Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to rise today, along with my colleague, the Ranking Member on the Judiciary Committee, Senator Leahy, to introduce legislation that will address a growing problem for consumers and American businesses online. At issue is the deliberate, bad-faith, and abusive registration of Internet domain names in violation of the rights of trademark owners. for the Net-savy, this burgeoning form of cyber-abuse is known as ``cybersquatting.'' for the average consumer, it is basically fraud, deception, and the bad-faith trading on the goodwill of others. Whatever you call it, it is an issue that has a great impact on American consumers and the brand names they rely on as indications of source, quality, and authenticity. As anyone who has walked down the aisle in the grocery store knows, trademarks serve as the primary indicators of source, quality, and authenticity in the minds of consumers. How else do you explain the price disparity between various brands of toothpaste, laundry detergent, or even canned beans. These brand names are valuable in that they convey to the consumer reliable information regarding the source and quality of goods and services, thereby facilitating commerce and spurring confidence in the marketplace. Unauthorized uses of others' marks undercuts the market by eroding consumer confidence and the communicative value of the brand names we all rely on. For that very reason, Congress has enacted a number of statutes addressing the problems of trademark infringement, false advertising and unfair competition, trademark dilution, and trademark counterfeiting. Doing so has helped protect American businesses and, more importantly perhaps, American consumers. As we are seeing with increased frequency, the problems of brand-name abuse and consumer confusion are particularly acute in the online environment. The fact is that a consumer in a ``brick and mortar'' world has the luxury of a variety of additional indicators of source and quality aside from a brand name. For example, when one walks in to the local consumer electronics retailer, he is fairly certain with whom he is dealing, and he can often tell by looking at the products and even the storefront itself whether or not he is dealing with a reputable establishment. These protections are largely absent in the electronic world, where anyone with Internet access and minimal computer knowledge can set up a storefront online. In many cases what consumers see when they log on to a site is their only indication of source and authenticity, and legitimate and illegitimate sites may be indistinguishable in cyberspace. In fact, a well-known trademark in a domain name may be the primary source indicator for the online consumer. So it a bad actor is using that name, rather than the trademark owner, an online consumer is at serious risk of being defrauded, or at the very least confused. The result, as with other forms of trademark violations, is the erosion of consumer confidence in brand name identifiers and in electronic commerce generally. Last week the Judiciary Committee heard testimony of a number of examples of consumer confusion on the Internet stemming from abusive domain name registrations. For example, Anne Chasser, President of the International Trademark Association, testified that a cybersquatter had registered the domain names ``attphonecard.com'' and ``attcallingcard.com'' and used those names to establish sites purporting to sell calling cards and soliciting personally identifying information, including credit card numbers. Chris Young, President of Cyveillance, Inc.--a company founded specifically to assist trademark owners police their marks online--testified that a cybersquatter had registered the name ``dellspares.com'' and was purporting to sell Dell products online, when in fact Dell does not authorize online resellers to market its products. We heard similar testimony of an offshore cybersquatter selling web-hosting services under the name ``bellatlantics.com''. And Greg Phillips, a Salt Lake City trademark practitioner that represents Porsche in protecting their famous trademark against what is now more than 300 instances of cybersquatting, testified of several examples where bad actors have registered Porsche marks to sell counterfeit goods and non-genuine Porsche parts. Consider also the child who in a ``hunt-and-peck'' manner mistakenly typed in the domain for ``dosney.com'', looking for the rich and family-friendly content of Disney's home page, only to wind up staring at a page of hard-core pornography because someone snatched up the ``dosney'' domain in anticipation that just such a mistake would be made. In a similar case, a 12-year-old California boy was denied privileges at his school when he entered ``zelda.com'' in a web browser at his school library, looking for a site he expected to be affiliated with the computer game of the same name, but ended up at a pornography site. In addition to these types of direct harm to consumers, cybersquatting harms American businesses and the goodwill value associated with their names. In part this is a result of the fact that in each case of consumer confusion there is a case of brand-name misappropriation and an erosion of goodwill. But, even absent consumer confusion, there are many many cases of cybersquatters who appropriate brand names with the sole intent of extorting money from the lawful mark owner, of precluding evenhanded competition, or even very simply of harming the goodwill of the mark. For example, a couple of years ago a small Canadian company with a single shareholder and a couple of dozen domain names demanded that Umbro International, Inc., which markets and distributes soccer equipment, pay $50,000 to its sole shareholder, $50,000 to a charity, and provide a lifetime supply of soccer equipment in order for it to relinquish the ``umbro.com'' name. Warner Bros. was reportedly asked to pay $350,000 for the rights to the names ``warner-records.com'', ``warner-bros-records.com'', ``warner-pictures.com'', ``warner-bros- pictures'', and ``warnerpictures.com''. And Intel Corporation was forced to deal with a cybersquatter who registered the ``pentium3.com'' domain and used it to post pornographic images of celebrities. It is time for Congress to take a closer look at these abuses and to respond with appropriate legislation. In the 104th Congress, Senator Leahy and I sponsored the ``Federal Trademark Dilution Act,'' which has proved useful in assisting the owners of famous trademarks to police online uses of their marks that dilute their distinctive quality. Unfortunately, the economics of litigation have resulted in a situation where it is often more cost-effective to simply ``pay off'' a cybersquatter rather than pursue costly litigation with little hope of anything more than an injunction against the offender. And cybersquatters are becoming more sophisticated and more creative in evading what good case law has developed under the dilution statute. The bill I am introducing today with the Senator from Vermont is designed to address these problems head on by clarifying the rights of trademark owners online with respect to cybersquatting, by providing clear deterrence to prevent such bad faith and abusive conduct, and by providing adequate remedies for trademark owners in those cases where it does occur. While the bill shares the goals of, and has some similarity to, legislation introduced earlier by Senator Abraham, it differs in a number of substantial respects. First, like Senator Abraham's legislation, our bill allows trademark owners to recover statutory damages in cybersquatting cases, both to deter wrongful conduct and to provide adequate remedies for trademark owners who seek to enforce their rights in court. Our bill goes beyond simply stating the remedy, however, and sets forth a substantive cause of action, based in trademark law, to define the wrongful conduct sought to be deterred and to fill in the gaps and uncertainties of current trademark law with respect to cybersquatting. Under our bill, the abusive conduct that is made actionable is appropriately limited to bad faith registrations of others' marks by persons who seek to profit unfairly from the goodwill associated therewith. In addition, the bill balances the property interests of trademark owners with the interests of Internet users who would make fair use of others' marks or otherwise engage in protected speech online. Our bill also limits the definition of domain name identifier to exclude such things as screen names, file names, and other identifiers not assigned by a domain name registrar or registry. it also omits criminal penalties found in Senator Abraham's earlier legislation. Second, our bill provides for in rem jurisdiction, which allows a mark owner to seek the forfeiture, cancellation, or transfer of an infringing domain name by filing an in rem action against the name itself, where the mark owner has satisfied the court that it has exercised due diligence in trying to locate the owner of the domain name but is unable to do so. A significant problem faced by trademark owners in the fight against cybersquatting is the fact that many cybersquatters register domain names under aliases or otherwise provide false information in their registration applications in order to avoid identification and service of process by the mark owner. Our bill will alleviate this difficulty, while protecting the notions of fair play and substantial justice, by enabling a mark owner to seek an injunction against the infringing property in those cases where, after due diligence, a mark owner is unable to proceed against the domain name registrant because the registrant has provided false contact information and is otherwise not to be found. Additionally, some have suggested that dissidents and others who are online incognito for legitimate reasons might give false information to protect themselves and have suggested the need to preserve a degree of anonymity on the Internet particularly for this reason. Allowing a trademark owner to proceed against the domain names themselves, provided they are, in fact, infringing or diluting under the Trademark Act, decreases the need for trademark owners to join the hunt to chase down and root out these dissidents or others seeking anonymity on the Net. The approach in our bill is a good compromise, which provides meaningful protection to trademark owners while balancing the interests of privacy and anonymity on the Internet. Third, like the Abraham bill, our bill encourages domain name registrars and registries to work with trademark owners to prevent cybersquatting by providing a limited exemption from liability for domain name registrars and registries that suspend, cancel, or transfer domain names pursuant to a court order or in the implementation of a reasonable policy prohibiting the registration of infringing domain names. Our bill goes further, however, in order to protect the rights of domain name registrants against overreaching trademark owners. Under our bill, a trademark owner who knowingly and materially misrepresents to the domain name registrar or registry that a domain name is infringing is liable to the domain name registrant for damages resulting from the suspension, cancellation, or transfer of the domain name. Our bill also promotes the continued ease and efficiency users of the current registration system enjoy by codifying current case law limiting the secondary liability of domain name registrars and registries for the act of registration of a domain name. Finally, our bill includes an explicit savings clause making clear that the bill does not affect traditional trademark defenses, such as fair use, or a person's first amendment rights, and it ensures that any new remedies created by the bill will apply prospectively only. Mr. President, this bill is an important piece of legislation that will promote the growth of online commerce by protecting consumers and providing clarity in the law for trademark owners in cyberspace. It is a balanced bill that protects the rights of Internet users and the interests of all Americans in free speech and protected uses of trademarked names for such things as parody, comment, criticism, comparative advertising, news reporting, etc. It reflects many hours of discussions with senators and affected parties on all sides. I want to thank Senator Leahy for his cooperation in crafting this particular measure, and also Senator Abraham for his cooperation in this effort. I expect that the substance of this bill will be offered as a Committee substitute to Senator Abraham's legislation when the Judiciary Committee turns to that bill tomorrow, and I look forward to broad bipartisan support at that time. I similarly look forward to working with my other colleagues here in the Senate to report this bill favorably to the House, and I urge their support in this regard. I ask unanimous consent that the text of the bill and a section-by- section analysis of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to recognize the death of the Arab world's longest-standing leader, King Hassan II of Morocco, who died last Friday at the age of 70. To his family, and to the people of Morocco, I extend my heartfelt condolences. King Hassan ruled Morocco for 38 years as only the second King of Morocco in that country's modern, independent history, having succeeded to the throne after the death of his father, King Mohammed V, in 1961, only five years after Morocco gained its independence from the French. Morocco, however, is an ancient country and the country with which the United States has its oldest uninterrupted diplomatic relations. Our two countries signed a Treaty of Peace and Friendship in 1786, which the United States ratified the following year. Thus began a relationship that provided our tall ships a haven in the 18th century and developed into a relationship of geostrategic importance in the 20th century. This special friendship was cherished in modern times by leaders in both of our countries, particularly King Hassan, and I was pleased to see that President Clinton, along with former President Bush, attended King Hassan's funeral this weekend. America lost a good friend, a wise counsel on the region, and an important and brave promoter for peace in the Middle East. One of the biggest challenges for the Arab world, as in other parts of the world, has been the challenge of modernization, and how leaders encourage their governments and societies to rise to this challenge. We have seen several models: secular socialist dictatorships, radical fundamentalist regimes, and traditional authoritarians. King Hassan, whose remarkable career spanned from the era of decolonization to the doorstep of the next century, demonstrated that the traditional model could adapt to the economic and political challenges of modernization. He understood that tradition was not the enemy of the modern, but could ease the transition by providing stability and respect for his people while allowing political and economic reforms to unleash the fundamental strengths and dreams of his people. For his adept stewardship, he earned the deep and sincere affection of the vast majority of Morocco's nearly 30 million citizens. Beginning as a traditional authoritarian, the King recognized the importance of constitutional governance early in his reign and expanded political rights through the years. In doing so, he was one of the most successful leaders in the Arab world in reconciling traditional monarchy with the requisites and demands of modernity. King Hassan in recent years had furthered political reform such that, today, the lower house of parliament is elected through universal suffrage from a roster of multiple parties, and the governing coalition, including the Prime Minister, is controlled by the opposition. Concomitant with these political reforms has been a steady improvement in the human rights situation, marked, in some significant cases, by reconciliation with and compensation for victims of the past. While power still resides predominantly with the crown, King Hassan, by advancing political democracy and the free market, allowed his people and provided his son, King Mohammed VI, with the fundamental platform on which Morocco will proceed confidently into the next century. Mr. President, no remarks on the legacy of King Hassan can be complete without recognizing his prescient view of reconciliation between Israel and the Arab world. Many note that some of the initial meetings preparing for the signing of the historic Camp David accords occurred with King Hassan in Morocco. The fact is that the King of Morocco had been providing opportunities for encounters and dialogue for years before then, showing that the King had a wise vision for peace as well as a pragmatist's approach for moving toward this noble goal. From the 1960s to the late Prime Minister Rabin's visit to Morocco in 1993--which was, by the way, only the second Arab nation visited by an Israeli leader, after Egypt--King Hassan of Morocco demonstrated that he recognized the permanent role that the Jewish state had to play in the affairs of the Middle East. In this, as in many other areas, King Hassan was a leader among leaders. Morocco's new king, King Mohammed VI, has many challenges before him. He, along with King Abdallah of Jordan, represents the new generation of leaders in the region: highly educated, understanding the West, cognizant of the realities of the region, and faced with enormous domestic economic challenges. Morocco's is a youthful population, straddled with an unacceptably high illiteracy rate and an unyielding demand for economic development. These are extremely tough challenges to burden a new and young king. But let us recall the youth of King Hassan when he assumed the throne in 1961 and the misplaced doubts about his future. We recognize today the legacy of King Hassan to his son and his nation. The United States should assist in the continuing modernization of Morocco and the continuing cooperation to create a more peaceful Middle East. So should continue a special relationship into the 21st century that began so propitiously in the 18th.

Mr. HATCH

Mr. HATCH. Mr. President, I hope and expect that cloture will be invoked shortly. It is my understanding that we will then proceed to the appointment of conferees for the juvenile crime bill, which is something I have been working on with the majority leader for some time. I commend the leader for his commitment to this bill, and I thank my colleague from New Hampshire for allowing the Senate to work its will. I appreciate the arguments my colleagues have made and agree with much of what they said. But, in the end, the Senate and House have passed different juvenile crime bills, and it is a conference committee's task to reconcile those differences. It will be a difficult challenge since the Senate has an obligation to advocate for its position. Yet--at the same time--we must recognize that the House passed a bill which contains different cultural reform proposals, less spending, and no gun control provisions. In fact, the House defeated a separate gun control bill. We must do our best to reconcile these bills. In the end, I hope and trust that this conference committee will produce a vehicle that the House, the Senate, and the President can support. If, however, some in positions of leadership and responsibility are unwilling to search for common ground and are content to simply politicize this issue, the change to do something meaningful for our Nation's children may slip through our hands. I hope that does not happen and I hope that we can come together for the sake of our children. I want to say yet again that this is one of the most important bills that Congress will consider this year. The Judiciary Committee has worked on juvenile crime legislation for more than two years. The committee marked up the predecessor to S. 254 for nearly two months last Congress. And as you are aware, the Senate spend 2 full weeks this spring debating S. 254. In 1997, juveniles accounted for nearly one-fifth of all criminal arrests in the United States. Juveniles committed 13.5 percent of all murders, more than 17 percent of all rapes, nearly 30 percent of all robberies, and 50 percent of all arsons. In particular, schools are becoming more and more dangerous. Fifteen percent of students have reported being victimized at school. Additionally, more than half of the Nation's public schools have reported that a crime had been committed on the premises. Sadly, the killings at Columbine High School last Spring are not an isolated event. Similar shootings have occurred in recent years at schools in Pearl, Mississippi, which left two dead, West Paducah, Kentucky, which left three dead, Jonesboro, Arkansas, which left five dead, Edinboro, Pennsylvania, which left one dead, and Springfield, Oregon, which left two dead. S. 254 provides an infusion of funds to state and local authorities to combat juvenile crime and youth violence. While juvenile crime is largely a state and local issue, the federal government can play a valuable role in assisting the States fight juvenile crime and violence through flexible block grants. S. 254 provides $1 billion a year to the States to fight juvenile crime and prevent juvenile delinquency. Specifically, S. 254 includes a $450 million juvenile accountability incentive block grant to the States. States can use this grant to implement graduated sentencing sanctions; build detention facilities for juvenile offenders; drug test juvenile offenders upon arrest; and require juvenile offenders to complete school or vocational training, among other reforms. S. 254 also includes the ``juvenile Brady'' provision, which prohibits the possession of a firearm by persons who commit a violent felony as a juvenile and $75 million annually to help States upgrade juvenile felony records and provide school officials access to such juvenile felony records in appropriate circumstances. In addition, S. 254 provides more than $500 million annually to the States for prevention programs, some of which are specifically targeted toward gangs in schools, and it extends the Violent Crime Reduction Trust Fund through 2005 to ensure adequate funding of administration of justice programs. In closing, I hope that we can proceed to the appointment of conferees. This will give us the opportunity to accomplish a great deal over the August recess, and I believe that it will allow us to approve a conference report the week after Labor Day. It would be fitting for Congress to wrap up this historic juvenile crime legislation when America's children are returning to school from the summer recess.

Mr. HATCH

Mr. HATCH. Mr. President, late last week, Senior Judge Frank M. Johnson, Jr. of the Eleventh Circuit Court of Appeals passed away at his home in Montgomery, Alabama. Judge Johnson will be remembered for his courageous stands in some of the most difficult struggles of the Civil Rights era. At a time when men of lesser fortitude would have avoided direct confrontation on the highly unpopular issues of school desegregation and voting rights for African-Americans, Judge Johnson stood firm on his convictions and the law. Soon after his appointment to the district court by President Eisenhower in 1955, Johnson took the courageous step of striking down the Montgomery law that had mandated that Rosa Parks sit in the back of a city bus. He believed that ``separate, but equal'' was inherently unequal. Judge Johnson upheld the constitutionality of federal laws granting African-Americans the right to vote in Alabama elections. He believed in the concept of ``one man, one vote.'' Despite tremendous pressure from Governor George Wallace, Judge Johnson allowed the voting rights march from Selma to Montgomery to proceed despite threats of continued civil unrest and violence. The national fervor that followed the march resulted in the enactment of the Voting Rights Act of 1965. Today, around a courthouse that bears Frank Johnson's name in Montgomery, there are integrated schools, buses, and lunch counters. Truly representative democracy flourishes in Alabama with African- American state, county, and municipal officials who won their offices in fair elections with the votes of African-American and white citizens. In large part because of Judge Johnson, attitudes that were once intolerant and extreme have dissipated, but the example he set has not. The members of the Judiciary Committee extend our deepest sympathies to Judge Johnson's family and the host of friends that he had across the country. We will always remember this federal judge for exemplifying unwavering moral courage in the advancement of the wholly American ideal that ``all men are created equal'' and deserve ``equal protection of the laws.''

Mr. HATCH

Mr. HATCH. Mr. President, I noted that Senator Daschle used a quotation from a statement I made last fall concerning the Omnibus Appropriations bill for fiscal year 1990 in his arguments for his amendment to S. Res. 160. I am flattered that he felt my words were of such import that he had them blown up to poster size and displayed them for all to see. I wish he would do that with all of my speeches. In this case, however, I just wish he had quoted the entire statement. Although I, like many of our colleagues, expressed genuine frustration with the unusual process that resulted in the Omnibus Appropriations bill, my statement also defends it as necessary to prevent a devastating government shutdown. I regret that Senator Daschle took this excerpt out of context. Those who read my entire statement will see that it provides a much different position than what the Minority Leader suggests by excerpting this small section.

Mr. HATCH

Mr. HATCH. Mr. President, today I am introducing legislation that would provide critical and direct improvements to the competitiveness of the over 2.1 million S corporations nationwide. The vast majority of S corporations operate as small businesses. By 1995, they comprised 48 percent of all corporations. In my home state of Utah, S corporations make up half of the 21,600 corporations in the state. Despite the reforms that were enacted in 1996 and in previous years, the tax laws that currently govern S corporations remain too restrictive, complex, and burdensome, particularly in comparison with the laws that are imposed on other entities. As a result, Mr. President, many of these small businesses are unable to attract sufficient capital and to grow to their full potential. For example, the inability to issue preferred stock denies S corporations access to badly needed senior equity. Capital is also eliminated by a requirement that prevents straight debt from being converted into stock. Substantial reforms need to be enacted to ensure better competition for small businesses in today's increasingly sophisticated and global economy. Mr. President, the current law is threatening the multi-generational family business in our country. Law allows only for 75 shareholders under an S corporation, and each member of a family is currently treated as a single, distinct shareholder. In addition, nonresident aliens are not allowed as shareholders. This ban on nonresident alien shareholders is an outmoded restriction dating back to the creation of Subchapter S. Since that time, partnerships have been allowed to involve nonresidential aliens. And, as the economy becomes more global, S corporations will be at a disadvantage relative to the more flexible partnerships. Mr. President, this bill would eliminate these outdated provisions and allow for all family members to be counted as one shareholder for purposes of S corporation eligibility, as well as permitting nonresident aliens to be shareholders. Mr. President, I urge my colleagues to review and support the Subchapter S Revision Act. This legislation will help American families pass their businesses from one generation to the next and to create a level playing field for small business. We should not allow the more than 10,000 S corporations in my home state, as well as the many others across the country, to be subject to rules and regulations that limit their competitiveness. I am looking forward to working with my fellow members of the Finance Committee in enacting this bill. I ask that a description of the bill's provisions be in included in the Record. The description follows:

Mr. HATCH

Mr. HATCH. Mr. President, I rise to day to introduce the Methamphetamine Anti-Proliferation Act of 1999, a very important piece of legislation in America's on-going war on drugs. Three years ago I introduced the Comprehensive Methamphetamine Act of 1999, which this body passed, to address the frightening and very real problem of methamphetamine abuse in this country. That legislation has provided law enforcement with necessary tools to combat methamphetamine and has helped us track and slow the proliferation of methamphetamine manufacturing and abuse. However, there remain too many people in this country who are determined to undermine our drug laws and turn America into one colossal metamphetamine laboratory. For this reason, I, along with Senators Feinstein, DeWine, Bond, Thurmond, Biden, Bryan, and Reid, are introducing this bipartisan bill that seeks to shield America against the proliferation of methamphetamine Manufacturing. The methamphetamine threat differs in kind from the threat of other illegal drugs because methamphetamine can be made from readily available and legal chemicals and substances, and because it poses serious dangers to both human life and to the environment. America's history of fighting illegal drugs has been long and tiring but with so many young Americans still being exposed to so many destructive drugs, now is not the time to give up--it is a time to fight smarter and harder. The provisions of this bill will provide law enforcement with several effective tools that will help us turn the tide of proliferation of methamphetamine manufacturing in America. Traditionally, the overwhelming majority of illegal drugs consumed in America has been manufactured outside of our borders and then illegally smuggled into America. The rapid spread and growing use of methamphetamine threatens to change the future of where drugs are manufactured. Drug pushers are threatening to turn America into a producing country of a drug that affects the lives of every American because it not only destroys the lives of those who use the drug, but also can have devastating effects on people situated around lab sites, on law enforcement officials that have to clean the labs, and on the environment. According to a report prepared by the Community Epidemiology Work Group, which is part of the National Institute on Drug Abuse, methamphetamine ``abuse levels remain high . . . and there is strong evidence to suggest this drug will continue to be a problem in West Coast areas and to spread to other areas of the United States.'' the reasons given for the ominous prediction are that methamphetamine can be produced easily in small, clandestine labs and the chemicals used to make methamphetamine are readily available. This threat is real and immediate, and the numbers are telling. According to the Drug Enforcement Administration, the DEA, the number of labs cleaned up by the Administration has almost doubled each year since 1995. Last year 5,786 amphetamine and methamphetamine labs were seized by DEA and State and local law enforcement officials, and millions of dollars were spent on cleaning up the pollutants and toxins created and left behind by operators of these labs. In Utah alone, there were 266 lab seizures last year, a number which elevated Utah to the unenviable position of being ranked third among all states for higher per capita clan lab seizures. The problem with the high number of manufacturing labs is compounded by the fact that the chemicals and substances utilized in the manufacturing process are unstable, volatile, and highly combustible. The smallest amounts of these chemicals, when mixed improperly, can cause explosions and fires. And of course, those operating these labs are not scientists, but rather unskilled, ignorant, criminals and fly-by-nights who are completely apathetic to the destructive powers that are inherent in the manufacturing process. This fact is even more frightening when you consider that most of these labs are situated in residences, motels, trailers, and vans. Let me take a moment to highlight some of the provisions of this bill that will assist Federal, State, and local law enforcement in preventing the proliferation of methamphetamine manufacturing in America. First, the bill will bolster the DEA's ability to combat the manufacturing and trafficking of methamphetamine and other drugs by authorizing the hiring of new agents to carry out a variety of anti- drug initiatives. Agents will be hired to assist State and local law enforcement officials in small and mid-sized communities in all phases of methamphetamine manufacturing investigations. Due to the large number of manufacturers and traffickers that are setting up shop in small and rural cities, law enforcement agencies located in these areas are in dire need of the DEA's expert guidance and knowledge of methamphetamine investigations, including assistance in interrogating suspects, conducting surveillance operations, and collecting evidence to build a case. This bill also authorizes the expansion of the number of DEA resident offices and posts-of-duty, which are smaller DEA offices often set up in small and rural cities that are overwhelmed by methamphetamine manufacturing and trafficking. Another way this legislation will help the DEA assist State and local officials is to provide for the training of State and local law enforcement personnel in techniques used in methamphetamine investigations and to provide them with certification training in handling the dangerously-volatile and toxic wastes produced by methamphetamine labs. It also provides for the creation of another DEA program that will enable certain State and local law enforcement officials to recertify other law enforcement in their regions. These programs are authorized for a three year period and designed to pass on the DEA's knowledge and expertise to State and local officials so that they can become more independent of the DEA and thereafter rely rather on each other in combating the scourge of methamphetamine manufacturing. This bill contains many references to the drug amphetamine, a lesser known, but equally dangerous drug. Because the process of manufacturing amphetamine is as dangerous as manufacturing methamphetamine, this bill seeks to equalize the punishment for manufacturing the two drugs. Other than being slightly less potent, amphetamine is manufactured, sold, and used in the same manner as methamphetamine. In fact, many times a person can set out to manufacture a batch of methamphetamine and end up with amphetamine if just one precursor chemical is used in place of another. When this happens, drug dealers sell amphetamine as methamphetamine and users buy and use it thinking it is methamphetamine. The dangers posed to the environment are also the same. Amphetamine labs have the same destructing and polluting ability as methamphetamine labs. Every law enforcement officer with whom I have spoken, including federal and State prosecutors and federal and State law enforcement officials, agreed that the penalties for amphetamine should be the same as those for methamphetamine. Another important section of this bill will assist in preventing the manufacture of methamphetamine and other illegal drugs by banning the dissemination of drug ``recipes'' and other demonstrative information relating to the manufacturing and use of controlled substances. The dissemination of this type of information is prohibited if the intent of the person disseminating the information is for it to be used for, or in furtherance of, a federal crime or if the person disseminating the information has knowledge that the person receiving the information intends to use the information for, or in furtherance, of a federal crime. Currently, there are hundreds of sites on the Internet that instruct how to manufacture methamphetamine and other illegal drugs, including what ingredients are required, what instruments or equipment is needed, and how to combine precisely the ingredients. These step-by- step instructions will be illegal under this bill if the person posting the information or the person receiving the information intends to engage in activity that violates our drug laws. I was shocked to discover that those who embrace the drug counter- culture these days are using the Internet to promote, advertise, and sell illegal drugs and drug paraphernalia. In 1992, Congress passed a law that made it illegal for anyone to sell or offer for sale drug paraphernalia. This law resulted in the closings of numerous ``head shops,'' yet, now the out-of-business store owners are selling their illegal drug paraphernalia on the Internet. This bill will amend the anti-drug paraphernalia statute to clarify that advertisements for sale include the use of any communication facility, including the Internet, to post or publicize in any way any matter, including a telephone number or electronic or mail address, knowing that such matter is designed to be used to buy, distribute, or otherwise facilitate a transaction in drug paraphernalia. This will not only prevent web sites from advertising drug paraphernalia for sale, but it will also prohibit web sites that do not sell drug paraphernalia from allowing other sites that do from advertising on its web site. Currently, anyone can log on to the Internet, go to one of the numerous pro-drug sites, and purchase illegal drug paraphernalia, such bongs, water pipes, ``Toke'' bottles and ``High Again'' bottles, along with descriptions of how these devices can assist in getting a better ``high'' from smoking marijuana. There are even web sites that advertise for sale marijuana and poppy seeds, along with growing and nurturing instructions. This type of behavior is not only reprehensible, but it is also illegal, and this clarifying provision can help stop this behavior from continuing over the Internet. Finally, this legislation seeks to impose harsher penalties on manufacturers of illegal drugs when their actions create a substantial risk of harm to human life or to the environment. The inherent dangers of killing innocent bystanders and, at the same time, contaminating the environment during the methamphetamine manufacturing process warrant a punitive penalty that will deter some from engaging in the activity. Mr. President, many people have grown increasingly more skeptical as to whether America can ever rid our nation of the dreadful plague of illegal drug use. I say to all those skeptics that now is not the time to take a defeatist attitude. Too many bright young people are depending on us to do what is right. Sure, some measures taken in the past have not been as helpful as some may have hoped, but that just means we need to keep persevering to find the right answers. I believe that this bill contains many of the right answers and will help in one of our nation's most difficult struggles. We can defeat the drug dealers and traffickers. We must fight back for the sake of our children and grandchildren. I hope that Senators will join me in this fight and support this very important piece of legislation. Mr. President, I ask unanimous consent that a copy of this legislation and a summary be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, today I am introducing legislation that would provide critical and direct improvements to the competitiveness of the over 2.1 million S corporations nationwide. The vast majority of S corporations operate as small businesses. By 1995, they comprised 48 percent of all corporations. In my home state of Utah, S corporations make up half of the 21,600 corporations in the state. Despite the reforms that were enacted in 1996 and in previous years, the tax laws that currently govern S corporations remain too restrictive, complex, and burdensome, particularly in comparison with the laws that are imposed on other entities. As a result, Mr. President, many of these small businesses are unable to attract sufficient capital and to grow to their full potential. For example, the inability to issue preferred stock denies S corporations access to badly needed senior equity. Capital is also eliminated by a requirement that prevents straight debt from being converted into stock. Substantial reforms need to be enacted to ensure better competition for small businesses in today's increasingly sophisticated and global economy. Mr. President, the current law is threatening the multi-generational family business in our country. Law allows only for 75 shareholders under an S corporation, and each member of a family is currently treated as a single, distinct shareholder. In addition, nonresident aliens are not allowed as shareholders. This ban on nonresident alien shareholders is an outmoded restriction dating back to the creation of Subchapter S. Since that time, partnerships have been allowed to involve nonresidential aliens. And, as the economy becomes more global, S corporations will be at a disadvantage relative to the more flexible partnerships. Mr. President, this bill would eliminate these outdated provisions and allow for all family members to be counted as one shareholder for purposes of S corporation eligibility, as well as permitting nonresident aliens to be shareholders. Mr. President, I urge my colleagues to review and support the Subchapter S Revision Act. This legislation will help American families pass their businesses from one generation to the next and to create a level playing field for small business. We should not allow the more than 10,000 S corporations in my home state, as well as the many others across the country, to be subject to rules and regulations that limit their competitiveness. I am looking forward to working with my fellow members of the Finance Committee in enacting this bill. I ask that a description of the bill's provisions be in included in the Record. The description follows:

Mr. HATCH

Mr. HATCH. Mr. President, I rise to address the funding for the Judicial Branch for fiscal year 2000. The Appropriations Committee that worked on this budget has done an outstanding job with limited resources and very demanding budget requests. Senators Stevens, Gregg, Byrd, and Hollings, and their staffs, are to be commended for doing a very difficult job in a professional manner that does credit to the Senate. As chairman of the Judiciary Committee, I have a special interest in this budget. And I agree with most of the Senate bill. The Senate bill fully funds compensation for judges. This is required by the Constitution. The Senate bill fully funds judges' staffs. This is appropriate because judges cannot operate without their law clerks and secretaries. The Senate bill fully funds the rental costs of court facilities leased from the General Services Administration. This is appropriate because we must have courtrooms for judges and their staffs to work in. Further, the Senate bill appropriately reduces funding for certain expenditure requests that were not critically needed. However, the Senate bill underfunds court support staff and operating expenses for the circuit and district courts by a net 257 million dollars. The Judiciary's budget request was for maintaining the current level of services by support staff. The support staff is needed to handle high levels of criminal cases, bankruptcy cases, pretrial services, and supervised release services. These duties are not going away. The Judiciary is required by law to continue to address each of these areas. Moreover, I note that the Judiciary's budget request does not even take into account the increased workload that new legislation, like the Juvenile Crime Bill, will place on the federal courts. The Judiciary cannot maintain the current level of services in the Courts of Appeal and District Courts without some portion of the 257 million dollar shortfall being replaced. I request that over the next few months we work together to provide the Judiciary with additional funding for support staff on the Courts of Appeal and the District Courts. I am also concerned about a deeper problem that exists with the budget process for the Judiciary. Current law requires the Executive Branch to submit the Judiciary's annual budget request to Congress ``without change.'' Nonetheless, the Administration's Office of Management and Budget indirectly decreases the Judiciary's budget request through the use of negative allowances. The Judicial Branch should be required to be responsible in its budget requests, and I believe they are. But, the Judicial Branch's budget should not be subject to reductions by the Executive Branch to fund the political priorities of the President. Current law prohibits such reductions, but the Administration does not follow this law. This is a systemic problem that I hope we can address in the future along with the Judiciary's current-year budget needs. As legislators, it is our duty under Article I of the Constitution to provide sufficient funds so that the federal courts established under Article III of the Constitution are effective and federal law is upheld. I look forward to working with my colleagues on both sides of the aisle to address these issues in the next few months.

Mr. HATCH

Mr. HATCH. Mr. President, I often detect confusion in foreign policy debate between the concepts of ``interest'' and ``values.'' For example, the President, at the end of Operation Allied Force over Yugoslavia, declared it an operation in support of our values. I disagree: The NATO actions in Kosovo, which I supported, protected American interests, specifically our interests in a stable southeastern Europe. The fact is that defining America's national interest is more fundamental than the promotion of democracy. But the reality is, Mr. President, that where we find democracy we are more likely to find it easier to protect our interests. For this reason, the advancement of democracy as a foreign policy goal has by no means been diminished by the end of the Cold War. I supported the actions of the NED during the Cold War, along with members of both parties. I worked with the NED and International Labor Organization supporting the nascent Solidarity movement in the early 1980s and am deeply proud of the work done by NED's early grantees. But the world is more complicated, with more challenges to U.S. interests, in the post-Cold War era. We need the NED more than ever. And if we look around this complicated globe, we see that NED's activities are complementing our foreign policy. China is perhaps the most vexing challenge this country faces. We cannot determine the direction political evolution in China will take. We hope for the day when democracy spreads to the mainland. Our dear friends in Taiwan, after all, have demonstrated that Chinese political culture is by no means alien to democracy. But on the mainland, the goals of political reform are murky. We don't know what the outcome will be in the next century--it may be democracy, it may be fascism, it may be something else. There is evidence to be optimistic, as we see the increasing manifestations of grassroots democracy and openness. Unfortunately, there is also evidence to be skeptical, given official actions that imprison democratic activists, outlaw non-political organizations, and threaten aggression against us and our friends. My attitude has always been to plan for the worst, but work for the best possible outcome. One of those ways to work for the best possible outcome is to support the NED, which has promoted democracy in China since its inception. A brief and incomplete list of NED's activities in China would include: Supporting, as one of its first grants, a Chinese-language journal that circulated in China in the mid-1980s; Supporting a New York-based human rights group, Human Rights in China, which assembled basic data on conditions in China; Assisting Harry Wu's Laogai Research Foundation, which exposed the abhorrent abuses in China's prison labor system; and, Contributing to the Tibetan Human Rights Foundation. In addition, my colleagues who have read the fascinating reports by the International Republican Institute on their work advising on and monitoring village level elections in China will recognize a practical and profoundly significant activity funded by the Endowment. These are among many, many other programs supported by the NED in China. The skeptics can say that NED's activities are small in comparison to Beijing's power to suppress. That is true. But my view is that it is always better to light a candle than curse the darkness, and the NED has been providing light and support to democrats in China, throughout Asia, and all around the world. Indonesia just had its first free and open elections in over 40 years. Indonesia is the fourth most populous nation in the world after China, India and the United States. As a result of this election, a country that has historically had good relations with us, a country that remains of great geostrategic importance, is now set to become the world's third largest democracy. Indonesia is a country with which we've had shared interests; those interests are now advanced because we now have shared political values. The ruling and opposition parties consulted with the NED throughout the period leading to these historic elections. I could go on and on about NED's activities promoting democracy around the world. I will simply add one more example: Three weeks ago a remarkable conference on emerging democracies was held in Yemen. Yemen, my colleagues will recall, was divided until 1990--South Yemen was one of the most radical countries in the Arab world. Since reunification in 1990, the NED has worked through its core institutes, the International Republican Institute and the National Democratic Institute, to support that country's transition to democracy. Yemen has had two parliamentary elections and is today one of the few Arab nations that has universal suffrage. The government of Yemen deserves the credit for this remarkable political evolution and deserves the support of the United States. But we should be proud, very proud, of the efforts that the NED has expounded in assisting this political reform. And, three weeks ago, when representatives from around the world convened in Yemen to see that this nation of 18 million can enhance its culture and empower its people through democracy, it was appropriate that they saw the NED as a supporter of democracy there, and everywhere. In recognition of these and other activities, brave democracy proponents around the world--individuals that Congress regularly lauds, that we regularly bring to the Hill for their perspectives on their parts of the world--these individuals have spoken of the need to preserve the NED. Hong Kong's Martin Lee, Chinese human rights activist Harry Wu, Vietnamese human rights activist Vo Van Ai, his Eminence the Dalai Lama have all declared the fundamental and irreplaceable importance of the NED in trying to advance democratic values in China, in Asia, around the world. I urge my colleagues to think of these individuals as they determine whether the Senate should continue to support funding for the National Endowment for Democracy. In every region of the world where the U.S. has interests or is challenged--in Bosnia, Kosovo, Iraq--there are people striving and risking their lives for democratic expression. They see the United States as a role model. The NED is actively working with all of these people, and in doing so, demonstrates America's--and Congress's--commitment to their causes. I urge my colleagues to continue their support for this important institution. Exhibit 1 [From the New York Times, July 21, 1999] A Vote for Democracy Abroad In most repressive countries today, civic activists such as election monitors, labor organizers, independent journalists and human rights groups look to Washington for support. But the Senate may vote any day to end one of their most important lifelines. Judd Gregg, Republican of New Hampshire, has persuaded the Appropriations Committee to recommend that the National Endowment for Democracy's funding drop from $31 million to zero. The Senate should defy him and vote to preserve an organization whose mission is more vital than ever. The endowment finances four international affairs institutes, run by the Republican and Democratic parties, the Chamber of Commerce and the A.F.L.-C.I.O. The endowment also gives money directly to organizations abroad that promote the rule of law and democracy. One of its strengths is that its budget is independent of the State Department. It is hard to think of a dictatorship whose opponents have not benefited from the endowment. Among hundreds of other projects, it has provided money and advice for village elections and exposure of prison labor camps in China, human rights groups in Sudan, independent broadcasting in Serbia, families of political prisoners in Cuba and the underground labor movement in Myanmar. Augusto Pinochet might still be ruling Chile if the National Democratic Institute had not helped the opposition set up a parallel vote count during the 1988 plebiscite on his rule, which caught Mr. Pinochet's attempt to rig the outcome. The endowment has earned the right to remain healthy and independent.

Mr. HATCH. Mr. President, I rise today as a cosponsor of the Lugar- Graham-Mack amendment to restore funding to the National Endowment for Democracy. I rise as an unwavering supporter of the Endowment since that day in 1982, when President Ronald Reagan announced his intent to create an institution to promote abroad the most fundamental of American political values --democracy. Since the Endowment was instituted the following year, it has received overwhelming bipartisan support. On six occasions the Senate has debated funding for the NED; on all six occasions the Senate has reaffirmed its commitment. We most recently debated funding the Endowment in 1997 and reaffirmed our support for it in a vote of 72-27. I expect that today the Senate will once again go on record demonstrating support for this venerable institution. Support for the NED goes beyond bipartisan politics. Rarely is there such near-unanimity in the so-called ``foreign policy establishment.'' But, in recent years, we have seen seven former Secretaries of State from both Republican and Democratic presidents--Secretaries Eagleburger, Baker, Haig, Kissinger, Muskie, Shultz and Vance--co-sign a letter in support of the National Endowment for Democracy. But the NED's support extends well beyond the Beltway into American society at large. For example, the U.S. Chamber of Commerce strongly supports the Endowment, recognizing that the promotion of democracy requires the rule of law, on which all fundamental, productive commercial activity rests. The AFL-CIO is also a principal supporter of the NED, recognizing the inseparable bond between the advancement of democracy and the protection of independent labor's right to organize. Both of these organizations, along with the Republican and Democrat parties, form the core groups through which the NED coordinates programs currently active in over 80 countries of the world. Further, support for the NED is widespread among our nation's media, editorialists and academics. How often, Mr. President, do we see editorials in support of an institution on the pages of liberal and conservative media? There has recently been editorial support for NED expressed by The Washington Post, New York Times, Wall Street Journal and The Washington Times. I ask unanimous consent that the editorials be added at the conclusion of my statement.

Mr. HATCH

Mr. HATCH. Mr. President, I won't take long. The amendment exempts juveniles and the mentally ill from the reforms accomplished by the Prison Litigation Reform Act, which was passed in 1996. This was my bill. This amendment would subject State prison systems to micromanagement by the Federal courts. Keep in mind, I am also the author of Civil Rights for Institutionalized Persons, which is to take care of a lot of these difficulties. I cast the deciding vote back in the late 1970s passing that bill. Currently everyone whose Federal or constitutional rights have been violated retains the ability to bring suit and to have any violation of their rights remedied by a Federal court. All this Congress did in 1996 was to say courts could not go beyond remedying people's Federal rights to micromanage prison systems. I am opposed to this amendment because of that. I know the distinguished Senator from Minnesota is trying to do something right, but basically it flies in the face of what the reform basically says. If true constitutional rights are being violated, they have a right to go to court under current legislation, both in the Civil Rights Act for Institutionalized Persons and the Prison Litigation Reform Act, which we passed in 1996. I reluctantly have to oppose this amendment because I believe that basically the current law takes care of it. His amendment would allow micromanagement of the Federal courts. I am happy to yield the floor. I hope my colleagues will vote with me on this, and I believe there will be a motion to table. I hope they will vote to table.

Mr. HATCH

Mr. HATCH. Mr. President, I am committed in my view that the Senate must lead and speak against hate crimes. Many of America's greatest strides in civil rights progress took place during recent generations--from Congress' protection of Americans from employment discrimination on the basis of race, sex, color, religion and national origin with the passage of the Civil Rights Act of 1964, to the protection of the disabled with the passage of the Americans with Disabilities Act in 1990, and many other important pieces of legislation. However, while America's elected officials have striven mightily through the passage of such measures to stop discrimination in the workplace, or to the hands of government actors, what remains tragically unaddressed in large part is discrimination against peoples' own security--that most fundamental right to be free from physical harm. Despite our best efforts, discrimination continues to persist in many forms in this country, but most sadly in the rudimentary and malicious form of violence against individuals because of their identities. As much as we condemn all crime, hate crime can be more sinister than non-hate crime. A crime committed not just to harm an individual, but out of the motive of sending a message of hatred to an entire community--oftentimes a community defined on the basis of immutable traits--is appropriately punished more harshly, or in a different manner, than other crimes. Moreover, hate crimes are more likely to provoke retaliatory crimes; they inflict deep, lasting and distinct injuries--some of which never heal--on victims and their family members; they incite community unrest; and, ultimately, they are downright un-American. I am resolute in my view that the federal government can play a valuable role in responding to hate crime. One example here is my sponsorship of the Hate Crime Statistics Act of 1990, another is the passage in 1996 of the Church Arson Protection Act. Given the seriousness of our objective to eradicate hate crime, it is imperative that any measure abide by the constitutional limitations imposed on Congress, and be cognizant of the limitations on Congress' enumerated powers that are routinely enforced by the courts. This is more true today than it would have been even a mere decade ago, given the significant revival by the U.S. Supreme Court of the federalism doctrine in a string of decisions beginning in 1992. I have therefore proposed a response to hate crimes that is not only as effective as possible, but that carefully navigates the rocky shoals of these court decisions. To that end, I have prepared a measure that I believe will be not only an effective one, but one that would avoid altogether the constitutional risks that attach to other possible federal responses that have been raised. There are four principal components to my approach: First, it creates a meaningful partnership between the federal government and the states in combating hate crime, by establishing within the Justice Department a fund to assist state and local authorities in investigating and prosecuting hate crime. Much of the cited justification given by those who advocate broad federal jurisdiction over hate crimes is a lack of adequate resources at the state and local level. Accordingly, before we take the step of making every criminal offense motivated by a hatred of someone's immutable traits a federal offense, it is imperative that we equip states and localities with the resources necessary so that they can undertake these criminal investigations and prosecutions on their own. Second, my approach undertakes a comprehensive analysis of the raw data that has been collected pursuant to the 1990 Hate Crime Statistics Act, including a comparison of the records of different jurisdictions-- some with hate crime laws, others without--to determine whether there is, in fact, a problem in certain states' prosecution of those criminal acts constituting hate crimes. Third, my approach directs an appropriate, neutral forum to develop a model hate crimes statute that would enable states to evaluate their own laws, and adopt--in whole or in part from the model statute--hate crime legislation at the state level. One of the arguments cited for a federalization of enforcement is the varying scope and punitive force of state laws. Yet there are many areas of grave national concern--such as drank driving, by way of example--that are appropriately left to the states for criminal enforcement and punishment. Before we make all hate crimes federal offenses, I believe we should pursue avenues that advance consistency among the states through the voluntary efforts of their legislatures. Perhaps, upon completion of this model hate crime law, Congress will review its recommendation and consider additional ways to promote uniformity among the states. Fourth, my proposal makes a long-overdue modification of our existing federal hate crime law (passed in 1969) to allow for the prosecution by federal authorities of those hate crimes that are classically within federal jurisdiction--that is, hate crimes in which state lines have been crossed. I believe that passage of this comprehensive measure will prove a strong antidote to the scourge of hate crimes. It is no answer for the Senate to sit by silently while these crimes are being committed. The ugly, bigoted, and violent underside of some in our country that is reflected by the commission of hate crimes must be combated at all levels of government. For some, federal leadership necessitates federal control. I do not subscribe to this view, especially when it comes to this problem. It has been proposed by some that to combat hate crime Congress should enact a new tier of far-reaching federal criminal legislation. That approach strays from the foundations of our constitutional structure-- namely, the first principles of federalism that for more than two centuries have vested states with primary responsibility for prosecuting crimes committed within their boundaries. As important as this issue is, there is little evidence such a step is warranted, or that it will do any more than what I have proposed. In fact, one could argue that national enforcement of hate crime could decrease if states are told the federal government has assumed primary responsibility over hate crime enforcement. Accordingly, we must lead--but lead responsibly--recognizing that we live in a country of governments of shared and divided responsibilities. I encourage this body to question the dogma that federal leadership must include federal control, and I encourage this body to act anew by supporting a proposal that is far-reaching in its efforts to stem hate crime, and that is at the same time respectful of the primacy states have traditionally enjoyed in prosecuting crimes committed within their boundaries. My proposal should unite all of us on the one point about which we should most fervently agree--that the Senate must speak firmly and meaningfully in denouncing as wrong in all respects those actions we have increasingly come to know as hate crimes. Our continued progress in fighting to protect Americans' civil rights demands no less. I take note that there are now two different hate crime measures that have been accepted by the Senate. It is my hope that the conference will consider the Hatch amendment's approach to be the wiser and the more responsible, and accordingly adopt it. Alternatively, however, it is my hope that some accord might be reached between the two versions that respects the constitutional and federalism boundaries I have discussed, and to the extent it is not, I may choose to pursue adoption of my measure through the Judiciary Committee.

Mr. HATCH

Mr. HATCH. Will the Senator from Illinois yield, because I understood I was to begin. I have to do the leadership announcements, and then I was supposed to give my statement.

Mr. HATCH. If my colleague will yield, I would appreciate it. I thank the Senator.

Mr. HATCH

Mr. HATCH. Mr. President, today the Senate will be in a period of morning business until 10:30 a.m. Following morning business, the Senate will resume debate on the intelligence authorization bill with Senator Bingaman to be recognized to offer a second-degree amendment regarding field reporting. Other amendments are expected to be offered and debated throughout today's session of the Senate. Therefore, Senators can expect votes throughout the day and into the evening. The majority leader would like to inform all Members that the Senate will remain in session today until action is completed on the pending intelligence authorization bill. Upon completion of that bill, it is the intention of the majority leader to proceed to any appropriations bill on the calendar. I thank my colleagues for their attention.

Mr. HATCH

Mr. HATCH. Mr. President, I thank my colleague from Illinois for allowing me to proceed with the two sets of remarks I would like to make.

Mr. HATCH

Mr. HATCH. Mr. President, once again, I thank my dear friend from Illinois for allowing me to proceed, and at this point I yield the floor.

Mr. HATCH. Mr. President, I rise to express my heartfelt sympathy to our colleague, Senator Ted Kennedy, and the whole Kennedy Family on the death of his nephew, John F. Kennedy, Jr. John Kennedy, Jr. was much admired by all Americans. The son of Camelot, he was aware of his own celebrity but did not flaunt it. His entry into politics--the Kennedy family business--would have been well paved for him, but he chose to go his own way. He succeeded in the extremely competitive publishing world. When failures in this industry outnumber successes, he created and built ``George'' into a popular and often insightful magazine. By all accounts, JFK, Jr. was a hands-on editor, had a fair hand, and had an eye for what would be interesting and fresh for American readers. His marriage to Carolyn Bessette took America's number one bachelor off the market. But, it also gave his life new dimension. We here in the Senate would be remiss if we did not also express our deepest sympathy to the Bessette family who lost two daughters in this terrible accident. As a father, this is a loss I cannot begin to imagine. It seems that no family should have to endure the level of tragedy that has befallen the Kennedys. I will say to the Senator from Massachusetts: America mourns with you and the Senate mourns with you, your family, and the Bessette family as well. Elaine and I want to express publicly what we have said privately, which is that you and your family and the Bessette family are in our thoughts and prayers. May God hold you in the palm of his hand. (The remarks of Mr. Hatch pertaining to the introduction of S. 1406 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. HATCH

Mr. HATCH. Mr. President, we are nearing the end of debate on legislation that is, unquestionably, one of the most important measures to be considered in the 106th Congress. We have heard the horror stories about denials of coverage for certain treatments. We have heard about the bureaucratic nightmares suffered by family members who have a simple question: Why can't the insurance companies understand a family's anxiety as well as they understand the costs of diagnostic tests or the arcane science of filling out forms? As a matter of fact, our constituents may be surprised to know that many of us have also experienced the bureaucratic two-step, many of us have also sat on ``hold'' trying to get past an automated switchboard. Our colleagues on the other side of the aisle have made it seem that we are completely oblivious to the health care needs of the American people. On the contrary, we are well aware of the public's frustration and of the need for effective legislation to ensure that those individuals enrolled in managed care plans are provided quality health care. Over the past several years, numerous hearings have been held in both the Senate and the House of Representatives, exposing story after story about individuals who had complaints about their managed care plans. The National Association of Insurance Commissioners (NAIC) recently published figures that, in 1998, more than 35,000 health insurance complaints were made to state insurance departments. According to an article in the February edition of the Employee Benefit Plan Review magazine, ``consumer complaints about health insurers and HMOs are surging.'' The article goes on to say that ``these complaints encompassed matters such as health care claim denials, disputed claims, slow payments by health insurers, and premium-related matters.'' But the article also reports that insurance commissioners in 12 states where the data were collected ``doubt the rise implies a deterioration in care but rather that the numbers reflect greater public readiness to fight HMOs, and encouragement by states for consumers to file complaints.'' Enrollees in managed care plans are not likely to acquiesce and abide by coverage decisions as final--when their lives are at stake. That is why we are here today and that is why the Senate is now poised to take significant action in addressing this issue for the American people. The question before the Senate this week is not so much will we pass a patients' bill of rights measure--and I hope and believe that we will--but rather what kind of patients' rights bill will the Senate pass and send over to the House of Representatives for consideration? All of us in this Chamber know very well there are numerous competing bills that have been introduced over the years that provide a variety of legislative remedies to address these concerns. In many respects, these bills have common components intertwined with similar and, in some cases, identical provisions. It is my understanding that there are presently 47 various bills that have been introduced in the Senate and House this year alone which are designed to provide patient protections to managed care enrollees. Clearly, we are all concerned. But, for Congress to act and pass responsible and workable legislation, we must come together in a bipartisan fashion and put forth the best bill for the American people. We have done this many times on health care legislation in the past, and there is no reason why we cannot succeed again today and do what is right for the country. I have joined 49 of my colleagues in sponsoring one of the proposals currently under consideration, S. 300, the Patients' Bill of Rights Plus Act of 1999. This legislation, along with its companion bill, S. 326, represents a balanced approach at addressing the concerns over managed health care. This bill is sound public policy that avoids unnecessary and costly federal mandates that would ultimately undermine the affordability and availability of health insurance to millions of Americans. S. 326 was considered in the Senate Health, Education, Labor, and Pensions Committee, where extensive hearings were held affording an opportunity for all points of view to be heard on the various provisions of the legislation. The HELP Committee reported S. 326 on March 18, 1999, and I want to commend Senator Jeffords and the members of the HELP Committee-- Senators Frist, Collins, Gregg, and others--for their work on this legislation. S. 300 is identical to S. 326 except that it contains important tax provisions that will make health insurance more affordable for those who either do not have insurance, or are paying high premiums for such coverage out of their own pocket. For instance, pursuant to the Title V provisions of S. 300, self- employed taxpayers would be permitted a 100 percent deduction for health insurance premiums. This provision would be effective beginning next year thereby easing the financial burden for self-employed individuals. Moreover, S. 300 removes the current law provisions restricting Medical Savings Accounts, or MSAs, to employees of small employers and self-employed individuals, making MSAs far more generally available to individuals than they are today. This legislation also eliminates the existing 750,000 policy cap on the number of taxpayers who can have MSAs as well as the cap placed on Medicare+Choice MSA plans. I would emphasize that a December 1998 report from the General Accounting Office concluded that 37 percent of those individuals who enrolled in MSAs were previously uninsured. Clearly, with greater availability and flexibility in the MSA design, these plans will attract even more of the uninsured. These tax provisions will provide much needed reforms in tax-based assistance to those individuals without employer-subsidized insurance. They also will help millions of employees and business owners in obtaining coverage. Today, however, the pending bill is S. 1344, championed by Senator Kennedy and my colleagues on the other side of the aisle. For months, we have heard from a number of our colleagues on the Democrat side about their desire to bring their bill to the floor for a vote. I am glad they got their wish, although I happen to believe that Senator Lott was quite generous in agreeing to this debate before we had even finished the appropriations bills. So, I hope we will hear no more about the majority's unwillingness to have this debate. So, tomorrow, with the roll call of the clerk, we will decide which approach to managed care reform will be in the best interest of our constituents. So I encourage the American people to listen carefully to this debate. I encourage them to listen with discernment. They will have to separate a lot of fact from fiction and a lot of reality from rhetoric. Let me see if I can shed some light on the fundamental differences that distinguish the Republican bill from the bill being advanced by Senator Kennedy and President Clinton. Contrary to the allegations made by some of my colleagues, the Republican bill that was reported by the HELP Committee--S. 326--is not the insurance industry's bill. In fact, the insurance industry's idea of a bill is no bill at all. Officials from the insurance and managed care industry tell me they not only oppose the Democrats' bill, S. 1344, but they also oppose the Republican bill, S. 326. S. 326 would, in fact, impose a number of new rules on group health plans relating to access to care, scope of coverage, disclosure of plan information to enrollees, and appeals of claim denials. Our Democrat colleagues assert that our bill is limited in scope and that it does not apply to all enrollees in ERISA plans. That simply is not true. Our bill includes many important features that will provide patient protections for enrollees in self-insured ERISA plans, about 48 million people. However, our bill also provides protections to all ERISA enrollees, or 124 million people, regarding the critically important issues relating to an internal and external appeals process, patient information disclosure, and on discrimination in underwriting based on genetic information. On the surface, the Democrats' criticism of our bill sounds credible. But the fact of the matter is that states have historically regulated the insurance market for those individuals not in self-insured ERISA plans. Why should Congress now suddenly preempt these regulations and impose a whole new series of costly federal mandates on plans that are already state regulated? In Utah, there are currently 21 state mandates on fully insured health insurance plans. Let me just highlight some of these rules: Direct access to OB-GYNs was adopted in 1995. The ban on the so-called gag clause was adopted in 1997. We have rules on drug abuse treatment, alcoholism treatment, maternity stays, coverage for optometrists, nurse midwives, podiatrists, psychologists, chiropractors, and well-child care. Why does the Congress need to duplicate and preempt what the states are already doing? And perhaps the single most driving reason why we should not impose these rules on all health plans is that the Health Care Financing Administration would ultimately regulate this whole program. Frankly, I have more confidence in our state legislature and governor in deciding what is best for Utah. I mean, if you think health insurance is complicated and bureaucratic now, just wait until HCFA is second-guessing everything from Washington, D.C. HCFA is that federal agency that administers Medicare and Medicaid--both of which have regulations that are the size of the New York City telephone directory. Mr. President, our constituents will benefit absolutely nothing if we merely transfer regulatory power from states to the federal government. On the contrary, they will suffer even more frustration since decisionmaking is more remote in terms of both distance and impact. Under the Republican bill, those plans which historically have been subject to state insurance regulation will remain subject to state law. This is consistent with the McCarren-Ferguson Act of 1945 which essentially codified the states traditional role in regulating the insurance industry. This is a wise policy that has worked well in many sectors including life insurance, automobile insurance, business casualty insurance, as well as health insurance. All of these areas are important, and thank goodness we don't hear cries to federalize matters like car insurance. The McCarren-Ferguson Act embraces the important principles contained in the 10th Amendment to the Constitution, which reserves to the states all governmental functions not specifically assigned elsewhere in the Constitution to the federal government. Elected state and local officials can weigh unique state and local conditions. As well, state and local officials can be held politically accountable for their decisions concerning state and local matters--including insurance regulation. So, while it may be true that health care is a vitally important matter, it does not necessarily follow--as my colleagues across the aisle apparently believe--that we should rush headlong into federalizing every aspect of health care delivery. The Congress wisely rejected this type of misguided thinking in 1994 when the public registered its adamant opposition to the Clinton/Kennedy/Gephardt health care reform bill. I do not think my friends on the other side of the aisle really mean to send the message that only the federal government can tackle ``important'' matters and that states and local governments are okay to handle the insignificant, less important issues. If that isn't the height of federal elitism, I don't know what is. From the beginning of our nation it has been left to the states to regulate the licensure of doctors and nurses. What is more important to the integrity and performance of the health care system than the credentialing of health care professionals? Do my colleagues want to take that over as well? Don't be fooled by the false argument that if something is not federally controlled and regulated by Washington that somehow that it will be second-rate. The Republican bill recognizes the traditional role of the states in the health insurance arena. By and large our states do a first-rate job with the responsibilities assigned to them under the Constitution and by law. States have done a good job in regulating the insurance industry--a task assigned to the states back in 1945 by the McCarren- Ferguson Act. This is not to say that every aspect of the insurance industry should be beyond some reasonable federal requirements. The bipartisan Health Insurance Portability legislation is one example where we all worked together to fashion a narrow, targeted, and effective set of federal rules that apply to health insurance. The challenge for legislators is to evaluate carefully which particular issues require national rules and which issues are best left to the states. In this regard, I must highlight the Republican bill's treatment of one of the most important aspects of this legislation-- dispute resolution. Under our bill, the important appeals process protections, which are the fundamental heart of this debate, apply to all ERISA plans. The Republican bill revises and improves the existing internal appeals provisions and adds new external appeal and nonappealable grievance procedures. And, as under current ERISA law, the claims procedures apply to both self-insured and fully-insured group health plans. I would add that the issue of ensuring a patient's right to an appeals process, for both internal and external review, is one of the central issues in the patient protection debate. Under the Republican bill, health plans are required to issue an internal coverage decision within 30 days after the date on which the request for review is submitted. The notice of the decision must be issued no later than 2 working days after the decision is made. For matters in which a patient's life or health is in jeopardy, a plan's decision must be made within 72 hours after a request for review is submitted. A notice of that decision must be made within that 72 hour period. Moreover, the review is to be conducted by an individual with appropriate expertise who was not involved in the initial determination. Appeals involving issues of medical necessity or experimental treatment are to be conducted by physicians with appropriate expertise. With respect to appeals for external review, the Republican bill requires that after a patient's internal appeal is denied, he or she can then submit a written request for review which must be submitted within 30 days after the date of the internal review decision. Within 5 working days after the receipt of a request for review, the plan will select an external appeals entity that will designate external reviewers. These entities could include an independent expert in the diagnosis or treatment under review, or certain state or federally authorized or privately accredited entities using appropriate credential experts. In addition, external reviewers are required to make an independent determination and consider all appropriate and available information on the patient. The review must be conducted no later than 30 working days, or earlier, after either the date on which a reviewer is designated, or all necessary information is received. And, finally, the decision of the external reviewers is binding on the health plan. With respect to the consumer protection standards, our bill provides for the following: Our bill requires that a group health plan ensure that enrollees have access to specialty care when covered by the plan. Our bill would require a plan to provide coverage for emergency medical care, including severe pain, without prior authorization by applying the so-called prudent layperson standard to medical screening. Our bill would permit individuals, with their providers consent, to continue a covered course of treatment for up to 90 days when a contract between a group health plan and health care provider is terminated. Our bill would permit women to obtain gynecological and obstetric care from a participating OB-GYN specialist without prior authorization by a primary care provider. Our bill would permit a child to obtain pediatric care from a participating pediatric specialist without prior authorization by a primary care provider. And, under our bill, a plan could not impose a prohibition or restriction on advice by a health professional for medical care or treatment. In effect, our bill prohibits the imposition of the so- called gag rule. With respect to the issue of information disclosure by managed care plans, S. 326 requires new information collection and reporting requirements relating to benefits, access to specialty care, coverage of emergency services, advance directives, prior authorization rules, appeals and grievance procedures and a list of specific prescription medications included in the formulary of each plan. And, on the controversial issue of drug formularies, both physicians and pharmacists must participate in the development of a drug formulary, and a plan must have a process to allow physicians to prescribe drugs that are not listed on the formulary. Finally, I want to commend my colleague, Senator Frist, for his principal role in developing the provisions for a comprehensive independent study of patient access to clinical trails and for developing the provisions to improve medical outcomes research. Senator Frist is the only physician in the Senate and, quite frankly, I'd much rather have his advice and expertise in developing this legislation than the input of attorneys who had helped shape the Democrats' bill. Mr. President, for anyone to describe S. 326 as ineffective and not doing much to help patients, I would respectfully submit that they simply have not read the bill. S. 326 will help people. It will help those people who most need our help: those people who are enrolled in health plans that are not regulated by the states. This legislation strikes an appropriate balance between ensuring patient protections without imposing excessive and costly new federal mandates on the private sector. In that respect, let me also add one other point: I was not particularly enamored with S. 326 when I first read it. It contains numerous federal mandates which, historically, I have opposed. I find it particularly troubling that the federal government will impose these mandates on the private sector because this action will drive-up the costs of health insurance which may ultimately lead to employers dropping health insurance altogether. And I can assure you that comments from the business community about dropping health insurance altogether are not idle threats. The one issue I hear most often from employers, especially from small and middle size companies which comprise most of the businesses in Utah, is the rapidly escalating costs associated with providing health insurance to employees. Employers want to provide their employees with comprehensive health insurance plans. In fact, in order for them to compete in today's competitive marketplace for talented and skilled help, they must offer employees decent health insurance coverage. I recently received a letter from one of my constituents who owns and operates a small company. Ms. Hydee Willis owns a small business called ``Creative Expressions'' in Murray, Utah. She wrote to me and said: I am a woman owned business person--fought through the ranks over the last 18 years of being in business [and] of fighting the entire stigma a woman in business [has] in this country. I have struggled with the intense feelings of inadequacy and helplessness as I lost employee after employee to larger companies able to offer wonderful benefits. She further states: After weeks of research and many agents, we finally found a plan that gave our employees at least part of what they wanted. Yesterday, the final program papers were put on my desk and a check was being requested by the insurance agent. My heart sunk. To insure 13 people, basic health coverage with $250 individual deductible, my costs are $3,700 per month per employee or $44,400 per year. Moreover, she writes that the employees' share of the premium was equally staggering with ``one manager with a family of five having a bill of $458 per month.'' Ms. Willis will ultimately pay the price for the federal mandates imposed under any legislation passed by the Senate. And so will her employees. Here is where the rubber meets the road. Here is where all of our platitudes about quality collide with issues of access and affordability. Here is where reality should set in for my colleagues who are advocating on behalf of the Clinton administration's proposal. While I have admitted my concerns about the Republican bill, at least, the increase in premiums will be .04 percent annually. Under the Democrat plan, the increase in premiums will be 6.1 percent annually. The former may be manageable; the latter will undoubtedly have serious repercussions. Mr. President, we simply cannot ignore the fact that whatever legislation we pass here in the Senate this week will ultimately be paid for by employers and employees alike. The federal government is certainly not going to pay for this; the American people--employers and employees alike--will pay for it, and that is precisely the reason why I oppose the Democrats' bill. Too many federal mandates will only mean no patient protection because no one will be able to afford health insurance. Who is left to protect when employers drop health coverage altogether because they and their employees can no longer afford it? In fact, we are already seeing an average premium increase this year of approximately 10 percent. With the 6.1 percent premium increase that the Congressional Budget Office estimates as the cost of the Democrats' bill, you are conceivably looking at a 16 percent increase in health insurance premiums--in just one year! That is not the kind of legislating I believe the vast majority of my constituents in Utah would support. Nor would most Americans. Even the letters I've received from my constituents who support the Democrats' bill are sensitive to the unintended financial consequences that passage of a misdirected and overly broad bill will have on health insurance affordability. Another area where there is wide disagreement between the Republican plan and the Democrat plan is on the issue of expanded litigation. The core of this debate is the critical issues associated with the expansion of health plan liability for coverage decisions and to allow tort actions for wrongful death and personal injury under state malpractice laws. Under the Republican plan, when patients are denied medical treatment or benefits, they have the right to a second opinion from a trained medical professional. Under the Democrat plan, when patients are denied medical treatment or benefits, they have the right to see a lawyer. Am I missing something here? If I have a medical condition, I want the services of a medical professional. Why is it that the first thing the Clinton administration thinks of is going to court? However, as a former medical malpractice attorney myself, I fully understand and appreciate how trial lawyers will benefit from the expanded litigation provisions in the Democrats' bill. It would be a bonanza for trial attorneys. The expanded liability provisions in S. 1344 are, by far, the most costly component of their bill. Expanded liability would increase costs by eroding the ability of a health plan to contain costs and provide quality care. It will also compel health plans to allow for coverage of defensive medicine practices, or the inappropriate and even unnecessary medical care to protect themselves from liability. Earlier this year, the Health Care Liability Alliance sponsored a briefing identifying the impact of the current health care liability system on health care costs and access issues. At that briefing, former Attorney General Dick Thornburgh provided an overview of the current state of affairs in our nation's legal system with respect to health care liability. Mr. Thornburgh stated, ``We've got plaintiffs' lawyers raking in millions in contingency fees while the clients they represent settle for pennies on the dollar. This is increasingly becoming the case in class action lawsuits.'' He further states, ``there are estimates that lawsuit abuse is costing the U.S. economy as much as $150 billion each year! And, there is the social cost to society with the impulse to settle every squabble with a subpoena.'' In addition Mr. Thornburgh says, Few areas provide such ample evidence of a legal system run amok than the area of medical liability. Compared to lawsuit abuse in other sectors of the economy and society, the litigation explosion in the health care area is, if anything, more damaging precisely because health care means so much not only to patients involved, but to all of us who--as potential patients--count on a vital, vibrant health care system to give us the best care that medical science can provide. Under the Democrats' bill, ERISA would be amended to expand state tort liability to health plans--and to employers. Interestingly, with respect to the practice of medicine, ERISA currently does not preempt state law malpractice claims against medical professionals for providing substandard care. A patient can sue an ERISA plan for medical malpractice. In addition, there has been a clear trend in recent years in federal court decisions that managed care organizations are held ``vicariously liable'' for the malpractice of health providers. With respect to denied benefits, ERISA already provides for a ``full and fair review'' of disputed claims. If the result of the benefit plan's internal appeal process is not satisfactory to the patient, then ERISA provides patients with a right to judicial review in either federal or state court, and the court may award attorneys' fees, court costs, the benefits denied, and ``other equitable relief'' as needed. In lieu of expanding health care litigation, the Republican bill provides specific internal and external appeals rights that would apply to all 124 million Americans covered by group health plans under ERISA. It seems to me to make better sense to provide an appeals mechanism that is timely and responsive to those individuals who seek a remedy on matters involving benefit coverage or denial. The Republican bill will achieve that objective. I have heard from many Utahns who voice strong opposition to expanding liability to both health plans and employers. Our objective is to ensure patients obtain the necessary treatment they need. I say to my colleagues on the other side, the ability to sue will not help those who face life threatening diseases. Malpractice claims take an average of 16 months to file and 25 months to resolve. And, as the record clearly shows, the contingent fee system promotes an aggressive trial bar that dramatically inflates medical malpractice claims. I would add that even the President's own Advisory Commission on Consumer Protection and Quality in the Health Care Industry did not recommend expanded liability for health plans as the commissioners agreed that such a recommendation would have serious consequences within the industry as well as for employees who would likely see the costs of their premiums increase dramatically. Furthermore, plaintiffs receive only 43 percent of their tort awards--the other 57 percent goes to the trial lawyers. We need a workable system that establishes specific time frames to ensure patients have an effective appeals process to address disputes. The Employee Retirement Income Security Act of 1974 has served this country well over the last 24 years by enabling employers to provide health care coverage and other benefits that meet the needs of their employees and families. Approximately 124 million Americans are enrolled in health care coverage through their employers under ERISA. Health care coverage for these people will clearly be threatened by opening up the floodgates to expanded litigation and shifting millions of dollars away from the provision of health care to the pockets of trial attorneys. The Republican bill provides an expeditious remedy under which patients can appeal decisions. In my opinion, the appeals mechanism in our bill is far preferable than handing these matters over to the courts and to trial lawyers. I might also speculate that resources not spent on lawsuits could be spent more productively on behalf of patients. Mr. President, as I have listened to the debate on patients' protection legislation, I am struck by the emotion and intensity that this issue holds for many of my colleagues in the Senate. This is a deeply personal issue for all of us because it literally affects the lives of people. At the end of the day, isn't that the reason why we are here? We are here to help our constituents and, indeed, to help all Americans. I had hoped this debate would have produced more consensus. I believe there is probably more agreement on these issues than is apparent by this week's debate. I support the Republican leadership bill because it provides a balanced approach at addressing the complex and emotional issue of patient protection. It's not a perfect bill and, for that matter, neither is the bill offered by the Democrats. But we have an obligation to the American people to do what is reasonable and responsible. I want the American people to know that we in the U.S. Senate are dedicated to providing access to the highest possible quality care at an affordable price to everyone across the country. For my part, I will continue to fight for increasing access to health care to the medically uninsured. It is troubling to me that 43 million Americans do not have health insurance coverage. But, I am afraid that the Clinton administration proposal violates the Hippocratic oath to do no harm. Accordingly, I urge my colleagues to support the Republican bill for the good of their constituents, and for the good of the American people. Thank you Mr. President.

Mr. HATCH

Mr. HATCH. Mr. President, I want to take a few moment to speak on behalf of the conference report. As you know, the negotiations over the details of the Y2K Act entered their final phase last Friday, during the weekend, and through Monday and Tuesday of this week. With the tremendous help and diligence, particularly of Senators McCain, Dodd, and Wyden, we were able to craft a compromise bill which addresses every one of the major concerns of the White House. Let me say that the final bill reflects the spirit of compromise. But I must admit that I believe the original Judiciary and Commerce Committee bills--along with the House bill--would have been far more effective in dealing with the problem of the expected frivolous and massive Y2K litigation--than the current compromise measure. But because of the overwhelming importance and need for this bill, both sides acted in good faith and reached an equitable agreement. Let me explain the depth and breadth of the changes that were made. First of all, the House, recognizing the urgent need to pass this legislation, acceded to the far more lenient Senate bill. In practice, this meant that twelve major provisions of the House bill were dropped, ranging from elimination of both caps on director and officer liability to caps on attorneys fees. In the conference negotiations, seven further important concessions were made. Finally, in negotiations with the White House led by Senator Dodd, we agreed to six further significant modifications to the bill. Mr. President, I have a list of these changes. I also have a letter from John Podesta to Senator Dodd, dated June 29, that enumerates the changes requested by the White House and--except for minor technicialities--agreed to by the conference. I ask unanimous consent that these two documents be printed in the Record.

Mr. HATCH. There can be no question that the final bill is more than a fair compromise. It balances the need to protect consumers against the need to safeguard business--particularly our high tech industries-- from the ravages of unrestrained predatory litigation. Indeed, some experts maintain that litigation over the Y2K bug could cost the world economy over one trillion dollars. I must emphasize the importance of this. One reason that our economy has been prospering is the beneficial effect of its increasing computerization. The Chairman of the Federal Reserve Board, Alan Greenspan, has asserted several times that the economy's increased productivity is in part due to computerization and the information revolution. And one of America's biggest exports is high technology goods and services. Without this bill, we would be strangling the proverbial goose that lays the golden egg. America must remain the pacesetter in high technology and the leader of the information revolution. Our security and national defense demands it. Because of the importance of this issue, I have stated that I want a bill and not a partisan issue. I believed that compromise was the only way to achieve a product that was both fair and that would pass Congress. The bill we produced is a good product. But, it could have been a better product if the administration had been more forthcoming. Despite frequent requests by myself, Chairman McCain, and other Senators, for the administration to become actively involved, the administration did not seriously enter into negotiations until last week. They now--after hours and hours of talks--reluctantly support the bill. Well, better late than never, I guess. I want to reiterate my thanks to Chairman McCain and Senators Dodd and Wyden. I also want to thank the other conferees, Senators Bennett, Thurmond, Gorton, Stevens, Burns, Leahy, Hollings, and Kerry, for all their hard work and efforts in making this bill fair, as well as, effective. Senator Bennett in particular was an early advocate for prompt and meaningful action on Y2K. I would also be remiss not to note my appreciation for the hard work and dedication of the cosponsor of my Senate Judiciary Y2K bill, Senator Feinstein. I also want to thank the House conferees for their hard work and for their wisdom and prudence. Finally, I want to thank the Senator and House staff for their dedication. I know the long hours they labored. I urge all Senators to support this compromise conference report.

Mr. HATCH

Mr. HATCH. Mr. President, today the Senate is considering four very important intellectual property related ``high-tech'' bills that Senator Leahy and I have introduced to promote the continued growth of vital sectors of the American economy and to protect the interests and investment of the entrepreneurs, authors, and innovators who fuel their growth. These bills were reported by unanimous consent earlier today by the Judiciary Committee. Technology is the driving force in the American economy today, and American technology is setting new standards for the global economy, from semiconductor chip technology, to computer software, Internet and telecommunications technology, to leading pharmaceutical and genetic research. In my own state of Utah, these information technology industries contribute in excess of $7 billion each year to the State's economy and pay wages that average 66 percent higher than the state average. Their performance has placed Utah among the world's top ten technology centers according to Newsweek Magazine. Similar success is seen in areas across the country, with the U.S. being home to seven of the world's top ten technology centers and with American creative industries now surpassing all other export sectors in foreign sales and exports. Underlying all of these technologies are the intellectual property rights that serve to promote creativity and innovation by safeguarding the investment, effort, and goodwill of those who venture into these fast-placed and volatile fields. Strong intellectual property protections are particularly critical in the global high-tech environment where electronic piracy is so easy, so cheap, and yet so potentially devastating to intellectual property owners--many of which are small entrepreneurial enterprises. In Utah, 65 percent of these companies have fewer than 25 employees, and a majority have annual revenues of less than $1 million. Intellectual property is the lifeblood of these companies, and even a single instance of piracy could drive them out of business. What's more, without adequate international protection, these companies would simply be unable to compete in the global marketplace. That is why we enacted a number of measures last year to provide enhanced protection for intellectual property in the new global, high- tech environment. For example, the Digital Millennium Copyright Act (DMCA) implemented two new World Intellectual Property Organization Treaties setting new global standards for copyright protection in the digital environment. We also paved the way for new growth in online commerce by providing a copyright framework in which the Internet and other new technologies can flourish. This year, Senator Leahy and I are continuing to focus our attention on important high-tech and intellectual property legislation. The bills we are considering today will build upon existing protections, including last year's measures to deter digital piracy, by raising the Copyright Act's limit on statutory damages to make it more costly to engage in cyber-piracy and copyright theft. They will also make technical ``clean-up'' amendments to the DMCA and other Copyright Act provisions to make them clearer and more user-friendly. On the trademark side, these bills will make the protection of famous marks easier and more efficient and provide recourse for trademark owners against the federal government for trademark infringement. Finally, these bills will allow the Patent and Trademark Office to better serve its customers--America's innovators and trademark owners--through the collection and retention of fees. Each of these bills is noncontroversial and enjoys widespread support. I want to thank Senator Leahy for his assistance, cooperation, and leadership in this process, and I look forward to the Senate swiftly passing these bills today.

Mr. HATCH

Mr. HATCH. Mr. President, I thank my colleague. I have been very intrigued and interested in the remarks that have been made. I just want everybody to know that I want to go to conference on this bill. The Hatch-Leahy-Biden-Sessions-Feinstein bill is a very important bill. We all know it. We all know it is important. We all know that we need to pass it this year. Let me just say this: Leadership will, in my opinion, appoint conferees in July because I believe we have to do this. I met just this week with leaders in both the House and the Senate-- the majority leader in the Senate and the Speaker of the House. I know the intention is to appoint conferees and to have this matter resolved. My hope is that we will pass a conference report before the August recess. No one wants this bill more than I do. It is an important bill. To hear some of my colleagues speak, though, you would think that 99 percent of this bill is a gun control bill. I would say that a very small part of it involves guns, and the rest of it addresses in a serious way the very important issues we must confront regarding juvenile violence and juvenile justice. These are the truly critical parts of this bill.

Mr. HATCH

Mr. HATCH. Mr. President, I rise in support of Senator Brownback's amendment to the FY 2000 Foreign Operations Appropriations bill, the aptly named ``Silk Road Strategy Act.'' This act puts in place a much- needed strategy toward a much-overlooked part of the world, a part of the world that the U.S. would ignore at considerable risk. I commend my colleague from Kansas for the extraordinary effort he has committed to shaping this policy and drafting this legislation. Senator Brownback has spent several years studying this region, traveling through it, meeting with political leaders and economic decision makers and discussing his thoughts with the Administration. The fruits of this in-depth research and commitment are evident in this amendment. I also thank my colleague for working with me to include language in this bill that strengthens the U.S. policy of opening these markets and raising these countries' level of economic cooperation with the United States through bilateral investment treaties. As the senior Senator from Utah, I am very fortunate to represent a State with many far-sighted international commercial ventures, and the language I proposed, which Senator Brownback has thoughtfully accepted, supports those interests by requiring the Secretary of State to report annually on the progress that is being made in negotiating investment treaties with nations of the region. I believe this measure will, for the time being, be sufficient to monitor progress in these important negotiations and will alert these nations to the serious concerns that the U.S. Congress has in protecting U.S. investments abroad. U.S. companies investing in this region should have the protections of bilateral investment agreements. This is entirely consistent with the strategy of the ``Silk Road Act,'' which is posited on the accurate belief that increased U.S. participation in this region is fundamental to their development and our interests. The economic component is only one part of the strategy of this amendment. By promoting infrastructure development, democratic political reforms, sovereignty, independence, and conflict resolution, the Brownback proposal will contribute to political stability and progress as well. Last fall, during a visit to the region, I went to the Republic of Georgia and renewed an acquaintance with Edouard Shevardnadze. An artful negotiator as foreign minister in the last years of the Soviet Union, President Shevardnadze returned to has native Georgia, which became independent as a result of the demise of the Soviet Union. As President of Georgia, Edouard Shevardnadze has been a stalwart promoter of democracy and an open economy, and he has done so under very, very difficult circumstances. Close to one-quarter of his nation's territory is not under central government control. Russian soldiers remain stationed on some of that territory, against the will of the Georgian government. President Shevardnadze has twice narrowly avoided assassination--one of his assassins freely resides in Russia today. In my discussions with President Shevardnadze, we discussed the need for increased U.S. attention to this region and increased participation by U.S. commercial interests. This ``Silk Road Strategy Act'' promotes these goals. The region of the world that this act addresses remains rife with internal conflicts, cross-border incursions, and--perhaps most disturbing--continued challenges by radical Islamic interests, supported in many cases by the extremists in Iran. If these conflicts succeed in destabilizing the region, millions of people recently freed from nearly a century of communist totalitarianism will be denied their economic and political progress, nations surrounding the region will be drawn into wider conflicts, and international markets will be affected. Further, and most importantly, if this region slips toward instability, I am deeply concerned that the U.S. will see the Central Asian and Caucasus States become the source of many future conflicts. Some of these conflicts could have troubling transnational consequences that directly affect us, such as the spread of terrorism and international crime. I commend Senator Brownback for this valuable legislation, which makes a solid and important step in refocusing U.S. interests to a part of the world that is important to us now, and will be even more important in the future.