and cosponsored by Senator John Warner. Once again, Major League Baseball has shown that it does not warrant an exemption from our antitrust laws. Our national pastime has been silenced, with little or no immediate prospect of a resumption in play. Mr. President, today is perhaps the coldest day of the winter so far this season. On these chilly days, our Nation should be on the verge of anticipating the annual ritual that signals hope of warmer weather on the way; the crack of bats at spring training. But spring training could be lost. The possibility--which would compound the loss of part of the 1994 regular season and the World Series--underscores the urgency of prompt consideration of the National Pastime Preservation Act. For Florida, the loss of spring training would result in an estimated loss in tourism dollars of at least $350 million, perhaps $1 billion. In the last several years, communities in Florida have made substantial investments in new and upgraded training facilities for the very clubs that will not be able to play. This crisis has hurt Florida and America. Clearly, it is time to subject Major League Baseball to the same laws of competition that apply to the rest of business in our country. No other professional sport has an antitrust exemption. Major League Baseball has used it antitrust exemption to prevent franchise migration to areas more willing to support teams. A consequence of this failure to allow the market to determine franchise location is a wide disparity between franchises. This, in turn, had led to the revenue-sharing proposal to be financed by a ceiling on players' salaries. Thus, the issue which is at the heart of the current controversy--a ceiling on players' salaries--is attributable to a misuse of the antitrust exemption. Additionally, removal of the antitrust exemption would be an incentive to the players to go back to work and continue negotiations. I urge my colleagues--in the name of restoring our national pastime-- to consider and support the legislation to remove baseball's antitrust exemption.