Frank Murkowski

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, we will soon vote on a $15 billion spending bill that will, among other things, further fund the war against Yugoslavia. Although the Administration requested some $6 billion for military and humanitarian needs for the Kosovo operation, this amount has almost doubled, and is well over $11 billion. Sadly, this higher figure will not get our readiness back where it needs to be--where we could, at the drop of the hat, successfully wage two full scale wars at the same time--as directed in the ``Quadrennial Defense Review.'' It also illustrates something seriously gone wrong here in Washington, D.C. Only a small amount of these funds are subject to offsets--its as if there is this notion, both in the Administration and in Congress, that this is ``free money.'' Well it's not, Mr. President. For every dollar spent, another priority loses out. And I can think of a whole host of areas where this money would be better spent than in fighting a war in a part of the world where most Americans can't clearly identify on a map. Tax cuts, Social Security, Education, to name just a few. I will vote against this bill for two reasons: (1) our Kosovo policy is seriously flawed and the only way we in Congress can truly voice our opposition is voting where it hurts the most--the pocketbook; and (2) this is a spending bill gone mad--there is no fiscal accountability here, nor is there any notion of fiscal responsibility. This vote, at least for me, will be one of the toughest I have had to cast in my tenure in the United States Senate. I strongly support our military, and am proud of our men and women in uniform. I certainly do not want to jeopardize our people who are charged with carrying out this war. But even so, this is not a vote against our military--rather, it is a vote in opposition to the Administration's seriously flawed, if not inept Kosovo policy. No one disputes that Milosevic is a bad person and that he should be stopped. His brutal, persistent attacks on the Albanian Kosovar people is akin to Germany in the Second World War. But air strikes alone are not going to do it--they will level Yugoslavia, destroy most of its infrastructure, terrorize its civilian population, and most likely, not be successful stopping Milosevic. I do not believe that our war fighters' are being given sufficient latitude to make this mission a success. Their decisions are subject to dual-review: (1) the ``political'' review of the White House; and (2) the ``consensus'' of our NATO allies through every step of the war. A few examples. General Clark's request to deploy gunships continues to be denied by ``senior military advisors in Washington, D.C.'' Who are these people? The Joint-Chiefs of Staff? Or Sandy Berger and Madeleine Albright? It took over a month to get Apache helicopters to the region; and they sit grounded because the ``polls'' show no support for a ground campaign. It seems to me that one of the first priorities in waging a war is to cut off the supply lines of the other side--and oil, in particular, so that they cannot fuel their tanks and planes. Unbelievably, the NATO alliance refused to cut off the flow of fuel that fires Milosevic's war machine. Although the U.S. proposed a blockade to stop the oil, it was defeated by France which opposed implementing a blockade without a formal declaration of war. We are executing massive, full scale air bombings every day; people are being killed; but the French believe a declaration of war must be a precondition for a blockade. Our bombs have gone off course several times, hitting refugee convoys, the country of Bulgaria, and the Chinese embassy in Belgrade-- which is technically Chinese soil in Yugoslavia. At least in the case of the Chinese embassy, it wasn't the bombs at fault, it was our intelligence. Although the tourist maps in Belgrade accurately place the Chinese embassy in that locale, our intelligence was using an outdated map that led them to believe it was a procurement center for the Serbian military. The Chinese people are outraged, and well they should be. But the American people should be just as outraged--not just by this bombing, but by the continued incompetence which has come to typify this policy. I fail to understand how waging this war by NATO consensus is getting us anywhere except more deeply involved militarily, and less likely to find a diplomatic solution to this crisis. Mr. President, wars should not be waged by consensus, and diplomacy should not be directed by polls. Internationally, the world is a much less stable place than it was even two months before. There was a sense of optimism that Russia might help broker a diplomatic solution to Kosovo. The possibility remains, but Russia is far less stable than previously thought: President Yeltsin survived an impeachment proceeding, but he has again disbanded his government to the degree that it is unclear who in Russia has the power to help negotiate an end to this crisis. The Chinese are no longer just a sideline observer. While China has opposed the NATO bombings from the outset, it didn't have a dog in this fight until we bombed their embassy in Belgrade. If a deal on Kosovo is reached, it will have to pass muster with the Chinese who hold veto authority on the U.N. Security Council. We continue to bomb Iraq daily--stretching our Air Force readiness even further. Saddam Hussein shows no signs of letting up, and will most likely use this as an opportunity to push us even further. And last, but not least, the Korean Peninsula continues to be a crisis in waiting. Starvation in North Korea is rampant, food supplies are gone, and the country is undergoing one of the worst droughts in history. If the North Koreans decide to engage us militarily, we will be fighting three wars at the same time--beyond that envisioned by our military strategists in the Quadrennial Defense Review, and perhaps much more than we are currently prepared to do. Again, we will soon vote on this supplemental funding package. Over $15 billion. And when the war is over, we will be asked to vote on additional funding to rebuild Yugoslavia. We will probably vote to rebuild the Chinese embassy in Belgrade. And if we approve additional funds for the military campaign, the end costs of rebuilding Yugoslavia will only continue to mount. My vote does not undermine my support, concern or pride for our military. But I do believe that a diplomatic solution to this problem should have been found, can still be found, and must be found if we are to avoid the further escalation of this war. Failure to do so will cost us precipitously--not just in dollars, but in American lives. I yield the floor.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that a full committee hearing has been scheduled before the Committee on Energy and Natural Resources. The hearing will take place on Thursday, May 27, 1999 at 9:30 a.m. in room SD-366 of the Dirksen Senate Office Building in Washington, DC. The purpose of this hearing is to consider the nomination of David L. Goldwyn to be an Assistant Secretary for International Affairs at the Department of Energy. For further information, please contact David Dye of the Committee staff at (202) 224-0624.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, today I am introducing a modified version of legislation that the Committee on Energy and Natural Resources reported to the Senate last Congress to address various problems that have arisen in the Commonwealth of the Northern Mariana Islands. As reported by the Committee last Congress, the legislation would have created an industry committee to establish minimum wage levels similar to committees that had been created for other territories and that still exist for American Samoa. The legislation would also have established a mechanism for the extension of federal immigration laws if the government of the Northern Marianas proved unable or unwilling to adopt and enforce an effective immigration system. The legislation that I am introducing today does not include any provisions dealing with wages. I continue to believe that an industry committee is preferable to outright extension of federal wage rates, but the Northern Marianas, the Administration, and some of my cosponsors would prefer to have that debate on another vehicle. Immigration, however, is at the heart of the problems facing the Northern Marianas. This legislation reflects the recommendation of the Committee on Energy and Natural Resources last Congress. What appears on the surface to be a prosperous diversified economy in the Northern Marianas, is in fact a far more fragile economy that is becoming ever more dependent on a system of imported labor. Unemployment among US residents remains high and the public sector is rapidly becoming the only source of employment for US citizens residing in the Marianas. The public sector workforce has doubled over the past several years and payroll is the largest expense of the government. The recent downturn in tourism as a result of economic problems in Asia has only served to aggravate the situation in the Marianas, increase the pressures on public sector employment, and tighten the dependence of the Marianas on imported labor for the private sector, mainly garment manufacturing. The Commonwealth of the Northern Mariana Islands (CNMI) is a three hundred mile archipelago consisting of fourteen islands stretching north of Guam. The largest inhabited islands are Saipan, Rota, and Tinian. Magellan landed at Saipan in 1521 and the area was controlled by Spain until the end of the Spanish American War. Guam, the southernmost of the Marianas, was ceded to the United States following the Spanish-American War and the balance sold to Germany together with the remainder of Spain's possessions in the Caroline and Marshall Islands. Japan seized the area during World War I and became the mandatory power under a League of Nations Mandate for Germany's possessions north of the equator on December 17, 1920. By the 1930's Japan had developed major portions of the area and begun to fortify the islands. Guam was invaded by Japanese forces from Saipan in 1941. The Marianas were secured after heavy fighting in 1944 and the bases on Tinian were used for the invasion of Okinawa and for raids on Japan, including the nuclear missions on Hiroshima and Nagasaki. In 1947, the Mandated islands were placed under the United Nations trusteeship system as the Trust Territory of the Pacific Islands (TTPI) and the United States was appointed as the Administering Authority. The area was divided into six administrative districts with the headquarters located in Hawaii and then in Guam. The TTPI was the only ``strategic'' trusteeship with review by the Security Council rather than the General Assembly of the United Nations. The Navy administered the Trusteeship, together with Guam, until 1951, when administrative jurisdiction was transferred to the Department of the Interior. The Northern Marianas, however, were returned to Navy jurisdiction from 1952-1962. In 1963, administrative headquarters were moved to Saipan. With the establishment of the Congress of Micronesia in 1965, efforts to reach an agreement on the future political status of the area began. Attempts to maintain a political unity within the TTPI were unsuccessful, and each of the administrative districts (Kosrae eventually separated from Pohnpei District in the Carolines) sought to retain its separate identity. Four of the districts became the Federated States of Micronesia, the Marshalls became the Republic of the Marshall Islands, and Palau became the Republic of Palau, all sovereign countries in free association with the United States under Compacts of Free Association. The Marianas had sought reunification with Guam and US territorial status from the beginning of the Trusteeship. Separate negotiations with the Marianas began in December, 1972 and concluded in 1975. In 1976, Congress approved a Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States (PL 94-241). The Covenant had been approved in a United Nations observed plebescite in the Northern Mariana Islands and formed the basis for the termination of the United Nations Trusteeship with respect to the Northern Mariana Islands in 1986 together with the Republic of the Marshall Islands and the Federated States of Micronesia. Prior to termination, those provisions of the Covenant that were not inconsistent with the status of the area (such as extension of US sovereignty) were made applicable by the US as Administering Authority. Upon termination of the Trusteeship, the CNMI became a territory of the United States and its residents became United States citizens. Under the terms of the Covenant certain federal laws would be inapplicable in the CNMI, including minimum wage to take into consideration the relative economic situation of the islands and their relation to other east Asian countries. Although the population of the CNMI was only 15,000 people in 1976 when the Covenant went into effect, the population now exceeds 60,000 and US citizens are a minority. The resident population is probably about 24,000 with about 28,000 alien workers and estimates of at least 10,000 illegal aliens. Permits for non-resident workers were reported at 22,500 for 1994, the largest category being for manufacturing. Tourism has climbed from about 230,000 visitors in 1987 to almost 600,000 in 1994. Total revenues for the CNMI for 1993 were estimated at $157 million. The 1995 census statistics from the Commonwealth list unemployment at 7.1%, with CNMI born at 14.2% and Asia born at 4.5%. Since no guest workers should be on island without jobs, the 4.5% suggests a serious problem in the CNMI. The 14.2% local unemployment suggests that either guest workers are taking jobs from local residents, or the wage rates or types of occupation are not adequate to attract local workers. The Covenant established a unique system in the CNMI under which the local government controlled immigration and minimum wage levels and also had the benefit of duty and quota free entry of manufactured goods under the provisions of General Note 3(a) of the Harmonized Tariff Schedules. The Section by Section analysis of the Committee Report on the Covenant provides in part: Section 503.--This section deals with certain laws of the United States which are not now applicable to the Northern Mariana Islands and provides that they will remain inapplicable except in the manner and to the extent that they are made applicable by specific legislation enacted after the termination of the Trusteeship. These laws are: The Immigration and Naturalization Laws (subsection (a)). The reason this provision is included is to cope with the problems which unrestricted immigration may impose upon small island communities. Congress is aware of those problems. . . . It may well be that these problems will have been solved by the time of the termination of the Trusteeship Agreement and that the Immigration and Nationality Act containing adequate protective provisions can then be introduced to the Northern Mariana Islands. . . . The same consideration applies to the introduction of the Minimum Wage Laws. (Subsection (c)). Congress realizes that the special conditions prevailing in the various territories require different treatment. . . . In these circumstances, it would be inappropriate to introduce the Act to the Northern Mariana Islands without preliminary studies. There is nothing which would prevent the Northern Mariana Islands from enacting their own Minimum Wage Legislation. Moreover, as set forth in section 502(b), the activities of the United States and its contractors in the Northern Mariana Islands will be subject to existing pertinent Federal Wages and Hours Legislation. (S. Rept. 94-433, pp.77-78) The Committee anticipated that by the termination of the Trusteeship, the federal government would have found some way of preventing a large influx of persons into the Marianas, recognizing the Constitutional limitations on restrictions on travel. In part, the Covenant attempted to deal with that possibility by enacting a restraint on land alienation for twenty-five years, subject to extension by the CNMI. The minimum wage issue was more difficult, especially in light of the Committee's experience in the Pacific. The extension of minimum wage to Kwajalein was a proximate cause of the overcrowding at Ebeye in the Kwajalein Atoll as hundreds of Marshallese moved to the small island in hope of obtaining a job at the Missile Range. The CNMI, at the time the Covenant was negotiated, had a limited private sector economy and was under the overall Trust Territory minimum wage, which was considerably lower than the federal minimum wage. The Marianas also had been a closed security area until the early 1960's, further limiting development. Congress fully expected that the Marianas would establish its own schedule and would, within a reasonable time frame, raise minimum wages as the local economy grew. At the time of the Covenant, Guam's local minimum wage exceeded the federal levels, and the Committee anticipated that the Northern Marianas would mirror the history of Guam. Shortly after the Covenant went into effect, the CNMI began to experience a growth in tourism and a need for workers in both the tourist and construction industries. Interest also began to grow in the possibility of textile production. Initial interest was in production of sweaters made of cotton, wool and synthetic fibers. The CNMI, like the other territories, except for Puerto Rico, is outside the U.S. customs territory but can import products manufactured in the territory duty free provided that the products meet a certain value added amount under General Note 3(a) of the Tariff Schedules (then called Headnote 3(a)). The first company began operation in October, 1983 and within a year was joined by two other companies. Total employment for the three firms was 250 of which 100 were local residents. At the time, Guam had a single firm, Sigallo-Pac, also engaged in sweater manufacture with 275 workers, all of whom, however, were U.S. citizens. Attempts by territories to develop textile or apparel industries have traditionally met resistence from Stateside industries. The use of alien labor in the CNMI intensified that concern, and efforts began in 1984 to sharply cut back or eliminate the availability of duty free treatment for the territories. The concerns also complicated Senate consideration of the Compacts of Free Association in 1985 and led to a delay of several months in floor consideration when some Members sought to attach textile legislation to the Compact legislation. By 1986, conditions led the Assistant Secretary, Territorial and International Affairs of the Department of the Interior to write the Governor on the situation and that ``[w]ithout timely and effective action to reverse the current situation, I must consider proposing Congressional enactment of U.S. Immigration and Naturalization requirements for the NMI''. By 1990, the population of the CNMI was estimated at 43,345 of whom only 16,752 had been born in the CNMI. Of the 26,593 born elsewhere, 2,491 had entered from 1980-1984, 2,591 had entered in 1985 or 1986, 6,438 had entered in 1987 or 1988, and 12,955 had entered in 1989 or 1990. Of the population in 1990, 21,332 were classified as Asian. The labor force (all persons 16+ years including temporary alien labor) grew from 9,599 in 1980 to 32,522 in 1990. Manufacturing grew from 1.9% of the workforce in 1980 to 21.9% in 1990, only slightly behind construction which grew from 16.8% to 22.2% in the same time frame. The construction numbers track a major increase in hotel construction. At the same time, increases in the minimum wage were halted although wages paid to U.S. citizens (mainly public sector and management) exceeded federal levels. In 1993, in response to Congressional concerns, the CNMI stated that it proposed to enact legislation to raise the wage rates from $2.15 to federal levels by stages and that legislation would be enacted to prevent any abuse of workers. Repeated allegations of violations of applicable federal laws relating to worker health and safety, concerns with respect to immigration problems, including the admission of undesirable aliens, and reports of worker abuse, especially in the domestic and garment worker sectors, led to the inclusion of a $7 million set aside in appropriations in 1994 to support federal agency presence in the CNMI. The Administration was not prepared to commit agency resources to the CNMI absent the funding, but with an agreement for reimbursement, the Department of the Interior reported to the Committee on April 24, 1995 that: 1) $3 million would be used by the CNMI for a computerized immigration identification and tracking system and for local projects; 2) $2.2 million would be used by the Department of Justice to strengthen law enforcement, including the hiring of an additional FBI agent and Assistant US Attorney; 3) $1.6 million would be used by Labor for two senior investigators as well as for training; and 4) $200,000 would be used by Treasury for assistance in investigating violations of federal law with respect to firearms, organized crime, and counterfeiting. In addition, the report recommended that federal law be enacted to phase in the current CNMI minimum wage rates to the federal minimum wage level in 30 cent increments (as then provided by CNMI legislation), end mandatory assistance to the CNMI when the current agreement was fulfilled, continue annual support of federal agencies at a $3 million/year level (which would include funding for a detention facility that meets federal standards), and possible extension of federal immigration laws. During the 104th Congress, the Senate passed S. 638, legislation supported by the Administration, that in part would have enacted the phase in of the CNMI minimum wage rate to US levels in 30 cent increments. No action was taken by the House, and, in the interim, the CNMI delayed the scheduled increases and then instituted a limited increase of 30 cents/hour except for the garment and construction industries where the increase was limited to 15 cents/hour. The legislation also required the Commonwealth ``to cooperate in the identification and, if necessary, exclusion or deportation from the Commonwealth of the Northern Mariana Islands of persons who represent security or law enforcement risks to the Commonwealth of the Northern Mariana Islands or the United States.'' (Section 4 of S. 638) At the same time that Congress began to consider legislation on minimum wage and immigration issues, concern over the commitment of federal agencies to administer and enforce those federal laws already applicable to the CNMI led the Committee to include a provision in S. 638 that the annual report on the law enforcement initiative also include: ``(6) the reasons why Federal agencies are unable or unwilling to fully and effectively enforce Federal laws applicable within the Commonwealth of the Northern Mariana Islands unless such activities are funded by the Secretary of the Interior.'' (Section 3 of S. 638) In February, 1996, I led a Committee trip to the CNMI. We met with local and federal officials as well as inspecting a garment factory and meeting with Bangladesh security guards who had not been paid and who were living in substandard conditions. Their living conditions were intolerable. There was no running water, no workable toilets, the shack--and that is being kind--was in deplorable condition. As I said at the time, this was a condition that should never exist on American soil. It existed in the shadow of the Hyatt Hotel. I raised my concerns with the Governor and with other officials in Saipan. We were assured that corrective action would be taken. Those assurances, especially those dealing with minimum wages, seem to have disappeared as soon as our plane was airborne. As a result of the meetings and continued expressions of concern over conditions, the Committee held an oversight hearing on June 26, 1996 to review the situation in the CNMI. At the hearing, the acting Attorney General of the Commonwealth requested that the Committee delay any action on legislation until the Commonwealth could complete a study on minimum wage and promised that the study would be completed by January. That timing would have enabled the Committee to revisit the issue in the April-May 1997 period after the Administration had transmitted its annual report on the law enforcement initiative. While the CNMI Study was not finally transmitted until April, the Administration did not transmit its annual report, which was due in April, until July. On May 30, 1997, the President wrote the Governor of the Northern Marianas that he was concerned over activities in the Commonwealth and had concluded that federal immigration, naturalization, and minimum wage laws should apply. Given the reaction that followed the President's letter, I asked the Administration to provide a drafting service of the language needed to implement the recommendations in the annual report and informed the Governor of the Commonwealth of the request and that the Committee intended to consider the legislation after the Commonwealth had an opportunity to review it. The drafting service was not provided until October 6, 1997 and was introduced on October 8, 1997, shortly before the elections in the CNMI. The Committee deferred hearings so as not to intrude unnecessarily into local politics and to allow the CNMI an opportunity to review and comment on the legislation after the local elections. The U.S. Commission on Immigration Reform conducted a site visit to the Northern Marianas in July 1997 and issued a report which, in general, supports the need to address immigration. The report, however, also raises some concerns with the extension of US immigration laws. The report found problems in the CNMI ``ranging from bureaucratic inefficiencies to labor abuses to an unsustainable economic, social and political system that is antithetical to most American values'' but ``a willingness on the part of some CNMI officials and business leaders to address the various problems''. The report expressed some concerns over the extension of federal immigration laws, but that absent the threat of federal extension, ``the CNMI is unlikely on its own to correct the problems inherent in its immigration system''. The report recommended that specific benchmarks for an effective immigration system be negotiated and that the ``benchmarks should be codified in statute, with provision for immediate imposition of federal law if the benchmarks are not met within the prescribed time.'' Specifically the report recommended that ``[s]hould the CNMI fail to negotiate expeditiously and in good faith, or renege on the negotiated agreements, we agree that imposition of federal law by Congress would be required.'' (Emphasis in original) While the outright exception from the minimum wage provisions of federal law in the Covenant is an anomaly, so also was the direct phase in to federal levels contained in the legislation as transmitted by the Administration. Congress has generally recognized the different economic circumstances of the territories and provided for a ``special industry committee''. The objective of an industry committee is to set wage rates by industry ``to reach as rapidly as is economically feasible without substantially curtailing employment the objective of the [federal] minimum wage rate'' (29 U.S.C. 208(a)). The committees may make classifications within industries. Such committees were established for Puerto Rico and the Virgin Islands in 1940 and continued until Congress provided for step increases in 1977 for the remaining covered industries. An industry committee has been applicable in American Samoa since 1956. In 1992, the Department of the Interior provided formal Administration opposition to legislation that would have extended federal minimum wage rates to Samoa stating that ``[i]mposition of the United States mainland minimum wage on American Samoa would have a serious, perhaps devastating effect on the territorial economy and jobs''. The industry committee for Samoa set rates for 1996 that ranged from $2.45/hour for local government employees to $3.75/hour for the subclass of stevedoring and lighterage. Wages for the canneries was set at $3.10/hour. While the economic situation of the CNMI is considerably different from that of American Samoa, it is not absolutely clear that all segments of all industries in the CNMI are capable of sustaining federal minimum wage rates. Unlike American Samoa, the minimum wage issue in the CNMI appears to involve only temporary non-immigrant workers. All U.S. citizens resident in the CNMI appear to be earning at or above federal minimum wage levels. The CNMI completed a minimum wage analysis in April 1997 by the HayGroup. The analysis recommended against a change in current wage rates for at least three years and planning to accommodate growth. An industry committee would be able to assess the merits of claims by individual industries and structure a system that takes into account the individual needs of particular industries or sub-classes. As I stated earlier, I believe that an industry committee is the proper approach. I have not included the provision in this legislation due to the opposition of the Northern Marianas, the Administration, and several of my colleagues. The Northern Marianas believes that it can avoid becoming entangled in the federal minimum wage legislation pending in Congress. I don't share their belief, but this is their choice. The Committee conducted a hearing on March 31, 1998 on S. 1275 and S. 1100, similar legislation introduced by Senator Akaka and others. The Committee heard from the Administration, the government of the CNMI, workers and representatives of the local industry, as well as public witnesses. At a business meeting of the Committee on May 20, 1998, the legislation was amended and then ordered to be favorably reported to the Senate. Unfortunately, the Senate did not take action on the measure prior to adjournment. The portion of the Committee amendment that I am introducing today provides for full extension of the Immigration and Nationality Act contingent on the Attorney General finding that 1) the Northern Marianas does not possess the institutional capacity to administer an effective system of immigration control or 2) the Northern Marianas does not have a genuine commitment to enforce the system. Neither I nor the Committee question the commitment of the current administration of the Northern Marianas to attempt to rectify the problems that led to this legislation, but we are mindful that commitments have been made in the past and then ignored. We also recognized that the Commisssion on Immigration Reform and others have concluded that some of the problem is structural and that a local government simply may not have the capability to maintain an effective immigration program within our federal system. As a result, the Committee adopted a provision that will take effect without further Congressional action if the requisite findings are made. The Committee viewed this as a last opportunity for the local government and provided that the Attorney General must promptly issue standards so that the Marianas is on full notice of what will be required. If, however, it does become necessary to extend federal law, the Committee also adopted amendments to the bill as introduced to ensure that those industries, especially construction, that depend on temporary workers for temporary jobs will have full access to alien labor as necessary. The Committee was mindful of the concern by the hotel industry over access to workers, and accordingly adopted a provision that would permit the transition provisions to be extended for additional five year periods as long as necessary. The Committee amendment required the Attorney General and the Secretary of Labor to consult with the Northern Marianas one year prior to the expiration of the transition period, and at 5-year intervals thereafter, to determine whether the provisions will continue to be needed. The Committee and I fully expect that any uncertainty be resolved in favor of the Northern Marianas. If the provisions are extended, a similar consultation will occur in the fourth year of the extension to decide if further extensions are warranted. The Committee reluctantly adopted these provisions because it believes that conditions in the Northern Marianas leave no alternative. Extension of additional federal laws, however, will not resolve the problems if federal agencies do not maintain their present commitment to administration and enforcement of federal law. A continuation of local efforts by the present administration of the Northern Marianas will also be necessary. Although the legislation contains the one-year grace period contained in the Committee amendment from last Congress, the one year has expired. The record of the Northern Marianas, and the status of local legislation, will determine whether and on what terms federal laws should be extended. The action earlier this year by the Northern Marianas to lift the moratorium on entry permits for new workers is particularly troubling. There are legitimate questions concerning immigration and minimum wage. We should now have sufficient experience to assess whether the Marianas is capable of providing the pre-clearance for any persons who attempt to enter the Marianas. The Immigration Commission concluded that they are not capable of undertaking such prescreening and clearance because they do not have the resources of the federal government through the State Department. The United States routinely does prescreening in foreign countries as part of our visa process. The situation that I saw with the Bangladesh workers should never have happened and would not have happened had federal immigration laws and procedures been in place and enforced. Reports of other workers who arrive only to find no jobs would also never happen. A particularly troubling aspect of the current situation in the Northern Marianas is the level of unemployment among guest workers. There should be no unemployment among the guest workers. If there are no jobs, then the workers should not be present. These are legitimate immigration related issues. They do not necessarily lead to a federal takeover, but they are legitimate issues and it serves no purpose to distort history and pretend that the current situation was the goal of the Covenant negotiators. That does not make the Marianas corrupt, but if accurate, it points out that this Committee was correct when it stated that we would need to make changes in the immigration laws prior to termination of the Trusteeship so that they could be extended to the Marianas. The report of the Immigration Commission also raises legitimate questions about the availability of asylum and the lack of civil rights since the Marianas is using temporary workers for permanent jobs, thereby denying workers the rights they would have if admitted into the US with a right of residency. That needs to be addressed. The Commission also expresses some grave concerns over outright extension of the Immigration laws and questions the willingness or commitment of the INS to devote the personnel or resources to effective administration. While I fully expect the INS to support the Administration position in our hearings on this legislation, I also share that concern. We do not need to make a bad local problem an equally bad federal one. I also think that the focus on the garment industry by the Administration and most of the critics of the situation in the Northern Marianas is somewhat shortsighted. The advantages that the Marianas can provide garment manufacturers in terms of duty and quota free treatment expire with the implementation of the multi-fibre agreement. The suggestion in the Administration's task force report last year that these jobs will move to the mainland if the garment industry is curtailed in the Marianas is simply wrong. Those jobs in all likelihood are temporary until they move back to the Asian mainland in about five years. That, by the way, is well within the transition period contemplated under the legislation submitted by the Administration last year. The legislation will actually have little or no effect on the industry that the Administration is targeting. I should also note that the Bank of Hawaii, in its economic study also concluded that the garment industry in the Marianas was not likely to last. Other studies have also come to that conclusion. The Administration has made it clear that they hope the effect of this legislation will be the end of the garment industry in the Marianas. Given both the studies and the Administration's objective, I do have a question about why the President's budget claims about $187 million per year in additional revenues from the enactment of the amendments to General Note 3(a). If there is no industry, there will be no imports, and there will be no revenues. The problem is that the Administration does not seem to comprehend that the Marianas is the United States. It is not a foreign country. The failure of the Administration to enforce federal laws has led to a climate conducive to worker abuse and to some sense within the Marianas that federal laws will not be applied. On the other side, a large population of workers without full civil rights also offers the opportunity for people to exploit the situation. I am not happy with either side of this debate. The cries for federal takeover are too strident and too partisan to ring true. The defense is simply unacceptable. In the middle are the workers who apparently no one cares about, except for their value in being put on display in the media. Complicating consideration of this legislation, however, is the Administration's somewhat lackluster response to the flood of illegal entries into Guam from China. These individuals are being smuggled into Guam by boat. Most of the aliens come from the China mainland from Fujian Province, but some have sought entry from the Northern Marianas. So far this year, over 800 illegal aliens have been apprehended either in Guam or attempting to reach Guam. Earlier this year I met with the Governor of Guam. He expressed his frustration with the Immigration and Naturalization Service for diverting revenues from Guam to the mainland. The result was that Guam had to assume the costs of incarceration for these aliens. An article in the Pacific Daily News on Sunday May 9 suggested that as many as 2,000 illegal aliens may already be in Guam. Only after the situation became even worse and the national media began to draw attention to what was happening, did the White House become involved. As a result of that involvement, the Administration has finally begun to pay some attention and is beginning to dedicate resources to the interdiction of these aliens. The Administration plans to send three more Coast Guard vessels and two C-130 aircraft to Guam and apparently will reimburse the local government for its expenditures on behalf of federal agencies. That response was too long in coming. Parenthetically, I would note that INS did not care about extending immigration laws to the Northern Marianas until after the Readers Digest and other publications began to question the Administration's commitment to human rights and the White House became concerned with its image. A continuing concern for my Committee over the years has been the reluctance of Executive Branch agencies, specifically the INS, to treat the Marianas as part of the United States. Up until last Congress, the INS resisted any attempt to extend the immigration laws to the Northern Mariana Islands. That resistance was not based on policy grounds or from a belief that the Northern Marianas was operating an effective immigration system, but from the narrow administrative concern of not wanting to dedicate the personnel and resources. I must admit that I have some apprehension over how solid the recent conversion of the INS is. Last Congress, they testified in support of the Administration's proposal to extend the immigration laws. They promised the Committee that they would dedicate the necessary resources to ensure successful implementation. Now we see that they are unwilling to dedicate the resources in Guam, where federal immigration laws already apply, until they are directed to do so by the White House. The situation in the Marianas may be sufficiently problematic that we will have to go forward with the legislation despite my reservations. I intend to closely examine the INS when we schedule hearings on this legislation. I also am concerned over the Administration's decision to use the Northern Marianas as a holding area for illegal aliens who are intercepted at sea. On May 8, the Coast Guard intercepted a Taiwanese vessel with 80 people suspected of trying to illegally enter Guam. The vessel was escorted to Tinian in the Northern Mariana Islands. Apparently the Administration made that decision because the federal immigration laws do not apply in the Marianas and that makes it easier to repatriate the aliens and prevent them from claiming asylum. If we extend the immigration laws, as one portion of the Administration wants, we will frustrate the interdiction and repatriation program being pursued by another portion of the Administration. The Committee will need to sort this out during our hearings. I also will look forward to an explanation of why the use of Tinian in the Northern Marianas avoids claims of asylum. The asylum requirements are matters of international obligation and federal policy. In fact, the failure of the Northern Marianas to deal with asylum issues as a matter of local legislation was one of the arguments that the Administration made in support of the extension of federal legislation. That contradiction will also need to be explored. It appears from press reports that the Administration plans to consider claims of asylum, but given the peculiar situation of refugees from mainland China, it will be interesting to see how those claims are processed. I am also aware of suggestions in Guam that we need to amend the immigration laws to prevent the claim of asylum on Guam. Congressman Underwood has introduced legislation to that effect already. I think we need to be very careful in considering legislation to extend the immigration laws to the Northern Marianas that we do not create an even larger problem than the one we already have in Guam. Guam is a single island, about 33 miles by 12 miles. The Commonwealth of the Northern Mariana Islands is an archipelago of fourteen islands three hundred miles long. If we can not adequately patrol Guam, how are we going to patrol the entire Marianas? That also is a question that will need to be answered before we move this legislation. Before the opponents of this legislation start their celebration, I want to repeat that I find the conditions and circumstances in the Northern Marianas to be unacceptable. I have serious concerns over this legislation, but something needs to be done. I am willing to consider modifications to the legislation. Last year I included provisions to guarantee both construction and tourism sectors access to sufficient workers, and I am willing to revisit those provisions or consider other changes to support the economy of the Northern Marianas. At some point, however, the Marianas needs to take a hard look at the structure of their economy. They can not continue indefinitely with the public sector being the only source of employment for US residents. They need to provide a future for their children. The federal government needs to ensure that federal laws are enforced and that they are applied in a manner that recognizes the unique circumstances of this island community. I support as much local authority and control as is possible. There are certain functions, however, that only the federal government can effectively perform. There are also certain rights that every individual who works and resides in the United States should expect to be guaranteed. This legislation will provide an opportunity for the Committee to see that those responsibilities are performed and that those rights are protected.

Mr. MURKOWSKI. Mr. President, at the request of the Administration, Senator Bingaman and I are introducing the President's proposed electricity legislation. The Administration's legislation is being introduced as two separate bills because Title X of their proposed legislation amends the Internal Revenue Code. I will speak first with respect to the restructuring portion of the Administration's legislation, Titles I through IX. Mr. President, I am not introducing the restructuring portion of the Administration's legislation because I support it--I do not. Some of its provisions I agree with, but many of its key provisions I am opposed to. Instead, I am introducing the Administration's legislation in order to initiate the debate in the hope that through the legislative process Congress can craft legislation that will enjoy bipartisan support and will benefit consumers. At the outset, let me observe that our electric power industry isn't broken. We have the finest electric system in the world bar none. Our electric utilities have done an excellent job supplying electricity to the consumers of this Nation. As a result, today electricity is both reliable and reasonably-priced. But that isn't to say that improvements cannot, and should not, be made. I believe that consumers will benefit through enhanced competition. The key question we face is: Should we try to enhance competition through increased reliance on the free market, or through increased use of government regulation? I think the answer is self evident. Although deregulation is our goal, some regulation will remain necessary to protect consumers. However, such regulation should not be made the exclusive jurisdiction of the Federal government, as some have suggested. The retail market has traditionally been the jurisdiction of the States, and it should remain that way. States are the closest to the people, and are best able to determine what is in their consumers' best interests. Let me speak now about some of the key provisions of the Administration's legislation. There are several important components of the Administration's legislation that I strongly support. For example, it proposes to repeal the Public Utility Holding Company Act (PUHCA) and the Public Utility Regulatory Policies Act of 1978 (PURPA), two anticompetitive laws that cost consumers billions of dollars every year in above-market electric rates. If we do nothing else, repeal of PUHCA and PURPA would materially advance competition and reduce electric rates to consumers. The Administration's legislation also shows a clear interest in addressing several contentious issues left out in their bill in the last Congress. For example, the Administration's legislation includes provisions that will begin the debate on what to do about the Federal utilities--the Federal power marketing administrations and the Tennessee Valley Authority. The Administration's legislation also takes a significant step forward by addressing the very difficult issue of creating a level playing field between municipal and private utilities--the tax-exempt municipal bond issue. This is an issue that must be dealt with. The Administration's bill also addresses reliability and it makes all wholesale transmission open access, two very important matters. Also of note is the Administration's recognition of the need to deal with the high cost of electricity in rural communities. Senator Daschle and I have introduced legislation to deal with this problem, and the Administration's legislation incorporates part of our bill. There are, however, several provisions in the Administration's legislation that I am opposed to. First, I do not support its Federal retail competition mandate which overrides State law. I see no need for this. The States are moving aggressively to implement retail competition in a manner and a time frame that benefits consumers. According to the DOE's Energy Information Administration, twenty States have already enacted restructuring legislation or issued a comprehensive regulatory order. More than half the U.S. population live in these twenty States. Again according to DOE's Energy Information Administration, twenty-eight of the remaining thirty States are in the process of deciding what is in the best interests of its residents. Accordingly I ask: With States making such good progress on retail competition what need is there for a Federal mandate--assuming such a mandate is Constitutional? Moreover, because the Administration's proposed mandate would apply even to the twenty States that have already acted, I am concerned that such a Federal mandate would upset the progress these States have made. In this connection, I am not convinced that the Administration's ``opt-out'' provision will in fact protect consumers from the adverse consequences of Federally-mandated retail competition. Second, the bill's so-called ``renewable portfolio mandate'' is also a significant problem. For reasons that I do not understand, the Administration has decided to exclude hydroelectric power from the definition of renewable energy, even though hydro is this Nation's most significant renewable energy source. Without hydroelectric power being counted, to meet this new Federal mandate ``renewable'' generation would have to increase to 7.5 percent by the year 2010. Clearly, an impossibility. Third, I am also troubled with the Administration's so-called ``public benefits'' fund. It puts a Federal $3 billion per year tax on electric consumers, that a Federal board gets to spend for vaguely defined public purposes. It also appears to require a matching $3 billion per year State expenditure. At the very outset, this eats up a very large share of the claimed consumer savings resulting from enactment of the Administration's bill. Finally, the Administration's bill also contains numerous new Federal oversight, regulatory and environmental programs, many of which give the Federal Energy Regulatory Commission major oversight--much of which comes at the expense of the States. There are far too many of these in the Administration's legislation to identify and discuss here. Some of these may be worthwhile, but clearly many are not. Each will have to be carefully scrutinized and will have to be justified on their own merits if it is to be included in a final bill. I will speak now about the tax provisions of the Administration's proposed legislation which I am introducing as a separate measure. Mr. President, at the request of the Administration I am also introducing the portion of their electricity restructuring bill that deals with tax-exempt debt issued by municipal utilities. This is Title X of the Administration's proposed legislation. In addiition, the Administration's bill clarifies the tax rules regarding contributions to nuclear decommissioning costs. Mr. President, if consumers and businesses are to maximize the full benefits of open competition in this industry it will be necessary for all electricity providers to interconnect their families into the entire electric grid. Unfortunately, this system efficiency is significantly impaired because of current tax law rules that effectively preclude public power entities--entities that financed their facilities with tax-exempt bonds--from participating in State open access restructuring plans, without jeopardizing the exempt status of their bonds. No one wants to see bonds issued to finance public power become retroactively taxable because a municipality chooses to participate in a state open access plan. That would cause havoc in the financial markets and could undermine the financial stability of many municipalities. At the same time, public power should be obtain a competitive advantage in the open marketplace based on the federal subsidy that flows from the ability to issue tax-exempt debt. The Administration's proposal attempts to resolve this issue by prohibiting public power facilities from issuing new tax-exempt bonds for generating facilities and transmission facilities. However, tax exempt debt could be issued for new distribution facilities. In addition, the Administration's proposal ensures that outstanding bonds would not lose their tax-exempt status if transmission facilities violate the private use rules because of a FERC order requiring non- discriminatory open access to such facilities. Outstanding debt for generation would not lose it's tax-exempt status if the private use rules were triggered simply because the entity entered into a contract in response to a marketplace based on competition. Mr. President, I am not endorsing every concept in the tax portion of the Administration's proposal. I believe it is a good starting point for discussion of how we transition from a regulated environment to a free market competitive landscape. It is my hope that the public power and the investor owned utilities will sit down and come to a reasonable compromise on how to resolve the tax issues affecting the industry. My door is always open to hear all sides on this issue and see whether we can fix the problems that exist in the tax code so that competition in the industry becomes a reality. Mr. President, the introduction of the Administration's bill is just the beginning of a very long and arduous process. I hope to be able to work with the electric power industry, my Republican and Democratic colleagues to both the Finance Committee and the Energy and Natural Resources Committee, and DOE Secretary Richardson to craft legislation that will benefit consumers and our Nation. Mr. President, I ask unanimous consent that the Administration's transmittal letter and section-by-section analysis be printed in the Record.

Mr. MURKOWSKI. Mr. President, the production of oil and gas in the United States is fast becoming a thing of the past. I am introducing two bills today to halt, and if possible, reverse that trend. The economic consequences of the 1973 oil embargo were severe and long lasting. Whole sectors of our economy underwent significant changes and dislocations. Parts of the United States were plunged into recession which remained for a decade as they adjusted to the fluctuations and insecurity of energy supplies in the 1970's. At the time of the embargo, imports made up 36% of our oil consumption. Our foreign policy was modified to reflect our growing dependence and protecting oil-producing regions of the world took on a new importance. By the time of the Gulf War of 1990-91, oil imports were roughly 50%. Today, the United States depends upon foreign sources for some 56% of our supply. This is despite Corporate Average Fuel Efficiency (CAFE) standards for cars which have almost doubled gas mileage. This is despite the creation of the Department of Energy. This is despite the untold billions of dollars which have been invested by U.S. industry in energy-saving equipment and processes in order to remain competitive in a world economy. If no changes are made in federal policy to protect our domestic oil and gas industry--the ``pilot light'' of our nation's economy and security upon which all productive enterprise depends--our future indeed may be bleak. The Department of Energy predicts 68% dependency on foreign oil by the year 2010. This is just shy of a doubling of our oil imports since the embargo of 1973. In two recent hearings the Senate Energy & Natural Resources Committee examined the state of the domestic oil and gas industries and their future. What we learned has been the impetus for my introduction of these bills today. During the past 18 months, 136,000 U.S. oil wells and 57,000 gas wells have been shut in. 50,000 men and women throughout the United States have lost their jobs in these industries--15% of all employees. With operating oil rigs at an all-time low and new investment in the U.S. drying up, the future for domestic production of oil and gas is grim. While the consumption of natural gas is favored by the Administration as a means to reduce emissions, unless changes are made now in federal policy to make production and delivery of natural gas easier, the projected 50% increase in the need for natural gas by the year 2010 will not be met without severe price shocks for American citizens. The price of oil today is high enough for investment in the U.S. by those who will or can still invest in our domestic oil and gas economy. However, the fact is that the fundamentals for investment in America are not good. Access to prospective areas is severely restricted, environmental costs are extremely high and production rates from U.S. wells are liable to be quite low, in comparison to other areas in the world. The U.S. is a mature and high cost oil producing region of the world. In response to a changing world oil market, other producing countries are undertaking changes in their government policies to attract and retain economic investment in what they properly consider to be an important national industry. For example, the United Kingdom has undertaken a significant regulatory reform effort to speed, simplify and provide certainty to investments in their energy industry. They are actively reviewing their tax and royalty systems to adjust them to the new realities of the world energy markets. Colombia, likewise, is undertaking major reductions in royalties to attract and retain investment. These nations and others have determined that they must compete with the rest of the world for investment capital, and are thus moving to make their nations more attractive to such investment. The U.S. lags far behind. The first of the bills I am introducing is identical to a measure being introduced in the U.S. House of Representatives by Congresswoman Barbara Cubin, Chairman of the Subcommittee on Energy and Mineral Resources. It makes significant changes in the oil and gas leasing policies of the United States, by simplifying procedures and granting more certainty for those who choose to invest in our domestic energy business. This legislation grants States the option of assuming federal regulation of oil and gas leases within their borders, after a federal decision to lease is made. States already perform identical functions on their lands, and this would standardize regulatory functions within a State's borders. The States are closer than the federal government to oil and gas leasing activities within their borders, and are best positioned to make timely and responsible regulatory decisions. In return for opting to assume the specified federal responsibilities for these activities, the States would receive payment of up to 50% of the costs currently assessed them by the federal government for these functions. Federal ownership of the lands would continue. An important part of this legislation clarifies that the federal government can no longer charge States via the existing ``net receipts sharing'' program for the costs of programmatic planning activities on federal lands unrelated to mineral leasing activities. This would stop creative legal interpretations by the Department of Interior like that which charged Utah for the government's secret planning which resulted in the creation of an enormous National Monument in that State. This type of creative accounting undermines the respect of the citizenry in their governmental institutions, and with this bill, we will plug this leak in the public trust. The legislation also assists States by dropping the requirement that their share of mineral leasing on federal lands within their borders be reduced by the government's costs of administering mineral leasing if a State opts to assume the federal government's responsibility for regulation of oil and gas activities. In order to speed development of secure sources of domestic oil and gas by making federal practices more competitive with the rest of the world, I have included in the bill certain provisions which are intended to correct federal practices which are hastening the flight of oil and gas development capital to foreign shores. One recurring criticism from those who would like to invest in America's domestic energy development is the uncertainty they encounter when they do business with their own federal government. In order to make investment decisions, they must have some certainty about when they might reasonably be expected to be able to actually take possession of, and invest capital in, a federal lease. Moreover, the government is increasingly charging potential lessees for governmental activities before they have any reasonable expectation of being granted a lease. This is akin to charging customers just to stand in line to buy a lottery ticket for a drawing which may never be held. This is absurd, and is a clear signal to potential investors that the U.S. cares little about whether the investment is made here or abroad. This legislation will reverse that signal and provide the certainty that investors need. Additionally, my legislation would establish reasonable and responsible time frames for the government to respond to requests for permits. If legally-required analyses could not be undertaken by the government within a reasonable time, the applicant could be offered the opportunity to contract for such analyses by an independent party for the government's use. My bill would allow the applicant to receive a credit against royalties due from eventual production in the area for such costs, in recognition of the fact that the more rapidly lands are leased and put into oil or gas production, the more revenues the government will receive and the quicker it will receive it. My legislation also sets fair but rigid performance deadlines for the completion of federal lease decision-making. One of the most frequent concerns I hear from small companies throughout the country in the oil and gas producing business is the snail-like pace of federal decision-making. Customers of government services deserve a ``yes'' or ``no'', instead of the endless series of ``maybes'' to which they have become accustomed. They deserve no less, and I seek to correct that deficiency before all oil and gas investment flees our shores. Coordination among federal land management agencies over leasing policies is also long overdue. The bill requires the Secretaries of the Interior and Agriculture to report to Congress with recommendations explaining the most efficient means of eliminating duplication of effort and inconsistent policy between the Bureau of Land Management and the Forest Service with respect to the treatment of oil and gas leases. The U.S. government and the public deserve to have the best knowledge possible about our domestic supplies of energy. The legislation I am introducing today initiates a modern, science-based energy inventory process to be undertaken by the Secretary of Interior and the Director of the U.S. Geological Survey. Technology for determining oil and gas availability has revolutionized the private sector; it is time for this quantum leap information to be used by the government. I am particularly happy to include as Title 4 of the bill a provision that Senator Don Nickles recently introduced as S. 924, concerning federal royalty certainty. This would put an end to the seemingly intractable problem that has sprung up between lessees and the Department of Interior over the issue of where oil is to be valued for royalty purposes. While other nations around the world are taking steps to become more competitive for energy investments by changing laws to encourage investment and provide certainty to possible investors, this recent back-door royalty increase by the Administration has sent a strong signal to domestic producers that they are no longer welcome here. Title 4 merely clarifies what congress has been saying all along--that oil should be valued for royalty purposes at or near the lease. This clarification is absolutely essential if consumers are to receive the 30 trillion cubic feet of gas the Administration says they will demand in a decade at a cost they can afford. The final title of the legislation will serve as a strong signal to our domestic industry that we value the jobs they provide for our neighbors and the investment they make right here at home. It recognizes that when world oil prices make investments in American energy production uncompetitive with foreign investments, the U.S. will adjust our take from the current direct royalty to a system which promotes jobs and investment in down times and increases royalty and U.S. production later. Specifically, it calls for a 20% credit against royalties due the federal government against capital expenditures during times of lowered oil and gas prices. If a landlord discovered that his rental units were vacant because they were overpriced compared to the competition, he would drop the price to attract renters. The federal government should do the same. The legislation would also adjust the definition of what constitutes a ``marginal'' oil well, and allow for suspensions of leases at the lessee's option when oil prices dip precipitously. This bill is a comprehensive attempt to bring some of our mineral leasing laws and regulations up-to-date with the realities of today's world energy markets. Our domestic industry is dying on the vine because of a combination of governmental actions and inactions, complex regulation and outdated governmental approaches to this important part of our national economy. We need to take steps to make sure that the ``pilot light'' of our economy does not go out, and it is my belief that this legislation will go a long way to ensuring its continuing contributions to our nation's strength. Mr. President, the second measure that I am introducing today will redress some of the unfair tax penalties that hinder the continued development and modernization of a domestic oil and gas industry. In particular the legislation focuses on aspects of the alternative minimum tax (AMT) that have a perverse effect on the industry, especially when energy prices are low. Mr. President, in adopting the AMT in 1986, Congress stated that its purpose was to ``serve one overriding objective: to ensure that no taxpayer with substantial economic income can avoid significant tax liability by using exclusions, deductions and credits.'' Yet the unintended consequence of the AMT is that companies with high fixed costs, such as the oil and gas industry, can face higher effective AMT tax rates when the price of oil is low than when the price is high. In other words, when oil and gas companies are struggling to cope with low world prices, the AMT serves to impose a tax penalty simply because prices are low. Let me give you an example of the perverse effect of the AMT. If the price of oil is $10 a barrel and an oil and gas company sells 100,000 barrels of oil, the company's revenues would be $1 million. If its production costs were $500,000, its gross profits would be $500,000. If the company took advantage of percentage depletion and other oil and gas incentives, it could reduce it's taxable income to $100,000 and owe $35,000 in taxes. However, because the AMT takes back many of these oil and gas incentives, the same company would be subject to a $90,000 AMT. That is a 90 percent tax rate. By contrast, assuming the same fixed costs and incentives, if the price of oil was $20 a barrel and the company had $1.1 million in taxable income, its regular tax rate would only be 35 percent and it's AMT liability would be only 26.4 percent. Mr. President, that is not the way the AMT was designed to work. My bill tackles this problem head-on. It eliminates the AMT preferences for intangible drilling costs, percentage depletion, and the depreciation adjustment for oil and gas assets. In addition, it eliminates the impact of intangible drilling costs, depletion and depreciation on oil and gas assets from the adjusted current earnings adjustment. Finally, the proposal allows the enhanced oil recovery credit and the Section 29 credit to be used to offset the AMT. In addition to trying to resolve the AMT problems that face the industry, I have adopted a portion of a bill introduced by Senator Kay Bailey Hutchison that attempts to maintain viable independent producers and ensure that marginal wells stay in operation. Marginal wells are those that produce less than 15 barrels a day. In reality they produce on average about 2.2 barrels of oil a day. While individually these wells may not seem like important components of our domestic energy supply, together they produce as much oil as the United States imports from Saudia Arabia. To maintain these marginal wells, the legislation includes a marginal well tax credit of $3.00 per barrel in order to prolong marginal domestic oil and gas well production. Mr. President, in an effort to stimulate enhanced recovery of oil and thereby increase U.S. production, my legislation enlarges the definition of enhanced oil recovery by including horizontal drilling in areas of Alaska where the only feasible method of recovering some oil is to use such methods. In Alaska, it is just not economically feasible to search for oil by moving drilling platforms from area to area. Instead, the oil companies attempt to locate oil by using a single drilling platform and employing horizontal drilling techniques to search for oil. My legislation recognizes these economic realities and encourages further development of horizontal drilling techniques so that we can recover oil more feasibly. Finally, Mr. President, this second measure addresses a problem that has recently arisen with natural gas gathering lines. These lines are used to transport natural gas from the well-head to a central processing facility for processing before it can be transported via trunk lines to an end user such as a distribution facility. The Federal Energy Regulatory Commission (FERC) exempts gas processor gather lines from FERC jurisdiction because they are classified as gas gathering equipment that is part of the production facility, not pipeline transportation under FERC rules. IRS has taken the position that these lines should be depreciated over a 15 year period if they are owned and operated by an entity that does not produce oil or gas transported in the line. However, if gas transported in the line is owned by the producer, the line can be depreciated over 7 years. Mr. President, this rule does not make sense. The depreciable life of an asset should depend on the use of the asset and not who owns the asset. For that reason, my legislation clarifies that these gathering lines are depreciable over 7 years no matter who the owner of the pipeline is. Mr. President, there are many other tax changes that have been proposed to assist the oil and gas industry. It is my view that the proposals I have offered will, over the long term, improve the health of the industry in the most cost-effective manner. I ask unanimous consent that the text of the two bills be printed in the Record.

Mr. MURKOWSKI. Mr. President, pursuant to an executive communication referred to the Committee on Energy and Natural Resources, at the request of the Department of Energy, I introduce a bill cited as the ``Energy Policy and Conservation Act Amendments.'' The bill would amend and extend certain authorities in the Energy and Policy Conservation Act which either have expired or will expire September 30, 1999. I would like to submit a copy of the transmittal letter and the text of the bill and ask that it be printed in the Record. I do this on behalf of myself and Senator Bingaman. The Act was passed in 1975. Title I of the Act authorized the creation and maintenance of the Strategic Petroleum Reserve that would be used to mitigate shortages during an oil supply disruption. Title II contains authorities essential for meeting key United States obligations to the International Energy Agency. The proposed legislation would extend the Strategic Petroleum Reserve and International Energy Program authorities to September 30, 2003. It would also delete or amend certain provisions which are outdated or unnecessary. I ask unanimous consent that the bill and the executive communication which accompanied the proposal be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise today to recognize the work of three Girl Scouts from Ketchikan, Alaska. Angela Pfeifer, Chelsea Pfeifer and Tennille Walker are each working towards the Girl Scout Gold Award. As a part of their service, they are attempting to enhance the visibility, respect and care of the American flag in Ketchikan. The following is an excerpt from a letter in which Chelsea explains the pride and respect she has for our nation's flag. This Spring Break I went down to Florida to visit my grandparents. My Grandfather served in World War II. At 87, he still put up the U.S. flag every morning, and takes it down every night. It makes my think of the number of people who died serving this country, so that we could have the freedoms that we enjoy today. The flag serves as a symbol of the respect and honor that should be given to those who fought. I observed that many of the retired people display the Flag proudly on a daily basis outside their homes. It would be my goal to see that my generation carry out this tradition and be proud to be an American. In their efforts to instill this same sense of pride and respect. Chelsea, Angela and Tennille have conducted school assemblies at Ketchikan area elementary schools, have placed flags in every classroom at Ketchikan High School and have spoken to local governments officials about erecting a new flag pole in Ketchikan City Park. Currently, there is no flag flying in Ketchikan City Park. Angela, Chelsea and Tennille have addressed this with Ketchikan--Gateway Borough Mayor Jack Shay. As a result, the Mayor and Borough Assembly agreed to install a flag pole in City Park. It is my honor to present these three outstanding Alaskans with an American flag flown over the United States Capitol. The flag will be presented to the City of Ketchikan on June 14, 1999, Flag Day, and will be the first flag to fly in City Park. I commend the work of Angela, Chelsea and Tennille and the Girl Scouts of Ketchikan. They have shown their ability to make a difference and have made a lasting impression on their community.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce that on Wednesday, May 12, 1999, the Committee on Energy and Natural Resources will hold an oversight hearing on Damage to the National Security from Chinese Espionage at DOE Nuclear Weapons Laboratories. The hearing will be held at 9:30 a.m. in room 216 of the Hart Senate Office Building in Washington, D.C. A portion of the hearing may be closed for national security reasons. Those who wish further information may write to the Committee on Energy and Natural Resources, U.S. Senate, Washington, D.C. 20510. subcommittee on national parks, Historic preservation, and recreation

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce that on Tuesday, May 25, 1999, the Committee on Energy and Natural Resources will hold an oversight hearing on State Progress in Retail Electricity Competition. The hearing will be held at 9:30 a.m. in room 366 of the Dirksen Senate Office Building in Washington, D.C. Those who wish to testify or submit a written statement should write to the Committee on Energy and Natural Resources, U.S. Senate, Washington, D.C. 20510. For further information, please call Julia McCaul at (202) 224-6567. subcommittee on national parks, historic preservation, and recreation

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that a hearing has been scheduled before the Committee on Energy and Natural Resources. The hearing will take place on Tuesday, May 11, 1999 and will commence at 9:30 a.m. in room SD-366 of the Dirksen Senate Office Building in Washington, DC. The purpose of the hearing is to receive testimony on S. 25, the Conservation and Reinvestment Act of 1999; S. 446, the Resources 2000 Act; S. 532, the Public Land and Recreation Investment Act of 1999; S. 819, the National Park Preservation Act and the Administration's Lands Legacy proposal. The hearing also will examine the role of the Council on Environmental Quality in the decision-making and management processes of agencies under the Committee's jurisdiction--Department of the Interior, Department of Energy, and the U.S. Forest Service. Because of the limited time available for each hearing, witnesses may testify by invitation only. However, those wishing to submit written testimony for the hearing record should send two copies of their testimony to the Committee on Energy and Natural Resources, United States Senate, 364 Dirksen Senate Office Building, Washington, DC 20510-6150. For further information, please contact Kelly Johnson at (202) 224- 4971. committee on energy and natural resources

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise in support of the motion to table the resolution authorizing the President to use whatever force and means necessary to carry the military campaign against Yugoslavia to a successful conclusion. As written, this resolution would provide the President with blanket authority to wage this war, including the right to deploy ground troops in the Balkans. There are too many unanswered, if not ignored questions about this war. If the Senate were to give the President this blanket authorization, we would abrogate our responsibility to our troops and to the American people to get real answers to these questions. First of all, what would constitute a ``successful conclusion'' to this war? Would it be the overthrow of Slobodan Milosevic and his government? Perhaps the removal of all Serbian troops from Kosovo and the subsequent return of all refugees to their homeland? Or would a successful conclusion to the war simply be forcing Milosevic to agree to the terms of the peace agreement which failed at Rambouillet? I, for one, do not feel this question has been sufficiently addressed, and I have a hunch that most, if not all of my colleagues would agree with this assessment. Mr. President, even if we can agree to what would constitute a ``successful conclusion'' to the war, what else are we agreeing to? Surely the use of ground troops. But how many are we talking? 50,000? 100,000? 200,000? more? We have already committed our pilots to the conflict. But as to ground troops--I think this is an issue which mandates a separate Senate debate specifically on this issue. We owe it to the American people, and we surely owe this to the troops whose lives lay in the balance of this decision. What about the costs of this operation? I do not think we have a clue what this will cost--in lives or in dollars. We know that the President has requested somewhere in the realm of $6 billion, but the actual floor debate hasn't even begun and the figure is already fluctuating between $8 and 13 billion. There is another matter about this resolution, and about this war, which troubles me greatly. When the military completed its Quadrennial Defense Review (QDR), we were assured that our readiness state would allow us to successfully respond to two full scale wars at the same time. This would mean that although we are engaged in the air, and perhaps on the ground, in Kosovo, we would be ready to fight a full scale operation at the same time in another theater--the Korean Peninsula and Iraq come to mind as real possibilities. Prior to the Kosovo operation, the Department of Defense assessed the risks associated with responding to a second major theater war as ``high.'' But now, because of our large commitment in the Balkans, and the fact that we are running dangerously low on cruise missiles and other munitions, our same military planners have changed this assessment to ``very high.'' If I understand this correctly, and I think I do, some of our own military strategists are concerned that our readiness is insufficient at this time to take on Milosevic and Saddam Hussein (Iraq) or Kim Jung-il (North Korea) at the same time. Given this Administration's track record in dealing with Iraq and North Korea, I think we have a real problem on our hands. This is a catastrophe of virtually untellable proportions waiting to happen. President Clinton has not asked the Congress for this blanket authorization on this war--and he continues to oppose the use of ground troops. While I strongly believe that it would be wrong for him to deploy ground troops absent clear Congressional authorization, I also do not believe that we should grant him this authority before he makes the request and the case for this authority. On a final note, I want to congratulate Reverend Jesse Jackson for his efforts this past weekend, and convey my deep relief and pleasure that the three American soldiers were released and are now reunited with their families. Mr. President, I support the motion to table, and urge my colleagues to do the same.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise to honor the opening of the Alaska Native Heritage Center in Anchorage, Alaska. The Heritage Center, the first of its kind in Alaska, is a twenty-six acre campus that offers a unique opportunity to learn and explore the traditional ways of Alaska Native cultures. The Center will be a ``gathering place'' where local residents and visitors to Alaska can meet Native Tradition Bearers, artists and performers. While visiting, they can learn about the Native traditional lifestyle by participating in workshops and guided tours of the five traditional village settings that have been built around a lake on the campus. In 1994, I was privileged to add the Stevens/Murkowski Alaska Native Culture and Arts Development Act as an amendment to the School-to-Work Opportunities Act. This amendment paved the way for authorizing federal funding for the Alaska Native Heritage Center. Congressman Don Young was instrumental in winning House approval for the measure. Over the past six years, Senator Stevens has been successful in securing matching federal funds for the Center--I am proud to say the Center isn't just a federal project, but a statewide project funded by individuals, private companies, Native Corporations and friends from outside the State who were united in a common dream. Finally, I would like to commend the vision and relentless dedication of the Chairman of the Alaska Native Heritage Center, Mr. Roy Huhndorf. The Heritage Center is a tribute to his leadership and determination to ensure a vibrant and continuing celebration of Alaska Native traditions and cultures for years to come.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise today to recognize the seventh and eighth graders from Dzantik'i Henni Middle School. They are doing important work by educating the public on something that affects much of Alaska in the winter: Seasonal Affective Disorder or SAD. This disorder causes severe depression during the winter months in Alaska when there can be up to 24 hours of darkness in some places. About one in three Alaskans suffer from mild to severe Seasonal Affective Disorder. Researchers suggest SAD may play a role in a variety of Alaska's social and medical problems, ranging from spousal abuse to alcoholism. These incredible students, led by teacher Robert Traul Jones, developed a community health project to combat SAD. The project had two major goals. The first was to educate people about depression and its impact on northern communities and their residents. The second goal was to provide affordable treatment for this condition. The students did this by designing, marketing and building high-intensity light boxes, which they distributed to the surrounding communities. The light boxes combat the daily darkness outside with light therapy. Their efforts were extraordinarily successful. The students projected 10 units being sold and ended up selling 39 units. The students are currently working with the Juneau Economic Development Commission to transfer their business to a local nonprofit organization. Mr. President, it is with great pride that I recognize the achievements of these students. Their hard work and dedication is an inspiration to us all. These are the future leaders of our country and our single greatest resource. The seventh and eighth grade students from Dzantik'I Heeni Middle School should be proud of their achievements in combating SAD.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I am pleased to be joined by Senator Stevens in introducing legislation that will allow Alaska Native Corporations to establish settlement trusts designed to promote the health, education, welfare and cultural heritage of Alaska Natives. Mr. President, in 1987, the Alaska Native Claims Settlement Act was amended to permit Native Corporations to establish settlement trusts to hold lands and investments for the benefit of current and future generations of Alaska Natives. Assets in these trusts are insulated from business exposure and risks and can be invested to provide distributions of income to Native shareholders and their future generations. Although the 1987 amendments were designed to facilitate the development of settlement trusts, many Native Corporations have been stymied in their efforts because the tax law, in many cases, imposes onerous penalties on the Native shareholders when the trusts are created. For example, when assets are transferred to the trust, they are treated as a de facto distribution of assets directly to the shareholders themselves to the extent of the corporation's earnings and profits. Even though the current shareholders receive no actual income at the time of the transfer into the trust, they are liable for income taxes as if they received an actual distribution. This not only requires the shareholder to come up with money to pay taxes on a distribution he or she never received, but also can result in a situation where a trust fund beneficiary is required to prepay taxes on his share of the entire trust corpus, which may be substantially more in taxes than the amount of cash benefits he or she will actually receive in the future. Our legislation remedies this inequity by requiring that a beneficiary of a settlement trust will be subject to taxation with respect to assets conveyed to the trust only when the actual distribution is received by the beneficiary. Moreover, the legislation provides that distributions from the trust will be taxable as ordinary income even if the distribution represents a return of capital. In addition, to ensure that these trusts do not accumulate excessive levels of the corporation's earnings, the legislation requires that the trust must annually distribute at least 55 percent of their taxable income. Mr. President, Alaska Native Corporations are unique entities. Unlike Native American tribes in the lower 48, Alaska Native corporations are subject to income tax. But unlike ordinary C corporations, Alaska Native corporations have diverse purposes, one of which is to preserve and protect the heritage of the Native shareholders. The settlement trust concept is well suited to the special needs of Alaska's Natives. As the Conference Committee Report to ANSCA amendments of 1987 stated: Trust distributions may be used to fight poverty, provide food, shelter and clothing and served comparable economic welfare purposes. Additionally, cash distributions of trust income may be made on an across-the-board basis to the beneficiary population as part of the economic welfare function. Settlement trusts will ensure that for generations to come, Native Alaskans will have a steady stream of income on which to continue building an economic base. The current tax rules discourage the creation of such trusts with the result that Native corporations are under extreme pressure to distribute all current earnings rather than prudently reinvesting for the future. Mr. President, it is my hope that we will be able to see this legislation adopted into law this year. For the long-term benefit of Alaska Natives, this tax law change is fundamentally necessary. Mr. President, I ask unanimous consent that the text of the legislation be included in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce that on Wednesday, May 5, 1999, the Committee on Energy and Natural Resources will hold an oversight hearing on Damage to the National Security from Chinese Espionage at DOE Nuclear Weapons Laboratories. The hearing will be held at 9:30 a.m., in room 216 of the Hart Senate Office Building in Washington, DC. A portion of the hearing may be closed for national security reasons. Those who wish further information may write to the Committee on Energy and Natural Resources, U.S. Senate, Washington, D.C. 20510.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I am pleased to be joined by Senator Stevens in introducing legislation that will allow Alaska Native Corporations to establish settlement trusts designed to promote the health, education, welfare and cultural heritage of Alaska Natives. Mr. President, in 1987, the Alaska Native Claims Settlement Act was amended to permit Native Corporations to establish settlement trusts to hold lands and investments for the benefit of current and future generations of Alaska Natives. Assets in these trusts are insulated from business exposure and risks and can be invested to provide distributions of income to Native shareholders and their future generations. Although the 1987 amendments were designed to facilitate the development of settlement trusts, many Native Corporations have been stymied in their efforts because the tax law, in many cases, imposes onerous penalties on the Native shareholders when the trusts are created. For example, when assets are transferred to the trust, they are treated as a de facto distribution of assets directly to the shareholders themselves to the extent of the corporation's earnings and profits. Even though the current shareholders receive no actual income at the time of the transfer into the trust, they are liable for income taxes as if they received an actual distribution. This not only requires the shareholder to come up with money to pay taxes on a distribution he or she never received, but also can result in a situation where a trust fund beneficiary is required to prepay taxes on his share of the entire trust corpus, which may be substantially more in taxes than the amount of cash benefits he or she will actually receive in the future. Our legislation remedies this inequity by requiring that a beneficiary of a settlement trust will be subject to taxation with respect to assets conveyed to the trust only when the actual distribution is received by the beneficiary. Moreover, the legislation provides that distributions from the trust will be taxable as ordinary income even if the distribution represents a return of capital. In addition, to ensure that these trusts do not accumulate excessive levels of the corporation's earnings, the legislation requires that the trust must annually distribute at least 55 percent of their taxable income. Mr. President, Alaska Native Corporations are unique entities. Unlike Native American tribes in the lower 48, Alaska Native corporations are subject to income tax. But unlike ordinary C corporations, Alaska Native corporations have diverse purposes, one of which is to preserve and protect the heritage of the Native shareholders. The settlement trust concept is well suited to the special needs of Alaska's Natives. As the Conference Committee Report to ANSCA amendments of 1987 stated: Trust distributions may be used to fight poverty, provide food, shelter and clothing and served comparable economic welfare purposes. Additionally, cash distributions of trust income may be made on an across-the-board basis to the beneficiary population as part of the economic welfare function. Settlement trusts will ensure that for generations to come, Native Alaskans will have a steady stream of income on which to continue building an economic base. The current tax rules discourage the creation of such trusts with the result that Native corporations are under extreme pressure to distribute all current earnings rather than prudently reinvesting for the future. Mr. President, it is my hope that we will be able to see this legislation adopted into law this year. For the long-term benefit of Alaska Natives, this tax law change is fundamentally necessary. Mr. President, I ask unanimous consent that the text of the legislation be included in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. I thank the Chair. I thank my colleagues.

Mr. MURKOWSKI. I ask that the remainder of my time be available to my cosponsor, Senator Hagel.

Mr. MURKOWSKI. Mr. President, today I rise to introduce legislation cosponsored by Senator Hagel, who is here, Senator Byrd, Senator Craig, Senator Roberts, Senator Grams, Senator Hutchinson, Senator Enzi, and, of course, Senator Hagel. This is a bill that deals with the issue of the potential climate change that we have heard so much about in this body over the last several months. Our specific bill would do three things, Mr. President. First, the bill would create a new $2 billion research, development, and demonstration program designed to develop and enhance new technology to help stabilize greenhouse gas concentrations in the atmosphere. This would be a cost-shared partnership with industry to spur innovation and technology so that we can use this technology and have it deployed in the United States, as well as have it exported around the world. Think about the tremendous advancements that have been made in technology in the last decade, Mr. President. Apply the same basis of need for that technology to be used to reduce greenhouse gases and address climate change. The necessity of doing this, Mr. President, is obvious. We have seen discussed and examined the costs of Kyoto. The cost of complying with Kyoto is estimated to be up to $338 billion in lost gross domestic product by the year 2010. That equates to $3,068 per household by that year. So it is a substantial investment and deserves our attention now. Our bill would improve the provisions in existing law which promote voluntary reductions in greenhouse gas emissions. Our emphasis remains on encouraging voluntary action and not creating new regulatory burdens. Finally, our bill would establish greater accountability and responsibility for climate change and related matters within the Department of Energy by establishing a statutory office of global climate change. Somebody needs to be accountable in the Department of Energy for policies in this area. While the Secretary is ultimately accountable, we want to see greater program direction and focus in this area. It is justified, Mr. President, when we think of the costs associated with meeting the demands and requirements of Kyoto. We can do this and achieve this through technology, and it is an investment well spent. Now, there are other commonsense approaches we continue to work on that we or others will later propose in separate bills or as amendments to this bill as we get into the debate. For example, we would like to protect the U.S. Global Climate Change Research Program from politics and ensure that it is conducting high-quality, merit-based, peer- reviewed science; we would like to remove regulatory obstacles that stand in the way of voluntary greenhouse gas emissions reduction; we would like to promote voluntary agricultural management practices that sequester, or trap, additional carbon dioxide in biomass and soils; we would like to promote forest management practices that sequester carbon. Mr. President, we encourage the growth of more trees. We would like to promote U.S. exports of clean technologies to nations such as China and India, who are belching greenhouse gases and choking on their own pollutants. For this to be a global approach to a global issue, the developing countries must be engaged in the solution--unlike Kyoto, where there is a mandate that developing countries simply get a free ride. The recognition is--if you buy that logic--there is no net gain, no substantial decrease in emissions. Under our proposal, the technology would be applicable to the developing nations, so there would be a substantial net decrease in greenhouse gases. Where sensible and cost effective, we would like to pursue possible changes to the Tax Code to promote certain activities or practices designed to reduce, sequester, or avoid greenhouse gas emissions. These are all approaches that we plan to pursue, in a bipartisan manner, to address the issue of greenhouse gas emissions and potential climate change, because we believe the potential threat of human- induced climate change will best be solved on a global basis, and solved with technology and American innovation over the long term. This is the reason we are engaging the developing nations to come aboard--by getting new technology into the marketplace, get it out there and installed and reduce emissions. Compare our approach with that taken by the Kyoto protocol, which gives developing nations a free ride. Kyoto explicitly ignores the provision of the Byrd-Hagel resolution, which passed this Senate 95 to 0 in 1997. We are, of course, a body of advice and consent. We gave the administration our advice 95 to 0, so they shouldn't expect our consent. Ninety-five Senators, Mr. President, rarely agree on anything. As a consequence, I think we have spoken relative to the merits of the treaty that was brought before us. Although the President may seek short-term political gain in simply signing a treaty that imposes burdens long after his watch is over--and that is the applicability of these targets--these targets will come long after the current administration is gone. So it is very easy to set these targets, because this administration won't be held accountable. If the President chooses to ignore our advice, then I don't think he should expect our consent. That is kind of where we are now. If we recall the Byrd-Hagel resolution, it said that all nations must be included in emission targets and that serious economic harm must not result--serious economic harm. But what serious economic harm? Mr. President, I suggest that a cost to this Nation of $338 billion in lost GDP in the year 2010 is significant economic harm. Yet the Kyoto proposal does not include all nations. Only 35 industrial nations are subject to emission limits, even though the 134 developing nations will surpass them in emissions by the year 2015. Moreover, the Kyoto protocol's regulatory approach requires legally binding quantified emissions reductions of 7 percent below 1990 levels by the years 2008-2012. That is roughly a 40-percent decrease in emissions from our current baseline. We simply can't get there from here without endangering energy supply, reliability, or our economy. According to the economic analysis of the Department of Energy's Energy Information Administration, if we were to adopt Kyoto, here is what American consumers could face in the year 2010: 53 percent higher gasoline prices; 86 percent higher electric prices; Upward pressure on interest rates; New inflationary pressures. There goes your surplus. At a recent hearing of the Energy and Natural Resources Committee, one witness testified that the economic downturn accompanying the Kyoto implementation would depress tax revenues, erase the surplus we have earmarked to shore up Social Security, and reduce the public debt. With the Kyoto approach, we say goodbye to the budget surplus, goodbye to the hopes of saving Social Security, and goodbye to the economic prosperity in this country today. What do we get for enduring this economic pain? Do we stabilize the greenhouse gas concentrations in the atmosphere under Kyoto? The answer is clearly no. Do we even reduce global greenhouse gas emissions? No, because any reductions by the 35 developed nations and the parties to the treaty would be overwhelmed by the growing emissions from the 134 nations that aren't covered by the Kyoto emissions limit. That is what is wrong with Kyoto. Make no mistake about it, Mr. President, the Kyoto protocol is an expensive, short-term, narrowly applied regulatory approach that will erode U.S. sovereignty, punish U.S. consumers, and do nothing to enhance the global environment. We are, with this bill and others that will follow, charting a different, a new, a progressive course. Ours is a long-term, technology-based, global effort. If human-induced greenhouse gas emissions are indeed changing the climate for the worse--and there remains substantial scientific uncertainty at this point--then we should act in a prudent manner to reduce, sequester, or avoid those emissions through technology. I would like to address criticisms leveled by the administration about our bill that are based, I hope, on a misunderstanding. A recent administration ``fact sheet,'' after recognizing that there are ``positive features'' in the bill, and noting that it ``makes improvements to current law'' regarding voluntary efforts to curtail emissions, goes on to incorrectly erroneously state that our bill ``rolls back energy efficiency and clean energy programs with a long history of bipartisan support.'' The administration ``fact sheet'' is incorrect. Our bill does not roll back funding for renewable energy or energy efficiency. Instead, it authorizes $200 million per year in new money; it does not deauthorize any existing programs. With that clarification, it would be my hope that the administration would support our bill and join us in a prudent, common sense approach to greenhouse gas emissions and climate. Mr. President, I think I had 20 minutes under special orders this morning.

Mr. MURKOWSKI

Mr. MURKOWSKI. I thank the Chair. I thank my colleagues.

Mr. MURKOWSKI. Mr. President, today, along with Mr. Akaka, Mr. Stevens, and Mr. Inouye, I am introducing legislation that will provide a measure of relief to the citizens of Alaska and Hawaii who must rely on air transport far more than citizens in the lower 48. When Congress adopted the balanced budget legislation in 1997, one of the provisions of the tax bill re-wrote the formula for calculating the air passenger tax for domestic and international flights. As part of this formula change, Congress adopted a per passenger, per segment fee which disproportionately penalizes travelers to and from Alaska and Hawaii who have no choice but to travel by air. The legislation we are introducing today would reinstate the prior law 10 percent tax formula for flights to and from our states. In addition, the $6 international departure fees that are imposed on such flights would be retained at the current level and would not be indexed. I see no reason why passengers flying to and from our states must face a guaranteed increase in tax every year because of inflation. We don't index tobacco taxes, we don't index fuel taxes; why should government automatically gain additional revenue from air passengers simply because of inflation? Mr. President, this legislation requires that intrastate Alaska and Hawaii flights will be subject to a flat 10 percent tax if such flights do not originate or terminate at a rural airport in our states. In addition, the definition of a rural airport is expanded to include airports within 75 miles of each other where no roads connect the communities. This provision not only benefits Alaska, but many island communities throughout the United States. In many towns in Alaska, air transport is the only viable means of transportation from one community to another. There is no reason these airports should be denied the benefit of the special rural airport tax rate simply because our state does not have the transportation infrastructure or geographic definition that exists in most of the lower 48. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. MURKOWSKI. Mr. President, today I rise to introduce legislation cosponsored by Senator Hagel, who is here, Senator Byrd, Senator Craig, Senator Roberts, Senator Grams, Senator Hutchinson, Senator Enzi, and, of course, Senator Hagel. This is a bill that deals with the issue of the potential climate change that we have heard so much about in this body over the last several months. Our specific bill would do three things, Mr. President. First, the bill would create a new $2 billion research, development, and demonstration program designed to develop and enhance new technology to help stabilize greenhouse gas concentrations in the atmosphere. This would be a cost-shared partnership with industry to spur innovation and technology so that we can use this technology and have it deployed in the United States, as well as have it exported around the world. Think about the tremendous advancements that have been made in technology in the last decade, Mr. President. Apply the same basis of need for that technology to be used to reduce greenhouse gases and address climate change. The necessity of doing this, Mr. President, is obvious. We have seen discussed and examined the costs of Kyoto. The cost of complying with Kyoto is estimated to be up to $338 billion in lost gross domestic product by the year 2010. That equates to $3,068 per household by that year. So it is a substantial investment and deserves our attention now. Our bill would improve the provisions in existing law which promote voluntary reductions in greenhouse gas emissions. Our emphasis remains on encouraging voluntary action and not creating new regulatory burdens. Finally, our bill would establish greater accountability and responsibility for climate change and related matters within the Department of Energy by establishing a statutory office of global climate change. Somebody needs to be accountable in the Department of Energy for policies in this area. While the Secretary is ultimately accountable, we want to see greater program direction and focus in this area. It is justified, Mr. President, when we think of the costs associated with meeting the demands and requirements of Kyoto. We can do this and achieve this through technology, and it is an investment well spent. Now, there are other commonsense approaches we continue to work on that we or others will later propose in separate bills or as amendments to this bill as we get into the debate. For example, we would like to protect the U.S. Global Climate Change Research Program from politics and ensure that it is conducting high-quality, merit-based, peer- reviewed science; we would like to remove regulatory obstacles that stand in the way of voluntary greenhouse gas emissions reduction; we would like to promote voluntary agricultural management practices that sequester, or trap, additional carbon dioxide in biomass and soils; we would like to promote forest management practices that sequester carbon. Mr. President, we encourage the growth of more trees. We would like to promote U.S. exports of clean technologies to nations such as China and India, who are belching greenhouse gases and choking on their own pollutants. For this to be a global approach to a global issue, the developing countries must be engaged in the solution--unlike Kyoto, where there is a mandate that developing countries simply get a free ride. The recognition is--if you buy that logic--there is no net gain, no substantial decrease in emissions. Under our proposal, the technology would be applicable to the developing nations, so there would be a substantial net decrease in greenhouse gases. Where sensible and cost effective, we would like to pursue possible changes to the Tax Code to promote certain activities or practices designed to reduce, sequester, or avoid greenhouse gas emissions. These are all approaches that we plan to pursue, in a bipartisan manner, to address the issue of greenhouse gas emissions and potential climate change, because we believe the potential threat of human- induced climate change will best be solved on a global basis, and solved with technology and American innovation over the long term. This is the reason we are engaging the developing nations to come aboard--by getting new technology into the marketplace, get it out there and installed and reduce emissions. Compare our approach with that taken by the Kyoto protocol, which gives developing nations a free ride. Kyoto explicitly ignores the provision of the Byrd-Hagel resolution, which passed this Senate 95 to 0 in 1997. We are, of course, a body of advice and consent. We gave the administration our advice 95 to 0, so they shouldn't expect our consent. Ninety-five Senators, Mr. President, rarely agree on anything. As a consequence, I think we have spoken relative to the merits of the treaty that was brought before us. Although the President may seek short-term political gain in simply signing a treaty that imposes burdens long after his watch is over--and that is the applicability of these targets--these targets will come long after the current administration is gone. So it is very easy to set these targets, because this administration won't be held accountable. If the President chooses to ignore our advice, then I don't think he should expect our consent. That is kind of where we are now. If we recall the Byrd-Hagel resolution, it said that all nations must be included in emission targets and that serious economic harm must not result--serious economic harm. But what serious economic harm? Mr. President, I suggest that a cost to this Nation of $338 billion in lost GDP in the year 2010 is significant economic harm. Yet the Kyoto proposal does not include all nations. Only 35 industrial nations are subject to emission limits, even though the 134 developing nations will surpass them in emissions by the year 2015. Moreover, the Kyoto protocol's regulatory approach requires legally binding quantified emissions reductions of 7 percent below 1990 levels by the years 2008-2012. That is roughly a 40-percent decrease in emissions from our current baseline. We simply can't get there from here without endangering energy supply, reliability, or our economy. According to the economic analysis of the Department of Energy's Energy Information Administration, if we were to adopt Kyoto, here is what American consumers could face in the year 2010: 53 percent higher gasoline prices; 86 percent higher electric prices; Upward pressure on interest rates; New inflationary pressures. There goes your surplus. At a recent hearing of the Energy and Natural Resources Committee, one witness testified that the economic downturn accompanying the Kyoto implementation would depress tax revenues, erase the surplus we have earmarked to shore up Social Security, and reduce the public debt. With the Kyoto approach, we say goodbye to the budget surplus, goodbye to the hopes of saving Social Security, and goodbye to the economic prosperity in this country today. What do we get for enduring this economic pain? Do we stabilize the greenhouse gas concentrations in the atmosphere under Kyoto? The answer is clearly no. Do we even reduce global greenhouse gas emissions? No, because any reductions by the 35 developed nations and the parties to the treaty would be overwhelmed by the growing emissions from the 134 nations that aren't covered by the Kyoto emissions limit. That is what is wrong with Kyoto. Make no mistake about it, Mr. President, the Kyoto protocol is an expensive, short-term, narrowly applied regulatory approach that will erode U.S. sovereignty, punish U.S. consumers, and do nothing to enhance the global environment. We are, with this bill and others that will follow, charting a different, a new, a progressive course. Ours is a long-term, technology-based, global effort. If human-induced greenhouse gas emissions are indeed changing the climate for the worse--and there remains substantial scientific uncertainty at this point--then we should act in a prudent manner to reduce, sequester, or avoid those emissions through technology. I would like to address criticisms leveled by the administration about our bill that are based, I hope, on a misunderstanding. A recent administration ``fact sheet,'' after recognizing that there are ``positive features'' in the bill, and noting that it ``makes improvements to current law'' regarding voluntary efforts to curtail emissions, goes on to incorrectly erroneously state that our bill ``rolls back energy efficiency and clean energy programs with a long history of bipartisan support.'' The administration ``fact sheet'' is incorrect. Our bill does not roll back funding for renewable energy or energy efficiency. Instead, it authorizes $200 million per year in new money; it does not deauthorize any existing programs. With that clarification, it would be my hope that the administration would support our bill and join us in a prudent, common sense approach to greenhouse gas emissions and climate. Mr. President, I think I had 20 minutes under special orders this morning.

Mr. MURKOWSKI. I ask that the remainder of my time be available to my cosponsor, Senator Hagel.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, today, along with Mr. Akaka, Mr. Stevens, and Mr. Inouye, I am introducing legislation that will provide a measure of relief to the citizens of Alaska and Hawaii who must rely on air transport far more than citizens in the lower 48. When Congress adopted the balanced budget legislation in 1997, one of the provisions of the tax bill re-wrote the formula for calculating the air passenger tax for domestic and international flights. As part of this formula change, Congress adopted a per passenger, per segment fee which disproportionately penalizes travelers to and from Alaska and Hawaii who have no choice but to travel by air. The legislation we are introducing today would reinstate the prior law 10 percent tax formula for flights to and from our states. In addition, the $6 international departure fees that are imposed on such flights would be retained at the current level and would not be indexed. I see no reason why passengers flying to and from our states must face a guaranteed increase in tax every year because of inflation. We don't index tobacco taxes, we don't index fuel taxes; why should government automatically gain additional revenue from air passengers simply because of inflation? Mr. President, this legislation requires that intrastate Alaska and Hawaii flights will be subject to a flat 10 percent tax if such flights do not originate or terminate at a rural airport in our states. In addition, the definition of a rural airport is expanded to include airports within 75 miles of each other where no roads connect the communities. This provision not only benefits Alaska, but many island communities throughout the United States. In many towns in Alaska, air transport is the only viable means of transportation from one community to another. There is no reason these airports should be denied the benefit of the special rural airport tax rate simply because our state does not have the transportation infrastructure or geographic definition that exists in most of the lower 48. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that a hearing has been scheduled before the Full Committee on Energy and Natural Resources to receive testimony on, S. 698, a bill to review the suitably and feasibility of recovering costs of high altitude rescues at Denali National Park and Preserve in Alaska, and for other purposes; S. 711, to allow for the investment of joint Federal and State funds from the civil settlement of damages from the Exxon Valdez oil spill, and for other purposes; and S. 748, a bill to improve Native hiring and contracting by the Federal Government within the State of Alaska, and for other purposes. The hearing will take place on Thursday, May 13, 1999 at 9:30 a.m. in room SD-366 of the Dirsken Senate Office Building in Washington, DC. Because of the limited time available for the hearing, witnesses may testify by invitation only. However, those wishing to submit written testimony for the hearing record should sent two copies of their testimony to the Committee on Energy and Natural Resources, United States Senate, SD-364 Dirksen Senate Office Building, Washington, DC 20510-6150. For further information, please contact Jim O'Toole or Shawn Taylor of the committee staff at (202) 224-6949.