
<#FROWN:H01\>Some reporters had difficulty distinguishing in their records between parts that should have been included in 'road vehicles and parts' or 'other transport equipment' and parts that should have been included in other categories. BEA reviewed reports with large trade values and, after discussions with reporters, revised those with incorrect reporting. However, reports with low values were not reviewed, and in some cases, reporters may have erroneously included both types of parts in 'road vehicles and parts' or 'other transport equipment.' Thus, these two categories may be overstated, and other categories, particularly machinery, may be understated.
Total U.S. trade associated with U.S. parents and their foreign affiliates consists of (1) trade between U.S. parents and their foreign affiliates, (2) trade between other U.S. persons and foreign affiliates, and (3) trade between U.S. parents and unaffiliated foreigners. Data on trade between U.S. parents and their foreign affiliates were collected on the BE-10A and BE-10B(LF) and (SF) forms; on the BE-10A form, total trade of a given U.S. parent with all of its foreign affiliates combined was reported, while on the BE-10B(LF) and (SF) forms, trade of the U.S. parent with only the individual foreign affiliate covered by that form was reported. In principle, the sum of a U.S. parent's trade with each of its individual foreign affiliates, as reported on the BE-10B forms for those affiliates, should equal the parent's total trade with all of its affiliates combined, as reported on the parent's BE-10A form. In fact, however, the sum of the data from the affiliates' BE-10B forms may not equal the total reported on their parent's BE-10A form, because of differences in timing and valuation and because the parent's BE-10A form may include data for affiliates that are exempt from being reported on the BE-10B forms.
In this publication, the data on trade between parents and affiliates used in computing total U.S. trade associated with U.S. parents and their foreign affiliates are derived from the affiliates' BE-10B forms rather than from the U.S. parents' BE-10A forms. (However, the data derived from the parents' BE-10A forms are shown as an addendum.) Data on trade between other U.S. persons and foreign affiliates are also derived from the affiliates' BE-10B forms. However, data on trade between U.S. parents and unaffiliated foreigners are from the parents' BE-10A forms.
In this publication, BEA is showing, for the first time, separate data on U.S. parent trade with foreign parent groups (FPG's). A U.S. parent has an FPG if the U.S. parent is, in turn, owned 10 percent or more by a foreign person. For a given U.S. parent, the FPG consists of (1) the foreign parent of the U.S. parent, (2) any foreign person, proceeding up the ownership chain, that owns more than 50 percent of the person below it, and (3) any foreign person, proceeding down the ownership chain(s) of each of these members, that is owned more than 50 percent by the person above it.
Direct Investment Position and Balance of Payments Data
Direct investment position and balance of payments data cover U.S. parents' positions in, and transactions with, their foreign affiliates; in contrast, the direct investment financial and operating data, discussed earlier, cover the overall activities of the parents and affiliates themselves. For foreign affiliates, the data include positions in, and transactions with, them by all persons, not just their U.S. parents. The U.S. direct investment position abroad is equal to U.S. parents' equity in, and net outstanding loans to, their foreign affiliates; foreign affiliates' total assets, in contrast, are equal to the sum of (1) total owners' equity in affiliates held by both U.S. parents and all other persons and (2) total liabilities owed by affiliates to both U.S. parents and all other persons. For example, suppose that an affiliate is owned 80 percent by its U.S. parent and that the affiliate has total owners' equity of $50 million and total liabilities of $100 million (including $20 million owed to the parent). In this case, the affiliate's total assets would be $150 million (total owners' equity of $50 million plus total liabilities of $100 million), and the parents' position in the affiliate would be $60 million (80 percent of the $50 million of owners' equity plus the $20 million of intercompany debt).
In the benchmark survey, data for the position and balance of payments items were reported in part III of the BE-10B(LF) or (SF) (or the BE-10B BANK) forms. The balance of payments items consist of transactions between parents and their affiliates and of transactions between parents and other persons that change the parents' equity in their affiliates. The major items that appear in the U.S. balance of payments accounts for U.S. direct investment abroad are these:
Direct investment capital outflows,
Direct investment income,
Direct investment royalties and license fees, and
Other direct investment services.
It should be noted that there are two types of adjustments made to the balance of payments data presented here before the data are entered into the U.S. international accounts. First, as noted earlier, two of these items - income and capital outflows - are not entered into the international accounts at the reported book values until they are adjusted to reflect current-period prices.
Second, as discussed in the section on fiscal year reporting, the direct investment position and balance of payments data collected in the 1989 benchmark survey and shown in this publication are on a fiscal year basis, whereas the data in the U.S. balance of payments accounts and in BEA's annual series on the direct investment position are on a calendar year basis. Before being incorporated into the balance of payments accounts and the series on the position, the data from the 1989 benchmark survey will be adjusted to a calendar year basis. These adjusted data for 1989 will also be extrapolated forward to derive universe estimates for subsequent calendar years, based on sample data collected in BEA's quarterly surveys for those years. The adjusted 1989 data and the extrapolated estimates for calendar years 1990-92 are scheduled for publication in the June and August 1993 issues of the Survey of Current Business. As noted earlier, BEA also plans to revise its balance of payments and direct investment position data for 1983-88 to incorporate information from the 1989 benchmark survey.
The balance of payments data included here differ from data from the 1982 benchmark survey because of methodological and definitional changes introduced in June 1992 to make BEA's data more consistent with the international standards recommended in the forthcoming fifth edition of the International Monetary Fund's (IMF) Balance of Payments Manual and in the United Nations System of National Accounts. These changes include (1) the presentation of receipts and payments of income, royalties and license fees, and other private services before deduction of withholding taxes and (2) the removal of capital gains and losses from direct investment income. These and other changes are explained in the sections that follow.
U.S. direct investment position abroad
As noted earlier, the U.S. direct investment position abroad is equal to U.S. parents' equity in, and net outstanding loans to, their foreign affiliates. The position may be viewed as the U.S. parents' contribution to the total assets of their foreign affiliates or as financing provided by U.S. parents to their affiliates in the form of either equity or debt. The data are derived from the foreign affiliates' books at yearend.
The direct investment position estimates published here are at book value and are not adjusted to current value. Thus, they largely reflect prices at the time of investment rather than prices of the current period. Because historical cost is the basis used for valuation in company accounting records in the United States, it is the only basis on which companies can report data in BEA's direct investment surveys. It is also the only basis on which detailed estimates of the position are available by country, by industry, and by account. (Elsewhere, however, BEA does provide aggregate estimates of the position valued in current-period prices.) For simplicity, all subsequent references to the position are to the position on a historical-cost (book-value) basis, unless otherwise stated.
U.S. parents' equity in incorporated foreign affiliates consists of the U.S. parents' holdings of capital stock in, and other capital contributions to, their affiliates and U.S. parents' equity in the retained earnings of their affiliates. Capital stock comprises all stock of affiliates, whether common or preferred, voting or nonvoting. Other capital contributions by U.S. parents, also referred to as the 'U.S. parents' equity in additional paid-in capital,' consists of capital, invested or contributed, that is not included in capital stock, such as amounts paid for stock in excess of its par or stated value, capitalizations of intercompany accounts (conversions of debt to equity) that do not result in the issuance of capital stock, and donations. U.S. parents' equity in retained earnings is the U.S. parents' shares of the undistributed earnings of their incorporated foreign affiliates.
For most unincorporated affiliates, U.S. parents' were able to provide a breakdown of owners' equity by type. Thus, in tables showing U.S. parents' equity in affiliates by type, the parents' equity in both incorporated and unincorporated affiliates are shown together. For those unincorporated affiliates for which no breakdown of owners' equity by type was available, all of the parents' equity in the affiliates was included in capital stock (which includes additional paid-in capital and capital contributions) rather than in retained earnings, because these affiliates usually remit all of their earnings to the U.S. parent. The U.S. parents' share in total owners' equity (not broken down by type) is shown separately for incorporated and unincorporated affiliates in addenda to the direct investment position tables.
The U.S. parents' net outstanding loans to their foreign affiliates, shown in the tables as the affiliates' net intercompany debt to U.S. parents, consist of trade accounts and trade notes payable, other current liabilities, and long-term debt owed by the affiliates to their U.S. parents, net of similar items due to the affiliates from their U.S. parents.
Intercompany accounts include the value of all capital leases and of operating leases of more than 1 year between U.S. parents and their foreign affiliates. (Only long-term operating leases are included in intercompany accounts to conform to U.S. data on merchandise trade, which also exclude shipments under leases for periods of 1 year or less.) The value of property so leased to a foreign affiliate by its U.S. parent is included in affiliates' payables, and the net book value of property so leased by a foreign affiliate to its U.S. parent is included in affiliates' receivables. Capital leases recognize that title to the leased property will usually be transferred to the lessee at the termination of the lease - similar to an installment sale. Operating leases have a term significantly shorter than the expected useful life of the tangible property being leased, and there is usually an expectation that the leased property will be returned to the lessor at the termination of the lease. For capital leases, the net book value of the leased property is calculated according to GAAP. Under GAAP, the lessee records either the present value of the future lease payments or the fair market value, whichever is lower; the lessor records the sum of all future lease receipts. For operating leases of more than 1 year, the value is the original cost of the leased property less accumulated depreciation.
For bank affiliates, the direct investment position is defined to include only their parents' permanent debt and equity investment in them; similarly, the direct investment flows that enter the U.S. balance of payments accounts for these affiliates include only transactions related to such permanent investment. All other transactions and positions - mainly claims and liabilities arising from the parents' and affiliates' normal banking business - are excluded from the direct investment accounts because they are included with other banking claims and liabilities in the portfolio investment accounts. The definition of permanent investment may vary somewhat from bank to bank. Examples of such investment are funds from parents that are used to establish or acquire the affiliates or that finance the affiliates' purchases of property, plant, and equipment.
<#FROWN:H02\>
CHAPTER I
INTRODUCTION
Members of the Kentucky General Assembly were not surprised when the 101st U.S. Congress, in its closing days, placed stringent new controls on the burning of coal by electric utilities. Proposals to control acid deposition, commonly referred to as acid rain, were introduced in Congress as early as 1981. From 1982 until 1990, interim committees of the Kentucky General Assembly studied congressional proposals to control acid rain and communicated regularly with the state's congressional delegation on the issue. Recognizing that Congressional action was close at hand, the 1990 General Assembly enacted Senate Concurrent Resolution 73 on March 29, 1990. Senate Concurrent Resolution 73 directed an interim legislative committee, the Energy Task Force, to study the potential impacts of federal acid rain legislation in Kentucky's economy and to develop a strategy for addressing those impacts.
On November 15, 1990, the President of the United States signed into law S.1630, the Clean Air Act Amendments of 1990, Public Law 101-5491. Title IV of the Act contains the acid rain legislation.
Acid rain forms when fossil fuel combustion from electric power plants, industrial boilers, and motor vehicles release pollutants, primarily sulfur dioxide (SO<sb_>2<sb/>) and nitrogen oxides (NO<sb_>x<sb/>), into the atmosphere. Reacting with the SO<sb_>2<sb/> moisture in the atmosphere, and NO<sb_>x<sb/> emissions are converted into sulfuric and nitric acids, respectively. The acidic materials, which may be carried long distances by wind, are released back into the atmosphere or are deposited on the ground in the form of rain, fog, snow, gas, or dry particles. Acid rain, in certain concentrations and under certain conditions, can damage forests, lakes, streams, aquatic life, buildings, and monuments, and cause human respiratory problems.
According to a national inventory completed in 1985, electric utilities were responsible for 69% of SO<sb_>2<sb/> emissions in the United States, with most of those emissions created by coal combustion. The transportation sector was identified as the largest source catetgorycategory for NO<sb_>x<sb/> emissions, 43% of the total. Electric utilities were responsible for 32% of NO<sb_>x<sb/> emissions. Fairly early in the process, proposals to tackle the acid rain issue narrowed to one source: fossil-fueled electric power plants.
Although the Clean Air Act, prior to the 1990 Amendments, did no specifically address acid rain formations, it did require certain controls on SO<sb_>2<sb/> and NO<sb_>x<sb/> for industrial power facilities, as well as electric utility power plants. However, as the phenomenon of acid rain was recognized and concern over the effects of acid rain grew in the 1980's, controls in the existing law were viewed as inadequate and support for increased controls grew, leading to the inclusion of Title IV acid rain provisions in the 1990 Clean Air Act Amendments.
The acid rain issue provoked much argument among the states and between the U.S. and Canada. Canada and the northeastern states initiated the congressional acid rain battle, claiming that their forested areas and lakes were suffering from the long-range transport of acid rain originating in the midwest.
Once it became clear that acid rain legislation would target emissions from coal-burning electric utilities, the congressional proposals pitted states with high-sulfur coal reserves against states with low-sulfur coal reserves. The mid-western states of Ohio, Indiana, and Illinois, which have high-sulfur coal, favored proposals to require installation of pollution control equipment on all existing coal-fired utility units. States with low-sulfur coal, such as Wyoming and Montana, pushed for proposals to give affected utilities more options for reducing sulfur emissions, including switching to their low-sulfur coal. States with utilities targeted for the largest SO<sb_>2<sb/> reductions, again, primarily midwestern states, argued for cost-sharing provisions where all electric consumers, nationwide, would be subject to a tax to be used to subsidize the cost of the acid rain controls. The regional battles still continue, months after the signing of the Clean Air Act Amendments, as the rules for implementation are being developed.
Kentucky, as one of the nation's largest coal-producing states, with large reserves of high-sulfur coal in the west and low-to-medium sulfur coal in the east, was in a particularly difficult position during congressional deliberations. Proposals which favored one of the state's coalfields were not always favorable to the other coalfield.
The state was one of the early supporters of clean coal technology development, contributing over $10 million for construction of the atmospheric fluidized bed combustion project at the Tennessee Valley Authority's Shawnee plant near Paducah. And much support did exist within the state and the General Assembly for the position that Congress should not act on the issue without sound scientific knowledge of the benefits and costs of new acid rain control. To gain this knowledge the federal government embarked in 1980 on one of the largest research projects of its kind ever undertaken, the National Acid Precipitation Assessment Program (NAPAP). The project took over ten years and $600 million to complete and involved the efforts of over 1000 scientists in the United States, Canada, and Great Britain.
Ironically, the fiscal assessment by the NAPAP project was not available to either the Senate or House of Representatives as each chamber passed their initial version of the Clean Air Act Amendments. A draft of the report surfaced just a month prior to final action by a conference committee but had little effect on the legislative process. The final NAPAP report raises serious questions as to whether the costs of the new acid rain controls outweigh the benefits NAPAP was able to identify.
The final bill gives utilities flexibility in making SO<sb_>2<sb/> and NO<sb_>x<sb/> reductions. Pollution control equipment is not mandated and no cost-sharing provisions are included.
Task Force Activity
Soon after the President signed the Clean Air Act Amendments of 1990, hereafter referred to as the CAAAs, the Interim Energy Task Force began its work on Senate Concurrent Resolution 73. In November 1990, a subcommittee of the Energy Task Force met with researchers at the University of Kentucky's Center for Applied Energy Research and reviewed the center's current coal research. Also that same month the Energy Task Force received its first briefing on the Clean Air Act Amendments of 1990 from state officials in the Natural Resources and Environmental Protection Cabinet and the Governor's Office for Coal and Energy Policy.
In January 1991, when the General Assembly reorganized several House and Senate committees, the Energy Task Force's jurisdiction was broadened to include tourism and the name was changed to the Tourism Development and Energy Task Force. Because of the 1991 Extraordinary Session of the General Assembly, the new task force did not meet during the first three months of 1991. At its April meeting, the Tourism Development and Energy Task Force established the Subcommittee on Energy and assigned the subcommittee the task of completing the Senate Concurrent Resolution 73 study on acid rain legislation.
The subcommittee devoted most of the remainder of the interim to the study, hearing testimony from coal producers and coal miners, from electric utilities in the state, and from various state agencies which will be involved in implementation of the acid rain legislation. On November 12, 1991, the Tourism Development and Energy Task Force completed its work on SCR 73, with the receipt of the subcommittee's report and adoption of recommendations.
Review of Chapters
This report is the final product by the Tourism Development and Energy Task Force on Senate Concurrent Resolution 73. Chapter II describes the federal acid rain legislation, including an SO<sb_>2<sb/> emissions trading system, and discusses the various compliance options available to affected utilities. Chapter III presents coal mining trends in this state, as well as factors which affect national coal markets. Chapter IV is an analysis, based on a computer model simulation, of the effects of the federal legislation on the state's economy. Chapter V presents all issues identified by the various participants of the study process, and the final chapter presents the task force's findings and recommendations.
Future Review
As the Tourism Development and Energy Task Force worked on this issue, through its subcommittee, it quickly became apparent that the task force's work is preliminary. Title IV of the Clean Air Act Amendments of 1990 - as well as the entire act - is a very complicated piece of legislation, a product of much political compromise. The emissions trading system is experimental; there is uncertainty as to how or indeed whether the experiment will work. Congress left many of the implementation details up to the U.S. Environmental Protection Agency (EPA), which has not yet worked out many of those details. Utilities are now formulating compliance plans without the final rules; the task force completed its work under similar uncertainties. As recommended by the task force, the General Assembly, through its interim committee system, will need to continue to monitor implementation of Title IV of the Clean Air Act Amendments of 1990.
CHAPTER II
CLEAN AIR AMENDMENTS OF 1990: ACID RAIN PROVISIONS
When President Bush signed S.1630 into law on November 15, 1990, a major overhaul of the nation's air pollution law was set into motion. The Clean Air Act Amendments of 1990 (CAAAs) are the first amendments to the Clean Air Act since 1977 and the first major environmental law of the 1990s. The amendments will require as many as 175 regulations. The CAAAs, which include 11 titles, tighten air standards to control acid rain, urban air pollution, and toxic air pollution. The legislation sets out a new permitting program, strengthens enforcement efforts, and mandates additional clean air research. This chapter summarizes the acid rain provisions of the CAAAs and explores the various ways affected entities may comply.
Title IV, the acid rain title, mandates that by the year 2000, utilities' overall SO<sb_>2<sb/> emissions will be ten million tons less than they were in 1980. Nitrogen oxide emissions are to be two million tons less than they were in 1980. Reductions of SO<sb_>2<sb/> and NO<sb_>x<sb/> will be accomplished in two phases. The U.S. Environmental Protection Agency (EPA) will administer the first phase; states with approved permit programs will administer the second phase. Whereas there will be no fees for permits in the first phase, there will be a permit emission fee in Phase II, which, in most states, will run $25.00 per ton of emissions. All affected units are required to install continuous emission monitors to record the levels of SO<sb_>2<sb/> and NO<sb_>x<sb/> emitted at specific time intervals.
Utility generating units larger than 25 megawatts will, at some point, become an affected source. Cogeneration facilities, facilitites that produce both electricity and process heat from the same source, are exempt if they produce less than one-third of their electric output for use by a utility.
Sulfur Dioxide Reductions
Title IV's SO<sb_>2<sb/> reduction provisions represent a radical departure form federal emissions control programs of the past. A permanent annual sulfur emissions cap for electric utility plants is set at 8.95 million tons for the year 2000 and each year thereafter. This represents approximately a 50% reduction in SO<sb_>2<sb/> emissions. No absolute caps on sulfur emissions are to be set for individual utilities. Instead the sulfur reductions will be accomplished through a market-based emissions allowance trading system. The underlying goal of the SO<sb_>2<sb/> provisions is to allow each utility flexibility to choose the most cost-effective way to make SO<sb_>2<sb/> reductions.
Affected units are to be given set allowances to emit SO<sb_>2<sb/>. One allowance will permit an affected source to emit one ton of SO<sb_>2<sb/> during or after a specified calendar year. The allowances can be traded within the utility's own system, banked for future use, or sold on the open market. Utilities which exceed their emissions allowance and do not obtain any additional allowances to cover their deficit will be fined $2000 per excess ton and will be required to offset the excess tons the following year. However, regardless of the number of allowances an affected source may hold, previously existing SO<sb_>2<sb/> air quality standards must still be met. For example, units which come under the New Source Performance Standard of 1977 will not be permitted to exceed their current SO<sb_>2<sb/> emission rate of 1.2 pounds per million Btus.
<#FROWN:H03\>
Although we are here to discuss the subject matter in a broad nature, I want you to know that I support H.R. 1502, which is the Violence Against Women Act.
I have a special interest in the provisions relating to domestic violence and, in fact, offered an amendment to the crime bill that incorporated part of Mrs. Boxer's bill last session. As a former prosecutor, I know firsthand how difficult it is for women to come forward in domestic violence cases.
I am sad to report that today a battered woman stands a better chance in the courts if her assailant is a stranger. The undeniable fact is that if the husband or partner is the assailant her complaint is often dismissed as a domestic squabble or a private matter between husband and wife. Until very recently, battery almost never resulted in arrest.
Why is it that battered women who eventually kill their husbands in self-defense receive on an average double the sentence that men who murder their wives receive. I believe we in Congress have a responsibility to recognize domestic violence for what it is; and that is, it is a crime. Those guilty of domestic violence crimes must be held accountable for their actions and punished under the law.
We must work to change the perception that domestic violence is a family matter. We can begin by passing laws that will give our Nation's police officers, judges, and prosecutors the tools necessary to treat these types of offenses in the same way as any other crime. In addition, victims of domestic violence who are often terrified to come forward need assurances and, indeed, should be guaranteed that the system will help them and not work against them.
Sadly, Mr. Chairman, the problem of violence against women goes well beyond the disturbing trends in domestic violence. In today's violent culture, it seems as though every woman has reason to fear. In fact, the Department of Justice's calculations that three out of four American women could expect to be victims of at least one violent crime in their lifetime is, as astounding as it is, unacceptable. Also unacceptable is the FBI statistic indicating that rapes have increased four times as fast as the general crime rate during the past decade, and Mrs. Boxer's bill suggests proposals in those areas as well.
I look forward to hearing the testimony this morning and thank you again, Mr. Chairman, for scheduling this hearing.
Mr. SCHUMER. Thank you, Mr. Sangmeister.
Mr. Gekas.
Mr. GEKAS. I thank the Chair, and I too welcome Senator Biden and Congresswoman Boxer and Congresswoman Morella to this hearing.
For a long time, I had been laboring under the false impression that we had made great strides in the arena of victimization of women. In my own State and elsewhere, even in the Federal establishment, we began to develop recognition of groups that would be honing in on these various individual problems, like rape crisis, and other domestic violence entities that really had a firsthand, hands-on knowledge of the series of problems that we are encountering in this field, and I was feeling rather smug about it until this last couple of years when the headlines began to scream all over the country with a renewed, shall we say, outbreak of visible incidents involving the victimization of women. So when Senator Dole and Congresswoman Molinari and I got together to do our version of a women victims' rights bill, I was eager to renew my own interest in this field and in preventing such victimizations.
We have shield laws, we have increased penalties, we have even the inclusion of rape-murder in the death penalty provisions pending, so we are continuously cognizant of the problem. But, a sweeping change in the attitudes of our citizens and in our law enforcement, and in those of us who have the responsibility of crafting new laws, still remains with us. That is why I am eager to proceed with listening to our colleagues and in hearing hard testimony for our consideration.
Thank you, Mr. Chairman.
Mr. SCHUMER. Thank you, Mr. Gekas.
Congressman Washington.
Mr. WASHINGTON. Thank you for recognizing me, Mr. Chairman. I don't have a prepared statement, but I would like to say that I have always felt that leadership was defined by, or at least the qualities of leadership were essentially defined by those who had the courage to step forward and to recognize a problem and do what was right. I am therefore not at all surprised that Senator Biden and Congresswomen Boxer and Morella, all of whom I respect and admire very much, have taken the leadership on this issue. So I look forward to hearing their testimony, and I am happy to be an original cosponsor of H.R. 1502, and I hope that we can find a way to make all the provisions that are required in order to beef up our law to make all our citizens understand that there is no difference between violence committed against women and violence committed against others. In fact, if there were to be a distinction, I think we would look on it with more abhorrence than violence committed against men, but that would sound chauvinistic on the other end.
At any rate, I look forward to hearing all the testimony. I have had the opportunity to read over the testimony of the witnesses last evening, a lot of which brought tears to my eyes. I want to hear it again, and I want us to move forward on this legislation. I want us to get it on the floor and get it passed and over to the President's desk as soon as possible.
Thank you, Mr. Chairman.
Mr. SCHUMER. Thank you, Mr. Washington.
Mr. Ramstad.
Mr. RAMSTAD. Thank you, Mr. Chairman.
I, too, thank you for holding this important hearing today. As we all know, far too many women in our neighborhoods are battered, far too many women on our college campuses are raped, and I might add to Mr. Sensenbrenner's comment that the most recent national study corroborates the University of Minnesota study, which was a local study done in my State, that, in fact, one of four college women during her 4-year college career is the victim of either attempted rape or an actual rape, a full-fledged sexual assault, and, as we all know, far too many women are denied justice.
On top of all that, we know that these crimes are vastly underreported. The same study I just cited shows that, once again, fewer than 10 percent of all sexual assaults in this country are reported.
In Minnesota alone, with a population of just over 4 million people, further research indicates there may be over 400,000 battered women, yet 41 of our 87 counties do not have battered women's programs. In some counties, a battered woman's nearest option for emergency safety is over 100 miles away. In the Twin Cities metropolitan area, part of which I represent, more than two-thirds of women seeking safe shelter from domestic violence are turned away due to lack of space.
Clearly, Mr. Chairman, the Federal Government must step in to buttress State efforts to prevent violence against women, to prosecute their attackers, and to provide victims shelter and much needed treatment.
Mr. Chairman, I am particularly pleased today that we will receive testimony from Jenny Katzoff, who was the victim of sexual assault as a 1st-year college student and whose allegations of rape were grossly mishandled by a number of different college officials. As Jenny knows, we tried but just weren't able to get her out to Minnesota to testify at a recent field hearing that Congresswoman Molinari, Congresswoman Penny, and I conducted last September on the issue of campus sexual assault. Thus, I am very pleased that we will be able to hear from her today.
I am also grateful that Senator Biden and our distinguished colleagues, Congresswomen Boxer and Morella, are here today. Senator Biden and I introduced the Campus Sexual Assault Victims Bill of Rights Act, H.R. 2363 and S. 1287, last year. This legislation, which now has 165 cosponsors in the House, complements the Violence Against Women Act which I was proud to cosponsor.
H.R. 2363, the campus sexual assault victims bill, would protect campus rape victims by requiring university and college officials to make victims aware of their legal rights and assist them in bringing allegations of sexual assault before the criminal justice system. Our bill also protects victims who choose to go through campus disciplinary proceedings. But the choice should be with the victim.
Jenny's tragic story shows exactly why we must enact both the Violence Against Women Act and the Campus Sexual Assault Victims' Bill of Rights Act. Senator Biden and Congresswomen Boxer and Morella obviously recognize this as they are sponsors of both, Senator Biden being the principal sponsor of both of these bills in the Senate, and Congresswomen Boxer and Morella are cosponsors. We must work to prevent rape as well as ensure that rape survivors are not traumatized a second time because justice is denied them.
Mr. Chairman, I think this will be one of the most important hearings that we will hold this year, and I thank you again for your leadership in this area.
Mr. SCHUMER. Thank you, Mr. Ramstad.
Now let us go on to our first panel. If the witnesses don't mind, I would like to ask Connie Morella maybe to join us because she not only has her legislation but she is the second sponsor of the bill after Congresswoman Boxer for the Violence Against Women Act.
So, Connie, you are welcome to join us and maybe say a few words after Joe and Barbara.
As our first panel of witnesses today, I am pleased to welcome two - three now - very distinguished Members of Congress: Senator Joe Biden of Delaware, Representative Barbara Boxer from the Sixth District of California, and Representative Connie Morella from the Eighth District of Maryland.
Senator Biden and Representative Boxer and Representative Morella have been leaders in combating violence against women. Senator Biden introduced the Violence Against Women Act, S. 15, which was reported favorably by the Senate Judiciary Committee, and Representatives Boxer and Morella have introduced the Violence Against Women Act, H.R. 1502, here in the House. All three have been real leaders on this issue, being the beacon for not only the Congress but for the country in helping us all recognize not only how serious the problem is but how hidden it has been for so long.
I want to thank all of you for coming, commend you for your efforts, and turn over the floor to you.
Senator Biden, again, it is an honor for you to be here, and you may proceed. We are doing it in alphabetical order. It is not because you are a Senator or a man.
STATEMENT OF HON. JOSEPH BIDEN, A SENATOR IN CONGRESS FROM THE STATE OF DELAWARE
Mr. BIDEN. Thank you, Mr. Chairman. Thank you very much. Let me begin by thanking my colleagues on my left and right for their leadership. Quite frankly, it is not only their leadership in drafting and pushing this legislation, but also their standing that has given this legislation the kind of credibility that it otherwise might not have had. The mere fact that my friend, Barbara Boxer, immediately indicated an interest in perfecting this legislation and introducing it gave it a legitimacy - and I mean this sincerely - that I was not capable of giving it by the mere fact of drafting parts of it on the Senate side. I want to thank both my colleagues for their work.
As you know, Mr. Chairman - you and I have worked together on a lot of crime issues - I try not to beat around the bush. I am not going to take your time by going through each part of this legislation - it has a number of titles.
<#FROWN:H04\>
Chapter III
ASSESSMENT OF HIGHWAY NEEDS
The Task Force to Study Highway Needs held public hearings in all twelve highway districts. These hearings assisted the Task Force in identifying projects being proposed by the Department of Highways' personnel and the local elected officials of the district.
The intent of the Task Force was to identify those corridors which would have the greatest impact on a region. The Task Force defines corridor as a major route through Kentucky or a route which connects a rural area to its regional center or another corridor. While the Task Force recognizes the needs for storage lanes, local connector roads, curve realignments and other types of local improvement projects, priority was given to establishing a system of roads which would allow each region better access to larger markets of the area. The state's philosophy of road building, the Task Force believes, should continue to emphasize connecting the rural areas to the urban markets.
The finding of the Task Force is that the 1990-1996 highway construction proposal is the best starting point for the future of road building in Kentucky and these identified needs should be addressed prior to the introduction of other needs.
The information obtained through the hearing process, coupled with an examination of the highway accessibility of every county in Kentucky, allowed the Task Force to develop its strategic highway corridor system. The highway corridor system includes the existing limited access system, key US routes, and other corridors which need upgrading to four lanes.
The following discussion is the strategic corridor system identified by the Task Force to Study Highway Needs. The first segment is a list of highways which currently provide adequate access to the Commonwealth. Following that list is a discussion of highways which the Task Force identified as needing improvement in order to provide access to all regions of the Commonwealth.
Adequate Corridors
The following routes have been determined to provide adequate accessibility, with the exception of minor reconstruction and improvements which will maintain the functional integrity of the existing system. For example, several interstate routes need additional lanes and these improvements are critical to the highway network. In addition, many of the proposed corridors will connect to the routes presented in this section.
East to West Corridors
Interstate 64
Mountain Parkway from I-64 to Campton
Bluegrass Parkway
Western Kentucky Parkway
Cumberland Parkway
Interstate24
Audubon Parkway
North to South Corridors
Interstate 75
Interstate 65
Green River Parkway
Pennyrile Parkway
Purchase Parkway
Interstate 71
Circumferential Corridors
Interstate 264
Interstate 265
Interstate 275
KY 922, KY 4, US 25
The Task Force is defining an adequate corridor as an existing facility of four or more lanes. Despite this categorization, some of these corridors will need reconstruction in order to maintain their functional value. The improvements for those purposes are estimated by the Department of Highways to be $2,230,400,000.
Corridors Needing Development
The routes which follow are projects for which the Task Force is recommending improvement. The Task Force recommends that each route be designed as a four-lane facility; however, it realizes that initial reconstruction as quality two-lane routes may be a desirable goal.
The discussion of each route will provide the rationale for project inclusion, points of interest along each route and a cost estimate provided by the Department of Highways.
U.S. 23
U.S. 23 is the major north to south corridor in eastern Kentucky. It enters the state at South Shore, Kentucky and exits at Jenkins, Kentucky. Its route intersects with major east to west corridors including I-64, KY 114 (connects to Mountain Parkway), KY 80, and U.S. 119. This corridor is the major route in eastern Kentucky and serves to connect the region with the larger markets in all directions.
Completion of the segments of U.S. 23, as authorized by the 1990 road bond issue projects, was emphasized at public hearings in Districts 9 and 12. The entire length of this route will be four-lane upon completion. Points of interest along this route include: Paintsville Lake State Park, Jenny Wiley State Resort Park, Fishtrap Lake, and Dewey Lake.
This route will complete U.S. 23 as a four-lane facility from monies allocated by the 1990 bond issue and federal highway development funds. For that reason, no cost estimate is included.
U.S. 25E
U.S. 25E connects with I-75 at Corbin and extends southeast to Middlesboro and into Tennessee. Points of interest along this route include: Pine Mountain State Resort Park, Kentucky Ridge State Forest, and Cumberland Gap National Historical Park.
Two segments of U.S. 25E are currently under construction. A section south of Barbourville to Pineville is being funded by the 1990 bond issue. A second project is the Cumberland Gap tunnel project just south of Pineville. Upon completion of this project, U.S. 25E will be a four-lane facility. For that reason no cost estimate is included.
U.S. 127
U.S. 127 is a north to south corridor entering the state at Newport and extending south to Static, at the Kentucky line, and on into Tennessee. The current bond issue will provide major reconstruction along this route. In addition, U.S. 127 will provide access to I-64, the Bluegrass Parkway and the Cumberland Parkway. Points of interest along this route include: Buckley Hills Wildlife Sanctuary, Old Harrod State Park, Isaac Shelby State Historic Shrine, Constitution Square, Herrington Lake, Lake Cumberland, and Dale Hollow Lake.
The 1990 bond issue included several sections of U.S. 127 for improvements. The six-year road plan included $105,977,000 in projects for the U.S. 127 corridor. In addition, $79,000,000 was cited in long range needs for U.S. 127.
US 119
US 119 enters Kentucky at South Williamson and traverses the southeast border of Kentucky, intersecting US 25E at Pineville. The route joins US 23 at Pikeville; therefore, the segment from Dorton to Jenkins is incorporated into the current bond issue, as is a section of US 119 over Pine Mountain to Letcher County.
The improvements of US 119 can be divided into two distinct sections: the section between South Williamson and Pikeville and the section between Pineville and Jenkins. The section between South Williamson and Pikeville was identified by the local officials at the District 12 hearing as a major need. The two-lane section traverses two mountains and its narrow curvy nature makes it hazardous. Improvement to the section would also extend a multi-lane road into a previously isolated area of Pike County, allowing easier access to I-77 in West Virginia, opening the area to eastern markets.
US 119 from Pineville to Jenkins crosses Letcher, Harlan, and Bell Counties. These counties have been established as being at least 25 miles away from an existing continuous four-lane highway. This project was also identified at the District 11 public hearing as a major corridor need for the region. The counties which will directly benefit from this improvement have the following unemployment and per capita income figures:
<O_>table<O/>
Development of US 119 would give this region an east to west route which would provide greater access to the US 23 corridor in Eastern Kentucky, and the US 25E corridor, which accesses Interstate 75. These connections would provide access to major markets in the northeast and southeast. A segment of this route was placed in the 1990 road bond issue. The estimated cost of the remaining portion of the project is $782,780,000.
US 460
The section of US 460 from Pikeville to the Kentucky-Virginia line is identified as a corridor which needs development. Improvement to this corridor was mentioned at the public hearing in District 12. The justification provided was improving tourist access to Fishtrap Lake and the Breaks Interstate Park.
A construction project in this area would also improve access to an isolated area of Pike County. The county has an unemployment rate in excess of 9% and a per capita income of approximately $10,000, which is about $3,000 less than the statewide average.
US 460 would connect at Grundy, Virginia, and eventually would access Interstate 77 at Princeton, West Virginia, to the east. The west connection at Pikeville would connect US 23, which is a major north-south corridor in the Eastern United States. US 23 connects with Interstate 64 in northern Kentucky, and the nearest interstate connection to the south is Interstate 77. The estimated cost of this project is $150,000,000.
The Mountain Parkway and KY 114
The segment of this corridor needing improvement is from Campton to Prestonsburg. The parkway's four-lane section currently stops at Campton and continues as a two-lane route from Salyersville to Prestonsburg, with truck climbing lanes to Salyersville, where it connects with KY 114. KY 114 is a two-lane route which connects with US 23. The counties directly benefiting from this project are Wolfe, Magoffin, and Floyd.
The extension of the Mountain Parkway was cited as a need at the public hearings in Districts 10 and 12. A concern mentioned at these hearings was that the completion of US 23 would allow easier access to out-of-state markets by the populace in this area. The parkway has long provided Eastern Kentucky a connection to Lexington as a retail center, but the lack of improvement to this route could change the habits of consumers, especially with the completion of improvements on US 23. Magoffin and Floyd Counties are both at least 25 miles from an existing four-lane facility. An improved east to west feeder in this area would connect north/south corridors at both ends. The west connection is Interstate 64 at Winchester, just 16 miles from the Interstate 75 junction. The east connection is US 23, which has been mentioned previously.
Wolfe, Magoffin and Floyd Counties have unemployment rates between 9% and 15% and per capita income ranging from $7,000 to $9,500. Both Wolfe and Magoffin counties have unemployment rates about twice the statewide average. State Parks along this route include Natural Bridge State Resort Park and Red River Gorge. The estimated cost of this project is $350,000,000.
KY 15
KY 15 traverses Wolfe, Breathitt, Perry, and Letcher Counties. Improvement to this corridor would provide easier access in these counties to the Mountain Parkway and US 119 south of Whitesburg.
This improvement was cited as a need in the public hearing in District 10 and, as a corridor, need by the Economic Development Cabinet. Breathitt, Perry and Letcher Counties are all at least 25 miles from a continuous four-lane highway. The unemployment rate is approximately 9% in each county and the per capita income is about $9,000.
Breathitt County is one of the counties previously identified as a county with only Kentucky routes. Buckhorn Late State Resort Park is located along this corridor. The estimated cost of this project is $473,700,000.
KY 7
KY 7 was identified as having potential regional significance at the public hearing in District 9. This route is a north to south corridor which crosses one of the most economically depressed areaareas in Kentucky. The proposed improvement would connect KY 7 to Interstate 64 in Carter County and the Mountain Parkway at Salyersville. The counties receiving direct benefit from this corridor improvement are Carter, Elliott, Morgan, and Magoffin. Grayson Lake State Park lies along this corridor.
Morgan and Magoffin Counties are 25 miles from a continuous four-lane highway and the major route in Elliott County is KY 7. The following economic data reveal problems associated with this area.
<O_>table&caption<O/>
KY 11
KY 11 was identified as a need at the District 10 meeting. This route is a north to south corridor which connects at the Slade exit on the Mountain Parkway and runs south to just east of Manchester on the Daniel Boone Parkway. This corridor has been upgraded from Slade to Beattyville. Counties receiving direct benefit from improvement to the remaining segment of KY 11 include Lee, Owsley, and Clay.
Lee and Owsley Counties are areas which have been previously identified as having only Kentucky routes. Owsley and Clay Counties are both outside of the 25-mile criterion. These counties can also be identified as depressed areas by the following data:
<O_>table&caption<O/>
US 421
US 421 is a major highway in the network of interstate connectors.
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Second, financial factors could also have a bearing on a decision about whether to appropriate. In particular, a concern that an uncured default on a bond issued by one authority might cause financial markets to increase the costs of issuance or lower the rating assigned to subsequent bonds of other state debt authorities could lead the General Assembly to appropriate funds to cure the default. Finally, even in the absence of any legal and financial consequences of a default, political factors could be such that legislators have little choice but to appropriate funds.
Thus, the purpose of the research is to identify the likely legal, financial and political consequences of a default of the various state debt authorities. Because the research issues are complex and because little prior research addresses the issues, five distinct research methods were utilized.
Legal Research
First, legal research was conducted by an LRC staff attorney to determine whether current law contains any provision that could be used to require the General Assembly to appropriate funds in the event of a default by any of the state debt authorities. The results of the legal research are presented in Chapter II.
Case Studies
The second approach was to conduct case studies of past defaults of bonds issued by state debt authorities in other states. Since the late 1970's, the Bond Investor's Association (BIA) has tracked defaults of corporate and municipal bonds. At the request of LRC staff, BIA searched their on-line database for the years 1980-1990 and identified 71 defaults of bonds issued by state debt authorities, in twenty states. Staff conducted a telephone interview with the ranking legislative staff (or a designee) having knowledge of state debt management issues in each of those states. The interview questionnaire (Appendix A) was intended to elicit information regarding the legal, financial and political consequences of each default for the state legislature, and to identify any actions the legislature considered in response to the default. These case studies are presented in Chapter III.
Expert Opinions
The third piece of the research utilized a technique known as the 'Adelphi technique,' whereby a small number of experts in a particular field are asked their opinions concerning the issues under study. To this end, a random sample of listings was drawn from the Bond Buyer's Municipal Marketplace and a survey questionnaire was sent to each selected listing. The survey instrument (Appendix B) contained open-ended questions concerning what financial consequences the respondents perceived from the 71 actual defaults identified in the BIA search. They were also asked for opinions regarding expected consequences from a hypothetical default of any of the active Kentucky state debt authorities. A summary of the survey responses is presented in Chapter IV and copies of the complete responses are contained in Appendix C.
Periodical Search
A fourth research activity was a search of newspaper and periodical indexes for articles relating to defaults of state debt authorities. There were two aspects to this research. First, a search was conducted for articles and editorials pertaining to the particular defaults examined in the case studies. The purpose here was to see if the press had extensively covered the default and had, perhaps as a reflection of public opinion, called for state action to cure the default. The results of the search pertaining to the existing defaults are reported in the summary of each case study.
A second search of indexes focused on the more general topic of municipal bond defaults. Specific attention was given to identifying recent articles in the national financial press which discussed issues pertinent to market expectations about municipal defaults. In particular, staff reviewed all 1990 and 1991 issues of MuniWeek, a national news weekly devoted to the municipal bond market, to identify relevant articles. Articles obtained in the second search are discussed in Chapter IV.
Statistical Analysis
Staff believed that concerns about possible financial consequences of a default would be a major factor in any legislative decision to appropriate funds. However, the previously outlined research relied on individual perceptions of market responses to a default, rather than on actual assessments of market responses. Therefore, the final piece of the research represents an attempt to determine whether the defaults identified in the case studies had a statistically significant effect on the cost of subsequent issues of state debt authorities. Staff obtained data on bonds issued from 1980-1989 by the debt authorities of all 50 states, for either public projects or industrial development projects. Variables were incorporated to control for the effect of other factors, such as project type, the condition of the state's economy, the amount of state debt-outstanding and the general level of interest rates in the economy. A regression analysis was conducted to assess the amount of variation in interest costs which could be attributed to the existence of a prior state default. A full description of the statistical research and a discussion of the results are presented in Chapter V.
Chapter VI presents a summary assessment of the various research pieces. The chapter also includes staff recommendations regarding changes the General Assembly may want to consider in its oversight of the Commonwealth's state debt-issuing authorities.
Current Oversight of State Debt Authorities
Like most states, Kentucky has long issued bonds to pay for major capital projects. Similar to a mortgage, a bond is a promise to pay principal and interest in the future in return for money borrowed to fund a project for current use. In a mortgage loan, the house stands as collateral for the loan. If the borrower fails to repay the loan as promised, the lender is allowed to take possession of the house.
However, in the case of state borrowing, it would be difficult for bondholders to take possession of a road or the state capitol building. So rather than pledging the project as collateral for the bonds, traditional practice has been for states to pledge the 'full faith and credit' of the state for bond retirement. Bonds which pledge the full faith and credit of a government issuer are called general obligation bonds. With such bonds, if the government fails to make the regularly scheduled debt service payments, bondholders may go to court and force the government to do whatever is necessary, including raise taxes, to make the promised principal and interest payments. A special or limited obligation bond is one that pledges only certain tax or other receipts as collateral for the bond. An example is the pledging of the receipts of a motor fuels tax to retire a bond used to build a highway. State bonds have usually been issued with a repayment schedule (or term) of 20-40 years. A bond is said to mature when the final scheduled debt service payment is made and the state's obligation to bondholders is discharged. The key point to note about general or special obligation bonds is that if, at any time before the maturity date, the state does not make its regularly scheduled debt service payment (or defaults on the bond), bondholders may have the court enforce the obligation and require the state to raise taxes to make debt service payments.
Sections 49 and 50 of the Kentucky Constitution stipulate that, before the state can issue debt in excess of $500,000, the issuance must be approved by the majority of voters in a referendum election. This requirement applies to all state general and limited obligation bonds, which are issued by the State Treasurer. Kentucky issued its last bond subject to referendum vote in 1966.
Section 157 of the Constitution prevents units of local government from issuing any debt without prior approval of two-thirds of those voting in a referendum election. Section 158 limits total indebtedness of local governments to various percentages of the value of taxable property. Section 159 limits local debt to a term of no more than 40 years. The last Kentucky local government general obligation bond was issued in 1982.
Revenue bonds pledge only the particular revenues generated by a project as collateral on the bonds issued to fund the project. The traditional use of revenue bonds is for the provision of government services which generate fees, such as utilities. Revenue bonds issued for fee-supported government services are often called special revenue bonds, to differentiate them from revenue bonds issued for private purposes. Government issuance of private-purpose revenue bonds arose primarily because the interest earnings on bonds issued by state and local governments (called municipal bonds) are exempt from federal taxes and, usually, from the taxes of the state in which the bonds are issued. This means that lenders will charge a lower rate of interest for the tax-free bonds than they do for a bond which carries taxable interest earnings. State and local governments are able to provide an interest subsidy to local firms or individuals by issuing a tax-free municipal bond and loaning the proceeds to the firm or individuals. The loan repayments of the firm (or individuals) to the issuing government are the only collateral pledged by the government to secure the bonds. Such revenue bonds are also known as pass-through or conduit bonds because the issuing government merely acts as a go-between for the private borrower and the lenders. Because of the limited collateral offered for revenue bonds, they carry a higher interest cost than general obligation bonds issued by the same government. However, even that higher cost is usually lower than the interest cost a private borrower could obtain on a bond with taxable interest earnings.
Since 1966, the proceeds of state revenue bonds have also been used to fund all of the various types of public projects which had previously been funded through the use of general obligation bonds. The usual practice is as follows. The state creates an independent debt-issuing authority, which is defined to be a municipal corporation of the state, so it can issue tax-exempt bonds, but which is not defined to be a part of state government, so it is not subject to the Constitutional restrictions on debt issuance. The authority issues a revenue bond and uses the proceeds to fund a public project desired by the state. The authority then leases the project to the state for an amount equal to that necessary to fund debt service payments. When the bond is retired, ownership of the project is transferred to the state. The biennial lease payments of the state to the authority are the only 'revenue' pledged to secure the bonds. These bonds are called lease rental bonds.
Even though lease rental bonds are issued for public purpose projects and are supported by appropriations of the General Assembly, the Kentucky Supreme Court has held that they do not represent a debt of the Commonwealth and are not, therefore, subject to the Constitutional restrictions. This is because the General Assembly is not required to renew a lease with the independent authority beyond the current biennium. Since future General Assemblies are in no way legally obligated to make the lease payments, the lease agreement does not constitute state debt. (See Chapter II for a more thorough discussion of these legal issues.)
The Commonwealth currently has seventeen independent entities with outstanding state revenue debt, including the eight state universities. The entities are listed in Figure 2. Figure 3 displays various characteristics of the state debt entities.
Although the Supreme Court makes no legal distinction between appropriation-supported revenue bonds and non-appropriation-supported revenue bonds, state officials have made a clear distinction in oversight of the two kinds of state debt. According to staff of the Office of Financial Management and Economic Analysis (OFMEA), except in two special cases, the State Property and Buildings Commission and the Kentucky Turnpike Authority issue all state appropriation-supported debt. Both authorities issue only appropriation-supported debt. As one special case, state universities issue consolidated education bonds and housing and dining bonds, which are supported by appropriations from restricted agency funds derived from university receipts. In the second special case, the Kentucky Infrastructure Authority (KIA) issues appropriation-supported bonds for the following programs:
Fund A: Federally Assisted Wastewater Revolving Loan Fund
Fund B: Infrastructure Revolving Loan Fund
Fund B1: Kentucky Drinking Water Grant Fund
Fund B2: Kentucky Drinking Water Loan Fund
Fund E: Solid Waste Revolving Loan Fund
<#FROWN:H06\>Because such research depends on costly and specialized equipment, funding for ships and associated sampling tools is a limiting factor (NSB, 1989).
The importance of marine biodiversity is almost as vast as the oceans themselves. Much of the Earth's human population depends on the oceans, especially marine coastal systems, for food. In the developing nations, more than half of the population obtains at least 40 percent of its animal protein from fish (WRI, 1986). Some 9,000 species of fish are currently exploited for food, although only 22 are harvested in significant quantities on a global scale (WRI, 1987). Approximately 80 percent of the marine species of commercial importance occur within 200 miles of a coast. Marine flora and fauna are also extensively used in the production of antibiotics and other pharmaceuticals, food additives and processing agents, and a variety of manufactured goods.
Above and beyond these commodity values, marine organisms are critical determinants of the structure and function of the global ecosystem. Marine phytoplankton, for example, are the foundation of marine food chains and play an important role in atmospheric dynamics. The interactions among marine biota, the Earth's geochemical cycles, and global climate change are just coming to light, and even our most advanced computer models have been able to offer only the roughest approximations of the feedback mechanisms involved in the maintenance of biospheric conditions. The study of marine biodiversity is thus critical to understanding environmental dynamics on the global, as well as on local and regional, scales.
Interest in the conservation of marine biodiversity is a relatively recent phenomenon. The immensity that makes oceans such a challenge to study has also made it possible to believe that anthropogenic disturbances would remain limited in their environmental impact. Compared to terrestrial environments, oceans provide relatively stable, extensive, open, well-buffered habitats for the organisms that inhabit them. Nonetheless, the threats to marine diversity are much the same as on land: habitat destruction (especially in coastal, estuarine, wetland, and coral reef systems); pollution (including suspended sediments, nutrients, and toxics); overexploitation of harvestable species (including fish, shellfish, turtles, and mammalian species); and the specter of global climate change with all its attendant marine impacts (Soul, 1991; Thorne-Miller and Cantena, 1991).
Although the biota of oceans has been protected from many of these impacts by the extent of the medium itself, environmental stresses can be expected to place the same pressures on marine systems that they are placing on terrestrial systems. So little is known about marine biota that rates of extinction are difficult to estimate. Ray (1988), however, suggests that the degradation of coastal zones is occurring as rapidly as tropical forest destruction, and recent findings indicate that coral reefs may be among those communities most seriously imperiled by human activities (Salvat, 1987; Guzman, 1991). As in terrestrial systems, inventories and ecological studies are needed for all oceans, with special emphasis on those habitats most immediately threatened.
This brief review does not reflect the full status of scientific knowledge with regard to specific taxa, geographic areas, ecosystems, or habitats, and only touches on genetic-level diversity and the vitally important relationship between ecosystem dynamics and diversity. As we seek the means to slow or reverse the losses, we will have to secure increased support for established scientific efforts in systematics and resource management, and for relatively new scientific endeavors in such integrative, applied fields as sustainable agriculture, conservation biology, and restoration ecology. We face an unprecedented situation that demands new combinations of the basic and applied sciences, the expertise of specialists and the vision of generalists, conceptual clarity as well as concrete experience. The science of biological diversity and its conservation demands not only more knowledge but new kinds of knowledge, and new ways of synthesizing what we know.
IMPLICATIONS FOR DEVELOPMENT AGENCIES
Biological diversity reaches its highest levels, and faces its greatest risks, in the developing nations of the world, primarily because of intensive resource exploitation and the extensive alteration of habitats. This is due in part, however, to international markets, development policies, and lending practices that transfer financial resources from developing countries to industrial countries and undermine the capacity of developing countries to sustainably manage their resources.
Rapid population growth, extreme and persistent poverty, social inequity, institutional breakdown, and perverse policy incentives have brought unstable economic conditions to many developing nations. In response, many of these countries have had to adopt short-term development agendas and exploitative resource management practices aimed at increasing foreign exchange earnings from their undiversified economies. Trade in elephant ivory (mostly illegal) and tropical timber (legal) provides obvious examples that have important consequences for the maintenance of biodiversity, but other less publicized practices - overgrazing of ranges, expansion of cash crop agriculture, intensified shifting cultivation - also lead directly to the demise of species and habitats.
As a result of these interrelated social, economic, and environmental trends, many developing countries have begun to question the sustainability of current resource management practices and look for more promising alternatives. The policies and funding practices of international development agencies, if directed toward wise, long-term commitments of assistance, can aid in this by affording developing countries greater economic stability and hence greater national capacity to preserve biological diversity. In the past, development agencies have funded infrastructural development activities, agricultural expansion programs, dams, and other large-scale projects that have contributed directly to the loss of biological diversity, while doing little to ease the indirect causes of resource decline (NSB, 1989). A new vision is necessary at all levels of the development community - one that recognizes the inextricably connected fate of human communities and the biotic community, of development and conservation.
Biological diversity is, in the most literal sense, the basis of sustainable development and resource management. By conserving biodiversity, we retain not only plants and animals, soils and waters, but the foundations of sustainable societies and the availability of options for future generations. Fuelwood gathering, to cite just one example, is a significant contributing factor behind the rising rates of deforestation in many parts of the tropics. A billion and half people in developing countries depend on firewood as their major fuel source. In many areas, expanding demand and declining local supplies have led to excessive harvest rates, and acute fuelwood shortages, and subsequent decline in soil and water resources. Developing renewable, cost-effective alternative energy sources, sustainable agroforestry systems, and more productive sources of firewood, charcoal, and timber will require greater attention to potentially useful species and genetic resources (NRC, 1991a).
Biodiversity, in short, must come to be seen as an inherently important aspect of every nation's heritage and as a productive, sustainable resource upon which we all depend for our present and future welfare. The conservation of biological diversity is not merely an obscure, hitherto neglected area of endeavor whose importance has only now been discovered; rather, it is a fundamental concern that has been absent in short-term development planning, at the risk of long-term social and economic well-being.
Responding to Research Needs
In both the developing and the developed nations, immediate action needs to be taken to protect biodiversity. At the same time, there is a continuing need for research on biodiversity that improves our knowledge base and our management capacities, and leads to the development of new ways for people to live with, and not at the expense of, their biological resources.
It is unlikely that poor countries will be able to support major biodiversity research enterprises, however important, in the near future. If global environmental and scientific objectives are to be served, more effective means for north-south transfers of funding must be found, and more productive mechanisms for scientific collaboration must be invented (NSB, 1989). The international development agencies are essential in this regard. Other organizations are unlikely or unable to provide the necessary funds. In the long run, this assistance will allow developing nations to move toward greater independence by strengthening in-country research institutions. As their research capacity increases, so too will their ability to chart their own course of sustainable development.
As they seek to meet these growing research needs, development agencies will themselves have to undertake institutional changes. Research on biological diversity is necessarily broad based and multidisciplinary, and the administration of research within the agencies must reflect this. Overlapping areas of biology, including ecology, sustainable agriculture, and conservation biology, are critically important in addressing the needs of developing countries and must be given greater support. More support must also be given to research that integrates economics, the social sciences, and biodiversity conservation. Above all, research must be carried out largely by people in and of the countries involved.
Long-term institutional commitment is necessary. Support for these changes must be incorporated wherever possible into the human resource development programs of technical assistance agencies. All personnel should be given training in biodiversity science and policy. More personnel with the requisite background knowledge must be brought into the agencies on a permanent basis and given adequate specific training, as well as opportunities to remain up to date on research in their fields. Although development and science agencies can play a leading role in promoting these efforts, their work must involve agencies, institutions, and organizations that have not traditionally taken part in conservation activities. Finally, development agencies must have a 'built-in' capacity to review outcomes, monitor practices, and recommend adjustments in policies that affect the status of biological diversity.
Several development agency research programs have begun to reflect these needs. The U.S. Agency for International Development, for example, provides funds for innovative research on biodiversity under its Program of Scientific and Technical Cooperation (PSTC) and its Sustainable Agriculture and Natural Resource Management (SANREM) Collaborative Research Support Program. Support for this kind of research should be expanded and strengthened. Agencies will need to find creative ways to sustain funding for these endeavors over many years, even indefinitely. National biological inventories, for example, could well be funded by pooling the resources of all international assistance agencies functioning within a given country.
The research agenda outlined in the remainder of this report is intended to assist development agencies in their efforts to respond to these research needs. Research cannot, in and of itself, conserve biodiversity in developing nations any more than it can in the developed nations. What research can do, however, is provide the people and the leaders of these nations with information that may help them to improve their lives, while securing the biological legacy on which their livelihood depends.
Biological Aspects Of Conservation
In the past, national and international development agencies have seldom relied on - or called for - basic information on biological diversity. This can no longer be the case. Many development projects include a significant natural resource component and thus require sober analysis of their environmental impacts. More broadly, international agencies and resource and planning ministries in developing countries need information about biological diversity to formulate development plans and specific projects that are both successful and sustainable.
Pertinent information on biological diversity in most developing countries is too sparse or scattered to be of practical use. Often it is unavailable altogether. A good deal of 'gray' literature exists - unpublished reports, files in government archives, studies of limited distribution. The most important of these should be analyzed and made more accessible. In general, however, the required information can be gathered and disseminated only through systematic efforts to strengthen the entire research process.
Development agencies need to know which kinds of research are of greatest relevance as they assist client governments and develop the rationale to secure funding for this research. A large and growing body of literature describes conservation strategies appropriate to different species, ecosystems, and regions in developing countries. This includes journals such as Biotropica, Biological Conservation, and Conservation Biology. Recent agendas, involving a range of basic and applied research needs, can be found in Research Priorities in Conservation Biology (Soul and Kohm, 1989); From Genes to Ecosystems: A Research Agenda For Biodiversity (Solbrig, 1991); and The Sustainable Biosphere Initiative: An Ecological Research Agenda (ESA, 1991). Subsequent chapters of this report focus on the socioeconomic and cultural aspects of biodiversity research in developing countries.
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Mission Statement
The mission of the Metropolitan Water District of Southern California is to provide its service area with adequate and reliable supplies of high-quality water to meet present and future needs in an environmentally and economically responsible way.
Foreword
Incorporated in 1928, the Metropolitan Water District of Southern California provides a supplemental water supply for Southern California's coastal plain. Municipal and industrial demands account for approximately 92 percent of the water supplied by Metropolitan with the remaining 8 percent being used for agricultural purposes and the prevention of seawater intrusion into coastal groundwater basins. Metropolitan currently supplies more than half of the water used within its service area, and is expected to deliver nearly all of the anticipated increase in future demand.
Metropolitan's service area encompasses 5,200 square miles, consisting of 27 member agencies, composed of 14 individual cities, 12 municipal water districts, and a county water authority. This area extends for about 200 miles along the Pacific Ocean, from Oxnard to the Mexican border, and inland in some places for about 70 miles into six counties: San Diego, San Bernardino, Riverside, Orange, Los Angeles, and Ventura. The distribution system utilizes 775 miles of pipeline, five filtration plants, eight reservoirs, numerous regulating structures, 350 service connections, and includes 14 hydroelectric power recovery plants. Metropolitan's member agencies (or their subagencies) subsequently deliver the water to homes, industries, and agricultural users.
Water for Southern California is supplied by the State Water Project, operated by the California Department of Water Resources, and by the Colorado River Aqueduct, built and operated by Metropolitan. Water from the State Water Project is transported from the Sacramento-San Joaquin Delta through the central valley via the Governor Edmund G. Brown California Aqueduct to Southern California. It is introduced into Metropolitan's distribution system through State Water Project's West Branch from Castaic Lake in the Santa Clarita Valley, and through the State Water Project's East Branch from Silverwood Lake in the San Bernardino Mountains. East Branch water flows through several points into the distribution system: the Rialto Pipeline below Devil Canyon Power Plant, the Box Springs Feeder Junction Structure, the Perris Bypass Pipeline, or directly from Lake Perris.
The Colorado Aqueduct spans 242 miles of desert terrain and mountain ranges between its Lake Havasu intake and its terminal reservoir, Lake Mathews, near Riverside. Five pumping plants lift the Colorado River Water a total of 1,617 feet, taking it over several mountain ranges and into Metropolitan's service area. Whitsett Intake Pumping Plant on the western shore of Lake Havasu lifts water 291 feet to Gene Wash Reservoir located two miles inland. Gene Pumping Plant raises the water an additional 303 feet to Copper Basin Reservoir, the aqueduct's major flow control point. The water then flows by gravity approximately 63 miles to the Iron Mountain Pumping Plant where it is elevated 144 feet through the Iron Mountains. After flowing another 45 miles, the water reaches Eagle Mountain Pumping Plant where it is lifted 438 feet. Following a 16-mile gravity flow, the water arrives at the Julian Hinds Pumping Plant. This final lift of 441 feet brings the water to an elevation of 1,807 feet, adequate for flow by gravity the remaining 116 miles to Lake Mathews. Completed in 1941, the Colorado River Aqueduct was designed to accommodate an eight-pump flow of 1,605 cubic feet per second (cfs), but will convey flows 15 percent higher due to the massive pump rehabilitation project which was designed to ensure dependable delivery of Metropolitan's allocation of 487,000 acre-feet, as well as more than 800,000 acre-feet of surplus Colorado River water, when available.
The Colorado River Aqueduct Pump Rehabilitation Project resulted from a 1985 evaluation of the pumping units which had been installed as part of the original Colorado River Aqueduct construction. The evaluation revealed that the pumping units were nearing the end of their useful life and needed to be rehabilitated. The rehabilitation project started in 1988; work was divided into phases and completion is scheduled for 1993. This project is distinct from normal operating requirements and maintenance schedules.
Organization
Office of General Manager
The General Manager's Department has the responsibility for planning, directing, and managing Metropolitan's overall operations. For fiscal year 1991-92 the objectives were:
To make the most efficient use of Metropolitan's existing facilities.
To expand Metropolitan's water distribution system capacity.
To continue the program of upgrading existing facilities to maintain reliability and enhance service capability.
To pursue opportunities to increase dependable water supplies.
To encourage conservation and formulate programs to reduce demands on Metropolitan's system.
To intensify programs to meet regulations in the areas of drinking water, wastewater, air quality, hazardous materials, and waste.
To continue automation of Metropolitan's activities (purchasing, accounting, maintenance, project management) to increase staff efficiency and effectiveness.
To enhance Metropolitan's employee development and Equal Employment Opportunity programs.
To continue legislative monitoring at both the State and Federal level.
Legal Department
Metropolitan's legal staff represents Metropolitan, its Board of Directors, officers, and occasionally employees, in litigation and administrative proceedings. The staff provides the Board of Directors and Metropolitan's officers with legal advice and written opinions, and reviews contracts and other documents. Additionally, staff members follow litigation and administrative proceedings to which Metropolitan is not a party, but whose outcome could affect Metropolitan or the resources on which it depends. By closely monitoring State legislative proposals, staff recommends positions Metropolitan should take, if any.
Internal Audit
Metropolitan's Audit Department performs internal auditing activities consisting of financial, compliance, and computer audits, as well as miscellaneous reviews or special audits. The Auditor reports directly to the Board of Directors through its Special Audit Committee. He works closely with Metropolitan's staff, but is independent of general management.
Internal audit assignments are usually selected by the Auditor and are occasionally requested by Metropolitan's Board of Directors or management. Proposed Audit Department work activities are reflected in the Audit Work Plan submitted to all directors through the Special Audit Committee at the beginning of each fiscal year. The Audit Work Plan is modified as necessary throughout the year based on actual experience, new priorities, or other circumstances. The Auditor also prepares a written activity report each month for the Board of Directors information.
Detailed audit testing is preceded by appropriate planning and coordination with management or staff. When significant audit assignments are completed, all directors receive the report to the Special Audit Committee, with copies provided to management. In accordance with internal auditing standards, the typical audit report outlines the objectives and scope of the work performed, the audit findings noted, and any recommendations for corrections or improvements which the Auditor feels are warranted under the circumstances. In addition to internal audit assignments, the Auditor and his staff provide substantial assistance to Metropolitan's external auditors in conducting quarterly financial audits and the year-end audit required by the California Government Code and Metropolitan bond covenants.
Preface
Fiscal year 1991-92 opened with a gloomy water supply picture for Southern California as it faced a sixth year of drought. On September 30, the end of a water year, storage in the State's major reservoirs was only 58 percent of average, the lowest level since 1977's severe drought. Sacramento river runoff, a major source for the State Water Project and usual provider of about half of the water Metropolitan delivers, was only 46 percent of normal. Colorado River basin supplies, which usually provide the other half of the water Metropolitan delivers, were only slightly better, ranging from 63 to 75 percent of normal. To cope with dwindling supplies and increasing demands, Metropolitan provided input to proposed plans for better management of Federal and State water supplies; moved forward with its plans to construct Southern California's largest reservoir; and accelerated its efforts to encourage water management and conservation, and to construct new and rehabilitate existing facilities for greater efficiency.
As the Federal government considered reforms to the operation of the federal Central Valley Project, Metropolitan's board of Directors adopted a series of provisions to be pursued for inclusion in any Central Valley Project reform legislation. The general principles to be promoted involved water transfers; fish and wildlife improvements, including water metering and changes in water pricing; appropriate Federal actions to pursue needed facilities; and other provisions consistent with Metropolitan's mission to provide "adequate and reliable supplies of high quality water to meet present and future needs in an environmentally and economically responsible way". At the State level, providing input to Governor Pete Wilson's Water Policy Task Force, Metropolitan urged that the State formulate a balanced water policy, stressing the need for developing significant new supplies through a combination of improved facilities and water transfers.
Innovative was the key word for many of Metropolitan's programs during the fiscal year. With approval of a landmark pact, forged by the State's major urban water suppliers and environmental organizations, Metropolitan helped set an industry standard for urban water conservation practices throughout California. Detailing 16 specific conservation measures, also known as 'best management practices', the agreement helps assure a more dependable water supply by providing justifiable water savings. To secure additional water supplies, Metropolitan's Board of Directors adopted a far-reaching policy statement regarding the future development of voluntary water transfers, primarily from agricultural water users. Transfer activities would be accomplished through conservation, conjunctive use, water management programs and selective land fallowing, and would be designed to avoid contributing to or creating long-term groundwater overdraft conditions. The activities appropriately address potential third-party impacts in a manner that protects and enhances the state's environmental resources. An historic two-year experimental program will demonstrate the potential of fallowing California farmland near the Colorado River and making the saved water available to urban Southern California. The program's agreement marked the first time urban and agricultural water interests and Colorado River water rights holders have joined forces in a land-fallowing program.
Locally, Metropolitan launched an inventive pilot program that combines the goals of water conservation with community action. The program in East Los Angeles will create new jobs for community members who will be trained to install ultra-low-flush toilets in local residences and who will also receive instruction in sales and personal development.
Domenigoni Valley was selected as the site for an 800,000-acre-foot reservoir, the largest in Southern California - completion of which will nearly double Southern California's water storage capacity. The proposed 4,410-acre lake is critical to long-range planning, prudent water management practices, and assurance that an adequate supply of water will be available. It will also provide the Hemet and San Jacinto areas with increased tourism, a stronger economy, and one of the largest and most pristine public recreation areas in California.
Reservoir construction will be accomplished in an environmentally sensitive manner through creation of one of the first multi-species preservation and mitigation banking areas in the nation. Joining lands purchased in the Santa Rosa Plateau and lands already maintained as a reserve by the Nature Conservancy, dedication of the 3,000-acre Shipley Reserve brought the multi-species habitat to nearly 16,000 contiguous acres.
Metropolitan's concern for the environment extended to actively joining efforts to alleviate air pollution in the Los Angeles area by acquiring ten clean-burning, methanol-fueled automobiles and including a program of preventing and containing chemical spill hazards as part of a major capital improvement program. The chemical containment program essentially will eliminate the risk of accidental chemical contamination at Metropolitan's filtration, pumping and hydroelectric power plants, reservoirs and maintenance areas where chemicals are stored and handled.
Anticipating rigid new drinking water quality standards under the Safe Drinking Water Act, Metropolitan began testing a new treatment process at its Oxidation Demonstration Project on the grounds of the F.E. Weymouth Filtration Plant. The demonstration facility allows Metropolitan to test the performance of ozone and PEROXONE (a combination of hydrogen peroxide an ozone) at a scale that closely resembles actual use. Until the plants' completion, Metropolitan had studied ozone and PEROXONE use in small-scale treatment tests to reduce disinfection by-product levels, eliminate disease-causing water-borne microorganisms, and control undesirable taste and odor.
Hoping to make desalination a more viable option for supplementing existing water supplies, Metropolitan's Board of Directors authorized the first planning and development phase of a seawater desalination demonstration project which will include construction of a 2,000 gallon-per-day test unit at a coastal power plant site.
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Terrorism: Efforts Toward International Solutions
A. Peter Burleigh, Coordinator for Counter-Terrorism
Address before the 1992 Worldwide Anti-terrorism Conference, Fort Leavenworth, Kansas, June 23, 1992
I appreciate the opportunity to address this important conference. I'd like to describe some recent noteworthy developments in our efforts to counter the threat of international terrorism.
Despite the extraordinary and positive changes in the world in the last 2 years and despite an evolving international consensus to oppose terrorism, the problem is still very much with us. In fact, last year there was a sharp increase in the number of international terrorist incidents, although the number of deaths and injuries declined. The increase reflected the large number of generally small-scale incidents that occurred during the Gulf war. There were no terrorist spectaculars resulting in large loss of life in 1991. However, in 1992, we have seen the most spectacular terrorist attack in 3 years: the bombing of the Israeli Embassy in Buenos Aires. This brutal bombing killed about 2 dozen people and left 200 injured.
Although the number of international terrorist incidents seems to be on a downward trend so far this year, the number of deaths and injuries has increased. There have also been a number of serious attacks by domestic terrorist groups in Spain, Peru, Turkey, and other countries.
It is shocking to note that almost all of the American citizens who died in terrorist attacks during the past 2 years had some connection to the US military - either on active duty or under contract to the Defense Department. They died in Panama, the Philippines, El Salvador, Turkey, and Greece. Two weeks ago, one US serviceman was killed by gunfire and a second soldier wounded in an ambush in Panama in advance of the President's visit.
The Gulf War
One of the most important developments of the last year was the success of the coalition and the international community in trumping Saddam Hussein's terrorist 'ace in the hole.' I think it is clear that Saddam Hussein believed terrorism would be a strategic weapon in deterring the coalition and undermining support for the effort to liberate Kuwait. Iraq trained terrorists and Iraqi intelligence operatives and dispersed them to locations around the world in preparation for the 'mother of all battles.' In the months following the invasion of Kuwait, and especially during Operation Desert Storm, Saddam Hussein called publicly and repeatedly for terrorist attacks against coalition targets. But these attacks for the most part did not materialize.
As many of you here know well, it was no accident that there were no major successful terrorist attacks. It was the result of unprecedented and largely unheralded cooperation among security and law enforcement services around the world - including Europe, Eastern Europe, and the Arab world - that stifled the Iraqi terrorist threat. This cooperation involved the sharing of intelligence information, expulsion of Iraqi diplomats and agents, preemptive arrests, and enhanced security countermeasures. Those attacks that did take place were largely sporadic and uncoordinated acts of indigenous groups acting in sympathy with Saddam Hussein or exploiting the Gulf war as a pretext to commit terrorism.
While we can be proud of our successes, we must remember that the Iraqi terrorist threat, while currently suppressed, is likely to re-emerge if international sanctions are loosened and Iraq is allowed to rebuild its diplomatic and intelligence operations.
End to East Bloc Support
Another new element has been the astonishing changes that have occurred in the former Soviet Union and former Soviet bloc. We note with great interest the recent reports from Moscow of documents containing evidence that the former Soviet Government supported groups that engaged in terrorism against Western interests. It is too early to discuss broad conclusions about the extent of the former Soviet Union's responsibility for international terrorism, but these fragmentary reports are disturbing.
The demise of the communist governments has obviously deprived terrorist groups of material support, sanctuary, and safehaven from which to operate, arms, financing, and front companies and other infrastructure. Also important, it deprived them of the Leninist ethos of all-justifying revolutionary violence. In some circles, this had lent appeal and an aura of respectability to leftwing terrorist groups.
At the same time, the disintegrations of the Soviet Union and now Yugoslavia has unleashed long-contained ethnic, religious, and territorial rivalries. While these, regrettably, have claimed a great number of lives and caused widespread suffering, they do not appear to have spilled over into international terrorist incidents. Nevertheless, it is a sobering reminder, today, that Sarajevo, site of one of the most momentous terrorist incidents in history, is again the scene of bloodshed.
State-Supported Terrorism
While Iraq was unable to incite a terrorist offensive against the coalition, and despite welcome changes in the former communist bloc, there remain states that have been and remain willing to employ terrorism as an instrument of state policy.
As many of you know, the United States maintains a list of countries that support terrorism. There are six countries on that list: Cuba, Iran, Iraq, Libya, North Korea, and Syria.
Iraq, today, is in a state of enforced quiescence. Libya, as I will discuss in greater detail shortly, is under great pressure to comply with the UN resolutions requiring it to hand over suspects in the Pan Am [Flight] 103 bombing, cooperate with French authorities' investigation into the bombing of UTA Flight 772, and cease its support for terrorism. Libya continues to provide support and facilities for a number of terrorist groups, including the Abu Nidal Organization [ANO], the Popular Front for the Liberation of Palestine-General Command, and the Palestine Liberation Front.
Iran, regrettably, continues to sponsor terrorism in an effort to intimidate governments and individuals around the world. An Iranian-sponsored group, Islamic Jihad, has claimed responsibility for the bombing of the Israeli Embassy in Buenos Aires, and it produced videotaped footage of the embassy taken prior to the bombing in order to authenticate its claim.
Iran continues to assassinate dissidents abroad. Four Iranian agents are under arrest for the murder of former Iranian Premier Minister Shapur Bakhtiar in Paris last year.
Iran has also refused to rescind the fatwa, or religious decree, calling for the murder of author Salman Rushdie because of his book, The Satanic Verses. This seems a particularly perverse and Orwellian fromform of terrorism - international thought crime, bearing a sentence of death. In addition, attacks on translators of Rushdie's books in Italy and Japan are believed to be linked to their work.
Iran also continues to provide material and financial assistance to terrorist groups throughout the world. Last year, Iran finally helped arrange for the freeing of Western hostages held in Lebanon. The last two, both German citizens, were freed last week. We have recognized Iran's role in this, and it was an important step. As the President said, it has removed an enormous obstacle to a more normal relationship with Iran. Serious problems remain, however.
Hezbollah elements in Lebanon that are fighting Israeli troops are continuously resupplied by the Government of Iran by flights to Damascus. Syria then permits these supplies to travel overland by truck.
Islamic Jihad also claimed responsibility for an attack in Ankara, Turkey, that killed the Israeli Embassy's top security officer. This attack followed by a few days a handgrenade attack in front of the Neve Shalom Synagogue in Istanbul for which Hezbollah is suspected.
Tehran must recognize that only by abandoning state sponsorship of terrorism can it expect to re-enter the international community. The Iranians are not acting as if they have understood this basic message. We need to work with other states to drive it home in every way possible.
Syria is not known to have sponsored any international terrorist attacks outside Lebanon since 1987, and most of the groups it supports have been relatively quiet since Syria joined the allied coalition in the war with Iraq. However, Syria continues to provide support and safehaven to a number of groups that engage in international terrorism, and, for that reason, it remains on the US Government list of state sponsors.
A number of terrorist attacks, particularly against Israel, have been attributed to groups based in Syria and in Syrian-controlled areas of Lebanon. Groups enjoying Syrian support and sanctuary include Hezbollah, Palestinian Islamic Jihad, and the ANO. Two non-Arab groups that receive Syrian support - the PKK and Dev Sol - are very active in Turkey. The PKK, or Kurdish Workers' Party, has kidnapped Western hostages, including Americans. The virulently anti-US group Dev Sol murdered two DOD [Department of Defense]-associated Americans in Turkey last year. Another non-Arab group supported by Syria is the Japanese Red Army, which has attacked the US military. It is responsible for the 1988 car bombing of a USO [United Services Organization] club in Naples that killed an American servicewoman and injured four US servicemen.
Syrian efforts over the past few years to reign in terrorists under its control represent a half step. It has yet to sever its relationships with these groups and shut down their training camps.
Other Trends
I'd like to also touch briefly on two other issues. One is what you might call the growing 'reach' of terrorists today. During the Gulf war, Iraqi agents attempted unsuccessful attacks in Indonesia, Thailand, and the Philippines, far from the traditional areas of operation in the Middle Eastern terrorist groups. The bombing of the Israeli Embassy in Buenos Aires is the latest, tragic example of what may be a new strategy of seeking targets in traditionally low-threat areas of the world, where security may be less vigilant and local security forces may have little experience with the international terrorist threat.
I would also like to mention the threat of narco-terrorism. This is not a new problem. In recent years, we have seen the emergence both of narcotics traffickers who employ terrorism against the state, and particularly its judicial system, to further their own criminal goals. Many of you will recall the terrible violence that struck Colombia in 1989, including the bombing of a civilian airliner and the assassinations of judges, journalists, police officials, and politicians.
We have also seen more political insurgent and terrorist groups - for example, the Shining Path in Peru - turn to narcotics trafficking as an easy way to generate more income to support their terrorist and military activities.
We must continue to closely monitor this phenomenon, especially as terrorist groups feel the effects of the cutoff in funding from the former East bloc countries and reduced assistance from Cuba. In Latin America and the Middle East especially, there are many areas that are both major and traditional narcotics production areas and operating areas for terrorist groups.
US Policy
I would like to turn now to the US counter-terrorism policy. Our policy is based on three tenets:
No concessions to terrorists;
Pressure on states to cease support for terrorism; and
Cooperation with other governments to impose the rule of law on terrorists. This involves practical measures to help us identify, apprehend, and prosecute terrorists.
I believe that over the past year this policy has produced some significant successes in our fight against terrorism.
No Deals. The United States maintains a policy of refusing to make concessions to terrorists. This means that we will not pay ransom, release convicted terrorists, or pressure other countries to give in to terrorist demands. No group should believe that it can blackmail the United States. There will be no rewards for terrorism.
This aspect of our policy was damaged by the Iran-contra affair, but we saw it succeed in the unconditional release, last year, of all the remaining US hostages in Lebanon. As President Bush stated last week in the wake of the release of the two remaining German hostages from captivity, the 'no deals' policy, which had encountered some rough water along the way, has been vindicated by results. We are very well aware of the terrible, wrenching pressure that terrorists can bring to bear, especially on humane, democratic governments that value the lives of their citizens. But we believe this policy is the only correct one.
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By Mr. BIDEN (for himself and Mr. DeConcini):
S. 618. A bill to control and reduce violent crime; to the Committee on the Judiciary.
VIOLENT CRIME CONTROL ACT OF 1991
Mr. BIDEN. Mr. President, I rise today to introduce the Violent Crime Control Act of 1991, the most comprehensive anticrime initiative I have ever proposed. It is my belief that this legislation would make tremendous strides toward restoring safety and sanity to our Nation's dangerous streets.
America needs a crime bill and it can have one in 100 days. But it must be a crime bill that is tougher than the one the President proposed yesterday, in at least two important respects:
First, it must ban the killer assault weapons used by drug-dealers and terrorists.
Second, it must do more to add new police officers to the front lines of the war on crime.
If anyone doubts that such action is needed, I urge them to take a look at a report that the Judiciary Committee majority staff is releasing today.
This report, entitled 'Fighting Crime in America: An Agenda for the 1990's,' contains new data that illustrates how horrible the crime problem has become.
Among the report's findings:
The year 1990 set a national record for murders, a national record for rapes, a national record for assaults. Last year's increase in murder and rape was the largest 1-year jump in more than a decade. And every American - every American - is four times more likely to be victimized by a violent crime today than he or she was in 1960. The fact is this: more Americans were killed on our streets over the past 8 weeks than were killed by enemy soldiers during Operation Desert Storm.
Yet if the report we are releasing today contains some depressing, stark facts, it also contains some rather simple - but important - solutions for meeting this crisis.
And these solutions form the core of the legislation I am proposing today: a bill, I am proud to say, that was endorsed last month by my colleagues in the Senate Democratic Conference.
Before I discuss our bill, I want to say a few things about the President's 100 days.
I have little doubt that Congress can pass a crime bill in 100 days. In fact, we could have passed a crime bill last year had the special interests in the gun lobby not worked to stall, delay, and ultimately kill the bill because of its ban on deadly assault weapons.
Simply put: If the President would join the Congress in banning the murderous weapons that are killing police officers, children and countless of innocent bystanders, we could easily pass a crime bill within the next 100 days.
The report we are releasing today makes clear what America must do to end its rapidly rising crime rates:
First, we must get the people who commit crimes out of the community, and we must punish them severely for their actions;
Second, we must stop people from committing crimes before they happen; and
Third, we must get the deadly weapons off the streets.
On the first of these goals, our bill has little difference from the President. We disagree not in what the President proposes - but what he opposes - not in what he includes but in what he excludes.
Like the President's bill, our bill:
Imposes the death penalty for the largest number of offenses in U.S. history - indeed, our bill covers even more capital offenses than does the President's.
It extends the death penalty for drug killers, terrorists, and the murderers of law enforcement officers.
It shortens the appeals process for capital offenders.
And, it increases penalties for criminals who commit gun offenses.
We have no disagreement with the President over whether we must punish criminals severely. On this point, both proposals are in agreement. Our differences with the President start with the second goal, the question of whether more must be done to prevent crimes in the first place.
Here, we think that much more must be done - not just to punish criminals - but also to make our streets safer from mayhem in the first place.
On this point, the findings of our new staff report are worth noting. It shows:
In 1950, America had three police officers per violent crime. Yet today, the ratio is just the reverse - three violent crimes per officer.
After 18 months of the administration's war on drugs, the number of police officers on our streets today is only 1 percent higher than it was when the President's effort was launched.
And the administration's 1992 budget actually proposes a cut in Federal aid sent to local law enforcement agencies.
Our streets are unsafe because our police forces are undermanned and overwhelmed. They can never be safe again until we reverse this imbalance.
That's why our bill, unlike the President's, includes funding for thousands of new police officers, FBI agents, DEA agents, and other law enforcement officers. We don't want to just punish murderers, we want to prevent murders.
And it's why our bill includes three new initiatives that the President's plan ignores: a comprehensive new program to combat juvenile gangs; more help for rural areas that are suffering rising crime rates, and emergency aid to the places hardest hit by drugs.
And it is why we are pushing an important initiative called the Violence Against Women Act, which would tackle the escalating problems of rape, domestic violence, and sexual assault.
The Violence Against Women Act, along with Senator DeConcini's motorcycle gang bill are further aspects of our anticrime agenda that are not adequately addressed by the President's plan.
Finally, and again, unlike the President's bill, our bill addresses a third goal of any substantial crime legislation; getting killer assault weapons off the streets.
Our bill includes the so-called DeConcini amendment, a measure adopted by the Senate last year to ban the manufacture and sale of 14 deadly assault weapons.
These guns are the weapons of choice for drug dealers and international terrorists. They have no legitimate purpose and they must be controlled before they kill any more of our law-abiding citizens.
Unfortunately, the President's bill is silent in this respect. Instead of controlling assault weapons, the President proposes to increase the penalties on those who use such guns to commit crimes.
Mr. President, I say this in response: We agree that gun criminals should face stiffer punishments, but we also think that we should get the most deadly weapons off the streets before they are used to kill or maim anyone else.
In sum: The President wants to punish crime - and so do we - but we also want to do more to prevent crime, and make our cities and towns safer for all Americans.
Can the Congress meet the challenge to pass a crime bill in 100 days? I am convinced that if the President works with us, this ambitious goal can be achieved.
But for this goal to be a meaningful one, the crime bill we pass must be a meaningful one. Our goal should not be to pass just any crime bill within 100 days, but rather, to enact a comprehensive, valuable piece of crime-fighting legislation in that period.
To achieve that end, the President must help us in two ways: First, he must prevent his allies in the gun lobby from blocking this bill, and indeed, he should join us in coming up with an agreeable proposal to limit these weapons; and second, he must work with us putting aside the rhetoric of partisanship on crime to reach an accord on a hill that we can all support.
None of us here in Congress or at the White House, Republican or Democrat - can afford to wait any longer to start to tackle this crisis.
Hopefully, if we all work together, we can make progress to combat death and violent aggression on this home front as swiftly and decisively as we achieved this same end in the gulf.
I urge my colleagues to review our new majority staff report and join me in supporting the Violent Crime Control Act.
I ask unanimous consent that the full text of my bill, along with a side-by-side comparison of it to the President's bill, and some summary materials, be printed in the Record.
Mr. President, I rise today to introduce a voluminous piece of legislation, but I think an important one - I hope my colleagues see it that way - the Violent Crime Control Act of 1991. This is the most comprehensive anticrime initiative I have ever introduced in the 18 years I have been here, and it is my belief that this legislation would make tremendous strides toward restoring safety and sanity to our Nation's streets and neighborhoods.
Mr. President, before I say my little piece here, let me point out that the President announced yesterday that violent crime is going to be his No. 1 domestic initiative. I hope that doesn't mean we are going to back off on the fight against drugs. The President laid out a crime bill, a crime bill all of which we passed last year here in the Senate. It ultimately failed because of a Presidential threat of a veto because we in the Senate included a provision eliminating 14 assault-style weapons - the so-called DeConcini bill.
Mr. President, I want to say at the outset about the death penalty that I do not think many of us in here - I know the Senator from Florida, because he knows so much about this area and has worked so hard in it so long when he was a Governor and since he has been here - disagree. Few of us disagree - at least I do not, nor does the Senator from Florida - on reinstating the death penalty.
Our bill last year provided for the death penalty. And the bill this year provides for a dealthdeath penalty - total of 44 offenses for which you can receive death as the penalty. That is more than what the President is proposing.
There is also a proposal the President has to change the habeas corpus law. The Senator, as an attorney and former attorney general, knows full well what that means. It means that there are people who have been put on death row, and who are filing frivolous and successive petitions that are taking up the courts' time and everyone's time.
But we can change habeas corpus tomorrow, and it will have no effect on the crime rate; zero. Those folks on death row are not shooting people. Yet, if you listen to some of my colleagues talk, they will tell you: "If we get the death penalty and we get a change in the habeas corpus, well, we will change the world. Our streets will be safer."
Now, I support the death penalty. I am going to try to pass it again through this legislation. We passed it here in the Senate, and passed it in the House, and we are going to pass it again. That is not a big problem.
But with the Federal death penalty, Mr. President, if you add up all the potential people who will be put to death and convicted for all the crimes we include, you are not talking about more than a dozen folks a year. Heck, there are far more murders right here in the city of Washington. We are not talking about a lot of people.
The point I wanted to make is this: It is not what the President has proposed in his legislation that I oppose; it is what he does not propose. We will change the habeas corpus law to provide for only one appeal, one bite out of the apple. We have some disagreement among ourselves and with the President over the nuances. We will settle that. And we will pass a death penalty.
As I said, I spoke to a group of attorneys general this morning - and you spoke to them just prior to my speaking to them, Mr. President - Republicans and Democrats alike.
<#FROWN:H10\>Women have the right to be informed of the risks, potential ramifications, and benefits related to urine screening toxicology.
Recommendation #32
The Michigan Department of Social Services and the Michigan Department of Public Health should review the Child Protective Services policies regarding child abuse and neglect in relation to substance use among parent(s). Policies should be revised where indicated to foster family preservation as the goal of all programs, that is to keep families together with appropriate support services where possible.
Recommendation #33
Prosecutors should include in their policies the referral of substance-using pregnant women into substance abuse treatment programs and prenatal care. The Department of Public Health should enlist the assistance of advocacy groups and private organizations to support local prosecutors in the development and implementation of policies on the non-punitive approach to pregnant, substance-using women and their referral into substance abuse and prenatal care. The statement submitted to the Task Force by Wayne County Prosecutor John O'Hair in support of the non-prosecution of substance-using pregnant women should be accepted as a stellar example for local prosecutors.
Recommendation #34
Widely publicize written policies of treatment and education as an alternative to criminal prosecution for substance-using pregnant women.
Recommendation #35
Increase public information targeting the male role and responsibility in reducing fetal exposure to alcohol, tobacco, and other drugs and in promoting positive pregnancy outcomes.
Recommendation #36
All state legislation, regulations and programs should consider the culturally relevant lifestyle issues of substance-using women.
Recommendation #37
All state legislation and regulations should support smoke-free treatment environments, i.e., Clean Air Act. The Michigan Department of Public Health should develop a protocol for smoking cessation that may be used with pregnant women. Substance abuse treatment facilities should offer smoke-free environments.
Health Services
The use of ATOD (alcohol, tobacco and other drugs) during pregnancy can have detrimental effects both non-specific and highly specific on perinatal outcome. Non-specific effects include fetal growth retardation, resulting in low birth weight infants and infants with small head circumference. Specific effects include facial, skeletal and organ system abnormalities. Women using drugs during pregnancy are also at increased risk for preterm labor and abruptio placenta thereby placing an already compromised fetus at increased risk. The number of mothers who are HIV infected from sharing needles and practicing unsafe sex is increasing at an alarming rate.
Definitive information does not exist about the long-term effects of drug use during pregnancy. Researchers have reported that some infants who were prenatally exposed to cocaine have suffered from stroke or hemorrhage in the areas of the brain responsible for intellectual capabilities; and there is a substantial body of information available which describes the harmful effects of alcohol and tobacco use on the developing fetus. In-utero exposure to alcohol, tobacco and other drugs is associated with an increased rate among newborns of (1) low birthweight, with small for gestational age length and head circumference, (2) central nervous system damage that may delay or impair neurobehavorial development, (3) mild to severe withdrawal effects, and (4) certain congenital physical malformations. Researchers have also stated that follow-up studies of these children indicate that the vast majority of them reach developmentally appropriate milestones by 36 months.
Prenatal care can help or at least ameliorate many of the problems and costs associated with the births of prenatally-exposed infants. Through three basic components of prenatal care: (1) early and continued risk assessment, (2) health promotion, and (3) health/medical and psychosocial interventions and follow-up, the chances of an unhealthy infant are greatly reduced. Comprehensive residential and intensive outpatient substance abuse treatment that includes prenatal and other health services for women, such as gynecological, HIV counseling and testing, etc. is the best approach to helping women to stop using drugs during pregnancy and providing the developing infant with the best chance of being born healthy.
In addition to prenatal care, the earliest opportunity for intervention is the provision of reproductive health services. Reproductive health services should be made available to all substance-using women of childbearing age in Michigan. These services would include teaching abstinence and family planning as well as providing pre- and post-conceptional counseling. In addition it is widely accepted and documented by pregnancy and sexually-transmitted disease (STD) data that adolescents are negatively impacted by early sexual activity and that the most reliable method of preventing pregnancy and STDs is abstinence. Abstinence-based strategies, therefore, should receive adequate funding.
Recommendation #38
Reproductive health services should be made a Basic Health Service (teaching abstinence, family planning methods, pre- and post-conceptional counseling.) Abortion counseling is not included.
Recommendation #39
Develop protocols for use and dissemination of reproductive health services information to substance-using women to be used by all appropriate programs.
Recommendation #40
Increase statewide access to health care for substance-using pregnant women through provision of education, training and incentives to providers to serve this population.
Administrative Recommendations
Education and Training
A recurring theme in discussing substance abuse treatment is the importance of well-trained and committed professionals to lead substance abuse programs and to provide direct care. Unfortunately, more often than not, drug treatment services, as well as other services which should be linked with them, are frequently staffed by inadequately trained individuals who are poorly paid and given little on-going support. It is often the least skilled and trained individuals who are given the tasks of managing the state's most serious problems in health and human services.
It is imperative that persons caring for substance-using women and pregnant women clearly understand and address all aspects of the complex psychosocial, medical, gender, legal and ethical issues involved, so that the best possible care and positive outcomes can be provided for the woman, her infant and family.
Recommendation #41
State funding should be made available to sponsor on-going training to professionals who provide care to substance-using women. Training should include information on assessment, culturally-relevant lifestyle issues and the influence/impact drug usage may have on women (e.g., issues of sexuality and hormonal surge). State funding should be made available to substance abuse programs to assist with planning, implementation and evaluation.
Recommendation #42
Curricula for physicians, nurses and social workers and others concerned with maternal and child health issues should include gender specific issues including behavioral manifestations of exposures to environmental stress, and sexual abuse and stress. Topics should include post-traumatic stress syndrome, depression, incest, rape, co-dependency, drug use, child abuse, and domestic violence.
Evaluation
Research and evaluation is needed on the results for various approaches of treating alcohol, tobacco, and other drug use among parents and families, and especially among pregnant women and women with young children. This requires, among other things, greater clarity among goals of treatment and careful definition of the markers of success.
In Michigan, few resources have been devoted to evaluating programs for substance-using women. There is little qualitative or quantitative data to support the objectives of the state's programs. What works? How can we replicate? What should be replicated? How can we prevent, treat and address the myriad of problems associated with and the impact of perinatal substance use on women, their children and families in our state?
Many experts believe that the most cost-effective approach is a comprehensive continuum of care model program that includes specially trained staff; provision of physical, social, medical, educational, childcare, and vocational services; and the involvement of the family in therapy. The conclusion is that more programs tailored to meet the unique requirements of women are needed. More research is also needed regarding treatment effectiveness, as well as the etiology of alcohol and drug abuse. To this end, the government (federal, state and local) must play a major role in funding longitudinal and multi-site studies.
Recommendation #43
The Michigan Department of Public Health should develop guidelines for cost-effectiveness, process and outcome-based evaluations of women- and family-specific substance abuse treatment and prevention programs. The guidelines should be reviewed and endorsed by appropriate state, local and educational institutions.
Recommendation #44
Guidelines and training should be made available to assure that program evaluators understand the need for culture and gender specific program designs and service delivery methods.
Recommendation #45
The Michigan Department of Public Health should disseminate information about effective alcohol and other drug treatment programs for women.
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Early Childhood Development
Introduction
Charge to the Committee
The Early Childhood Development Committee of the Governor's Task Force on Drug-Exposed Infants originally described its task as "the careful consideration of, and the formulation of recommendations for the population of children between the ages of 0 and six years who have been prenatally exposed to drugs, or exposed to drugs in the environment." This approach, however, posed at least one major problem to committee members: many, and probably most, prenatally drug-exposed infants will not be detected using current screening mechanisms. Correspondingly, many children who were not prenatally drug-exposed are in need of services. Therefore, the committee expanded its charge to include all infants in need of intervention, with special emphasis placed on the identification of and intervention with those infants known to have been prenatally drug-exposed.
Statement of the Problem
The issue addressed by the Governor's Task Force on Drug-Exposed Infants is the syndrome of problems sustained by infants as a consequence of maternal drug use during pregnancy. The Governor's Office has charged this Task Force with the responsibility of generating recommendations which will prevent and ameliorate these problems, as well as to recommend effective interventions for those children sustaining developmental disabilities as a consequence of such exposure.
A difficult problem the Early Childhood Development Committee had to confront was the reality that - short of intensive and unrealistically expensive (and often intrusive) screening techniques - many drug-exposed newborns will go undetected. A 1989 study indicates that hospitals assessing every pregnant woman and newborn infant through rigorous detection procedures had an incidence rate of drug-exposed infants three to five times greater than hospitals utilizing more customary, less rigorous screening techniques. (Chasnoff, 1989)
Further, it became clear that there may be many drug-exposed infants who for one reason or another may not have sustained any early detectable negative consequences. Factors which may have a bearing on detectable infant health problems attributable to prenatal drug exposure include amount and duration of exposure, drug/s of choice, nutrition, access to health care systems, prenatal care and overall maternal health. A review of the literature indicated abundant reports on the occurrence of developmental delays and/or disabilities in this population. Ramer, et al, revealed significantly smaller-sized fetuses in mothers known to be heroin-addicted (1975), even when controlling for prenatal care and nutrition. Babies born to methadone addicts were found to have normal birthweights, but greater postnatal weight loss due to hyperactivity and sleep disturbances (Householder, 1982). Neonatal drug withdrawal symptoms were noted in neonates of heroin- and methadone-addicted mothers, with symptoms mainly involving the central nervous and gastrointestinal systems. Such symptoms included irritability, increased muscle tone, shrill crying, inability to sleep, and hyperactive deep tendon reflexes. "Uncoordinated and ineffective sucking and swallowing reflexes, non-nutritive sucking, vomiting, diarrhea and progressive weight loss were also noticed." (Dinges, 1980).
Infants born to opiate addicts were found to be "highly energetic, talkative, and easily distracted, with brief attention spans" (Hutchings, 1982). Disturbances also included immature object manipulation; and cognitive, speech, and perceptual difficulties. The frustrating nature of these difficulties to the drug-addicted mother and other family members may also place the infant at high risk for child abuse (Bauman et al, 1986).
Bauman and Levine (1986) found that children of methadone-maintained mothers had a higher incidence of adverse behavior such as yelling, whining, teasing, and physical abuse of other children as compared with children of non-addicted mothers, which they postulate may contribute to impairment. The same study found that both the mothers and the children had lower intelligence quotient scores when compared to children and their non-addicted mothers; and that children of addicted mothers had a lower ability to learn and to adapt to new situations. However, they found no significant differences in the gross motor skills of these two populations of children.
Mayes, Granger, et. al. (1992), warn about the potential dangers of arriving at premature conclusions about the severity and universality of cocaine effects, which they caution "are in themselves potentially harmful to children."
<#FROWN:H11\>This is unfortunate, given that such expenditures often have very high rates of return. For instance, the expected return to efficient nonwage O&M in the irrigation sector in Indonesia in the mid-1980s is estimated at 117 percent in Java and 90 percent off Java. A Bank report found that in the transport sector, specific road improvements have an estimated return of 13 rupiahs for each rupiah spent. These high economic returns often justify a higher priority for expansion of maintenance expenditures than for outlays for new construction in a number of countries. Unfortunately, increases in nonwage O&M do not yield the political dividends that new and visible capital investments do. Nor do declines in their allocations have the same political costs as a retrenchment in civil service employment, erosion of real salaries, or elimination of subsidies. This expenditure category has thus been cut along with capital investment, but unlike capital investments, its starting point was unsatisfactorily low to begin with (Heller 1977 and 1982).
While countries exhibit pervasive difficulties in this area, there are a few instances of progress. In Ghana, spending on nonwage goods and services more than tripled in real terms from 1984 to 1989. Much of this increase has focused on health, education, and agriculture, with allocations guided by newly established government norms. The Bank actively facilitated this process, through advice, technical assistance, and associated conditionality in adjustment loans. In several cases - Bangladesh, Indonesia, and Papua New Guinea, for example - the Bank has encouraged the adoption of nonwage O&M strategies for such sectors as roads, education, health, and agriculture. In Indonesia, road maintenance was a problem for several years, but nonwage O&M spending has recently been increased to more adequate levels.
Most cases are less positive. In a set of country briefs on adjustment lending countries in Sub-Saharan Africa, Bank staff cited inadequate nonwage O&M as a key problem in the allocation of public expenditures in seventeen of nineteen countries. Several countries (Benin, Togo) had falling levels and shares of nonwage O&M (SPA Working Group 1991). Some countries have experienced a collapse of effective service delivery - schools without teaching materials, health clinics without drugs and supplies, and rehabilitated roads once again becoming impassable because of the absence of subsequent maintenance. Inadequate nonwage O&M expenditure has also brought about an alarming deterioration of infrastructure assets, imposing high economic costs for road transport. Country reports are replete with evidence on declining allocations for nonwage O&M, the worsening wage-nonwage balance, and the undesirable implications for the efficiency of government infrastructure and services (box 3.4).
The Bank's attention to nonwage O&M issues in adjustment lending is relatively recent. Conditions on nonwage O&M feature in only 8 percent of adjustment loans during 1979-85, increasing to 14 percent in 1986-88 and then leaping to about one-third in 1989-90. Greater emphasis has been placed on the adequacy on nonwage O&M allocations in key sectors. Examples include allocating sufficient funds for routine road maintenance for 1989-91 in Chad (Transport Sector Loan 1989); making adequate nonwage O&M budget allocations for irrigation, transport, and power in Nepal (1989); and increasing allocations on nonwage expenditures for road maintenance, agriculture, education, and health in Cameroon (1989-92). But even more emphasis needs to be placed on the adequacy of nonwage O&M for critical economic and social sector programs. Conditionality can constitute a good mechanism for bridging the deviation between economic benefits and political indifference in this area.
Subsidies and other current tansfers. Subsidies and other current transfers include all unrequited, nonrepayable government payments for current purposes. For fifteen intensive adjustment lending countries (data were incomplete for Bolivia), average spending under this category fell from 6.4 percent of GDP in the first half of the 1980s to 5.7 percent in the second half. All countries in this group except Pakistan registered a decline. As a share of total expenditure net of interest payments, average expenditure on subsidies and other current transfers fell from 31.9 percent in the first half of the adjustment decade to 28.8 percent in the second half. In four countries in the sample (Korea, Pakistan, Thailand, and Uruguay), the budgetary share increased in the second half of the 1980s.
Bank involvement has focused on subsidies for key commodities and on transfers to public enterprises. Many adjustment loans have included conditions to cut subsidies - almost half the loans during 1979-85 and only slightly less than that in recent years. Many conditions have focused on reducing or eliminating subsidies on agricultural commodities and inputs, principally fertilizers. Examples include eliminating subsidies for rice, wheat flour, and fertilizers in Sri Lanka (Economic Reconstruction Credit, 1990), reducing fertilizer subsidies by 15 percent in Ghana (SALII, 1989), and reducing the ratio of budgetary subsidies to GDP during 1990-91 in Mozambique (Economic Recovery Program, 1989). Further work in this area needs to distinguish between types of subsidies (generalized or targeted, production or consumption) and alternative reforms supported by the Bank (such as elimination or better targeting). For instance, in Venezuela's SAL and Jamaica's Social Sector Development Project, sharp reductions in general subsidies in the context of the adjustment program were accompanied by targeted interventions to protect the poor.
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Changes in the functional composition of spending
Expenditure shifts, in tandem with cuts, are critical for improving economic performance and the quality of life. For instance, rechanneling resources from nonproductive uses to social sectors can enhance human capital for sustainable and equitable growth and shield the poor during fiscal adjustment. For twenty-four developing countries, Hicks (1991) analyzed expenditure reductions during 1970-84 and concluded that governments facing tough expenditure choices preserve present welfare and security interests at the expense of longer-term capital investment and thus long-term economic growth. Hicks found that during this period social sectors and defense were relatively protected (elasticities of these expenditures relative to total expenditure were less than one), while economic infrastructure spending bore a larger burden of the fiscal adjustments. The evidence for social and economic infrastructure during adjustment is broadly consistent with these findings (table 3.3). In addition, government expenditure on industry and mining fell during adjustment in intensive adjustment lending countries, suggesting a desirable reduction of the role of the state in areas where the private sector has a comparative advantage.
Economic infrastructure spending. Both intensive adjustment lending and non-adjustment lending countries cut the share in GDP of expenditure on transport and communication (a proxy for economic infrastructure spending) during the 1980s. A comparison of pre- and postadjustment trends in each country shows that economic infrastructure spending declined in eleven intensive adjustment lending countries and increased in four. On average, spending declined by 25 percentage points during the postadjustment period. There is also evidence that in both the intensive adjustment lending and the non-adjustment lending groups, the budgetary share fell. The intensive adjustment lending countries, however, cut spending less, on average, than the non-adjustment lending countries.
Although economic infrastructure expenditures in general have a high proportion of capital expenditures, the fall in economic infrastructure spending also reflects the decline in the materials, supplies, and maintenance part of the nonwage O&M budget. This decline has led to a deterioration of economic infrastructure in many countries, most notably roads (see section on nonwage operations and maintenance above).
Social sector spending. Some critics of Bank- and Fund-supported adjustment programs, including UNICEF, argue that these programs have imposed fiscal austerity that has compressed government spending on social services, particularly health and education (Cornia, Jolly, and Stewart 1987). A breakdown of government spending by function does not support this hypothesis (table 3.3). There is no perceptible change in the ratio of central government expenditure on education and health to GDP in both intensive adjustment lending and non-adjustment lending countries from the first half of the 1980s to the second half. But there is evidence that the share of health and education in total public expenditures increased slightly. The share of these expenditures in government expenditure net of interest payments for the 16 intensive adjustment lending countries increased marginally - from 23.5 percent in the first half of the 1980s to 25.1 percent in the second half. During the same period, the non-adjustment lending countries increased the share of health and education in total expenditures net of interest from 20.4 to 22.8 percent. Social expenditures include more than health and education, but we focus on these two categories because they are the most commonly important.
Real per capita social spending also indicates the social impact of adjustment lending. This measure gives an indication of the real level of social services that countries provide. Real social sector spending per capita on education and health by central governments increased in the late 1980s in over 60 percent of intensive adjustment lending countries but in only 42 percent of non-adjustment lending countries. Among the low-income intensive adjustment lending countries in the sample, real per capita spending on education and health increased in Ghana, Kenya, and Pakistan and declined in Bolivia and Malawi in the postadjustment period. Moreover, the average increase in intensive adjustment lending countries was greater than that in non-adjustment lending countries in the sample (table 3.4).
Interpretation of the aggregate evidence requires caution, however. The indicators of social spending presented in tables 3.3 and 3.4 do not support the hypothesis that government expenditures in health and education subsectors declined under Bank-supported adjustment programs. Beyond this, any meaningful assertion about the social cost of adjustment or the effect of stabilization programs on the poor requires a more detailed examination of primary-level expenditures and efficiency (better delivery, targeting, and cost recovery) in the social sectors. Expenditures on primary and secondary education and on preventive health usually have high returns and are central to increasing the productivity and welfare of the poor. The problem is that cross-country data on social sector expenditures generally are not sufficiently disaggregated to address these questions.
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An examination of individual country experiences suggests that even though social sector expenditures may have been protected, complacency is unwarranted. A few countries (for example, Chile, Ghana, and Indonesia) have increased the relative share of aggregate social sector expenditures as well as expenditures on basic social services. In Ghana, the share of aggregate social sector expenditures as well as that of primary education increased - as a percentage of GDP and of total expenditures - in real terms during the adjustment. A range of social indicators improved during the adjustment period. In Indonesia, when expenditures were being reduced between 1982 and 1987, expenditure shares of poverty-related sectors - social sectors, agriculture, and transfers to local governments for basic social services - were increasing and large-scale capital investments in industry and mining were deferred. In Chile, while the real level and shares of education and health expenditures dropped, the private sector expanded its role at the tertiary level. In addition, there were increased allocations for primary education and improved targeting in primary health care and nutrition programs, which permitted continued progress in social indicators. Chile was thus able to protect targeted and poverty-oriented expenditures despite fiscal austerity.
In some intensive adjustment lending countries, however, there have been cutbacks in the levels and shares of social sector expenditures during periods of austerity. Even when total social expenditures have been protected, important intrasectoral imbalances remained or got worse. Resources were concentrated at tertiary levels, while allocations for basic social services declined, despite poor social indicators. There were shortages of critical complementary inputs, such as basic drugs, textbooks, and supplies, while overstaffing continued (for instance, the experience of Brazil - box 3.5). Similar problems can be seen in many other intensive adjustment lending countries (box 3.6).
On balance, restructuring social expenditures in favor of primary education and health services and safety nets offers substantial scope both for mitigating the costs of adjustment for the poor and for improving their human capital and earning potential in the long run. But such restructuring usually requires sustained political will to reduce the allocation of social expenditures for such items as universities and city hospitals that benefit principally better-off segments of society.
The role of the Bank's adjustment lending in restructuring public expenditures to enhance efficiency and reduce poverty has been limited, but it has received more attention in recent years in the context of a renewed emphasis on poverty alleviation.
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(3) National Defense Authorization Act for Fiscal Years 1992 and 1993
Partial text of Public Law 102-190 [H.R. 2100], 105 Stat. 1290, approved December 5, 1991
AN ACT To authorize appropriations for fiscal years 1992 and 1993 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe personnel strengths for such fiscal years for the Armed Forces, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the 'National Defense Authorization Act for Fiscal Years 1992 and 1993'.
TITLE X - GENERAL PROVISIONS
PART G - MISCELLANEOUS MATTERS
SEC. 1095. IRAQ AND THE REQUIREMENTS OF SECURITY COUNCIL RESOLUTION 687.
(a) FINDING. - The Congress finds that the Government of Iraq continues to violate United Nations Security Council Resolution 687, which required Iraq to submit within 15 days of its adoption on April 3, 1991, a declaration of the locations, amounts, and types of all weapons of mass destruction and to "unconditionally accept the destruction, removal or rendering harmless" of chemical weapons, biological weapons, and missiles with a range greater than 150 kilometers and the removal of nuclear weapons-usable material.
(b) SENSE OF CONGRESS. - It is the sense of the Congress that -
(1) Iraq's noncompliance with United Nations Security Council Resolution 687 constitutes a continuing threat to the peace, security, and stability of the Persian Gulf region;
(2) the President should consult closely with the partners of the United States in the Desert Storm coalition and with the members of the United Nations Security Council in order to present a united front of opposition to Iraq's continuing noncompliance with Security Council Resolution 687; and
(3) the Congress supports the use of all necessary means to achieve the goals of Security Council Resolution 687 as being consistent with the Authorization for Use of Military Force Against Iraq Resolution (Public Law 102-1).
RESOLUTION 688
(a) FINDING. - The Congress finds that the Government of Iraq, through its ongoing suppression of the political opposition, including Kurds and Shias, continues to violate the Universal Declaration of Human Rights and United Nations Security Council Resolution 688 which demanded that Iraq "ensure that the human and political rights of all Iraqi citizens are respected".
(b) SENSE OF CONGRESS. - It is the sense of the Congress that -
(1) Iraq's noncompliance with United Nations Security Council Resolution 688 constitutes a continuing threat to the peace, security, and stability of the Persian Gulf region;
(2) the President should consult closely with the partners of the United States in the Desert Storm coalition and with the members of the United Nations Security Council in order to present a united front of opposition to Iraq's continuing non-compliance with Security Council Resolution 688; and
(3) the Congress supports the use of all necessary means to achieve the goals of United Nations Security Council Resolution 688 consistent with all relevant United Nations Security Council Resolutions and the Authorization for Use of Military Force Against Iraq Resolution (Public Law 102-1).
(4) Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991
Partial text of Public Law 102-25 [S. 725], 105 Stat. 75, approved April 6, 1991; as amended by Public Law 102-190 [National Defense Authorization Act for Fiscal Years 1992 and 1993; 105 Stat. 1508], 105 Stat. 1290, approved December 5, 1991; and Public Law 102-484 [National Defense Authorization Act for Fiscal Year 1993; H.R. 5006], 106 Stat. 2315, approved October 23, 1992
AN ACT Entitled the 'Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991'.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE
This Act may be cited as the 'Persian Gulf Conflict Supplemental Authorization and Personnel Benefits Act of 1991'.
SEC. 2. TABLE OF CONTENTS<*_>three-stars<*/>

SEC. 3. DEFINITIONS
For the purposes of this Act:
(1) The term 'Operation Desert Storm' means operations of United States Armed Forces conducted as a consequence of the invasion of Kuwait by Iraq (including operations known as Operation Desert Shield, Operation Desert Storm, and Operation Provide Comfort).
(2) The term 'incremental costs associated with Operation Desert Storm' means costs referred to in section 251(b)(2)(D)(ii) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(b)(2)(D)(ii)).
(3) The term 'Persian Gulf conflict' means the period beginning on August 2, 1990, and ending thereafter on the date prescribed by Presidential proclamation or by law.
(4) The term 'congressional defense committees' has the meaning given that term in section 3 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510; 104 Stat. 1498).
SEC. 4. CONSTRUCTION WITH PUBLIC LAW 101-510.
Any authorization of appropriations, or authorization of the transfer of authorizations of appropriations, made by this Act is in addition to the authorization of appropriations, or the authority to make transfers, provided in the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510).
TITLE I - AUTHORIZATION OF FISCAL YEAR 1991 SUPPLEMENTAL APPROPRIATIONS FOR OPERATION DESERT STORM
SEC. 101. FUNDS IN THE DEFENSE COOPERATION ACCOUNT
(a) AUTHORIZATION OF APPROPRIATION. - During fiscal years 1991, 1992, and 1993, there is authorized to be appropriated to the Department of Defense current and future balances in the Defense Cooperation Account established under section 2608 of title 10, United States Code.
(b) USE OF FUNDS. - Amounts appropriated pursuant to subsection (a) shall be available only for -
(1) transfer by the Secretary of Defense to fiscal years 1991, 1992, and 1993 appropriation accounts of the Department of Defense or Coast Guard for incremental costs associated with Operation Desert Storm; and
(2) replenishment of the Persian Gulf Regional Defense Fund created under section 102.
SEC. 102. PERSIAN GULF REGIONAL DEFENSE FUND
(a) ESTABLISHMENT OF ACCOUNT. - There is established in the Treasury of the United States a working capital account for the Department of Defense to be known as the 'Persian Gulf Regional Defense Fund'.
(b) AUTHORIZATION OF APPROPRIATIONS. - During fiscal years 1991 and 1992, there is authorized to be appropriated to the Persian Gulf Regional Defense Fund the sum of $15,000,000,000.
(c) USE OF FUNDS. - Funds appropriated pursuant to subsection (b) shall be available only for transfer by the Secretary of Defense to fiscal years 1991, 1992, and 1993 appropriation accounts of the Department of Defense or Coast Guard for the incremental costs associated with Operation Desert Storm. Such funds may be used for that purpose only to the extent that funds are not available in the Defense Cooperation Account for transfer for such incremental costs.
(d) REPLENISHMENT OF ACCOUNT. - Amounts transferred from the Persian Gulf Regional Defense Fund shall be replenished from funds available in the Defense Cooperation Account to the extent that funds are available in the Defense Cooperation Account. Whenever the balance in the Persian Gulf Regional Defense Fund is less than the amount appropriated to that account pursuant to this section, the Secretary shall transfer from the Defense Cooperation Account such funds as become available to the account to replenish the Persian Gulf Regional Defense Fund before making any transfer of such funds under sections 101 and 102.
(e) REVERSION OF BALANCE UPON TERMINATION OF ACCOUNT. - Any balance in the Persian Gulf Regional Defense Fund at the time of the termination of the account shall revert to the general fund of the Treasury.
SEC. 103. ADDITIONAL TRANSFER AUTHORITY
The amount of the transfer authority provided in section 1401 of Public Law 101-510 is hereby increased by the amount of such transfers as the Secretary of Defense makes pursuant to law (other than Public Law 101-511) to make adjustments among amounts provided in titles I and II of Public Law 101-511 due to incremental costs associated with Operation Desert Storm.
SEC. 104. ADMINISTRATION OF TRANSFERS
A transfer made under the authority of section 101 or 102 increases by the amount of the transfer the amount authorized for the account to which the transfer is made.
SEC. 105. NOTICE TO CONGRESS OF TRANSFERS
(a) NOTICE-AND-WAIT. - A transfer may not be made under section 101 or 102 until the seventh day after the congressional defense committees receive a report with respect to that transfer under subsection (b).
(b) CONTENT OF REPORT. - A report under subsection (a) shall include the following:
(1) A certification by the Secretary of Defense that the amount or amounts proposed to be transferred will be used only for incremental costs associated with Operation Desert Storm.
(2) A statement of each account to which the transfer is proposed to be made and the amount proposed to be transferred to such account.
(3) A description of the programs, projects, and activities for which funds proposed to be transferred are proposed to be used.
(4) In the case of a transfer from the Persian Gulf Regional Defense Fund established under section 102, an explanation of the reasons why funds are not available in the Defense Cooperation Account for such transfer.
SEC. 106. MONTHLY REPORTS ON TRANSFERS
Not later than seven days after the end of each month in fiscal years 1991, 1992, and 1993, the Secretary of Defense shall submit to the congressional defense committees and the Comptroller General of the United States a detailed report on the cumulative total amount of the transfers made under the authority of this title through the end of that month.
TITLE II - WAIVER OF PERSONNEL CEILINGS AFFECTED BY OPERATION DESERT STORM
SEC. 203. AUTHORIZATION FROM DEFENSE COOPERATION ACCOUNT
(a) AUTHORIZATION. - In addition to authorizations under section 101, there is hereby authorized to be appropriated from the Defense Cooperation Account such sums as may be necessary for increases in military personnel costs for fiscal years 1991 through 1995 resulting from the exercise of the authorities provided in section 201. Such increases in costs are incremental costs associated with Operation Desert Storm.
(b) USE OF FUNDS. - Funds appropriated to the Persian Gulf Regional Defense Fund pursuant to section 102(b) may be used for the purposes described in subsection (a) to the extent provided in section 102(c).
(c) REPORTING. - Funds obligated for the purposes described in subsection (a) shall be included in the reports required by section 106.
SEC. 204. CONFORMING REPEAL
Section 1117 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510; 104 Stat. 1637) is repealed.
TITLE IV - REPORTS ON FOREIGN CONTRIBUTIONS AND THE COSTS OF OPERATION DESERT STORM
SEC. 401. REPORTS ON UNITED STATES COSTS IN THE PERSIAN GULF CONFLICT AND FOREIGN CONTRIBUTIONS TO OFFSET SUCH COSTS
(a) REPORTS REQUIRED. - The Director of the Office of Management and Budget shall prepare, in accordance with this section, periodic reports on the incremental costs associated with Operation Desert Storm and on the amounts of contributions made to the United States by foreign countries to offset those costs. The Director shall prepare the reports in consultation with the Secretary of Defense, the Secretary of State, the Secretary of the Treasury, and other appropriate Government officials.
(b) COSTS OF OPERATION DESERT STORM. -
(1) PERIOD COSTS AND CUMULATIVE COSTS. - Each report prepared under subsection (a) shall specify -
(A) the incremental costs associated with Operation Desert Storm that were incurred during the period covered by the report; and
(B) the cumulative total of such costs, by fiscal year, from August 1, 1990, to the end of the period covered by the report.
(2) NONRECURRING COSTS AND COSTS OFFSET. - In specifying the incremental costs associated with Operation Desert Storm that were incurred during the period covered by a report and the total of such costs, the Director shall separately identify those costs that -
(A) are nonrecurring costs;
(B) are offset by in-kind contributions; or
(C) are offset (or proposed to be offset) by the realignment, reprogramming, or transfer of funds appropriated for activities unrelated to the Persian Gulf conflict.
(c) SPECIFIC COST AREAS. - Each report prepared under subsection (a) on the incremental costs associated with Operation Desert Storm shall specify an allocation of the total amount of such costs among the military departments, the Defense Agencies of the Department of Defense, and the Office of the Secretary of Defense, by category, including the following categories:
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"(1) IN GENERAL. - If the taxpayer's principal residence or any of its contents is compulsorily or involuntarily converted as a result of a Presidentially declared disaster -
"(A) TREATMENT OF INSURANCE PROCEEDS. -
"(i) EXCLUSION FOR UNSCHEDULED PERSONAL PROPERTY. - No gain shall be recognized by reason of the receipt of any insurance proceeds for personal property which was part of such contents and which was not scheduled property for purposes of such insurance.
"(ii) OTHER PROCEEDS TREATED AS COMMON FUND. - In the case of any insurance proceeds (not described in clause (1)) for such residence or contents -
"(I) such proceeds shall be treated as received for the conversion of a single item of property, and
"(II) any property which is similar or related in service or use to the residence so converted (or contents thereof) shall be treated for purposes of subsection (a)(2) as property similar or related in service or use to such single item of property.
"(B) EXTENSION OF REPLACEMENT PERIOD. - Subsection (a)(2)(B) shall be applied with respect to any property so converted by substituting "4 years" for "2 years".
"(2) PRESIDENTIALLY DECLARED DISASTER. - For purposes of this subsection, the term 'Presidentially declared disaster' means any disaster which, with respect to the area in which the residence is located, resulted in a subsequent determination by the President that such area warrants assistance by the Federal Government under the Disaster Relief and Emergency Assistance Act.
"(3) PRINCIPAL RESIDENCE. - For purposes of this subsection, the term 'principal residence' has the same meaning as when used in section 1034, except that no ownership requirement shall be imposed."
(b) EFFECTIVE DATE. - The amendment made by subsection (a) shall apply to property compulsorily or involuntarily converted as a result of disasters for which the determination referred to in section 1033(h)(2) of the Internal Revenue Code of 1986 (as added by this section) is made on or after September 1, 1991, and to taxable years ending on or after such date.
By Mr. AKAKA:
S.3124. A bill to amend the Consolidated Farm and Rural Development Act and the Farm Credit Act of 1971 to establish a program to aid beginning farmers and ranchers, to improve the operation of the Farmers Home Administration, and for other purposes; to the Committee on Agriculture, Nutrition, and Forestry.
FARMING OPPORTUNITY ACT
Mr. AKAKA. Mr. President, today I am introducing the Farming Opportunity Act, a bill to target credit assistance to those who need it most - beginning farmers.
Anyone familiar with farming should be alarmed by the dramatic decline in the number of farmers and the advancing age of our farm population. Last month the Census Bureau announced that the average age of our farmers continues to grow older and that farm population has once again declined.
The average farmer is 52 years of age, compared to an average of 33 years for nonfarmers. Today, there are twice as many farmers over the age of 60 as there are below the age of 35. As our aging farm population retires, we must ask ourselves: Where will the next generation of farmers come from?
Clearly we are not doing enough to attract rural youth to farming. All too often, young people with farm backgrounds don't follow in their parents' footsteps. Often this occurs at their parents' urging. Farming simply has too many barriers to remain attractive to young people.
Gone are the days when, if you had land, labor, and a little cash, you could make a go at farming. Modern farms are capital intensive businesses. Ask struggling young farmers about the greatest challenge they face, and the near-universal response you will hear is "access to credit."
The Federal Government simply has not done enough to help beginning farmers establish themselves or remain in business. In part, this is because the Farmers Home Administration has forsaken its central mission of extending credit to beginning farmers until their operations can become viable. The legislation I introduce today is a companion measure to H.R. 2401, introduced by Representative PENNY, and is designed to redirect the lending priorities of the Farmers Home Administration.
Under this bill, a new FmHA loan program would be established to assist persons interested in pursuing farming, ranching and aquaculture as their primary occupation. It specifically targets the beginning farmer - individuals who have not previously operated a farm or have operated farms for less thenthan 5 years.
To relieve assistance under the Farming Opportunity Act, an applicant must agree to participate in loan assessment, borrower training and financial management programs under the Department of Agriculture. An applicant must be able to demonstrate that after 10 years the farming operation will be viable without further FmHA loans. Finally, the measure creates a special downpayment loan program so that these farmers can achieve the dream of owning their own farm.
Nowhere would such a program have greater benefit thatthan in Hawaii. Due to a number of recent developments, we have an abundance of idle farmland and a growing rural labor pool.
Last Friday, the big island's second largest sugar plantation, Mauna Kea Agribusiness, announced that it would cease farming sugarcane. Beginning in November, nearly 9,000 acres of caneland will be converted to other agricultural uses.
One-third of the land producing sugarcane 20 years ago is no longer being cultivated today. By the time that Mauna Kea's sugar operations have come to an end, Hawaii's cane acreage will have declined by 85,000 acres. If past experience is a guide, only 12 percent will be planted in other crops.
There is an ample supply of good farmland in Hawaii. In addition to the changes planned by Mauna Kea Sugar, there is evidence that additional farm acreage may be available soon. As a means of raising capital in order to reduce its debt, the big island's Hamakua Sugar Co. has announced plans to sell nearly 2,000 acres at Laupahoehoe. The land will be subdivided into small agricultural lots and offered for sale to current and former Hamakua employees, and to nearby residents.
In another development, the 9,600-acre Mauna Kea Ranch was recently subjected to a foreclosure sale. While the new landowner has not announced its intentions about the use of this property, ranching or agriculture appears to be the only conceivable land use. Further reductions in Hawaii's sugar acreage remain a possibility, as the Hawaiian sugar industry gets caught in a squeeze between static or declining sugar prices and higher production costs.
Rising unemployment, especially on the neighbor islands, means that there is a labor pool capable of becoming the next generation of Hawaii's farmers. On the big island, unemployment is 3.1 percent above the statewide average. Molokai is 4.3 percent above the State average, while Maui's unemployment is 1.3 percent above the State as a whole.
The neighbor island economy has been hard hit by a downturn isin sugar and tourism. The Farming Opportunity Act can offer a shot in the arm for our lagging economy. Many sugar workers have spent their lives in agriculture, and I want to ensure that they can continue to find employment in farming.
Agriculture has always been the economic backbone of rural Hawaii. The decline of sugar means that we must turn to other crops if we are to preserve the economic health of the neighbor islands. The best way to achieve this transition is to promote new ventures in diversified agriculture by targeting credit assistance to beginning farmers.
There is no magic answer to the problems that precipitated Mauna Kea's decline. But I am committed to finding solutions that will maintain a strong and healthy economy in rural Hawaii.
Fortunately, Hawaii has an abundance of good agricultural land as well as ambitious young people capable of farming successfully. What is lacking is a credit program specifically designed for the needs of beginning farmers. Through the Farming Opportunity Act, we can establish a new generation of farmers who will produce diversified crops that are in demand in mainland and overseas markets.
Mr President, I ask unanimous consent that a copy of the bill be printed in the RECORD at the conclusion of my statement.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
S. 3124
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION. 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE. - This Act may be cited as the 'Farming Opportunity Act of 1992'.
(b) TABLE OF CONTENTS. - The table of contents of this Act is as follows.
Sec. 1. Short title; short title.
Sec. 2. Limitation on aggregate indebtedness.
Sec. 3. Federal-State beginning farmer partnership.
Sec. 4. Beginning farmer and rancher program.
Sec. 5. Graduation of borrowers with operating loans or guarantees to private commercial credit.
Sec. 6. Time period within which county committees are required to meet to consider applications for farm ownership and operating loans and guarantees and beginning farmer plans.
Sec. 7. Period for certification of eligibility for loans.
Sec. 8. Processing of applications for farm operating loans.
Sec. 9. Simplified application for guaranteed loans of $50,000 or less.
Sec. 10. Graduation of seasoned direct loan borrowers to the loan guarantee program.
Sec. 11. Debt service margin requirements.
Sec. 12. Targeting of loans to members of groups whose members have been subjected to gender prejudice.
Sec. 13. Recordkeeping of loan success rates by gender.
Sec. 14. Effective date.
SEC. 2. LIMITATION ON AGGREGATE INDEBTEDNESS.
The first sentence of section 305 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1925) is amended by striking "and 310D" and inserting "310D, and 310E".
SEC. 3. FEDERAL-STATE BEGINNING FARMER PARTNERSHIP.
(a)
COORDINATION OF ASSISTANCE FOR ELIGIBLE BEGINNING FARMERS AND RANCHERS. - Section 309 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929) is amended by adding at the end the following new subsection:
"(i)(1) Within 60 days after any State expresses to the Secretary, in writing, a desire to coordinate the provision of financial assistance to eligible beginning farmers and ranchers in the state, the Secretary and the State shall conclude a joint memorandum of understanding that shall govern how the Secretary and the State are to coordinate the assistance.
"(2) The memorandum of understanding shall provide that if a State beginning farmer program makes a commitment to provide an eligible beginning farmer or rancher (as defined in section 310E(e)) with financing to establish or maintain a viable farming or ranching operation, the Secretary shall, subject to applicable law, normal loan approval criteria, and the availability of funds, provide that farmer or rancher with -
"(A) a downpayment loan under section 310(E);
"(B) a guarantee of the financing provided by the State program; or
"(C) such a loan and such a guarantee.
"(3) The Secretary may not charge any person any fee with respect to the provision of any guarantee under this subsection.
"(4) As used in paragraph (1), the term 'State beginning farmer program' means any program that is -
"(A) carried out by, or under contract with, a State; and
"(B) designed to assist persons in obtaining the financial assistance necessary to enter agriculture and establish viable farming or ranching operations.".
(b) ADVISORY COMMITTEE. -
(1) ESTABLISHMENT; PURPOSE. - Within 18 months after the date of the enactment of this Act, the Secretary of Agriculture shall establish an advisory committee, to be known as the 'Advisory Committee on Beginning Farmers and Ranchers', which shall provide advice to the Secretary on -
(A) the development of the program of coordinated assistance to eligible beginning farmers and ranchers under section 300(1) of the Consolidated Farm and Rural Development Act (as added by subsection (a) of this section);
(B) ways to maximize the number of new farming and ranching opportunities created through the program;
(C) ways to encourage States to participate in the program,
(D) the administration of the program; and
(E) other methods of creating new farming or ranching opportunities.
(2) MEMBERSHIP. - The Secretary shall appoint the members of the Advisory Committee which shall include representatives from the following:
(A) The Farmers Home Administration.
<#FROWN:H14\>
2. CHARACTERISTICS OF POVERTY IN AFRICA
2.1. Definition and Causes of African Poverty
2.1.1. What Is Poverty?
Poverty is the state of deprivation of fundamental human needs and expectations. Among these are the desire for sufficient food and water, adequate shelter, good health, long life, knowledge, and the capacity to provide materially for oneself and one's family through productive endeavor. Poverty is, thus, far more than lack of income, although that is how it is typically measured. It is rather the absence of basic human progress, without which the concept of social and economic development becomes a mockery.
Poverty may be defined relatively and absolutely. Relative poverty refers to comparative measures of deprivation between groups within one country or cross-nationally. Absolute poverty attempts to define a minimum standard of material acquisition below which one is poor anywhere in the world. The absolute poverty line is normally that income required to secure a basic nutritional intake (2,250 calories per day) and other necessities (Lipton, 1988). The World Bank has estimated this consumption-based poverty line to lie between $275 and $370 per person per year, according to country context (World Bank, 1990a).
The absolute poverty line in each country should be estimated by calculating the cost of a basket of essential goods and adjusting it to reflect real purchasing power with respect to other countries. The number of poor households in a country can then be expressed as a proportion of total population. This headcount index, however, fails to indicate the degree to which the poor fall below the poverty line. The poverty gap measures the income necessary to bring the poor up to the poverty line. Nevertheless, both the headcount and the poverty gap calculation fail to indicate the distribution of inequality among the poor.
Poverty lines adjusted for purchasing power are thus gross measures of the number of poor in a country. Country-specific poverty lines can only be a start in understanding the characteristics and composition of poverty, with more detailed analysis necessary for targeting programmes of poverty reduction.
2.1.2. The Nature of African Poverty
Africa is among the poorest regions of the world, and the number of poor is increasing rapidly. The number of persons with less than $370 income per year increased by about two-thirds between 1970 and 1985 and is expected to increase from 180 million in 1985 (47 percent of the population) to 265 million by the year 2000.
If current trends continue, the African poor, constituting 16 percent of the world's destitute in 1985, will comprise 30 percent of the total by the year 2000 (Lele and Adu-Nyako, 1991). Other estimates of African poverty are worse and probably reflect an unrealistically high absolute poverty level. The ILO, for example, estimates that the number of absolute poor in Africa had already reached 270 million by 1985, about half the total population; by 1995 this number is expected to reach nearly 400 million (UNDP, 1990).
Poverty in Africa is still primarily a rural phenomenon, despite the increasing presence of slums around rapidly growing cities. Reflecting the generally dismal conditions of rural life, urbanization has been rapidly increasing throughout Africa and has been growing faster than in other regions of the world. From an urban population of 14 percent in 1965, the towns and cities of Africa expanded to 28 percent of the total population in 1985 and continued to grow at over 6 percent per year throughout the 1980s. Migration to cities has tended to be primarily a male phenomenon, leading to heightened impoverishment of rural areas and rapidly growing number of female-headed rural families, especially in Southern and Eastern Africa.
Although varying from country to country, the overall population growth rate for Africa is about 3.1 percent a year, while per capita agricultural production has declined for more than a decade. In some countries, population doubled between 1965 and 1987. During the same period real GNP per capita declined from $400 to 330 (excluding Nigeria).
From 1970 to 1985, agricultural production rose on average only 1.4 percent per year, half the population growth rate. In spite of rising food imports, malnutrition has become endemic in many countries.
Malnutrition and low income contribute strongly to the short life expectancy of Africans, currently about 54 years compared to 62 for all developing countries. The child mortality rate of 196 per 1,000 is second only to India (200) among the regions of the world. Primary school enrollments are the lowest in the world, averaging 56 percent, and are strongly linked to high infant and child mortality and morbidity rates.
The lack of reliable data makes detailed accounting of the poor impossible at present. Few countries can do more than estimate the number of absolute poor and their location. However, for countries with good data, the pattern of severely worsening poverty in Africa holds across the continent (World Bank, 1990a). In Tanzania, real rural living standards fell at an average annual rate of 2.5 percent between 1969 and 1983. Real urban wages declined by 65 percent during the same period, and real private consumption per person has dropped 43 percent since 1973. In Nigeria, consumption fell by 7 percent a year during the early 1980s and living standards were lower in the mid-1980s than in the 1950s. In Ghana, nearly 60 percent of the population in 1985 lived on less than $370 per year, while in Botswana this figure was almost 50 percent, in spite of a near 9 percent a year economic growth rate since 1965. In contrast, Morocco counted only 34 percent of its population below the poverty line in 1984, down from 43 percent in 1970 (World Bank, 1990a).
2.1.3. Causes of African Poverty
The origins of widespread poverty in Africa are rooted in the economic dislocation and political balkanization brought on by European colonialism. Since the end of colonialism, the following factors have limited African progress in achieving broad-based economic development, and have resulted in stagnant growth and declining per capita incomes (Dumont and Mottin, 1980):
Persistence in following inappropriate development models based on an emphasis on capital-intensive, industrial sector investment at the expense of labor-intensive agricultural-led growth. This has resulted in neglect of rural areas in favor of urban zones, and a massive rural-to-urban exodus;
Overemphasis on public sector interventions in economic activities more efficiently performed by the private sector. Not only has this hindered private sector development, but it has also retarded development of public capacity to work effectively in areas that are appropriate for government intervention (such as the legal system, education, health, and agricultural research);
Failure to recognize the informal sector as a legitimate engine of economic growth. Although several governments have become more enlightened in recent years, many are still more concerned with policing informal sector participants than in seeking strategies for assisting them to improve the performance of their enterprises;
Over-reliance on projects, donors, and foreign assistance that has resulted in too many poorly conceived and supervised projects, bloated recurrent costs, and inconsistent development strategies as governments depend more on outsiders than their own citizens to make crucial public policy and investment decisions;
Neglect of subsistence food crops through lack of research and extension of appropriate production and processing technologies;
Unfavorable trends in the terms of trade as many African agricultural and mineral exports have declined in price at the same time that import costs have risen, most notably for oil; and
Insufficient concern with environmental degradation as population growth combined with expansion of areas cleared for agriculture and fuelwood gathering have imperiled sustainable development.
Historical poverty in Africa has been perpetuated in recent years by slow economic growth coupled with rapid population increases. African GDP growth slowed during the 1980s to 0.3 percent during the period 1980-1986 and even declined by 1.1 percent in 1987. Since 1988 growth rates have turned positive again but remain modest.
Much of the stagnation in economic growth revolved around the inability of agriculture to outperform population increase, itself primarily a reflection of low productivity and poor national policies. Exports, which could have spurred real growth, were hindered in most countries by overvalued exchange rates, lack of price incentives to producers, and export taxes. Poor governmental agriculture policies, in fact, seem to have been as important in promoting agricultural decline in Africa as the general reversal of commodity terms of trade during the 1970s and their stagnation in the 1980s. This trend has been compounded by competition from Asian and Latin American countries, whose share of agricultural exports has expanded rapidly in the last decade.
Slow growth of export-oriented agriculture has been accompanied by a similar stagnation of smallholder food crop production and productivity since the 1960s. This neglect of smallholder agricultural development has operated in favor of import-substituting industrialization. Although some countries were successful in promoting exports for national growth (for example, C<*_>o-circ<*/>te d'Ivoire, Cameroon, and Kenya), most were not. In general, exploitation of natural forest or mineral resources and capital-intensive, protected infant industries created pockets of prosperity, yet bypassed the bulk of the population.
In retrospect, it appears that African countries would have been far more successful at reducing poverty and stimulating economic growth had they focused on attaining an appropriate policy environment and stimulating investment in smallholder agriculture and health and education, while developing carefully their comparative advantage in higher-value export crops. A broad-based, small-farm approach could have stimulated family savings and on-farm investment leading to increased food crop productivity and diversification into specialized export crops. This could have produced in many countries an economic transformation to postsubsistence agriculture, while at the same time guaranteeing increased food self-reliance.
Social services and infrastructure investment spurred by the apparent commodity export boom of the early 1970s, was replaced by the mid-1980s by enormous debt service obligations and macroeconomic adjustment programmes. This debt burden has increased significantly since the mid-1970s; by 1987, debt outstanding was nearly $129 billion, up from only $20 billion in 1975. By 1986, debt service represented about 45 percent of African export earnings, effectively stifling much potential for renewed economic growth.
In many countries, salaries now constitute an unacceptably high share of government expenditures (70-85 percent), while essential investment has dwindled to less than replacement levels. Social indicators in many countries of Africa have stagnated or even declined (except for immunization rates in some countries) during the 1980s, and subsidized services remain untargeted on the poor and tend to be disproportionately captured by the wealthier classes. Primary education, sanitation and potable water services, and basic health care have not been provided by African governments at levels sufficient to match population growth, because of the crowding-out effect of salary expenditures for oversized parastatal and government bureaucracies, urban social services and infrastructure, and more recently debt service obligations.
2.2. Who Are the Poor?
Comparatively speaking, most African populations are poor by world standards. Moreover, the United Nations Development Programme (UNDP) distinguishes various categories of poor: the chronic poor at the margin of society, constantly suffering from deprivation; the borderline poor, who are occasionally poor during the year because of employment insecurity; and the newly poor, victims of budgetary austerity under structural adjustment (UNDP, 1990). These distinctions are important in the targeting of poverty reduction actions within the context of an overall poverty reduction strategy for the African Development Bank.
The concern here is to identify the absolute poor, that is that portion of the population in various countries with income per person too low to afford 2,250 calories per day or basic nutritional needs (Lipton, 1988). Although varying substantially from country to country, a generally accepted per capita income level for assuring nutritional adequacy is about $370 - adjusted for purchasing power parity. This line is, of course, arbitrary and represents a proxy indicator for serious material deprivation.
The identification of an even lower level of poverty based on an annual income of $275 per capita defines the extremely poor, or 'ultra-poor.' Both levels define poverty in absolute terms compared to relative income levels based on country income or consumption deciles or quintiles.
<#FROWN:H15\>
1. INTRODUCTION
The United States Department of Energy's (DOE) Office of Civilian Radioactive Waste Management (OCRWM) has prepared this draft Strategy for parties with an interest in spent nuclear fuel and high-level radioactive waste transportation activities. The purpose of the Strategy is to inform the public what steps DOE will take to ultimately develop an implementation plan to provide funding and technical assistance to States and Indian Tribes as required by Section 180(c) of the Nuclear Waste Policy Act, as amended (NWPA). A schedule of when the steps will take place is included.
1.1 Purpose
The NWPA directs DOE to dispose of the spent nuclear fuel generated by commercial nuclear power facilities and high-level radioactive waste from defense facilities. OCRWM was established to carry out this mission. OCRWM is developing a transportation system to support shipping of spent nuclear fuel to a Monitored Retrievable Storage (MRS) facility, and spent nuclear fuel and high-level radioactive waste to a final disposal repository.
A 1987 amendment to the NWPA added Section 180(c) which states that DOE:
...shall provide technical assistance and funds to States for training for public safety officials of appropriate units of local government and Indian Tribes through whose jurisdiction the Secretary [of Energy] plans to transport spent nuclear fuel or high-level radioactive waste .... Training shall cover procedures required for safe routine transportation of these materials, as well as procedures for dealing with emergency response situations.
Passage of Section 180(c) committed OCRWM to provide funding for training and technical assistance for public safety officials. OCRWM stated it will use a phased approach to deliver the assistance. In the 1991 Draft Mission Plan Amendment, OCRWM committed to define workable mechanisms for administering technical assistance. Assistance will initially be for shipments to an MRS, if an MRS site has been identified. OCRWM will begin providing training assistance between 1993 and 1995 to jurisdictions along the initial corridors from the utilities to an MRS; and make adjustments and support retraining as needed, after 1995.
This draft strategy represents a five-step process to meet the requirements of Section 180(c). The steps are: (1) continue current efforts with the interested groups to identify and discuss funding and technical assistance issues; (2) develop a Policy Options Paper to identify possible Section 180(c) implementation processes; (3) issue a policy statement identifying the option selected; (4) issue a plan detailing the implementation process; and (5) initiate funding for 'training assistance.' For brevity, the term 'training assistance' is used to mean 'technical assistance and funds to States for training for public safety officials of appropriate units of local government and Indian Tribes through whose jurisdiction the Secretary [of Energy] plans to transport spent nuclear fuel or high-level radioactive waste.'
A notice of the availability of this draft for review by Federal agencies, States, Indian Tribes, and interested parties will be published in the Federal Register. The comments received will be fully considered and will be reflected, where appropriate, in the final strategy. All comments will be catalogued and their disposition explained in writing.
1.2 Scope
This document presents the five-step process for OCRWM to develop an implementation plan to meet the requirements of Section 180(c). The introductory section includes information on the purpose of the Strategy; the legal requirements of the NWPA with respect to technical assistance and funding to train transportation corridor and host governments for safe routine transportation and emergency response, and the relevant sections of the Hazardous Materials Transportation Uniform Safety Act of 1990 (HMTUSA); planning principles that address or incorporate recommendations repeated most often by interested parties; and a proposed schedule.
The subsequent section, Issue Identification as an Interactive Process, describes the methods and means OCRWM has employed to ensure that all interested and potentially affected parties can have an appropriate predecisional role in the development of Section 180(c) policy. The three remaining sections delineate the steps to provide training assistance.
Accompanying the Strategy are lists of definitions and acronyms in common usage throughout the document, and general references.
1.3 Legal Requirements
The NWPA contains provisions regarding technical assistance and funding for training relating to transportation for both host and corridor jurisdictions. Assistance provisions mandated by Section 180(c) apply to corridor States and Indian Tribes through whose jurisdictions spent fuel and high-level waste are transported to an MRS or repository. For corridor Indian Tribes thoughthrough whose jurisdictions DOE will transport spent nuclear fuel and high-level waste, DOE will provide direct funding to Indian Tribes as sovereign Nations.
For a State or Indian Tribe that will host a repository, Section 116(c) provides for financial assistance to the State, and Section 118(b) insures financial assistance to an Indian Tribe, to participate in "activities required by Sections 116 and 117 or authorized by written agreement entered into pursuant to subsection 117(c)." Section 117(c) of the NWPA states that OCRWM will work with a State [or Indian Tribe] where a repository is being constructed and with "the units of general local government in the vicinity of the repository site, in resolving the offsite concerns ... arising from accidents, necessary road upgrading and access to the site, ongoing emergency preparedness and emergency response, monitoring of transportation of high-level radioactive waste and spent nuclear fuel..." under written agreement.
For a State or Indian Tribe who will host an MRS facility, Section 149 of the NWPA extends the same "provisions of Section 116(c) or 118(b) with respect to grants, technical assistance, and other financial assistance...to the state, to affected Indian Tribes and to affected units of local government...in the same manner as for a repository."
Section 403(d)(1) and (2) of the NWPA provides that training assistance for an MRS or repository host State or Indian Tribe would be through an agreement submitted by the Nuclear Waste Negotiator to Congress "...and shall contain such provisions as are necessary to preserve any right to participation or compensation of such State, unit of local government, or Indian Tribe under Sections 116(c), 117, and 118(b)."
If DOE is unable to reach any agreement with the repository or MRS host State or Indian Tribe under these sections, DOE shall develop a policy to provide training assistance for emergency response and safe routine transportation for a host State or Indian Tribe within the scope of Section 180(c) training assistance.
The recently passed HMTUSA amended the Hazardous Materials Transportation Act of 1974. HMTUSA has emergency response and Federal inspection provisions that have potential implications for the technical assistance and funding required by Section 180(c).
Section 17 of HMTUSA authorizes Federal funding for: 1) planning grants to States to develop emergency response plans; 2) training grants to States and Indian Tribes for training official personnel in hazardous materials emergency response; 3) curriculum development by a Federal committee to develop a list of courses, recommend courses of study and minimum hours of instruction, and develop appropriate emergency response training and planning for non-Federal Government and Tribal employees under other Federal grant programs; and 4) monitoring and technical assistance through the Federal Emergency Management Agency, in coordination with four other agencies including DOE, for non-Federal Government and Tribal emergency response training and planning. HMTUSA also requires that Federal departments, agencies, and instrumentalities coordinate to minimize duplication of effort and expense in all emergency response and preparedness training programs.
Section 16 of HMTUSA directs the Secretary of Transportation (DOT) to employ 30 additional hazardous materials inspectors, including 10 of whom are to focus on promoting safety in the transportation of radioactive materials.
In order to ensure cooperation between DOT and DOE in implementing both Section 180(c) and the relevant sections of HMTUSA, DOE is represented on the HMTUSA Interagency Coordination Group (ICG), and will coordinate with the ICG through the DOE State, Tribal, and Local Working Group on Transportation Emergency Preparedness.
1.4 Planning Principles
In carrying out the requirements to provide technical assistance and funds for training, OCRWM is committed to an open dialogue with all interested parties. Interested parties have repeatedly requested that OCRWM include the following in its implementation of Section 180(c). OCRWM is committed to fulfilling these requests.
OCRWM will strive to develop a program with enough flexibility to accommodate the wide variety of State, Tribal, and local assistance needs.
OCRWM training assistance will be integrated into current established Federal, State, and Tribal training assistance structures.
OCRWM will integrate its Section 180(c) planning with current DOT HMTUSA planning functions and rulemakings, where possible.
OCRWM will seek input from the diverse and broadly representative sources using a cooperative approach.
OCRWM recognizes that diverse interested groups can make contributions to the decision-making process. OCRWM will seek input in particular from representatives of transportation corridor jurisdictions who will be directly impacted by NWPA shipments.
1.5 Schedule
A proposed schedule for OCRWM to provide training assistance for public officials is shown in Figure 1. The Section 180(c) strategy will be flexible enough to accommodate changes in OCRWM program schedule. Opportunities for ample interaction and predecisional input from interested parties and the public have been factored into the schedule. Current planning assumes that OCRWM will accept spent fuel for shipping to an MRS in 1998. Prior to 1994, OCRWM should be able to predict whether an MRS will be available to receive shipments, and thus plan for training to begin. Training assistance will depend on the location of an MRS facility and the spent fuel acceptance schedule.
2. ISSUE IDENTIFICATION: AN INTERACTIVE PROCESS
Section 180(c) training assistance is of particular interest to the State, Tribal, and local governments. OCRWM has utilized a cooperative approach to identify, discuss, and resolve planning issues to provide a viable training assistance program strategy.
2.1 Activities to Date
After the enactment of the NWPA in 1982, OCRWM initiated a dialogue with interested parties to identify and resolve issues related to OCRWM shipment planning. Interested parties included Federal, State, and Tribal governments; the nuclear power utilities; the transportation industry; special interest groups; the media; and the public. OCRWM was able to use these interactions to identify issues and formalize a resolution process. OCRWM published its Transportation Institutional Plan (TIP) in 1986. The TIP identified emergency response, inspection, and enforcement issues, and provided a foundation for issue discussion and resolution processes that proved instrumental to developing this Strategy document.
The process to evaluate and resolve issues comprises continued identification, coordination, research, and resolution of issues using a combination of DOE policies and studies, work with regional and national groups of States, Indian Tribes and technical organizations, and interactions with interested parties.
With the passage of Section 180(c) in 1987, the commitments OCRWM had initiated regarding emergency response, inspection, and enforcement, became mandates. OCRWM began planning to provide training assistance, and resolve issues discussed in the TIP. As stated above, issues regarding emergency response, inspection, enforcement, and the implementation of Section 180(c) were identified through a variety of program activities with interested parties. These issues as stated in the TIP and discussed at TCG meetings include OCRWM's need to:
Define roles and responsibilities
Define potential emergency situations
Define the appropriate emergency actions to be taken by the first responders
Develop a set of inspection criteria
Develop a system for inspections
Determine training needs by assessing existing training programs
Determine the definition of assistance
Determine eligibility for assistance
Assess potential funding and assistance mechanisms
Explore the desirability of a training certification or standards process
Determine an approach to the timing of training assistance
Additional issues may be identified through the resolution process and through interactions with interested parties.
2.2 Issue Resolution Mechanisms
OCRWM and the interested parties are working together to develop an efficient plan to provide training assistance to States, Indian Tribes, and local governments. Some of the mechanisms that currently provide forums for communication, issue identification and resolution, and policy development include: OCRWM cooperative agreements with national, regional, and technical groups; the Transportation Coordination Group (TCG); the HMTUSA Interagency Coordination Group; the Federal Radiological Preparedness Coordinating Committee; and the Commercial Vehicle Safety Alliance.
Working groups are a significant communication mechanism. An informal working group met following a TCG meeting in July 1989, to discuss a rough outline of this strategy document.
<#FROWN:H16\>It is equally clear that a State might temper such an 'any county' rule to the extent a reasonable assessment of defendants' interests so justified.
Here, Montana has decided that the any-county rule should give way to a single-county rule where a defendant resides in Montana, arguably on the reasonable ground that a defendant should not be subjected to a plaintiff's tactical advantage of forcing a trial far from the defendant's residence. At the same time, Montana has weighed the interest of a defendant who does not reside in Montana differently, arguably on the equally reasonable ground that for most nonresident defendants the inconvenience will be great whether they have to defend in, say, Billings or Havre. See Power Manufacturing Co. v. Saunders, 274 U.S. 490, 498 (1927) (Holmes, J., dissenting). Montana could thus have decided that a nonresident defendant's interest in convenience is too slight to outweigh the plaintiff's interest in suing in the forum of his choice.
Burlington does not, indeed, seriously contend that such a decision is constitutionally flawed as applied to individual nonresident defendants. Nor does it argue that such a rule is unconstitutional even when applied to corporate defendants without a fixed place of business in Montana. Burlington does claim, however, that the rule is unconstitutional as applied to a corporate defendant like Burlington that not only has its home office in some other State or country, but also has a place of business in Montana that would qualify as its 'principal place of business' if it were a Montana corporation.
Burlington's claim fails. Montana could reasonably have determined that a corporate defendant's home office is generally of greater significance to the corporation's convenience in litigation than its other offices, that foreign corporations are unlikely to have their principal offices in Montana, and that Montana's domestic corporations will probably keep headquarters within the State. We cannot say, at least not on this record, that any of these assumptions is irrational. Cf. G. D. Searle & Co. v. Cohn, 455 U.S. 404, 410 (1982); Metropolitan Casualty Ins. Co. v. Brownell, 294 U.S. 580, 585 (1935). And upon them Montana may have premised the policy judgment, which we find constitutionally unimpeachable, that only the convenience to a corporate defendant of litigating in the county containing its home office is sufficiently significant to outweigh a plaintiff's interest in suing in the county of his choice.
Of course Montana's venue rules would have implemented that policy judgment with greater precision if they had turned on the location of a corporate defendant's principal place of business, not on its State of incorporation. But this is hardly enough to make the rules fail rational-basis review, for "rational distinctions may be made with substantially less than mathematical exactitude." New Orleans v. Dukes, 427 U.S. 297, 303 (1976); see Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 814 (1976); Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78 (1911). Montana may reasonably have thought that the location of a corporate defendant's principal place of business would not be as readily verifiable as its State of incorporation, that a rule hinging on the former would invite wasteful sideshows of venue litigation, and that obviating the sideshows would be worth the loss in precision. These possibilities, of course, put Burlington a far cry away from the point of discharging its burden of showing that the underinclusiveness and overinclusiveness of Montana's venue rules is so great that the rules can no longer be said rationally to implement Montana's policy judgment. See, e.g., Brownell, supra, at 584. Besides, Burlington, having headquarters elsewhere, would not benefit even from a scheme based on domicile, and is therefore in no position to complain of Montana's using State of incorporation as a surrogate for domicile. See Roberts & Schaefer Co. v. Emmerson, 271 U.S. 50, 53-55 (1926); cf. United States v. Raines, 362 U.S. 17, 21 (1960).
Burlington is left with the argument that Power Manufacturing Co. v. Saunders, supra, controls this case. But it does not. In Saunders, we considered Arkansas' venue rules, which restricted suit against a domestic corporation to those counties where it maintained a place of business, 274 U.S., at 491-492, but exposed foreign corporations to suit in any county, id. at 492. We held that the distinction lacked a rational basis and therefore deprived foreign corporate defendants of the equal protection of the laws. Id., at 494. The statutory provision challenged in Saunders, however, applied only to foreign corporations authorized to do business in Arkansas, ibid., so that most of the corporations subject to its any-county rule probably had a place of business in Arkansas. In contrast, most of the corporations subject to Montana's any-county rule probably do not have their principal place of business in Montana. Thus, Arkansas' special rule for foreign corporations was tailored with significantly less precision than Montana's, and, on the assumption that Saunders is still good law, see American Motorists Ins. Co. v. Starnes, 425 U.S. 637, 645, n. 6 (1976), its holding does not invalidate Montana's venue rules.
In sum, Montana's venue rules can be understood as rationally furthering a legitimate state interest. The judgment of the Supreme Court of Montana is accordingly
Affirmed.
UNITED STATES v. ALVAREZ-MACHAIN
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
No. 91-712. Argued April 1, 1992 -Decided June 15, 1992
Respondent, a citizen and resident of Mexico, was forcibly kidnaped from his home and flown by private plane to Texas, where he was arrested for his participation in the kidnaping and murder of a Drug Enforcement Administration (DEA) agent and the agent's pilot. After concluding that DEA agents were responsible for the abduction, the District Court dismissed the indictment on the ground that it violated the Extradition Treaty between the United States and Mexico (Extradition Treaty or Treaty), and ordered respondent's repatriation. The Court of Appeals affirmed. Based on one of its prior decisions, the court found that, since the United States had authorized the abduction and since the Mexican Government had protested the Treaty violation, jurisdiction was improper.
Held: The fact of respondent's forcible abduction does not prohibit his trial in a United States court for violations of this country's criminal laws. Pp. 659-670.
(a) A defendant may not be prosecuted in violation of the terms of an extradition treaty. United States v. Rauscher, 119 U.S. 407. However, when a treaty has not been invoked, a court may properly exercise jurisdiction even though the defendant's presence is procured by means of a forcible abduction. Ker v. Illinois, 119 U.S. 436. Thus, if the Extradition Treaty does not prohibit respondent's abduction, the rule of Ker applies and jurisdiction was proper. Pp. 659-662.
(b) Neither the Treaty's language nor the history of negotiations and practice under it supports the proposition that it prohibits abductions outside of its terms. The Treaty says nothing about either country refraining from forcibly abducting people from the other's territory or the consequences if an abduction occurs. In addition, although the Mexican Government was made aware of the Ker doctrine as early as 1906, and language to curtail Ker was drafted as early as 1935, the Treaty's current version contains no such clause. Pp. 663-666.
(c) General principles of international law provide no basis for interpreting the Treaty to include an implied term prohibiting international abductions. It would go beyond established precedent and practice to draw such an inference form the treaty based on respondent's argument that abductions are so clearly prohibited in international law that there was no reason to include the prohibition in the Treaty itself. It was the practice of nations with regard to extradition treaties that formed the basis for this Court's decision in Rauscher, supra, to imply a term in the extradition treaty between the United States and England. Respondent's argument, however, would require a much larger inferential leap with only the most general of international law principles to support it. While respondent may be correct that his abduction was 'shocking' and in violation of general international law principles, the decision whether he should be returned to Mexico, as a matter outside the Treaty, is a matter for the Executive Branch. Pp. 666-670.
946 F. 2d 1466, reversed and remanded.
REHNQUIST, C.J., delivered the opinion of the court, in which WHITE; SCALIA; KENNEDY; SOUTER, and THOMAS, JJ., joined. STEVENS, J., filed a dissenting opinion, in which BLACKMUN and O'CONNOR, JJ., joined, post, p. 670.
Solicitor General Starr argued the cause for the United States. With him on the briefs were Assistant Attorney General Mueller, Deputy Solicitor General Bryson, Michael R. Dreeben, and Kathleen A. Felton.
Paul L. Hoffman argued the cause for respondent. With him on the brief were Ralph G. Steinhardt, Robin S. Toma, Mark D. Rosenbaum, John A. Powell, Steven R. Shapiro, Kate Martin, and Robert Steinberg.
CHIEF JUSTICE REHNQUIST delivered the opinion of the Court.
The issue in this case is whether a criminal defendant, abducted to the United States from a nation with which it has an extradition treaty, thereby acquires a defense to the jurisdiction of this country's courts. We hold that he does not, and that he may be tried in federal district court for violations of the criminal law of the United States.
Respondent, Humberto Alvarez-Machain, is a citizen and resident of Mexico. He was indicted for participating in the kidnap and murder of United States Drug Enforcement Administration (DEA) special agent Enrique Camarena-Salazar and a Mexican pilot working with Camarena, Alfredo Zavala-Avelar. The DEA believes that respondent, a medical doctor, participated in the murder by prolonging Agent Camarena's life so that others could further torture and interrogate him. On April 2, 190, respondent was forcibly kidnaped from his medical office in Guadalajara, Mexico, to be flown by private plane to El Paso, Texas, where he was arrested by DEA officials. The District Court concluded that DEA agents were responsible for respondent's abduction, although they were not personally involved in it. United States v. Caro-Quintero, 745 F. Supp. 599, 602-604, 609 (CD Cal. 1990).
Respondent moved to dismiss the indictment, claiming that his abduction constituted outrageous governmental conduct, and that the District Court lacked jurisdiction to try him because he was abducted in violation of the extradition treaty between the United States and Mexico. Extradition Treaty, May 4, 1978, [1979] United States-United Mexican States, 31 U.S.T. 5059, T.I.A.S. No. 9656 (Extradition Treaty or Treaty). The District Court rejected the outrageous governmental conduct claim, but held that it lacked jurisdiction to try respondent because his abduction violated the Extradition Treaty. The District Court discharged respondent and ordered that he be repatriated to Mexico. 745 F. Supp., at 614.
The Court of Appeals affirmed the dismissal of the indictment and the repatriation of respondent, relying on its decision in United States v. Verdugo-Urquidez, 939 F. 2d 1341 (CA9 1991), cert. pending, No. 91-670. 946 F. 2d 1466 (1991). In Verdugo, the Court of Appeals held that the forcible abduction of a Mexican national with the authorization or participation of the United States violated the Extradition Treaty between the United States and Mexico. Although the Treaty does not expressly prohibit such abductions, the Court of Appeals held that the 'purpose' of the Treaty was violated by a forcible abduction, 939 F. 2d, at 1350, which, along with a formal protest by the offended nation, would give a defendant the right to invoke the Treaty violation to defeat jurisdiction of the District Court to try him. The Court of Appeals further held that the proper remedy for such a violation would be dismissal of the indictment and repatriation of the defendant to Mexico.
In the instant case, the Court of Appeals affirmed the District Court's finding that the United States had authorized the abduction of respondent, and that letters from the Mexican Government to the United States Government served as an official protest of the Treaty violation. Therefore, the Court of Appeals ordered that the indictment against respondent be dismissed and that respondent be repatriated to Mexico. 946 F. 2d, at 1467. We granted certiorari, 502 U.S. 1024 (1992), and now reverse.
<#FROWN:H17\>The fact of respondent's forcible abduction does not therefore prohibit his trial in a court in the United States for violations of the criminal laws of the United States.
The judgment of the Court of Appeals is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.
So ordered.
JUSTICE STEVENS, with whom JUSTICE BLACKMUN and JUSTICE O'CONNOR join, dissenting.
The Court correctly observes that this case raises a question of first impression. See ante, at 659. The case is unique for several reasons. It does not involve an ordinary abduction by a private kidnaper, or bounty hunter, as in Ker v. Illinois, 119 U.S. 436 (1886); nor does it involve the apprehension of an American fugitive who committed a crime in one State and sought asylum in another, as in Frisbie v. Collins, 342 U.S. 519 (1952). Rather, it involves this country's abduction of another country's citizen; it also involves a violation of the territorial integrity of that other country, with which this country has signed an extradition treaty.
A Mexican citizen was kidnaped in Mexico and charged with a crime committed in Mexico; his offense allegedly violated both Mexican and American law. Mexico has formally demanded on at least two separate occasions that he be returned to Mexico and has represented that he will be prosecuted and, if convicted, punished for his offense. It is clear that Mexico's demand must be honored if this official abduction violated the 1978 Extradition Treaty between the United States and Mexico. In my opinion, a fair reading of the treaty in light of our decision in United States v. Rauscher, 119 U.S. 407 (1886), and applicable principles of international law, leads inexorably to the conclusion that the District Court, United States v. Caro-Quintero, 745 F. Supp. 599 (CD Cal. 1990), and the Court of Appeals for the Ninth Circuit, 946 F. 2d 1466 (1991) (per curiam), correctly construed that instrument.
I
The extradition treaty with Mexico is a comprehensive document containing 23 articles and an appendix listing the extraditable offenses covered by the agreement. The parties announced their purpose in the preamble: The two governments desire "to cooperate more closely in the fight against crime and, to this end, to mutually render better assistance in matters of extradition." From the preamble, through the description of the parties' obligations with respect to offenses committed within as well as beyond the territory of a requesting party, the delineation of the procedures and evidentiary requirements for extradition, the special provisions for political offenses and capital punishment, and other details, the Treaty appears to have been designed to cover the entire subject of extradition. Thus, Article 22, entitled 'Scope of Application,' states that the "Treaty shall apply to offenses specified in Article 2 committed before and after this Treaty enters into force," and Article 2 directs that "[e]xtradition shall take place, subject to this Treaty, for willful acts which fall within any of [the extraditable offenses listed in] the clauses of the Appendix." Moreover, as noted by the Court, ante, at 663, Article 9 expressly provides that neither contracting party is bound to deliver up its own nationals, although it may do so in its discretion, but if it does not do so, it "shall submit the case to its competent authorities for purposes of prosecution."
Petitioner's claim that the Treaty is not exclusive, but permits forcible governmental kidnaping, would transform these, and other, provisions into little more than verbiage. For example, provisions requiring "sufficient" evidence to grant extradition (Art. 3), withholding extradition for political or military offenses (Art. 5), withholding extradition when the person sought has already been tried (Art. 6), withholding extradition when the statute of limitations for the crime has lapsed (Art. 7), and granting the requested State discretion to refuse to extradite an individual who would face the death penalty in the requesting country (Art. 8), would serve little purpose if the requesting country could simply kidnap the person. As the Court of Appeals for the Ninth Circuit recognized in a related case, "[e]ach of these provisions would be utterly frustrated if a kidnapping were held to be a permissible course of governmental conduct." United States v. Verdugo-Urquidez, 939 F. 2d 1341, 1349 (1991). In addition, all of these provisions "only make sense if they are understood as requiring each treaty signatory to comply with those procedures whenever it wishes to obtain jurisdiction over an individual who is located in another treaty nation." Id., at 1351.
It is true, as the Court notes, that there is no express promise by either party to refrain from forcible abductions in the territory of the other nation. See ante, at 664, 665-666. Relying on that omission, the Court, in effect, concludes that the Treaty merely creates an optional method of obtaining jurisdiction over alleged offenders, and that the parties silently reserved the right to resort to self-help whenever they deem force more expeditious than legal process. If the United States, for example, thought it more expedient to torture or simply to execute a person rather than to attempt extradition, these options would be equally available because they, too, were not explicitly prohibited by the Treaty. That, however, is a highly improbable interpretation of a consensual agreement, which on its face appears to have been intended to set forth comprehensive and exclusive rules concerning the subject of extradition. In my opinion, "the manifest scope and object of the treaty itself," Rauscher, 119 U.S., at 422, plainly imply a mutual undertaking to respect the territorial integrity of the other contracting party. That opinion is confirmed by a consideration of the "legal context" in which the Treaty was negotiated. Cannon v. University of Chicago, 441 U.S. 677, 699 (1979).
II
In Rauscher, the Court construed an extradition treaty that was far less comprehensive than the 1978 Treaty with Mexico. The 1842 treaty with Great Britain determined the boundary between the United States and Canada, provided for the suppression of the African slave trade, and also contained one paragraph authorizing the extradition of fugitives "in certain cases." 8 Stat. 576. In Article X, each nation agreed to "deliver up to justice all persons" properly charged with any one of seven specific crimes, including murder. 119 U.S., at 421. After Rauscher had been extradited for murder, he was charged with the lesser offense of inflicting cruel and unusual punishment on a member of the crew of a vessel on the high seas. Although the treaty did not purport to place any limit on the jurisdiction of the demanding State after acquiring custody of the fugitive, this Court held that he could not be tried for any offense other than murder. Thus, the treaty constituted the exclusive means by which the United States could obtain jurisdiction over a defendant within the territorial jurisdiction of Great Britain.
The Court noted that the treaty included several specific provisions, such as the crimes for which one could be extradited, the process by which the extradition was to be carried out, and even the evidence that was to be produced, and concluded that "the fair purpose of the treaty is, that the person shall be delivered up to be tried for that offence and for no other." Id., at 423. The Court reasoned that it did not make sense for the treaty to provide such specifics only to have the person "pas[s] into the hands of the country which charges him with the offence, free from all the positive requirements and just implications of the treaty under which the transfer of his person takes place." Id., at 421. To interpret the treaty in a contrary way would mean that a country could request extradition of a person for one of the seven crimes covered by the treaty, and then try the person for another crime, such as a political crime, which was clearly not covered by the treaty; this result, the Court concluded, was clearly contrary to the intent of the parties and the purpose of the treaty.
Rejecting an argument that the sole purpose of Article X was to provide a procedure for the transfer of an individual from the jurisdiction of one sovereign to another, the Court stated:
No such view of solemn public treaties between the great nations of the earth can be sustained by a tribunal called upon to give judicial construction to them.
The opposite view has been attempted to be maintained in this country upon the ground that there is no express limitation in the treaty of the right of the country in which the offence was committed to try the person for the crime alone for which he was extradited, and that once being within the jurisdiction of that country, no matter by what contrivance or fraud or by what pretence of establishing a charge provided for by the extradition treaty he may have been brought within the jurisdiction, he is, when here, liable to be tried for any offence against the laws as though arrested here originally. This proposition of the absence of express restriction in the treaty of the right to try him for other offences than that for which he was extradited, is met by the manifest scope and object of the treaty itself. Id., at 422.
Thus, the Extradition Treaty, as understood in the context of cases that have addressed similar issues, suffices to protect the defendant from prosecution despite the absence of any express language in the Treaty itself purporting to limit this Nation's power to prosecute a defendant over whom it had lawfully acquired jurisdiction.
Although the Court's conclusion in Rauscher was supported by a number of judicial precedents, the holdings in these cases were not nearly as uniform as the consensus of international opinion that condemns one nation's violation of the territorial integrity of a friendly neighbor. It is shocking that a party to an extradition treaty might believe that it has secretly reserved the right to make seizures of citizens in the other party's territory. Justice Story found it shocking enough that the United States would attempt to justify an American seizure of a foreign vessel in a Spanish port:
But, even supposing, for a moment, that our laws had required an entry of The Apollon, in her transit, does it follow that the power to arrest her was meant to be given, after she had passed into the exclusive territory of a foreign nation? We think not. It would be monstrous to suppose that our revenue officers were authorized to enter into foreign ports and territories, for the purpose of seizing vessels which had offended against our laws. It cannot be presumed that congress would voluntarily justify such a clear violation of the laws of nations. The Apollon, 9 Wheat. 362, 370-371 (1824) (emphasis added).
The law of nations, as understood by Justice Story in 1824, has not changed. Thus, a leading treatise explains:
A State must not perform acts of sovereignty in the territory of another State.
It is ... a breach of International Law for a State to send its agents to the territory of another State to apprehend persons accused of having committed a crime. Apart from other satisfaction, the first duty of the offending State is to hand over the person in question to the State in whose territory he was apprehended. 1 Oppenheim's International Law 295, and n. 1 (H. Lauterpacht 8th ed. 1955).
Commenting on the precise issue raised by this case, the chief reporter for the American Law Institute's Restatement of Foreign Relations used language reminiscent of Justice Story's characterization of an official seizure in a foreign jurisdiction as "monstrous":
When done without consent of the foreign government, abducting a person from a foreign country is a gross violation of international law and gross disrespect for a norm high in the opinion of mankind. It is a blatant violation of the territorial integrity of another state; it eviscerates the extradition system (established by a comprehensive network of treaties involving virtually all states).
<#FROWN:H18\>
Topics of Discussion for President's Trip to Europe
Secretary Baker
Opening statement at news conference, the White House, Washington, DC, July 1, 1992
Ladies and gentlemen, let me quickly outline some of the specific topics that the President will be looking to discuss on his visits to Warsaw, Munich, and Helsinki.
In Warsaw, the President will attend the repatriation of the remains of Poland's pre-communist Prime Minister, Paderewski; a symbolic return to an independent Poland. The President will reaffirm America's strong support for democracy and economic freedom in Poland and in Central and Eastern Europe, as a whole. He will want to discuss the reform process with President Walesa and explore some new ways that Poland and the international community can work together to advance these courageous reforms. He will then be in a position to share these ideas with his G-7 [Group of Seven industrialized nations] colleagues.
From Warsaw, the President will travel to Munich, of course, for the G-7 summit. We hope that this summit will send a pro-growth message that will reinforce the recoveries already underway in several G-7 economies, including our own.
The President's meeting with [Japanese] Prime Minister Miyazawa, today, allows us to exchange perspectives on the topic of growth a few days in advance.
The President will also use the opportunity of the Munich meeting to determine what further actions may be necessary to cope with the humanitarian tragedy in Sarajevo. Our view is that we should work with our friends and allies, particularly in the UN Security Council, to see that relief supplies are delivered.
At Munich, the leaders of the G-7 will also be meeting with [Russian] President Yeltsin as a signal of their strong support for Russia's bold reforms.
Building on the Washington summit, President Bush will want to continue his dialogue with President Yeltsin on further developing our political partnership. He will also want to hear an update on the state of Russia's reform program, and he will discuss how we can work together to move forward with assistance from the IMF [International Monetary Fund], the World Bank, and bilateral assistance.
Finally, as an important item on their collective agenda, the G-7 leaders will discuss with President Yeltsin the steps we can take to improve the safety of Soviet-designed nuclear reactors throughout Eurasia.
The final stop on the trip will be Helsinki, where the President will be attending the summit meeting of the Conference on Security and Cooperation in Europe -CSCE. In 1975, the first Helsinki summit - Helsinki I - launched the CSCE and promoted the values and the process that helped transform the shape of Europe and end the Cold War.
If Helsinki I helped usher in the final act of a divided Europe, Helsinki II must help set the stage for a democratic Eurasia by equipping CSCE to address more effectively the momentous opportunities and challenges that we face today.
In particular, CSCE is considering developing enhanced capacities for conflict prevention and crisis management through such steps as annual human rights meetings and a CSCE peace-keeping role that would draw on the capacities of organizations like the North Atlantic Treaty Organization, the North Atlantic Cooperation Council, and the Western European Union.
In addition, in Helsinki, we will lay the foundation for a stable new European security order by encouraging the quick entry into force of the CFE [Conventional Armed Forces in Europe] Treaty.
US Policy Toward UNESCO
John R. Bolton, Assistant Secretary for International Organization Affairs
Statement before the Subcommittees on International Operations and on Human Rights and International Organizations of the House Foreign Affairs Committee and the Subcommittee on Environment of the House Science, Space, and Technology Committee, Washington, DC, June 25, 1992
I appreciate the opportunity to appear before you to discuss our policy toward UNESCO [UN Educational, Scientific and Cultural Organization]. It is particularly timely to do so in the context of the recently completed GAO [General Accounting Office] report on the organization's management, administrative, budgetary, and personnel practices.
It has been 7 1/2 years since the United States withdrew from UNESCO because of the organization's excessive politicization, poor management, and runaway budgets. Since then, we have been working with our allies, with the Secretariat, and with Director General Mayor to promote reform. We have maintained a presence at UNESCO through our Observer Mission, have attended every meeting of the organization's governing bodies, and have made voluntary contributions of approximately $2 million per year in support of selected activities in which we continue to participate.
We are, consequently, pleased to note that the GAO report concludes that initial progress has been made in implementing management reforms. We have reviewed the report and find it a useful assessment of UNESCO's management practices. The report states that it is too soon to judge the effectiveness of some reforms. Knute Hammarskjold and Peter Wilenski, authors of a 1989 study on UNESCO's management, said much the same thing last January in a follow-up report on the implementation of their recommendations: "Extensive progress in reform has been made on a broad front but has not yet taken root...."
The GAO report states that UNESCO has not solved long-standing problems with consultants and program evaluation. It makes 12 formal recommendations that address policies for decentralization of activities and resources, program evaluation, procedures for the use and control of supplementary staff, budget techniques, and payroll controls. These recommendations and the other suggestions made throughout the text provide helpful guidelines and a benchmark for further progress.
As we noted in the State Department comments included as an appendix to the report, each of the recommendations is consistent with goals sought by the Department of State for several years. In this regard, we believe that our policy of insistence on real change at UNESCO - before any consideration of re-entry into the organization - has been a significant factor in motivating its member states, governing bodies, and the Secretariat, itself, to achieve the progress noted in the report.
In contrast to this progress, there are other areas of UNESCO policy which still deeply concern us. Particularly troubling was a UNESCO mission to Iraq in February, reportedly undertaken in cooperation with the UNDP [UN Development Program], to assess the situation of education. While sympathetic to humanitarian initiatives that meet essential medical and nutritional needs, we are not inclined to stretch "essential civilian needs" discussed in UN Security Council Resolution 687 to repairing or replacing school buildings. Last August, the UN Sanctions Committee informed UNESCO that it was unable to reach agreement on the appropriateness of such a mission, and UNESCO wisely canceled its plans to send an assessment team to Iraq.
In September, the UNESCO Executive Board deferred, sine die, consideration of any discussion of the situation of the educational and cultural institutions in Iraq. In November, our Mission to the United Nations informed the UNESCO representative that we were not sympathetic to another UNESCO initiative to send a mission to Iraq to assess the status of schools and cultural sites. Nonetheless, a UNESCO/UNDP team spent 2 weeks in Iraq during the month of February. In a March 3 letter to Director General Mayor, the Kuwaiti Permanent Delegate to UNESCO expressed his surprise that UNESCO would undertake such a mission in the light of the board decision and the UN sanctions regime. The Director General responded that the mission was undertaken in consultation with the UN Interagency Humanitarian Program and did not contravene Resolution 687. The officer-in-charge of the Office of the Executive Delegate for Humanitarian Assistance indicated that the Director General did not consult his office prior to making a decision to send a mission to Iraq. We believe the action was ill-advised, potentially detrimental to the sanctions regime, and inconsistent with the spirit, if not the letter, of the Executive Board decision to postpone consideration of the status of Iraqi educational institutions.
Turning once more to the GAO report, we believe that particular attention should be given to the recommendation on better application of the rules on the use of supplementary staff and fee contracts to control the contract authorization procedure more effectively and make it more transparent and uniform. This is of considerable import in that supplementary staff costs and fee contracts amounted to nearly $70 million during the 1990-91 biennium. GAO found considerable gaps and inconsistencies in data on supplementary staff. This raised doubts "about whether UNESCO uses too many supplementary staff or validly employs them." We endorse the Hammarskjold-Wilenski recommendations that call for the introduction of a consistent and fair promotion system based on merit, a better career development system, and equal opportunity for women.
The report underscores the need for significantly better program evaluation. We concur and believe considerable improvement in this area is needed if further program concentration is to be achieved, as recommended in the report. Impact evaluations are particularly wanting, both in number and in quality. GAO notes that UNESCO has conducted only 16 impact evaluations since 1986, covering only 8% of its activities, and that the appropriate methodologies, in some instances, were not employed even for this limited selection. Moreover, while guidelines exist for impact evaluation, there is no overall plan to ensure that a reasonable and representative selection of programs will be evaluated.
Regarding decentralization, there is reason for concern at the report's observation that 73% of UNESCO's total staff of 2,697 persons is located in Paris and that the ratio of headquarters to field staff has not varied since 1984. The report notes that a higher proportion of funds are expended in the field than would be expected by the distribution of staff; 44% of the 1990-91 regular and extra-budgetary budgets was expended in the field. This, however, is the same percentage as in 1988. Clearly, it is time for the organization to develop the systematic approach to decentralization mandated by the Executive Board at its November 1991 session.
In conclusion, we concur with the GAO report's view that initial progress has been made in implementing management reforms at UNESCO. Based on the report's conclusions and the observations of the Hammarskjold/ Wilenski report of last January, however, we believe that much remains to be done and that what has been accomplished needs to settle in and be institutionalized. We will have more to say on this in the report on UNESCO that Congress has asked us to submit later this summer. Finally, we will continue to implement fully our current policy and work with UNESCO's governing bodies, other governments, and the Director General to effect further reform along the lines recommended in the GAO report. At present, we do not believe the changes adopted warrant opening the question of whether to rejoin the organization, at an expenditure of approximately $55 million per year.
US Policy Toward Iraq and the Role of the CCC Program, 1989-90
Lawrence S. Eagleburger, Deputy Secretary of State
Statement before the House Committee on Banking, Finance, and Urban Affairs, Washington, DC, May 21, 1992
Mr. Chairman and members of the committee, I plan this morning to do my best to set the record straight on the US Government's policy toward Iraq during the latter half of the 1980s and in 1990 and to place in context the role of the Commodity Credit Corporation (CCC) program. I intend to make clear that the Administration followed a prudent policy toward Iraq at the time - including the management of the CCC program - even though we, and other governments, were ultimately unable to restrain Saddam Hussein.
In explaining US policy, I also plan to address many of the factual and legal misstatements currently being put forth by members of this committee. Quite frankly, the selective disclosure, out of context, of classified documents has led -knowingly or otherwise - to distortions of the record, half truths, and outright falsehoods, all combined into spurious conspiracy theories and charges of a 'coverup.' For those interested in the truth, let me make the following 10 points:
First, neither the Agriculture Department's investigation of the Commodity Credit Corporation program, nor the US Attorney's investigation of BNL [Banca Nazionale del Lavoro]-Atlanta has, to date, established diversion to third countries of commodities sold to Iraq or Iraqi misuse of the CCC program to purchase military weapons.
<#FROWN:H19\>
Combating Drug Money-Laundering

The Problem
In 1990, the Financial Action Task Force (FATF), an ad hoc organization of 26 countries that have significant financial centers, estimated worldwide proceeds from the production, trafficking, and consumption of illicit drugs at more than $300 billion.
The Response
In recent years, it became clear that campaigns against money-laundering are an important tool to destabilize drug-trafficking organizations.
In 1988, nearly 100 governments approved the UN Convention Against Trafficking in Illicit Narcotics and Dangerous Drugs, which requires signatories to criminalize money-laundering and remove bank secrecy barriers that inhibit criminal investigations. The 1989 economic summit, held in Paris, established the FATF to develop recommendations for action.
In 1990, the FATF endorsed 40 countermeasures, which it recommended to governments throughout the world, calling for:
The criminalization of money-laundering;
Removal of legislative barriers to investigations;
Reporting suspicious transactions;
Regulating non-bank as well as banking institutions; and
Rendering assistance to other governments on financial investigations.
FATF recommends that each of the 26 participating governments adopt and implement legislation to enforce these countermeasures. They further recommend that, through an outreach program already involving governments in Latin America, the Caribbean, Africa, the Middle East, and Asia, participating governments seek concurring legislation among all possible governments whose financial systems are considered vulnerable to exploitation by traffickers.
To bolster this effort, the 26 FATF members have agreed to mutual evaluation, in which teams comprised of experts from other member countries will assess each government on progress. This commitment to examination, in addition to submitting annual self-evaluations, has given the FATF greater political credibility. The organization has established a secretariat through the Organization for Economic Cooperation and Development in Paris.
The European Community (EC) adopted a policy directive to guide its 12 members in the implementation of the UN convention, going beyond the convention in some key aspects - notably the requirement for mandatory reporting by banks of suspicious transactions. The EC is one of two regional members of FATF and works closely with that body. A new convention, drafted by the Council of Europe, addresses the critical issue of cooperation on asset forfeiture, which is essential given the multiplicity of financial transactions that today's traffickers are initiating through professional money managers across the globe.
The Future
Money-launderers are using increasingly complex schemes to avoid detection, such as employing a wide variety of monetary instruments, non-bank financial institutions, and corporate shells for placing money. The United States and other financial center countries have changed strategies to counter these innovations.
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The United States supports Colombian Government efforts to target money managers. Raids on the Cali cocaine organization, for example, resulted in the arrests of six leading managers and seizures of millions in assets. These raids also yielded 300,000 documents, which provide important new insights into how and where money is laundered. The United States plans similar cooperation with other governments in South America and Asia, the results of which should force traffickers to increasingly expose their assets by constant movements that should result in more seizures and arrests.
In 1992, FATF is focusing on non-bank institutions, while also targeting corporate criminal liability and strengthening asset forfeiture and seizure provisions.
The Caribbean Group is expected to adopt more than 60 measures unique to its region, and governments in Latin America and the Caribbean are expected to take the first steps to implement model legislation recommended by the Organization of American States. Similar efforts will begin in other regions.
Controlling Chemicals Used in Drug Trafficking
Chemicals are necessary for the production of cocaine, heroin, and synthetic drugs. In order to curb drug production, the United States is working to deny traffickers access to these chemicals.
The extensive and competitive international commerce in chemicals, however, complicates the design and adoption of effective regulations to prevent diversion. Such regulations must control the entire chain of a chemical transaction, from chemical manufacturers through intermediaries to ultimate users, while not unduly burdening legitimate commerce. They must be adopted by all major chemical manufacturing and trading countries, in addition to drug producing countries, to prevent traffickers from switching to unregulated sources of supply.
The 1988 UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances outlines procedures for controlling 12 of the most important drug-related chemicals. The United States, other Western Hemisphere countries, and the European Community (EC) have been leaders in adopting laws and regulations incorporating them.
The 1988 US Chemical Diversion and Trafficking Act placed 20 chemicals under government control. In 1990, the Organization of American States (OAS) adopted 'Model Regulations to Control Precursor Chemicals and Chemical Substances, Machines and Materials' which are forming the basis for chemical control regulations in many OAS countries. They call for the regulation of 36 chemicals. The EC has adopted community-wide chemical control regulations based on the 1988 UN convention to control chemical trade with non-EC countries.
Nevertheless, chemicals essential to the production of illicit drugs are getting through for two basic reasons: the absence of universal, uniform regulations; and the inability of many countries to effectively implement their chemical control laws because they do not have the regulatory infrastructure and trained personnel to do so.
We are attacking the problem on two fronts. Experience demonstrates that the most effective chemical control action is that taken by the exporting country prior to the exportation of regulated chemicals. The United States chairs the G-7 Chemical Action Task Force (CATF) which includes 26 other major chemical manufacturing countries, drug manufacturing countries, and concerned international organizations; the CATF has developed comprehensive recommendations for chemical control, building on procedures in the 1988 UN convention.
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The extensive discussion in five meetings during 1990-91 on these recommendations demonstrated to the CATF members that chemical control is not only desirable but feasible and provided uniform procedures to be incorporated in a chemical control regime. The recommendations include five basic chemical control procedures to be adopted at the national level to prevent diversion and the addition of 10 chemicals to the 12 in the 1988 UN convention.
These multilateral initiatives are being supplemented by US Government bilateral initiatives targeted at the major cocaine producing countries. We have chemical control agreements with Bolivia, Colombia, Ecuador, Panama, and Peru to facilitate the exchange of information to determine the legitimacy of chemical sales between our countries. The United States is funding chemical control training through the UN Drug Control Program and the OAS for the chemical and drug producing countries of Latin America. In 1991, national training workshops were conducted in Bogota, Mexico City, Quito, and Santiago. The US Drug Enforcement Administration conducts much of the training.
The model regulatory regimes and chemical control training are providing the foundation for enhanced international cooperation between enforcement agencies of major chemical and drug producing countries. Our chemical control objective is to extend adoption of compatible chemical control regimes through the CATF to those countries that do not have them, while enforcement agencies work to improve cooperation within existing regulatory frameworks. The ultimate objective is to make diversion control a standard part of any transaction involving a drug-related chemical.
Coca Production And the Environment

The Problem
Cocaine production causes serious - often irreparable - damage, since coca is grown and processed in some of the world's most fragile ecological zones. Coca farmers and the so-called chemists who process the raw product for export irreversibly damage jungle forests, soils, and waterways. The populations of the primary Andean coca regions in Peru, Bolivia, and Colombia - largely migrants who have come specifically to grow coca - have almost no regard for the 'eyebrow of the jungle' region where the tributaries of the Amazon begin.
Although the US drug war seeks mainly to halt the devastation caused by drugs to citizens and communities, the United States also wants to stop environmental destruction. American drug users help finance the environmental degradation, and the increasing number of drug users in Europe, in neighboring Latin American countries that serve as narcotics pipelines, and in the producer countries themselves add to the market.
Coca growers and processors damage the environment in three ways:
Deforestation. Deforestation increases erosion and soil runoff, depletes soil nutrients, and decreases biological diversity. As heavy rains erode the thin topsoil of the fields, growers often must abandon their parcels to prepare new plots. Traffickers also destroy jungle forests to build landing strips and laboratories. A smoky haze covers much of the Huallaga Valley throughout August and September as farmers slash and burn forests to create new fields for coca production; much of the coca-producing land is cut out of nature preserves and national forests.
Scientists in Peru report the irretrievable loss of plant and animal species due to clearance of large areas of the country's most biologically diverse region. Besides the 171,000 hectares of coca cultivated in Bolivia and Peru, producers of illicit drugs have deforested as much as 1 million hectares of fragile jungle forest lands in the Amazon region.
Use of Herbicides, Pesticides, and Fertilizers in Coca Growing. Seeking to maximize their incomes and largely ignorant about chemicals, coca growers dump great quantities of strong pesticides, weedkillers, and fertilizers on their crops. Peruvian environmentalists estimate that coca growers use 1.5 million liters of paraquat each year in the Upper Huallaga Valley alone. These chemicals saturate the soil and contaminate waterways, poisoning the water system and destroying the species that depend upon it. Although the extent of damage is still unknown, Latin American environmentalists believe that the contamination is spreading into adjacent ecological zones.
Toxic Chemicals From Cocaine Processing. Cocaine processing laboratories disposing of huge amounts of toxic chemicals into nearby streams and rivers have killed several fish species in Peru. Scientists estimate that pollution in Peru's Amazon feeder rivers from Peruvian processing included, in 1 year, the discharge of:
57 million liters of kerosene - the equivalent of one supertanker;
22 million liters of sulfuric acid;
16,000 metric tons of lime;
3,000 metric tons of carbide;
6 million liters of acetone;
6 million liters of toluene; and
10,000 tons of toilet paper.
US Strategy
Successful drug control strategies must weigh environmental as well as social and economic effects. Since manual eradication of coca bushes is very difficult, dangerous work and because of environmental concerns about chemical eradication, the United States - in consultation with Andean nations - is pursuing a three-fold strategy.
1. In Peru and Colombia - limit forced eradication to coca seedbeds to reduce the spread of cultivation, while working with local authorities and grower organizations to promote voluntary eradication. (Some forced eradication of mature coca plants continues in Bolivia, primarily in public areas such as national parks.)
2. Support alternative economic opportunities, crop substitution, and other programs to provide growers with another way to earn a living and escape from dependence on criminal organizations.
3. Attack the trafficker organizations by intercepting their aircraft, seizing their assets, destroying their drug production facilities, and reducing their supplies of chemical inputs to stem their earnings.
Bolivia
US-Bolivian Relations
Traditionally, the United States and Bolivia have enjoyed good, friendly relations. Our goals in Bolivia are similar to those that the current government has set for itself: to strengthen democracy, institutionalize economic reforms, and eliminate narcotics trafficking. The United States has a longstanding aid relationship with Bolivia. Between 1945 and 1991, US economic assistance totaled more than $1.6 billion.
Bolivia is an active participant in regional organizations such as the Organization of American States (OAS) and the Rio Group. The country has a good human rights record and has created a legal framework to encourage foreign private investment. The United States has modest trade with Bolivia and is negotiating a bilateral investment treaty.
Since taking office in August 1989, President Jaime Paz Zamora has met twice with President Bush. Vice President Quayle visited the Bolivian capital, La Paz, in the fall of 1989.
Political Conditions
Bolivia is close to completing a decade of democratic government. Since 1982, it has had two peaceful democratic transitions. The Administration of President Paz Zamora is now in its third year of its 4-year term. He has been a moderate, pragmatic president.
<#FROWN:H20\>The specific question raised by corporate integration is whether the current distinction in the treatment of corporate equity investments by tax-exempt entities (which bear the corporate, but not the shareholder level tax) versus corporate debt investments (which bear neither corporate nor debtholder level tax) should be retained or decreased. An integration system best fulfills its goals if it provides uniform treatment of debt and equity investments by tax-exempt investors. Equating the tax treatment of debt and equity will require either an increase or decrease in the taxes on corporate capital supplied by tax-exempt investors or the introduction of a separate tax on investment income of these investors. As Section 6.D discusses, such a tax could be designed to maintain the current level of tax on income from corporate capital supplied by tax-exempt investors while equalizing the treatment of debt and equity.
6.B DISTORTIONS UNDER CURRENT LAW
Current law encourages tax-exempt investors, like taxable investors, to invest in debt rather than equity. Only two types of income from capital supplied to corporations by tax-exempt entities are actually tax-exempt. Interest paid by corporations is both deductible by the corporate payor and exempt from tax in the hands of the tax-exempt recipient. Corporate preference income distributed to tax-exempt shareholders also is exempt from tax at both the corporate and the shareholder level. Non-preference income is taxed at the corporate level, but is not taxed at the shareholder level whether it is received by the exempt investor as capital gains from the sale of shares or as dividends from distributions. Thus, under current law, corporate income paid to tax-exempt investors in the form of interest is not taxed at either the corporate or investor level, while non-preference income retained or distributed to tax-exempt shareholders is subject to tax at the corporate level.
Current law does not, however, encourage tax-exempt investors to invest in equity of noncorporate rather than corporate businesses, because, in both cases, the income is subject to one level of tax. While corporate income (other than preference income) allocable to tax-exempt shareholders is subject to tax at the corporate level, the noncorporate unrelated business income of tax-exempt investors generally is subject to UBIT. For tax-exempt investors who invest in equity, current law generally also does not affect their preferences for distributed or retained earnings. Because corporate income (other than preference income) is subject to current corporate level tax and both distributed and retained earnings are exempt from tax at the shareholder level, a tax-exempt shareholder has no tax incentive to prefer distributed earnings over retained earnings.
6.C NEUTRALITY UNDER AN INTEGRATED TAX SYSTEM
Because of the asymmetric treatment of debt and equity investments by tax-exempt entities under current law, an integrated system can achieve neutrality between debt and equity investments for tax-exempt investors only by either decreasing the tax burden on equity income or increasing the tax burden on interest. A straightforward decrease in the tax burden on equity investments might be accomplished by removing the corporate level tax on earnings distributed as dividends to tax-exempt investors. A deduction for corporate dividends, for example, would achieve this result. The contrary approach might subject interest income on corporate debt earned by tax-exempt investors to one level of tax (at either the corporate or the investor level).
The first approach, taxing neither dividends nor interest paid to tax-exempt investors, would lose substantial amounts of tax revenue relative to current law. Extending the benefits of integration to tax-exempt investors would add costs of approximately $29 billion annually under distribution-related integration and approximately $42 billion annually under shareholder allocation. This revenue loss would increase the costs of integration and would require offsetting increases in other taxes or in tax rates, which might create or increase other distortions. This approach also would distort the choice between corporate and noncorporate investment for tax-exempt investors if UBIT remained in place for noncorporate investment. If corporate dividends were tax-exempt at both the corporate and investor level, while earnings from businesses conducted directly or in partnership form were subject to UBIT, a tax-exempt investor would always prefer corporate dividends. Indeed, anti-abuse rules might be required to preclude tax-exempt organizations from avoiding UBIT altogether simply by incorporating their unrelated businesses.
The second approach, taxing both interest and dividends at a single rate, would reduce the current advantage of tax-exempt investors relative to taxable investors. Tax-exempt investors would no longer enjoy an after-tax return on a given corporate equity or debt investment higher than that available to taxable investors. The principal advantage of this approach is that it would equate the treatment of debt and equity while maintaining the neutrality between corporate and noncorporate equity for tax-exempt investors.
6.D GENERAL RECOMMENDATIONS
This Report recommends that a level of taxation at least equal to the current taxation of corporate equity income allocated to investments by the tax-exempt sector be retained under integration. The dividend exclusion prototype, described in Chapter 2, essentially continues present law treatment of tax-exempt investors under an integrated tax system, so fully-taxed corporate profits would continue to bear one level of tax and preference income would not be taxed at either the corporate or shareholder level. A similar result can be accomplished under an imputation credit system of integration, but a dividend deduction system would eliminate the current corporate level tax on distributed earnings on equity capital supplied by tax-exempt investors. Under the shareholder allocation prototype described in Chapter 3, taxes are collected at the corporate level on corporate income allocable to investment by tax-exempt shareholders and no refund is provided to nontaxable shareholders.
Maintaining one level of tax on equity investments by tax-exempt entities would promote one of the primary goals of integration: achieving tax neutrality for all investors between corporate and noncorporate investments. This choice is consistent with a move to integration for taxable shareholders, because choosing to reduce the double tax burden on corporate income distributed to taxable investors does not necessarily dictate a commensurate reduction in the tax burden on tax-exempt investors. Finally, continuing to tax equity investments by the tax-exempt sector avoids the revenue loss that would result if such investments were completely tax-exempt. Increasing other tax rates to compensate for such a revenue loss would entail other inefficiencies.
Some countries that have adopted integration have chosen to tax separately corporate and other income allocable to tax-exempt investors. For example, in moving to an integrated corporate tax, Australia and New Zealand imposed a tax on the income of pension funds, thus reducing the number of tax-exempt investors. In both countries, the remaining tax-exempt investor base, such as charities, is small. Australia imposed a 15 percent tax on investment income earned by pension funds and made available the full 39 percent imputation credit from dividends as a nonrefundable offset. Australia did not project collecting more than a token amount of tax from this tax on investment income: it devised the mechanism to remove distortions between investing in domestic corporations (which pay Australian tax) and investing in foreign corporations (which generally do not). The new Australian system also removes distortions between investing in equity and investing in debt. New Zealand went further and repealed entirely the tax exemption of pension funds; they now function basically as taxable savings accounts. Under the U.K. distribution-related integration system, the corporate level tax is not completely eliminated, with the consequence that income distributed to tax-exempt shareholders bears some tax burden.
This Report also encourages an effort to achieve uniform tax treatment of corporate debt and equity investments by tax-exempt investors. Because of the important role played by the tax-exempt sector in the capital markets, failing to create neutrality for debt and equity investments by the tax-exempt sector would limit the extent to which integration could achieve tax neutrality between the two kinds of investments. This is achieved under CBIT by treating tax-exempt shareholders and debtholders generally like other suppliers of corporate capital, with tax imposed at the corporate level.
One potential alternative approach would tax all corporate and noncorporate income allocable to investment by the tax-exempt sector at a rate lower than the rate applicable to taxable investors. Such a tax on the investment income, including dividends and interest income, received by tax-exempt entities could be set to achieve overall revenues equivalent to those currently borne by corporate capital supplied by the tax-exempt sector. Under the imputation credit prototype discussed in Chapter 11, for example, imputation credits for corporate taxes paid would be allowed to tax-exempt shareholders. To the extent that the credit rate exceeds the tax rate on investment income, the excess credits could be used to offset tax on interest or other investment income. In addition to the substantial advantage of equating the tax treatment of debt and equity held by such investors, such an approach would allow tax-exempt investors to use shareholder level credits for corporate taxes paid to the same extent as taxable shareholders. By doing so, this approach would limit both portfolio shifts and other tax planning techniques that might otherwise be induced by efforts to distinguish among taxable and tax-exempt investors in integrating the corporate income tax. A revenue neutral rate for such a system would be in the range of 6 to 8 percent depending on the prototype. This would approximate the current law corporate tax burden on investments by tax-exempt shareholders.
CHAPTER 7:
TREATMENT OF FOREIGN INCOME AND SHAREHOLDERS
7.A INTRODUCTION
International issues are important in designing an integrated tax system because there is substantial investment by U.S. persons in foreign countries (outbound investment) and investment by foreign persons in the United States (inbound investment). At the end of 1990, private U.S. investors owned direct investments abroad with a market value of $714 billion, and $910 billion in foreign portfolio investment, while private foreign investors owned $530 billion in direct investment in the United States and $1.34 trillion in U.S. portfolio investment. U.S. investors received a total of $54.4 billion income from their direct investments abroad in 1990, and $65.7 billion of income from their foreign portfolio investments, while foreign investors received $1.8 billion from their direct investments in the United States in 1990 and $78.5 billion from their U.S. portfolio investments.
The income from transnational investments may be taxed by both the country in which the investment is made (the host or source country) and the country of residence of the investor (the residence country). The United States uses two primary instruments for mitigating the potential problem of double taxation: the foreign tax credit and bilateral income tax treaties entered into between the United States and about 40 other countries.
Taxation of foreign investment by U.S. investors. The United States taxes the worldwide income of its residents. The U.S. tax on income earned by U.S. corporations or individuals through foreign corporations is generally deferred until such income is repatriated through dividend or interest payments to U.S. shareholders or creditors.
The United States allows taxpayers to claim a foreign tax credit for qualifying foreign income taxes paid (the direct foreign tax credit). Current law also allows corporate taxpayers that receive dividends (or include Subpart F income) from at least 10-percent owned foreign subsidiaries to claim a foreign tax credit for a ratable portion of the qualifying foreign taxes paid by the subsidiary on the income from which the dividends are paid (the indirect foreign tax credit). The portion of the foreign taxes which taxpayers may claim as an indirect credit is proportional to the fraction of the earnings of the foreign subsidiary distributed or deemed distributed. The dividend income for U.S. tax purposes is grossed up by the amount of the direct and indirect credits claimed. The indirect foreign tax credit, like the dividends received deduction available domestically, prevents multiple taxation of corporate profits at the corporate level.
The Code limits the maximum foreign tax credit to prevent the foreign tax credit from offsetting taxes on domestic source income. Separate limitations apply to several different kinds of foreign source income (baskets) in order to restrict the use of foreign tax credits from high-taxed foreign source income against low-taxed foreign source income.
<#FROWN:H21\>
Radio Address to the Nation on Domestic Reforms
March 28, 1992
Good morning:
Many have called the 20th century the American Century. The question before us today is about the next century, looking just a few years ahead.
Let me tell you a story that will help shape that century, a story you probably haven't heard about. It's about a battle between those who want to change things and those who want to protect the status quo. And in this battle those who support change are telling those who want to stand pat: lead, follow, or get out of the way.
Wednesday, those words were heard loud and clear. I'm talking about how the Democratic Congress couldn't muster a two-thirds majority; incredibly, couldn't even get a majority to override my veto of the liberals' latest tax increase. This story you haven't heard about is also unheard of. Only twice before in the last 60 years has the House failed to muster a simple majority to override a veto.
Congressional liberals suffered this defeat for a simple reason: Americans measure progress in people helped, not dollars spent. And that's why I'm going to continue the fight to keep a lid on Federal spending. It's also why I ask Senator McCain of Arizona and Congressman Harris Fawell of Illinois to formally introduce legislation to endorse the 68 rescissions I announced last week to cut nearly $4 billion in waste from a bloated Federal Budget.
Unlike liberal Democrats, given our big deficit, I don't think the Federal Government can afford to fund prickly pear research or study asparagus yield declines. Those who reject these pork barrel projects will stand with me and the American taxpayer. Those who support them will have to explain in November why the public interest has been denied.
If enough members demand it, Congress must vote on each of these bills, yes or no, up or down. I'm going to work with those who want the Congress to be accountable and fight those who will try to block our initiatives through parliamentary gimmicks. I know that Government is too big and spends too much. And now let's see where Congress stands. Stay tuned, keep listening. We'll find out who really wants to cut spending and who just wants to keep the pork.
In a world more driven by economic competition than ever before, the challenge I am referring to is crucial to our future. I mean reform of the American Government. During the last decade, one institution after another has looked within itself, decided on improvements, and acted to fix its problems and reflect its principles. Our task now is to bring that process of reform to the United States Government. All of us know Government's problem, too often it is not accountable, not effective, not efficient. It's not even compassionate. Only by changing it can we protect America's general interest against selfish, special interests.
My rescissions will help knock out one part of the special interest problem at work in Congress today, but the changes I want are even bigger. I want to end the PAC contributions which are corrupting our system. I want to place term limits on Congress, and I want to lead the American people in making changes that will make the 21st century another American Century.
One challenge is to make our people educated, literate, and motivated to keep learning. And that's why I'm trying to reform our education system from top to bottom.
Our people must have a sense of well-being about their health and that of their children and families. My health care reform plan will guarantee them access to the finest health care system in the world and make that care affordable.
And next, help me return our civil justice system to its original purpose: dispense justice with civility. Eighteen million lawsuits a year are choking us, costing individuals and businesses billions, a tremendous drag on our morale as well as our economy.
And in the next century, as we look at the likely economic competition as well as the likely opportunities, they will be beyond our borders. That means we must open up more foreign markets to sell our goods and our services and to sustain and create jobs for our people.
Reform of Government, education, health care, our legal system, opening markets abroad: addressing these issues is fundamental to America's future. Already America has changed the world. Today I'm asking you to help me change America. If Congress won't change, we'll have to change the Congress. The battle has been joined, and it's your future that we're fighting for.
Thank you for your support. And may God bless the United States of America.
Note: This address was recorded at 10:30 a.m. on March 27 in the Oval Office at the White House for broadcast after 9 a.m. on March 28.
Remarks to State Attorneys General
March 30, 1992
Well, may I salute Ken Eikenberry and Jeff Amestoy and all the State attorney generals, and salute also - whoops, there he is down there - our own Bill Barr, who I think is doing an outstanding job. And I know he's working closely with everybody in this room.
Bill has his forces moving out on several fronts, from tort reform to relief of prison overcrowding. We've also started what we call the Weed and Seed initiative, our plan to get the roots, rip them out of the inner-city violence, and then plant seeds of hope with more educational opportunity, with more job training, with a new approach to health care. And then we are going to keep hammering away on the need for enterprise zones. This plan joins Federal, State, and local forces to go after and to take back our hardest-hit neighborhoods. They're crucial missions, and I am determined to see them achieved and let nothing stand in the way.
The efforts of the Justice Department help shape the kind of legacy that we leave for future generations. And our children must inherit a society that is safe, is sane and just. And I've also spoken of other meaningful legacies like jobs and a world at peace and certainly, strong families. The American heritage which I describe is one where children can sit on their porch without the fear of getting caught in an ugly crossfire, where decent people don't have to hide behind locked doors while gangs roam the streets, where the message is clear: when it comes to the law, if you're going to take liberties, you're going to lose your own, you're going to pay.
We cannot pass this legacy onto our children tomorrow unless we start going after tough crime legislation today. And for 3 years running, we have called on the Congress to pass a tough crime bill. We've pushed hard. Many of you have been at our side in trying to get something done. I want a bill that won't tie the hands of the honest cops in trying to get their jobs done, one that shows less sympathy for the criminals and certainly more for the victims of crime. And most of all, I want to get a crime bill that I can sign.
But law and order mean more than just safe streets and bigger prisons. Reforming the system also means going after public corruption in our cities and our States, the rot that eats away at our institutions and at our trust. Over the past 3 years, this administration has moved aggressively to hunt down corruption and stop it dead in its tracks.
For the record, in '89 and '90 alone the Department secured over 2,200 convictions, 2,200 in public corruption cases. Judges, legislators, and law enforcement officials, part-time crooks, full-time fakes: Nobody is immune. And this kind of crime does society real harm because these swindlers aren't satisfied merely with making crime pay; they stick the taxpayer with the tab. And millions and millions of hard-earned tax dollars are disappearing from public treasuries every single year and showing up in corruption's back pocket. And this is money that could be building roads or balancing budgets. I am preaching to the choir on this subject because you all are out there on the cutting edge, on the front line all the time, trying to do something about the problem.
But the problem is greater than a few individuals who stopped caring. The problem is a system that has stopped working. And the old bureaucratic system of big Government has ground to a halt. And it's not accountable; it is not effective; and it is not efficient. It's not even compassionate. And the chronic problems we see today are sad proof that the old approaches are producing new failures.
So in this election year, it's understandable, I'm sure, that we hear a lot of talk about change. You all have been fighting for change; I think I have. And yes, the time has come for change, far-reaching, fundamental reform. That's the kind of change that his country needs in the fighting-crime field. Not just in fighting crime, incidentally, and not just in Government but all across the board.
And that's why I've - proposing school choice reform - just finished almost an hour meeting with our Secretary of Education on that one. So the choices about education can be made from the kitchen table, not from the halls of bureaucracy. Where it's been tried, it has been effective in improving the schools that are not chosen as well as those that are.
And I've proposed a health care reform to improve access for those who need it the most. Legal reform, we need your help on. We've got good proposals up there on Capitol Hill. Our legal reform is shaped so that Americans can start solving their problems face to face instead of lawyer to lawyer. I'm amazed at the number, the great increase in lawsuits that is really putting a damper on so many aspects in our society.
The kind of change that I'm describing is hard. It has its enemies, and the battle lines have been drawn: the allies of change versus the defenders of the status quo. So, I want to make it very clear which side I'm on; I know which side many of you are on.
So, let the cynics say that this is only a fight for the next election. We know it's a battle for the next generation. And I'm very glad you all are here. And what we'll do is go over here, and I'd love to have suggestions from you as to how we might be doing our job better down here. And of course, I'd be glad to take questions and if they're technical, I'll kick them off to perhaps the most able Attorney General a guy could hope to have with him.
Thank you all very much.
Note: The President spoke at 10:36 a.m. in the Roosevelt Room at the White House. In his remarks, he referred to Kenneth O. Eikenberry, attorney general of Washington, and Jeffrey L. Amestoy, attorney general of Vermont.
Exchange With Reporters Prior to a Meeting With President George Vassiliou of Cyprus
March 30, 1992
Cyprus
Q. President Vassiliou, are you going to ask the United States to pressure Mr. Denktash to make some progress?
President Vassiliou. Well, I am grateful to the President for his support for a solution of the Cyprus problem, and I'm sure that the fact that he's meeting here, with him in an election campaign period, is the best proof of his interest. And I'm grateful.
President Bush. I am interested, and I just hope we can help. Our Ambassador's been wonderful and tried, a special Ambassador, but now he's going on to greater pursuits. But we can't let him get too far away because he's very interested in all of that. No, but we'll talk about it, and I think your visit up there in New York probably is very important. I hope the new Secretary-General is energized.
<#FROWN:H22\>
PART ONE
GENERAL PART
Chapter One
Objectives
Article 101: Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade, hereby establish a free trade area.
Article 102: Objectives
1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to:
(a) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;
(b) promote conditions of fair competition in the free trade area;
(c) increase substantially investment opportunities in the territories of the Parties;
(d) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;
(e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and
(f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 103: Relation to Other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the General Agreement of Tariffs and Trade and other agreements to which such Parties are party.
2. In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
Article 104: Relation to Environmental and Conservation Agreements
1. In the event of any inconsistency between this Agreement and the specific trade obligations set out in:
(a) the Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington, March 3, 1973, as amended June 22, 1979,
(b) the Montreal Protocol on Substances that Deplete the Ozone Layer, done at Montreal, September 16, 1987, as amended June 29, 1990,
(c) the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, done at Basel, March 22, 1989, on its entry into force for Canada, Mexico and the United States, or
(d) the agreements set out in Annex 104.1,
such obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other provisions of this Agreement.
2. The Parties may agree in writing to modify Annex 104.1 to include any amendment to an agreement referred to in paragraph 1, and any other environmental or conservation agreement.
Article 105: Extent of Obligations
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by state and provincial governments.
Annex 104.1
Bilateral and Other Environmental and Conservation Agreements
1. The Agreement Between the Government of Canada and the Government of the United States of America Concerning the Transboundary Movement of Hazardous Waste, signed at Ottawa, October 28, 1986.
2. The Agreement Between the United States of America and the United Mexican States on Cooperation for the Protection and Improvement of the Environment in the Border Area, signed at La Paz, Baja California Sur, August 14, 1983.
Chapter Two
General Definitions

Article 201: Definitions of General Application
1. For purposes of this Agreement, unless otherwise specified:
Commission means the Free Trade Commission established under Article 2001(1) (The Free Trade Commission);
Customs Valuation Code means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade, including its interpretative notes;
days means calendar days, including weekends and holidays;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association;
enterprise of a Party means an enterprise constituted or organized under the law of a Party;
existing means in effect on the date of entry into force of this Agreement;
Generally Accepted Accounting Principles means the recognized consensus or substantial authoritative support in the territory of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities, disclosure of information and preparation of financial statements. These standards may be broad guidelines of general application as well as detailed standards, practices and procedures;
goods of a Party means domestic products as these are understood in the General Agreement on Tariffs and Trade or such goods as the Parties may agree, and includes originating goods of that Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, and its legal notes, as adopted and implemented by the Parties in their respective tariff laws;
measure includes any law, regulation, procedure, requirement or practice;
national means a natural person who is a citizen or permanent resident of a Party and any other natural person referred to in Annex 201.1;
originating means qualifying under the rules of origin set out in Chapter Four (Rules of Origin);
person means a natural person or an enterprise;
person of a Party means a national, or an enterprise of a Party;
Secretariat means the Secretariat established under Article 2002(1) (The Secretariat);
state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party; and
territory means for a Party the territory of that Party as set out in Annex 201.1.
2. For purposes of this Agreement, unless otherwise specified, a reference to a state or province includes local governments of that state or province.
Annex 201.1
Country-Specific Definitions
For purposes of this Agreement, unless otherwise specified:
national also includes:
(a) with respect to Mexico, a national or a citizen according to Articles 30 and 34, respectively, of the Mexican Constitution; and
(b) with respect to the United States, "national of the United States" as defined in the existing provisions of the Immigration and Nationality Act;
territory means:
(a) with respect to Canada, the territory to which its customs laws apply, including any areas beyond the territorial seas of Canada within which, in accordance with international law and its domestic law, Canada may exercise rights with respect to the seabed and subsoil and their natural resources;
(b) with respect to Mexico,
(i) the states of the Federation and the Federal District,
(ii) the islands, including the reefs and keys, in adjacent seas,
(iii) the islands of Guadalupe and Revillagigedo situated in the Pacific Ocean,
(iv) the continental shelf and the submarine shelf of such islands, keys and reefs,
(v) the waters of the territorial seas, in accordance with international law, and its interior maritime waters,
(vi) the space located above the national territory, in accordance with international law, and
(vii) any areas beyond the territorial seas of Mexico within which, in accordance with international law, including the United Nations Convention on the Law of the Sea, and its domestic law, Mexico may exercise rights with respect to the seabed and subsoil and their natural resources; and
(c) with respect to the United States,
(i) the customs territory of the United States, which includes the 50 states, the District of Columbia and Puerto Rico,
(ii) the foreign trade zones located in the United States and Puerto Rico, and
(iii) any areas beyond the territorial seas of the United States within which, in accordance with international law and its domestic law, the United States may exercise rights with respect to the seabed and subsoil and their natural resources.
PART TWO
TRADE IN GOODS
Chapter Three
National Treatment and Market Access for Goods
Article 300: Scope and Coverage
This Chapter applies to trade in goods of a Party, including:
(a) goods covered by Annex 300-A (Trade and Investment in the Automotive Sector),
(b) goods covered by Annex 300-B (Textile and Apparel Goods), and
(c) goods covered by another Chapter in this Part,
except as provided in such Annex or Chapter.
Section A - National Treatment

Article 301: National Treatment
1. Each Party shall accord national treatment to the goods of another Party in accordance with Article III of the General Agreement on Tariffs and Trade (GATT), including its interpretative notes, and to this end Article III of the GATT and its interpretative notes, or any equivalent provision of a successor agreement to which all Parties are party, are incorporated into and made part of this Agreement.
2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded by such state or province to any like, directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part.
3. Paragraphs 1 and 2 do not apply to the measures set out in Annex 301.3.
Section B - Tariffs

Article 302: Tariff Elimination
1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 302.2.
3. On the request of any Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules. An agreement between two or more Parties to accelerate the elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules for such good when approved by each such Party in accordance with its applicable legal procedures.
4. Each Party may adopt or maintain import measures to allocate in-quota imports made pursuant to a tariff rate quota set out in Annex 302.2, provided that such measures do not have trade restrictive effects on imports additional to those caused by the imposition of the tariff rate quota.
5. On written request of any Party, a Party applying or intending to apply measures pursuant to paragraph 4 shall consult to review the administration of those measures.
Article 303: Restriction on Drawback and Duty Deferral Programs
1. Except as otherwise provided in this Article, no Party may refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, on a good imported into its territory, on condition that the good is:
(a) subsequently exported to the territory of another Party,
(b) used as a material in the production of another good that is subsequently exported to the territory of another Party, or
(c) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party,
in an amount that exceeds the lesser of the total amount of customs duties paid or owed on the good on importation into its territory and the total amount of customs duties paid to another Party on the good that has been subsequently exported to the territory of that other Party.
2. No Party may, on condition of export, refund, waive or reduce:
(a) an antidumping or countervailing duty that is applied pursuant to a Party's domestic law and that is not applied inconsistently with Chapter Nineteen (Review and Dispute Settlement in Antidumping and Countervailing Duty Matters);
(b) a premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels;
(c) a fee applied pursuant to section 22 of the U.S. Agricultural Adjustment Act, subject to Chapter Seven (Agriculture and Sanitary and Phytosanitary Measures); or
(d) customs duties paid or owed on a good imported into its territory and substituted by an identical or similar good that is subsequently exported to the territory of another Party.
<#FROWN:H23\>
DEVELOPMENTS IN FEDERAL-STATE RELATIONS, 1990-91
By John Kincaid
The continuing federal fiscal crisis and the developing fiscal crisis in state and local governments dominated intergovernmental relations in 1990 and 1991 as the nation entered its deepest recession since the early 1980s. On Jan. 1, 1991, The Washington Post headlined a story, "Big Fiscal Woes Await Governors in Northeast." As problems spread to more states, the Post headlined an April story, "Recession, Soaring Medicaid Costs Put the Squeeze on State Budgets." By June 30, 1991 a Post headline read, "Facing Year of Living Penuriously, States Slash Costs, Beef Up Taxes."
Overall, state expenditures were $533.7 billion in fiscal 1991, up 8.8 percent from the previous year. However, the average general-fund balance for the 50 states at the end of fiscal 1991 was 1.5 percent, the smallest since fiscal 1983 (Howard 1991, 18). At the same time, about 34 states raised taxes. The total increase was in the range of $14.4 billion to $16.2 billion - the largest ever one-year increase (Gold 1991, 623-626).
The results of these developments, wrote New York Times columnist Russell Baker on July 9, 1991, are "predictable: Hordes of governors, mayors and county supervisors will be voted out of business in 1992. At the same time, the usual 95 to 98 percent of Congress and President Bush will enjoy re-election."
By the end of the year, though, George Bush, who seemed unbeatable after the American victory in the Gulf War in February 1991, was in trouble with voters because of the recession. Bush's plunge in the polls was counterbalanced only by continued public disdain for the Congress, a mood exacerbated in 1991 by the Clarence Thomas-Anita Hill controversy before the Senate Judiciary Committee and by revelations of bounced checks at the House bank and unpaid bills at the House restaurant.
The disarray in Washington increased the fiscal and policy problems facing state and local officials. These officials generally attributed their problems to: the deepening recession; increasing demands and costs for social welfare; increasing federal mandates and conditions of aid, especially in Medicaid; reductions in federal aid; and adverse federal court decisions. Some critics charged, though, that states were reaping the consequences of profligate spending during the growth years of 1984-1989 (Moore 1991). State spending had increased by more than 100 percent during the 1980s - above the rates of inflation and the increase in federal spending.
States also experienced pressures form the rising costs of: health care, due partly to inflation, mandates, and long-term care costs; education, due partly to reform efforts, teachers' lobbying and rising enrollments; and corrections, due in part to federal court orders, the drug war and mandatory sentencing policies. At the same time, states were widely criticized in the media for trying to balance their budgets on the backs of the poor, and by other observers for slowing economic recovery by raising taxes and cutting spending.
Hence, for many state and local officials, 1991 ended on a sour intergovernmental note. The mood was reflected in a commentary by the executive director of the National Governors' Association, who wrote that recovery from the 1991-1992 recession "will not resemble the 1980s, when state revenues grew an average of 9 percent a year throughout the decade and plenty of money was available for new programs. Instead, the 1990s will be a period of scarcity and adjustment." He added, "State government will no longer have the fiscal capacity to assume additional responsibilities from the federal and local governments. Efforts to shift responsibilities to states will meet increased resistance" (Scheppach 1991, 1-2).
Public opinion
The possible effects of these developments on public attitudes toward the states were reflected in a 1991 national opinion poll commissioned by the U.S. Advisory Commission on Intergovernmental Relations (ACIR). The proportion of respondents saying that states spend their tax dollars the most wisely of all governments in the federal system dropped from 20 percent in 1990 to 14 percent in 1991. Those picking local government declined slightly, from 36 percent to 35 percent, while respondents selecting the federal government, actually increased slightly from 11 percent to 12 percent. More dramatically, the percentage of Americans volunteering that none of the three governments spends their tax dollars wisely jumped from 19 percent to 27 percent.
The proportion of respondents saying they get the "most of their money" from state government declined from 23 percent in 1989 to 22 percent in 1991. However, the percentage dropped from 33 to 26 for the federal government while increasing from 29 percent to 31 percent for local governments.
The proportion of poll respondents who picked the state income tax as "the worst tax" increased from 10 percent in 1989 to 12 percent in 1991. Those picking the state sales tax as the worst increased from 18 percent to 19 percent, while those selecting the federal income tax declined from 27 percent to 26 percent, and the local property tax, from 32 percent to 30 percent.
Even so, when asked how well their state and the federal government cooperate, 7 percent said "very well" and 43 percent said "fairly well." When asked the same of their state and local government, 9 percent said "very well" and 50 percent said "fairly well." Overall, these respondents seemed more up-beat about federal-state cooperation than many activists in the intergovernmental community, despite the fact that public discontent with state governments appeared to have risen with the downturn in the economy. The most negative public views of state governments, and of federal-state and state-local cooperation, were found in the Northeast (ACIR 1991).
Public Pressure for Term Limits
Another indicator of public discontent with state government, as well as the U.S. Congress, was the term limitation movement. Although a term-limit measure failed on the 1991 Washington state ballot, such measures already had been approved in California, Colorado and Oklahoma in 1990, and were advocated in about 35 other states. In response, the National Conference of State Legislatures began a public education campaign to improve public perceptions of state legislatures.
While the wisdom of term limits is certainly debatable, attempts to limit the terms of members of Congress raise constitutional questions. Many observers believe the states cannot unilaterally limit the number of terms served by their Congressional members. After all, the framers of the U.S. Constitution rejected a term limit, and the term limit imposed on presidents required a constitutional amendment.
Yet, the situation with the Congress is different. Each member represents one state or substate jurisdiction. No one state or group of states could unilaterally limit presidential terms; but the voters of each state, as a sovereign entity, are arguably free to limit the number of terms served by their representatives in Congress, just as they can limit the number of terms served by any of their other elected officials. Although the U.S. Constitution contains no term limit, neither does it explicitly prohibit a state from setting a limit for its representatives. The Constitution specifies only the length of terms to be served by Senate and House members.
Federal Turnovers v. State Turn-ups
For most state officials during this period, term limits were of less immediate concern than fiscal limits. States continued to press the federal government for fiscal and economic relief and for federal assumption of certain fiscal responsibilities, such as long-term care under Medicaid. Some conflict also developed among states, especially over the bailout of the savings and loan industry. Officials in the Northeast and Midwest argued the bailout is shifting funds from their coffers to states such as Texas, New Mexico, Arizona, Alaska, Kansas and Louisiana - all net gainers of bailout monies.
In contrast to state emphases on fiscal 'turn-ups' and an economic turnaround, President Bush proposed in his 1991 State of the Union address to 'turn over' to the states $15 billion to $20 billion of grant programs in a fully funded, consolidated block grant, with essentially level funding guaranteed through fiscal 1996. Bush listed 11 examples of what could be turned over, and said these programs were subject to 1,028 pages of regulation in the Federal Register, requiring about 4.2 million hours of paperwork per year. The programs included four in education; EPA sewage construction grants; three in health and human services; two in housing and urban development; and the Byrne Memorial State and Local Law Enforcement Assistance Program.
The proposal generally was well received by governors and state legislators, but not by mayors and members of Congress. House Majority Leader Richard A. Gephardt suggested, instead, that the federal government increase by 2 percent the taxes on some corporate income to fund state education programs. To qualify for these bonus funds, states would be required to show that all children entering first grade were recipients of prenatal and well-baby care, nutrition screening, immunizations and early childhood education. The proposal received little attention.
City officials opposed Bush's proposal, primarily because the examples included programs of direct interest to them, especially the Community Development Block Grant, certain public housing funds, low-income energy assistance and impact aid for local schools. Robert M. Isaac, president of the U.S. Conference of Mayors, said that states cannot be trusted with block grant monies. He argued, for example, that under the Drug Abuse Act of 1986, states disburse funds that are too late and too little for local governments.
Both the National Governors' Association and National Conference of State Legislatures developed alternative proposals to present to the White House in April 1991. Missouri Gov. John Ashcroft, then vice-chairman of the National Governors' Association, emphasized the flexibility afforded by block grants. "A prime example of the lack of flexibility in Missouri," he said, "is that social service caseworkers must document by 15-minute intervals the time spent for individual Medicaid, Aid to Families with Dependent Children, and food stamp cases" (National Governors' Association 1991, 3). Both proposals allayed the major concerns of local officials by excluding programs of vital interest to them (McDowell 1991, 8-11). The National Governors' Association proposed to consolidate 42 categorical programs and six loan and loan-guarantee programs into a $15.2 billion block grant having eight functional components. The National Conference of State Legislatures proposed to consolidate about 85 categorical grants into 12 block grants falling into five categories and funded at $21.2 billion.
Virtually nothing was heard about the turnover until December 1991, when President Bush informed the National League of Cities that he would announce a new turnover in his 1992 State of the Union address. Bush proposed a consolidated block grant consisting of 25 programs in: education (12 programs); environmental protection (EPA's sewage construction program); health and human services (Maternal and Child Health Block Grant, Social Services Block Grant, and state administrative expenses for Medicaid, Aid to Families with Dependent Children, and Food Stamps); justice (drug control and juvenile justice); and four other programs (job training for the homeless, Agriculture Stabilization and Conservation Service cost share, community service employment for older Americans, and the National and Community Services Act). The proposed budget outlay was $14.6 billion for fiscal 1993, projected to $15.7 billion in fiscal 1997. The 1992 proposal did reflect some of the modifications that had been suggested by the National Governors' Association and National Conference of State Legislatures, and dropped most of the programs that had drawn the strongest objections from local governments.
The President said in the budget proposal that his goal was "to move power and decision-making authority closer to the people and allow state and local governments greater flexibility to manage programs more efficiently and effectively. The proposed block grant encourages the natural innovative powers of state and local governments as laboratories of change." The proposal contained a hold-harmless provision, transitional arrangements and requirements for intended use reports and audits to ensure that states spend the money for the intended purposes. State officials appeared to be cautiously optimistic about the plan, though they expressed concern about the prospects for passage and the fact that "it mixes and matches entitlements and discretionary programs" (Perlman 1992, 23).
In light of the recession and the upcoming presidential election, Bush's overall $1.52 trillion fiscal 1993 budget proposal drew mixed reviews.
<#FROWN:H24\>
Fuels Used in Farming
You may be eligible to claim a credit or refund of excise taxes included in the price of fuel used on a farm for farming purposes, if you are the owner, tenant, or operator of a farm. You may claim only a credit for gasoline and special motor fuel used on a farm for farming purposes. You may claim either a credit or refund for diesel fuel and aviation fuel used on a farm for farming purposes.
A farm includes livestock (including feed yards for fattening cattle), dairy, fish, poultry, fruit, fur-bearing animals, truck farms, orchards, plantations, ranches, nurseries, ranges, and structures such as greenhouses or horticultural commodities. A fish farm is an area where fish are grown or raised - not merely caught or harvested. The farm must be operated for profit and located in any of the 50 States or the District of Columbia.
Farming purposes. Fuel is used on a farm for farming purposes if it is used:
1) To cultivate the soil, or to raise or harvest any agricultural or horticultural commodity.
2) To raise, shear, feed, care for, train or manage livestock, bees, poultry, fur-bearing animals, or wildlife.
3) To operate, manage, conserve, improve, or maintain your farm, tools, or equipment.
4) To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity (as provided below).
5) To plant, cultivate, care for, or cut trees, or to prepare (other than the sawing into lumber, the chipping or other milling) trees for market, but only if the planting, etc., is incidental to your farming operations (as provided below).
Fuel is used on a farm for farming purposes when it is used by you to handle, dry, pack, grade, or store a raw commodity, but only if you produced more than one-half of the commodity which was so treated during the tax year. Commodity refers to a single raw product. For example, apples would be one commodity, and peaches another. The more than one-half test applies separately to each commodity.
Fuel used in incidental tree operations on your farm may not be included in a claim unless the operations are minor in nature when compared to the total farming operations.
Fuel used on a farm for farming purposes includes fuel used by you as the owner, tenant, or operator, and fuel used by a neighbor or a custom operator who performs services for you to cultivate the soil, raise or harvest any agricultural or horticultural commodity, or to raise, shear, feed, care for, train or manage livestock, bees, poultry, fur-bearing animals, or wildlife.
If you have a neighbor, custom operator, or any other person perform any other services for you on your farm, no one can claim the credit for fuel used on a farm for farming purposes for these services.
If there is doubt whether fuel was purchased by the owner, the tenant, or the operator of a farm, determine who actually bore the cost of the fuel. For example, if the owner of a farm and the tenant share the cost of the fuel 50-50, then each can claim a credit for the tax on one-half of the fuel used. Also, if you sell fuel to a neighbor who uses it on a farm for farming purposes, your neighbor (not you) can claim the credit on the fuel you sold, because your neighbor bore the cost of the fuel.
Cropdusting. The use of fuel in the aerial or other application of fertilizers, pesticides, or other substances is a use of fuel on a farm for farming purposes. You as the owner, tenant, or operator, may claim the credit or refund. If you do not file a claim, you may waive your right to the claim, and then the claim can be made by the applicator. The applicator is treated as having used the fuel on a farm for farming purposes.
Waiver. To waive your right to the credit or refund, you must:
1) Execute in writing an irrevocable statement that you knowingly give up your right to the credit or refund.
2) Identify clearly the time period that the waiver covers. The effective period of your waiver cannot extend beyond the last day of your tax year.
3) Sign the waiver before the applicator files his or her claim. Once signed, the waiver cannot be revoked. You may authorize an agent, such as a cooperative, to sign the waiver for you.
4) Keep a copy of the waiver for your records and give a copy of the signed waiver to the applicator. Do not send this waiver to the Internal Revenue Service, unless requested to do so.
The waiver may be a separate document or it may appear on an invoice or another document from the applicator. If the waiver appears on an invoice or other document, it must be printed in a section clearly set off from all other material, and it must be printed in type sufficiently large to put you on notice that you are waiving your right to the credit or refund. In addition, if the waiver appears as part of an invoice or other document, it must be written separately from any other item that requires your signature.
Sign a separate waiver for each tax year or part of a tax year in which the fuel was used. If any part of the waiver period extends beyond the end of the applicator's tax year, the applicator must wait until the next tax year to claim the credit or refund for that part.
Fuel not used for farming. Fuel is not used for farming purposes when used:
Off the farm, such as on the highway or in non-commercial aviation, even though the fuel is used in transporting livestock, feed, crops, or equipment;
For personal use, such as mowing the lawn;
In processing, packaging, freezing, or canning operations; or
In the processing of crude gum into gum spirits of turpentine or gum resin, or in the processing of maple sap into maple syrup or maple sugar.
Fuels Used in Commercial Fishing Boats
You may be eligible to claim a credit or refund of excise tax included in the price of fuel if you use the fuel in a boat used in the fisheries or whaling business.
Boats used in fishing include only watercraft used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. Both fresh and salt water fisheries are included. Commercial fishing boats do not include watercraft used on a specific trip for both sport fishing and commercial fishing. For example, a boat is not engaged in commercial fishing if on the same trip it is used for marlin sport fishing and for catching tuna. Fuel used in aircraft to locate fish is not fuel used in commercial fishing.
Fuels Used in Off-Highway Business Use
You may be eligible to claim a credit or refund of excise tax included in the price of fuel if you used the fuel in an off-highway business use.
Off-highway business use is any use of fuel in a trade or business or in any income-producing activity. The use must not be in a highway vehicle registered for use on public highways unless the vehicle is owned by the United States. If a vehicle owned by the United States is registered for highway use, but is not actually used on a public highway during the period for which the claim is made, its use is still an off-highway business use. Off-highway business use does not include any use in a motorboat.
Highway vehicle includes any self-propelled vehicle designed to carry a load over public highways, whether or not also designed to perform other functions.
It does not matter if the vehicle is designed to perform a highway transportation function for only a particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer), or a special kind of cargo, goods, supplies, or materials. It does not matter if machinery or equipment is specially designed (and permanently mounted) to perform some off-highway task unrelated to highway transportation except to the extent discussed in the next paragraph. Examples of vehicles that are designed to carry a load over public highways are passenger automobiles, motorcycles, buses, highway-type trucks, and truck tractors.
Vehicles not considered highway vehicles. Generally, the following kinds of vehicles are not considered highway vehicles:
1) Specially designed mobile machinery for nontransportation functions. A self-propelled vehicle is not a highway vehicle if it consists of a chassis that-
Has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways.
Has been specially designed to serve only as a mobile carriage and mount for the machinery or equipment, whether or not the machinery or equipment is in operation, and
Could not be used, because of its special design, as part of a vehicle designed to carry any other load without substantial structural modification.
2) Vehicles designed for off-highway transportation. A self-propelled vehicle is not a highway vehicle if-
The vehicle is designed primarily to carry a specific kind of load other than over the public highway for certain operations (construction, manufacturing, mining, processing, farming, drilling, timbering, or similar operations), and
The vehicle's use of carrying this load over public highways is substantially limited or impaired because of its design. To determine if the vehicle is substantially limited or impaired, you may take into account whether the vehicle may travel at regular highway speeds, requires a special permit for highway use, or is overweight, overheight, or overwidth for regular highway use.
A public highway includes any road in the United States that is no a private roadway. This includes federal, state, county, and city roads and streets.
Registered. A vehicle is considered registered when it is registered or required to be registered for highway use under the law of any state, the District of Columbia, or any foreign country in which it is operated or situated.
Any highway vehicle operated under a dealer's tag, license, or permit is considered registered. A highway vehicle is not considered registered solely because there has been issued a special permit for operation of the vehicle at particular times and under specified conditions.
Fuels used in power take-offs. You are not allowed a credit or refund for fuel used in the motor of a highway vehicle that operates special equipment by means of a power take-off or power transfer. It does not matter if the special equipment is mounted on the vehicle. For example, there is no credit or refund on gasoline used to operate the mixing unit on a concrete-mixer truck when the mixing unit is operated by a power take-off from the motor of the vehicle. Similarly, fuel used in the motor of a registered fuel-oil delivery truck to operate the pump on the truck for discharging the fuel into the customer's storage tank does not qualify for a credit or refund of tax.
If your registered highway vehicle is equipped with a separate motor to operate the special equipment, such as a refrigeration unit, pump, generator, or mixing unit, the fuel you use in the separate motor qualifies. When fuel is drawn from the same tank that supplies fuel for propelling the vehicle, you must figure the quantity used in the separate motor operating the special equipment. Your reasonable estimate of the amount of fuel used will be accepted for a credit or a refund. The figure must be based, however, on operating experience and supported by your records. Devices to measure the number of miles the vehicle has traveled, such as hubometers, may be used to figure the number of gallons of fuel used to propel the vehicle. Add to this amount the fuel consumed while idling or warming up the motor preparatory to propelling the vehicle.
<#FROWN:H25\>
Taking Stock: Community Development 25 Years Later
New York, N.Y. - Twenty-five years after the civil rights movement and the war on poverty spawned a resurgence of community efforts to combat poverty, representatives from seven of the country's oldest community development corporations met at the Ford Foundation to survey the road they had traveled.
The first order of business was defining just what a community development corporation is. Rocky Mitchell, president of the Bedford Stuyvesant Restoration Corporation in Brooklyn, N.Y., said the person best qualified to offer a definition in his organization was the switchboard operator. "A couple of months ago," said Mitchell, "someone from the community called Restoration to report that the house next door to them was on fire. I think that's an indication of how we're perceived by a lot of people in the community."
Mitchell's organization may not put out fires but, over the last 25 years, it has performed enough services to be routinely described as "the city hall of Bedford-Stuyvesant." Everyone agreed that since their organizations were defined primarily by the needs of the communities they served, there was no 'cookie-cutter' definition to their work, but 'city hall' seemed to fit admirably well.
The two-day conference, held in early November, marked the first time the seven groups - known as 'mature' CDCs - had sat down together around the same table. It was convened by the Foundation's Urban Poverty program so that the organizations' leaders could reflect on their shared experience and define the main issues confronting them in the 1990s. Participating organizations were: the Bedford Stuyvesant Restoration Corporation (BSRC); the Mexican American Unity Council (MAUC), from San Antonio; Mississippi Action for Community Education (MACE), from Jackson; the Spanish-Speaking Unity Council (SSUC), from Oakland, Calif.; Watts Labor Community Action Committee (WLCAC), from Los Angeles; New Community Corporation (NCC), from Newark, N.J.; and Chicanos Por La Causa (CPLC), from Phoenix, Ariz.
All of the groups were organized in the 1960s, when the issues of poverty and discrimination first burst onto the national agenda. There was a clear need then for organizations that could combine the technical and professional skills of a government agency with the street wisdom, motivation, and local pride found in many community-based groups.
Such CDCs were part of a generation of neighborhood organizations that played a pivotal role in the rebirth of urban neighborhoods. Emphasizing self-determination and self-help, they accepted as their mission the improvement of all aspects of a community's life - physical, economic, and social.
Over the years the CDCs represented at the conference had all demonstrated the ability to manage large amounts of public and private funds, often with great ingenuity, developing programs that included job training, youth counseling, care for the elderly, health services, housing rehabilitation, and commercial and industrial development. In addition, the early CDCs served as the training grounds for many local leaders.
In spite of all they had accomplished, all of the groups reported that their work had to be seen as a "holding action." Without substantial public and private reinvestment, it was felt that no single organization could reverse a continuing pattern of decline in many of the nation's poor neighborhoods.
Moreover, during the 1980s they all had to learn to survive in an era of drastically diminished support. Larry Farmer, the president of Mississipi's MACE, articulated a feeling shared by most of the other CDC leaders when he said, "All of us have been living one step ahead of the sheriff for the last 10 years or so."
In his remarks to the conference, Ford Foundation President Franklin Thomas, who had been BSRC's first president, serving for ten years, recalled how tough it had been to get these organizations going in the mid to late 1960s. "Some of these cities were burning," he said, "and we were all scrambling to try to show something tangible that would give people a basis for hope and give young people a sense of connection and empowerment."
He called for wider recognition of the challenges the groups faced in meeting capital and other needs, including leadership development and staff development. He took particular note of the devastating impact that the shift in national policy during the 1980s had on these groups. "At the same time," said Thomas, "the vision embodied in the early CDCs is one that the entire community development movement has to return to. For a development strategy to be worthy of the name, it has to simultaneously pursue work on housing, business growth, job training, education, and art, culture, and recreation - because those are all the elements necessary for a healthy community and a healthy society." He cited what he saw as a "real need to connect this first generation of CDCs with the newer ones in a way that strengthens the whole."
All the conference participants agreed that there hadn't been enough recognition of how hard it was to carry out that vision. Reflecting on their difficulties, SSUC's executive director, Arabella Martinez, said, "Over the last decade there's been a serious erosion of the social safety net. There's less of a will to do something about the problems of poverty. It's a less caring society."
"A lot of the time," said Martinez, who was an assistant secretary in the Department of Health and Human Services during the Carter Administration, "we're taking on development risks in areas long since abandoned by business and industry." Speaking from her own experience, she said, "If it hadn't been for the Spanish-Speaking Unity Council, the Fruitvale section of Oakland would look the way the South Bronx did 10 years ago."
Yet, given the shortage of funding, many of the CDCs formed over the past 10 to 15 years have had to restrict their activities to housing development. "They've done important work adding to the stock of low-income housing," said Martinez. "But it's a narrower vision of community development."
At least in part because the mature CDCs remain the most complete expression of the philosophy of community development, Monsignor William Linder of Newark's New Community said he believed that it was in everybody's interests that they continue to grow.
Describing them as one of the most important sources of expertise in the debate on poverty issues, from teenage motherhood to homelessness, he observed that the mature CDCs "can tie policy to the real world of people in a way that few other organizations can."
Speaking around a table where there were decidedly more people with gray hair than not, he added, "There's no way for a movement to progress if it doesn't have a sense of its own history. We need a lot of the gray-haired people who have lived that history to continue to play a role in the community development movement."
MACE's president, Larry Farmer, said that what he thought distinguished the work of the groups attending the conference from more recent efforts in poor communities was that many of the newer ones seemed "more committed to helping people live better in poverty rather than helping them get out of poverty."
He also said that community groups "had to try to empower from all directions. Not just through economic development, but through the people becoming leaders" - something that MACE has stressed since its beginnings.
Said SSUC's Martinez, "Don't measure my success solely on the dollars and cents at the bottom of my balance sheet. Measure me also on the number of people who got their first real chance while working in a CDC. Leadership is just like anything else - it's learned. And it's learned on the job. I would never have been an assistant secretary in Washington if it hadn't been for the experience I got at the Unity Council."
Most felt that their organizations had to become better at formalizing leadership training. CPLC's Pete Garcia recalled that when he first started to move beyond the world of South Phoenix's barrio, he was "still trying to figure out which one of these whoms and forths and wherefores you used first. You don't just take someone who grew up in a housing project, the way I did, and expect that he or she will be able to make their way through the corridors of power without some formal training. If you're going to make a leader, you're going to have to provide training, travel, internships, and a variety of other things."
One step that Garcia's organization has taken is to forge close ties with Hispanic students in the nearby universities. "We recruit interns through student associations," he said. "And even if we can't offer them jobs after they graduate, we try to keep in contact with them."
But many at the conference said that the crisis atmosphere brought on by the withdrawal of federal support made leadership development - in their organizations and in the larger community - a luxury they couldn't afford.
"We need real institutional support," said Martinez, "the kind of support that ballets, symphonies, and museums, and national organizations like the American Red Cross get. None of us are coming close to that kind of backing. We have a harder job to do with fewer resources."
"One of the problems," she added, "is that we're working with people who aren't terribly attractive to a lot of funders. Many have been drug dealers, or they're ex-addicts or welfare mothers. And they're black and Hispanic."
There's a double standard," said NCC board member Mary Smith. "Funders will tell you, 'Oh, the work you're doing is wonderful!' But then they'll tell you that they don't give grants for that kind of work. They'll give it to an institution they perceive as safe, like a college or a hospital."
Monsignor Linder cited as an example a university not far from Newark's New Community. By midway in a yearlong $100 million fund-raising drive it had already reached its goal. "New Community touches a lot more people's lives than that university," he said. "We're providing services that are every bit as important and a lot more challenging to deliver. But somehow we're not perceived as playing anywhere near as important a role."
CPLC's Garcia thinks wider recognition of that role is absolutely essential. "With all the hard times we've had," he said, "we've come of age as a group. We're an institution now. And the powers-that-be should start taking notice."
"We have track records," said WLCAC's Ted Watkins. "We've established our credibility. But government and the private sector still haven't realized sufficiently that what we're doing is in their best interests, too."
To overcome those perceptions, all agreed that they had to get much better at telling their story.
"When it comes to inner-city communities," said Watkins, "there's a lot more attention given to drive-by shootings, crack dealers, and drug busts than to the work of CDCs. But trying to get the attention of the media takes time - time that none of us can afford right now."
Just as important, said Garcia, was "getting more involved in the debate over public policy, so that instead of us having to follow the money, the money starts to follow us." He added that this was also an area where an organization's commitment to developing leaders in the community could be crucial. "If you've done that work," he said, "then a lot of the local political leaders may not only be your friends, they may be part of your organization's family." He cited as an example a recently elected U.S. congressman from the Phoenix area who was a longstanding member of CPLC's board. "CPLC identified the development of leadership as a primary objective 20 years ago," said Garcia. "We've succeeded at the local level, at the state level, and now, we're proud to say, at the national level."
According to Mary Smith of NCC, one way her organization has dealt with this issue was by having a strong community action group that worked hard to let elected officials know what they thought was best for their community.
She recalled an encounter she had 15 years earlier that brought home the importance of organizing.
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FROM THE DEPUTY CHAIRMAN
"To fulfill its educational mission, achieve an orderly continuation of free society, and provide models of excellence to the American people, the Federal Government must transmit the achievement and values of civilization from the past via the present to the future ..."
National Foundation on the Arts and the Humanities Act of 1965, as amended through November 5, 1990
Civilization is a fragile thing. As the legislation that authorizes the Endowment makes clear, history and literature and philosophy do not by themselves speak to generations, present and upcoming. There are necessary agents of transmission - teachers, scholars, students, books, exhibitions, films - and there is necessary support from American citizens. The National Endowment for the Humanities, as an agency of the federal government, does its part by translating American taxpayer monies into programs that serve the present and the future.
One universally acknowledged achievement of civilization is being recognized through the NEH Initiative on the Emergence of Democracy announced in 1992. It is a special invitation for projects that study democracy in its beginnings 2500 years ago and its subsequent emergence in different parts of the world. The initiative is particularly timely in that American scholars are just gaining access to archives held close in Eastern Europe and in the former Soviet republics, but the emergence of democracy is of enduring interest to a nation that seeks to provide for the future orderly continuation of free society. The Endowment has supported several initiatives over the years, mostly in response to historically significant commemorations, such as the Bicentennial of the Constitution, the Bill of Rights, and the Columbian Quincentennary. Although for none of these initiatives were there dedicated funds, they have served to enrich the pool of applications and raise even higher the quality of NEH's many awards.
The merit of the thousands of applications is determined by a process that encourages open debate and brings a multitude of perspectives to bear. It is a procedure that respects intellectual property and personal privacy while conducting public business. It is a three-way tug-and-pull: first, an individual applicant's or panelist's reasonable expectation of confidentiality; second, the citizen's right, therefore the press's right, to know how federal funds are being spent; and finally, a federal agency's responsibility to carry out statutorily mandated programs as effectively and fairly as possible.
When NEH peer reviewers are asked for advice, they have the reasonable expectation that their advice will be treated confidentially. Likewise, when applicants submit proposals, they have a reasonable expectation that the details of their proposals will be held in confidence until the decision to fund or not to fund is made. Once federal funds are obligated for a project, then the description of that project is public information, for the public has a right to know how federal funds are being spent.
Meetings at NEH to discuss specific proposals are closed to the public. When panelists and when National Council members meet in Washington to discuss individual applications, they are reminded that their discussions as well as the details within applications are confidential. Not only does the Endowment reason that it has a responsibility to protect the privacy of those people who do not receive federal funds, but it also understands that it must safeguard the ideas in the applications.
Closed review, however, is more than an issue of the right to privacy. It is an issue of fair and impartial evaluation. The Endowment argues that it cannot carry out its statutorily mandated programs without assuring that applications will be fairly and judiciously considered. Since its inception NEH has depended on the good will of knowledgeable people who have submitted assessments in complete confidence. They have given honest opinions freely; they have determined merit in an atmosphere of disinterested remove.
Their work has resulted in a wide-ranging array of Endowment-supported projects, from a film on Lyndon Baines Johnson to a comprehensive dictionary of classical Latin. In the course of its twenty-seven years, the Endowment has spent $2.65 billion enabling 47,000 projects. In terms of the total federal budget, the sums are small; in terms of total funding for humanities in the United States, however, NEH annually provides more financial support than the 846 largest private foundations do collectively.
One way in which the Endowment has made its funds go farther than they would under ordinary circumstances is through alliances with other federal agencies and with major private funders. Currently an interagency agreement has enabled NEH to participate with the National Science Foundation and the Fund for the Improvement of Postsecondary Education in the Department of Education. The three agencies are pooling resources to encourage programs that improve the quality of undergraduate curricula. Another agreement with the National Science Foundation and the Library of Congress will support public lecture-discussion programs in science and the humanities. A large gift from the DeWitt Wallace-Reader's Digest Fund has given sabbatical opportunities to almost 200 outstanding elementary and secondary teachers over the four years the program has been in place.
NEH is able to play as an equal partner with much larger enterprises for several reasons, but none as important as its reputation over the years for being a well-run agency with a highly competent professional staff. On the administrative side of the agency, for example, in the auditing office and grants office, are knowledgeable, collegial professionals who serve as stewards of taxpayer funds. And on the program side of the agency are dedicated, intelligent officials who daily encourage and inform potential applicants, and who, most importantly, assure fair and impartial review.
It is the widely acknowledged integrity of its merit review process that has given the Endowment the reputation of being primus inter pares in the community of grant-making agencies. It is through these means - merit review, a superlative staff, initiatives that emphasize the contribution of humanities to the national interest - that the National Endowment for the Humanities strives to enable projects that transmit the accomplishments and values of civilization.
HOW THE ENDOWMENT WORKS
In order "to develop and promote a broadly conceived national policy of support for the humanities," the National Endowment for the Humanities was established by Congress in 1965 as an independent grant-making agency of the federal government. The Endowment supports scholarly research, education, and public programs in the humanities. Under the act that established the Endowment, the term humanities includes, but is not limited to, the study of the following disciplines: history; philosophy; languages; linguistics; literature; archaeology; jurisprudence; the history, theory, and criticism of the arts; ethics; comparative religion; and those aspects of the social sciences that employ historical or philosophical approaches.
Programs.
This report lists federal funds obligated for grants made in fiscal year 1992 through the Endowment's six divisions - Education Programs, Fellowships and Seminars, Preservation and Access, Public Programs, Research Programs, and State Programs - and one office - the Office of Challenge Grants. Grant listings are preceded by a brief introduction describing the nature and purposes of the programs administered by each division. The grants themselves are listed in alphabetical order under each grant-making program. Except for the Travel to Collections program, grants for less than $1,000 are not listed.
Public Information.
Information about Endowment programs and activities can be found in a variety of publications produced by the Office of Publications and Public Affairs. The Endowment's bimonthly magazine Humanities features articles by nationally known scholars and writers on current humanities topics, a listing of recent grants by discipline, a calendar of grant application deadlines, a guide section for those who are thinking of applying for an NEH grant, and essays about noteworthy NEH supported projects.
Matching Funds.
To stimulate private support for the humanities, the Endowment uses federal funds to match funds donated from private sources. To date, NEH matching grants have helped generate almost 123 billion in gift funds - more than $953 million of which has been generated through the Challenge Grants program. Matching under the Challenge Grants program is required in a ratio of three to one for first-time awards or four to one for second-time awards. Matching under other programs is on a one-for-one basis.
In addition to federal matching funds, the Endowment stimulates private-sector support of specific projects by requiring grantees in most programs to commit their own funds for a portion of the costs of a project. In many cases, this amounts to 50 percent of total project costs.
Grants.
Except in the case of challenge grants and most grants made by the Division of State Programs, awards made by NEH are for specific projects in the humanities. To apply, an individual or organization submits a proposal for a project to one of the Endowment's funding categories. A final decision can normally be expected about six months after the application deadline.
Each application is assessed by knowledgeable persons outside the Endowment who are asked for their judgments about the quality of the proposed project. About 1,200 scholars and professionals in the humanities serve on approximately 250 panels throughout the course of a year. The judgment of panelists is often supplemented by individual reviews solicited from specialists who have extensive knowledge of the specific subject area dealt with in the application.
The advice of the panels and outside reviewers is assembled by the staff of the Endowment, who may comment on matters of fact or on significant issues that would otherwise be missing from the evaluation. These materials are then presented to the National Council on the Humanities, a board of twenty-six citizens nominated by the President of the United States and confirmed by the Senate. The National Council meets four times each year to advise the Chairman of the Endowment. The Chairman, who is appointed for a four year term by the President with the consent of the Senate, takes into account the advice provided by this review process and, by law, makes the final decision about funding.
In fiscal year 1992, more than 9,100 applications were reviewed, of which about 1,900 were approved.
DIVISION OF EDUCATION PROGRAMS
In 1992 the Division of Education Programs began to award grants for undergraduate curricula that illuminate connections among the various disciplines of science and the humanities. This interagency effort, in cooperation with the National Science Foundation and the Department of Education's Fund for the Improvement of Postsecondary Education, will continue into 1993 and 1994. By means of one such grant, Southwest Texas State University of San Marcos, Texas, will call on faculty from a wide range of fields whose common interest is the study of the Southwest through the perspectives of history, culture, and the natural sciences to develop courses for a new Southwestern studies minor. Another grant will enable Skidmore College to plan a series of multidisciplinary capstone courses which will enrich general education courses. The Division's Higher Education in the Humanities program emphasizes not only general education and core curricula but also deepening the humanities education of future teachers. At Southwest Texas State University a seminar of thirteen humanities faculty members and four secondary school teachers will refine foundation courses for a new program leading to a graduate certificate in the humanities for secondary school teachers. The courses are to focus on 'The Quest for Order and Happiness: The Individual, the State, and the Ethical Life'; readings will range from Seneca's 'Letter from a Stoic' through Diderot's Rameau's Nephew to Morrison's Beloved. To strengthen curricula for undergraduates preparing to become history and social studies teachers, the American Political Science Association will offer a summer institute on constitutional history, principles, and law for campus-based teams of humanities and education faculty members.
Both of the division's comprehensive programs support residential summer institutes for intensive study of significant topics and texts in the humanities. 'The Nature of Meaning,' sponsored by Rutgers University under a grant from the Higher Education program, will focus on the fundamental question, now widely disputed in the humanities, of whether meaning is verifiable among individuals. Intended for faculty members in literary theory, anthropology, linguistics, psychology, and cognitive studies, as well as those who teach philosophy, the institute will feature many leading contributors to the current debate.
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Hershey
A Report on the Company's Environmental Policies and Practices
The Council on Economic Priorities Corporate Environmental Data Clearinghouse
December 1992
HERSHEY FOODS CORPORATION
I. EXECUTIVE SUMMARY
This report documents the company's environmental impact. Among the key aspects are the following:
PERFORMANCE VS. INDUSTRY
CEP looks at six indicators to provide comparative industry-wide analysis. Taken together, these indicators by no means reflect the sum total of a company's environmental performance. CEP compares Hershey to its competitors in the Food Industry.
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Hershey reported the release of just over 90,000 pounds of toxic chemicals in 1989, up from 78,000 pounds in 1988. In terms of aggregate releases, the company's reported release of toxic chemicals was better than average among other companies in the food industry.
When adjusted for sales, Hershey's toxic releases were better than average for the food industry in 1988 and 1989. Hershey Soup reported the release of 0.04 pounds of toxic chemicals for every $1,000 in sales in 1989 and 0.03 in 1988.
Hershey Foods paid nearly $12,000 in OSHA violations during the past five years for 56 violations. This dollar amount was lower than nearly all its major competitors.
The environmental soundness of Hershey's PAC contributions was only about average in general, but much better than that of its competitors. Hershey scored 50 out of 100 on CEP's Greendex.
As of July 1991, the U.S. Environmental Protection Agency had not identified Hershey Foods as a 'potentially responsible party' (PRP) at any Superfund site. This tied them with 4 other companies in the food industry.
Hershey had 4 facility-quarters out of compliance with air permits in 1991. (A facility-quarter is a facility that is out of compliance with its air permit during one calendar quarter.) This was about average for the food industry.
ENVIRONMENTAL IMPACT
Though Hershey has not set goals to reduce the use or emission of carbon dioxide and methane, they have done so for nitrogen oxide and CFCs. Hershey states that its sulfur dioxide emissions have been reduced significantly, through an energy policy which uses cleaner burning natural gas as its primary fuel. And in Hershey's new chocolate facility the company has installed new technology in the boilers that reduces nitrogen oxide emissions.
In terms of solid waste management, the company participates in waste exchanges when possible and reprocess waste for sale as usable product. The company's edible products are reprocessed into animal feed and other wastes are reprocessed for use as mushroom and garden mulch.
The company now has a policy that whenever possible it purchases office paper with recycled content and it replaces photocopiers with new ones which can use recycled paper. Many of its photocopiers and laser printers also use refurbished cartridges.
Hershey's new chocolate facility is attempting to conserve water in the manufacturing process by using water recovered from the evaporation of milk in various non-food contact operations. The company estimated that this program will save approximately 100,000 gallons of water per day.
REGULATORY, LEGAL AND POLITICAL ISSUES
Though the company did not state its position on the proposed GATT Resolution (H.Con.Res. 246), they did state that they support "harmonization" of food safety standards and have a company representative in the U.S. delegation to the Codex Alimentarius Commission.
PRODUCTS AND TECHNOLOGIES
Hershey does plans to conduct biotechnology research on plants, but would not identify the projects and items under consideration, stating this was confidential information.
DISCLOSURE AND POLICY
Hershey responded to CEP's environmental questionnaire. The company also provided comments on a draft copy of CEDC's environmental profile.
Hershey does not support the labelling of foods for pesticides, waxes or shellacs, bioengineered genes, or irradiation, because the company believes "that foods complying with US safety standards do not require warnings on labels."
II. COMPANY OVERVIEW
Hershey Foods Corporation produces a broad line of chocolate confectionery, pasta and other food products. At the end of 1991, the company employed 14,000 people full-time and 1,300 people part-time and Richard A. Zimmerman is the Chairman and CEO.
In 1991, Hershey had nearly $3 billion in sales revenues, a 7% increase from 1990. Net income rose 2% in 1991 to $220 million. According to Fortune, it was the 160th largest company in the United States, and the 17th largest in the food industry in terms of 1991 revenues.
III. STRUCTURE AND POLICY
INDUSTRIES AND SUBSIDIARIES
Hershey Foods Corporation manufactures, distributes and sells consumer food products, which include various chocolates, confectionery, pasta and other food products. The corporation includes the following: Hershey Chocolate U.S.A.; Hershey Canada Inc.; Hershey Refrigerated Products; Hershey International and Hershey Pasta Group.
Hershey Chocolate U.S.A.
This division of Hershey Foods, along with Hershey Canada Inc., manufactures and sells chocolate and confectionery products under approximately fifty-five brand names. Hershey Chocolate U.S.A's main brand names are Hershey's, Reese's, Y&S, Luden's and Peter Paul.
Hershey Canada Inc.
In addition to Hershey, Reese and Y&S, the main brand names of this division include Moirs, Lowney, Glosette, Life Savers, Oh Henry! and Planters.
Hershey Refrigerated Products
This division of Hershey Foods manufactures and sells refrigerated puddings in the U.S.<
p_>Hershey International
In Germany and Mexico, the company manufactures chocolate and confectionery products under the brand names Gubor and Hershey's respectively. This division also exports products manufactured by other divisions and is involved in various international joint ventures.
Hershey Pasta Group
Hershey Pasta Group manufactures and sells pasta under eight brand names, which include San Giorgio, Skinner, Delmonico, P&R, Light 'N Fluffy, American Beauty, Perfection and Ronzoni.
Importation of Foods
The company imports ingredients directly as well as through brokers. Currently, Hershey receives cocoa beans from seven countries.
Hershey explained that they do not grow cocoa beans themselves, but import them from West African, South American and Far Eastern equatorial regions.
FACILITIES AND TERRITORIES
Domestic and Canada
Hershey Chocolate U.S.A. operates 10 manufacturing facilities, six of these are plants of Hershey Pasta Group and the rest are two Confectionery Products plants in Hershey, Pennsylvania, one Confectionery Products plant in Oakdale, California and one in Stuarts Draft, Virginia. Hershey Canada Inc. operates manufacturing facilities in Smith Falls and Hamilton, Ontario; Dartmouth, Nova Scotia; and Montreal, Quebec. They also have a Confectionery Products plant in Smith Falls, Ontario. In addition to the plants listed above, Hershey owns properties for manufacturing pasta products.
CONTACT PEOPLE
Dr. Catherine St. Hilaire
Director
Regular Affairs
(717)-534-5060
John C. Long
Director of Consumer and Public Relations
(717)-534-7641
ENVIRONMENTAL POLICY
Company's environmental policy
Hershey established an environmental taskforce in 1990 with the purpose of updating the company's Environmental Compliance Policy. The company's 'environmental philosophy' reads as follows: "We believe that Hershey Foods Corporation has an obligation to protect and preserve the environment for ouselves, our children and for future generations. We will continue to conduct our business activities in a manner which does not adversely affect the environment and which protects the health and safety of our employees, our consumers and the communities in which we operate."
Hershey's environmental compliance program is based on the following: The company stated that they keep management informed of all issues and circumstances relating to compliance; that its facilities are provided with individuals who have technical expertise in resolving environmental problems; that independent environmental assessments are made by the company; and that any permitting of non-compliance will result in disciplinary acton.
Agriculture policy
When importing ingredients, Hershey stated that they test all lots of cocoa beans to ensure they comply with U.S. regulations on pesticides.
Hershey's formal environmental policy does not deal specifically with integrated pest management (IPM), organic certification, or soil conservation. However, the company does endorse and encourage IPM and soil conservation in its supplier documents and position on pesticide use.
The company does not support the labelling of foods for pesticides, waxes or shellacs, bioengineered genes, or irradiation because the company believes "that foods complying with US safety standards do not require warnings on labels."
Food irradiation
Hershey Foods' policy on food irradiation seems to have fluctuated in the past few years. In 1990, it was reported that Hershey supports food irradiation in policy and the Better World Investment Guide in 1991, stated that up until the late 1980s Hershey belonged to the Coalition for Food Irradiation, a pro-food irradiation lobby. In November of 1991 the Interfaith Center on Corporate Responsibility (ICCR) had a dialogue with the company regarding its policy on food irradiation. At the time, Hershey was targeted as a company that possibly supports food irradiation and ICCR initiated a shareholder resolution against the company. Though ICCR was not able to follow up on the issue, Hershey stated to CEP that "With respect to food irradiation, it is not currently used by our corporation or any of our operating divisions. Neither do we currently purchase or use irradiated foods or ingredients or sell foods that have been exposed to radiation." However, Laurie Williams, educational coordinator for Food and Water, an anti-food irradiation group, stated that as of now Hershey has not submitted a statement to them on food irradiation.
IV. ENVIRONMENTAL IMPACT
RELEASES
While releases of methyl bromide (bromomethane), a potent carcinogen, decreased slightly from 1988 to 1989, Hershey's total reported toxic releases increased substantially. This was mostly dodue to the release of over 27,000 pounds of phosphoric acid into the sewer system at its Oakdale, CA facility.
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Toxic Releases Reduction
Hershey does not participate in the EPA's Industrial Toxics Project (33/50 program). The initiative aims to reduce by one-third by 1992 and by one-half by 1995 the release of 17 target chemicals from 600 industrial companies. Hershey stated that of the 17 chemicals targeted by the EPA, they use only "small amounts in laboratory-related methods." The company then explained that when appropriate, they are looking to eliminate the use of these chemicals through alternative methods.
Though Hershey has not set goals to reduce the use or emission of carbon dioxide and methane, they have done so for nitrogen oxides and CFCs, though the targets were not divulged to CEP. Hershey also stated that its sulfur dioxide (SO<sb_>2<sb/>) emissions have been reduced significantly. The company explained that this was achieved through its energy policy, which uses clean burning natural gas as its primary fuel. They further explained, that in Hershey's new chocolate facility the company has installed new technology in the boilers that reduces nitrogen oxide emissions.
In 1988, Hershey's plant in Hershey, Pennsylvania emitted 40,591 pounds of methyl bromide. According to the Toxic Chemical Release Inventory of the 1986 Emergency Planning and Community Right to Know Act, this chemical is one of many which is considered as "acutely toxic, possible carcinogenic, or capable of having a significant adverse effect on the environment."
WASTE MANAGEMENT
Company Policy
Hershey stated that their company does have a program for reducing wastes generated in manufacturing and it is implemented in the following ways: reducing or eliminating the use of hazardous/toxic materials by switching to non-hazardous/non-toxic materials; reusing or recycling materials; production design/engineering changes; recycling of non-spec or substandard product and establishing office paper recycling.
Hazardous Waste Management
In their 1991 Environmental Brochure, Hershey stated that they do not handle many materials that are hazardous or toxic, but that some amount of chemicals are used in their laboratories and manufacturing plants. For disposal of these materials, Hershey stated that they are moved by licensed transporters who deliver it to waste treatment or disposal facilities. They also stated that they are committed to minimizing the use of hazardous and toxic materials.
Hershey stated that their company does produce chemical, nuclear, and biological wastes from laboratory work which require special disposal procedures.
Hershey stated the amount of hazardous waste (as defined under the Resource Conservation and Recovery Act or RCRA - see APPENDIX J) they produced for each year between 1987 and 1991 was less than 20,000 pounds. Hershey did no onsite recycling, incinerating, treating or landfilling of the hazardous waste produced last year. In terms of offsite efforts, however, the company did recycle 95% of the hazardous waste generated and incinerated 5%.
Solid Waste Management
In their 1991 Environmental Brochure, Hershey stated that they "agree" with the following waste reduction and disposal techniques (in order of preference) adopted by the EPA: source reduction; recycling (including composting of yard waste); waste-to-energy conversion; and landfilling.
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Faculty Research Leave (Sabbatical Leave)
APPLICATION DEADLINE: None
Faculty members spend their sabbatical leave, typically 9-12 months, at the Laboratory. Over 120 appointments have been made since the program's inception in 1980.
The Faculty Research Leave Program is intended to provide mutual benefits to the faculty members and the Laboratory. In addition to bringing about fruitful research activity, it should give Argonne scientists and engineers and visiting faculty opportunities to develop a strengthened rapport and deepened appreciation of mutual needs and interests pertaining to research development and to catalyze the formation of continuing research partnerships and collaborations.
Interactions of faculty with students in the research programs is strongly encouraged. This can take the form of research collaboration as well as more conventional interactions such as seminars and teaching. Also, when funding is available, faculty can involve qualified student(s) from their home campus in their Argonne research program.
Appointments will normally be for an academic or a calendar year, extendable, if mutually agreed upon by the faculty member, the home institution and Argonne. To be eligible for the appointment, a faculty member must be in receipt of a sabbatical-leave award (or other appropriate award) from his/her university, have the approval of the appropriate university administrator to accept the Argonne appointment, and have demonstrated accomplishment in an area of research and/or development relevant to research at Argonne.
During his/her Faculty Research Leave appointment, the faculty member will remain on the payroll and under the fringe benefits of the university. Typically, Argonne will reimburse the university for 50% of salary and fringe benefits for the academic-year (9 months) and full salary and fringe benefits for the summer period (3 months). In addition, the Laboratory may, by direct payment to the faculty member, negotiate reimbursement for certain travel, moving, and housing expenses.
Argonne desires that the expression of interest in Faculty Research Leave participation by an individual faculty member, along with university endorsement of such participation, be transmitted to the Faculty Program Leader, Argonne Division of Educational Programs. Initial expressions of interest should include a curriculum vitae, a publication list, and a brief statement of the research interests of the faculty member. There should also be an indication by the responsible university official that the faculty member is eligible to receive a sabbatical or other appropriate award.
GRADUATE STUDENT PROGRAMS
Laboratory-Graduate Participantship Appointments
Laboratory-Graduate Participantship (Lab-Grad) appointments are available for qualified graduate students at U.S. universities who wish to carry out their thesis research at Argonne National Laboratory under the co-sponsorship of an Argonne staff member and a faculty member. The university sets the academic standards and awards the degree. In practice, the participation by the faculty member varies from full partnership in the research to general supervision. The Argonne staff sponsor undertakes to keep the faculty sponsor informed about the student's progress and he/she attends the thesis defense.
Research may be conducted in the basic physical and life sciences, mathematics, computer science, and engineering as well as in a variety of applied areas relating to conservation, environment, fission and fusion energy, and other energy technologies.
Lab-Grad appointments are for a one-year term with annual renewals being contingent upon satisfactory performance by the appointee. Appointments usually commence when the student begins full-time thesis research at Argonne after having completed all other academic requirements. In certain cases students may be awarded support for pre-thesis studies on campus, provided that they intend to carry out their thesis research at Argonne.
Support of a Lab-Grad appointee consists of a stipend, tuition payment up to $3,500 per year, and certain travel expenses. In addition, the student's faculty sponsor may receive payment for limited travel expenses.
An application for a Lab-Grad appointment may be submitted at any time during the year and an appointment may commence at any time. A completed application should be submitted at least one month prior to any proposed starting date but earlier application submission is advantageous because the availability of Lab-Grad appointments is limited by funding constraints.
Mutual interest in an area of research by the student and the Argonne staff sponsor is essential for the successful arrangement of a Lab-Grad appointment. To help the parties gauge their mutual interest, a limited number of temporary appointments are available for qualified graduate students so that they may work with an Argonne staff member and become familiar with his/her research program. These temporary appointments have a tenure of three months and support consists of a per diem payment to help defray the cost of living away from home, plus travel expenses.
Thesis-Parts Appointments
Thesis-Parts Appointments support qualified graduate students who wish to visit Argonne for periods from a few days to a few months, so that they may utilize special Laboratory facilities or capabilities during the course of their thesis research. Support consists of a per diem amount to help defray the cost of living away from home, plus transportation. Application is best made through an Argonne staff person or research Division appropriate to the proposed activity.
Guest Graduate Appointments
Guest Graduate Appointments are available for qualified graduate students who show that access to Argonne National Laboratory will be beneficial to their thesis research and to Argonne programs. A Guest Graduate is given a gate pass, usually for one year, and the student may visit Argonne whenever appropriate. A Guest Graduate receives no stipend or payment of any kind from the Laboratory.
For application materials and further information about any of these graduate student programs, or for assistance in identifying an appropriate Argonne staff member, write or call:
Graduate Student Program Office
Division of Educational Programs
Argonne National Laboratory
Argonne, Illinois 60439-4845
(708) 972-3371
UNDERGRADUATE PROGRAMS
The student research programs at Argonne are educational experiences designed to provide participants with the opportunity to study and carry out research at the frontiers of their fields of interest. Participation in the program takes the form of an individual collaboration with an Argonne staff member in some part of an ongoing project of interest to the student participant.
Three programs exist at Argonne in which college/university students may obtain research experience. These are the Summer Research Participation (SRP) Program, the Science and Engineering Research Semester (SERS), and the Graduate Student Thesis Research Program. While specific details for SRP and SERS are given below, a student will generally spend the first week of his/her Argonne experience with an Argonne staff member devising a research strategy. For the next few weeks the supervisor will provide considerable program assistance and guidance. Subsequently, the student will be expected to perform relatively independently and complete the project on his/her own initiative. Each student is required to submit a mid-term progress report and a final research report.
To be eligible for SRP or SERS, a student must:
<*_>star<*/> have a grade point average of at least 3.0 on a 4.0 scale, and
<*_>star<*/> be a U.S. citizen or permanent resident alien.
Selection for any program is based upon a student's academic record, statement of interests, and his/her faculty member recommendations.
Summer Research Participation Program
APPLICATION DEADLINE: February 3, 1992
The Program:
The Summer Research Participation Program extends for an eleven-week period which begins in early June and runs through mid-August. In addition to their research activities, participants are expected to attend a series of seminars and tours dealing with current topics in science and engineering.
Normally, participants in the summer program must have completed their sophomore year and not more than their first year of graduate study. While students must generally have matriculated status, science or engineering graduates who have been out of college for no more than one year will also be considered for the program.
Financial Assistance:
During the appointment period, participants receive a stipend of $200/week and complimentary housing or a housing allowance. All housing arrangements for single students are handled by Argonne's Division of Educational Programs. Transportation expenses are reimbursed for one round-trip between the Laboratory and the participant's home or university for round-trip distances greater than 100 miles. If travel is via personal auto, reimbursement is at a rate of 25.5 cents per mile, with the total not to exceed coach-class airfare.
Application Procedure:
An application packet can be obtained by writing or calling:
Student Research Programs
Division of Educational Programs
Argonne National Laboratory
Argonne, Illinois 60439-4845
(708) 972-4579
Once completed, the application form should be returned to the above address. The Student Evaluation Forms found in the application packet should be given to faculty members with whom the applicant has had frequent contact. The faculty member should mail the evaluation form directly to the Division of Educational Programs. These forms must be returned to complete your application file.
Science and Engineering Research Semester
APPLICATION DEADLINES: 1992 Fall Program - March 15, 1992
1993 Spring Program - October 20, 1992
The Program:
As part of a recent, nationwide Department of Energy initiative, the Science and Engineering Research Semester offers challenging opportunities for students selected nationally for participation in energy-related research during the academic year. The program enhances the historic collaboration between the university community and the national laboratories and strengthens the quality of science, mathematics, and engineering research and education.
The core of the academic-year SERS Program is the student research experience. As such, the student is expected to devote at least 35 hours per week to research on a specific project under the mentorship of an Argonne staff scientist. In addition to a mid-term and final report, each student will also be required to present a brief seminar at Argonne on his/her research project.
In addition to the research experience, courses which should accommodate the needs and interests of a majority of the student participants will be available. Information on the specific courses to be offered during a particular term can be obtained by writing to the Division of Educational Programs or by calling the Argonne SERS coordinator at (708) 972-4579.
Should a student require a special course not offered as part of the regular program, he/she will be allowed to substitute a course offered by a regional university. In this case, arrangements MUST be made by the student well in advance of his/her stay at Argonne. Students whose special needs are not covered by any of the above options may arrange with their home campus faculty for independent study to be conducted at Argonne under the supervision of one of the Argonne staff.
In addition to the above activities, Argonne has integrated into its program a number of special features and activities. During the Fall term, SERS participants have the opportunity to attend the Argonne Graduate School Fair in Science and Engineering. At this Fair, students have the chance to talk, one-on-one, with faculty representatives from some of the finest graduate schools in the U.S. On October 5, 1991, we will have over 135 departments represented, including: Princeton, Yale, The University of Chicago, Georgia Tech, to name a few. In the Spring, a number of the program's students are selected for an expense-paid trip to make a presentation on their Argonne research at the annual undergraduate conference sponsored by the National Council on Undergraduate Research. Last year, 18 Argonne students attended the Conference held at the California Institute of Technology. In addition to the above special activities, many cultural and scientific resources exist in the greater Chicago area. Trips to the Aquarium, Planetarium, Fermi National Accelerator Laboratory, Art Institute of Chicago, Museum of Science and Industry, etc., are also available.
Academic Credit:
Students are encouraged to seek academic credit from their home institutions for their SERS experience. Recommended credit is 12-16 semester hours or the equivalent; Interdisciplinary Seminar, 1 credit; Advanced Course, 3 credits; Research, 8-12 credits. The exact number of credits a student receives must be determined by the student in consultation with the student's departmental chairperson or advisor. DEP is willing to provide whatever assistance it can in helping a student arrange for academic credit.
Periods of Appointment:
Appointments are usually for either the Fall or Spring Semester. For those students on other types of academic schedules (quarter, tri-mester, etc.), adjustments of the beginning and ending dates are usually possible.
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P&G in Saudi Arabia:
Tapping a Wealth of Talents
BACK IN JANUARY 1991, THINGS looked pretty bleak to Ali Abdo. A welder at P&G's MIC-Dammam detergent plant in Saudi Arabia, he and his family had fled to Yemen, their home country. Yemen's support of Iraq during the Persian Gulf crisis prompted an exodus of Yemenis from Saudi-Arabia.
Beyond providing air tickets for the family, there was little anyone at MIC-Dammam could do for Abdo. In Yemen, he fretted about his future. Would the Saudi government allow him to return? Would he still have his job?
With the Gulf War's end and after three months of waiting, Abdo and his family were allowed to return to Saudi-Arabia. He was elated to find his old job waiting for him at the Dammam plant.
Today, reflecting on events, Abdo is clear on one point: MIC-Dammam stood by him. "I've heard a lot about the Company's principles," he says, "but the war put them to the test ... and they worked."
The Company's Saudi Arabian joint venture companies are P&G to the core, especially concerning principles and employees. Dealing with everything from war to labor shortages, the joint ventures reach across many borders to attract the best people for building a fast-growing, profitable business. Saudi Arabian market shares for diapers, detergents and shampoos are the highest in the world. [See sidebar on the next page.]
P&G's three Saudi joint ventures - Modern Products Company-Jeddah, Modern Industries Company-Dammam, Modern Industries Company-Jeddah- employ about 1,000 people from 31 nations.
This wide diversity is a necessity, since competition for the best-educated and trained Saudis is sharp. "Until the oil boom of the early '70s, the number of Saudi college graduates was very small," says Anand Prasad. A citizen of India, Prasad is personnel manager for P&G's Saudi businesses.
The kingdom moved quickly to establish universities and trade schools, but for now, the number of college and technical school graduates is well below the country's needs. Since the potential recruits are also attracted to government-sponsored corporations such as state oil companies, luring graduates to a consumer products company is a further challenge.
STAFFING CHALLENGES
The joint ventures' personnel goal is for Saudi nationals to make up at least half the workforce within a few years. Progress is steady: three years ago, only 15 percent of P&G's Saudi Arabian workforce were Saudi nationals; today, nearly 27 percent of employees are.
As the joint ventures' corporate recruiting manager, Haitham Alhudhaif creates ways to increase awareness of P&G and its global business on Saudi campuses. To capture the interest of the brightest students, the joint ventures hold marketing seminars at Saudi Arabia's two primary universities, King Fahd University and King Abdul Aziz University.
Students are responding. Wlid Hajj, a brand assistant on Head & Shoulders, was a marketing major at King Fahd University in Dhahran when he attended a marketing seminar sponsored by the joint ventures. Impressed, he chose MIC-Jeddah because "it has a quality of work I couldn't get anywhere else."
Amr Kandil, Pampers line manager, is a three-year veteran of MPC-Jeddah. A Saudi and a graduate of Riyadh University, he joined MPC because "it's an opportunity to learn and work with a worldwide company."
He sees himself as part of Saudi Arabia's drive to diversify its economy from total reliance on oil. "We [Saudis] need exposure to other working methods," he says, "and P&G is building a strong organization here."
While more Saudis are joining the business, the labor and skill shortage means that reliance on expatriate managers and technicians will continue for the near future. After Saudis, the largest nationality groups are from Egypt, Yemen, Sudan, Jordan, India and Pakistan.
ONLY THE BEST
"We recruit only the best," explains Personnel Manager Prasad, "to get the best mix of strengths and creative skills from different societies and nations."
On a language and cultural level, close co-operation between the dozens of nationalities is relatively easy. The majority of employees come from Arab countries, speak the same language (Arabic) and follow the same faith (Islam).
Employees work and live in a nation in which Islam serves as religious <tp|>and civil law: Employment is limited to males. Each work site has a prayer room facing Mecca. During the holy month of Ramadan, work shifts are shortened to six hours to accommodate the fasting required of Moslems.
Cultural and religious similarities are helpful, but hiring the best and creating an environment focused on business results are even more important. Consider the MPC-Jeddah plant, which produces Pampers, Luvs and Always. In 1991 it won Product Supply's Process Reliability Award for having the highest reliability rate of any P&G paper plant in the world. Backed with a combination of great quality at low cost, Pampers captured a commanding share of the Arabian Peninsula diaper market.
The foundation of success like this is meticulous attention to hiring the right people. The Company is "very selective", agrees Abdel Moneim Bashir, a Sudanese who works in Paper Product Development. "The Company wants wide-minded people."
To enable people to focus on "doing the best work possible," says Obied Khojah "there's one system, balanced and fair" for everyone. It's common for other companies to have one pay scale for Saudis and another for foreign workers. Not so with P&G's joint ventures, according to Khojah, a Saudi and MIC-Jeddah plant personnel manager. Saudis and non-Saudis alike have the same opportunities for advancement.
"LIKE ONE HAND"
Dedicated by King Faisal in 1965, the MIC-Jeddah plant is famous throughout Saudi Arabia as the Tide plant. Once the sole structure on this stretch of the Mecca road, Jeddah's booming growth has engulfed the plant site and placed it in the midst of a busy neighborhood.
Abdul-Mugni Qasim, a supervisor in the plant's Raw Materials section, describes a 'rare' bond of trust between MIC and its workers. He knows, for example, that many companies in the Middle East depend upon contracted labor and "are quick to fire a person for someone cheaper."
This is unheard of at the Jeddah plant. Qasim himself is a expatriate, a citizen of Yemen whose family has lived in Jeddah for nearly three decades. He has worked for MIC-Jeddah for most of his work life and now supervises a team of eight that includes six nationalities. Nearly 30 years ago, he was part of the construction crew that built the plant.
Differences in nationality are of no consequence to him. On the contrary, he sees his group as an extended family. "If someone's wife has a baby, or a relative dies, I live it with them."
Abdul-Qadir Basher, a Pampers line technician from Sudan, has a succinct metaphor to describe how MPC-Jeddah's 18 nationalities cooperate: "We work like one hand," with the "goal of getting fine products with good quality."
Lest one get the impression of a workplace utopia, frictions due to nationality occasionally arise. "There are differences" of cultural styles among Arabs, says Adnan Ossailan, a Saudi who works in Quality Control at MPC-Jeddah, which can sometimes lead to resentments. The goal is to address problems before they grow, explains Mohammad Al-Ghamdi, plant personnel manager.
MAXIMUM EFFORT
With Iraq's invasion of Kuwait in August 1990, the MIC-Dammam plant's personnel challenges took on a whole new dimension. "People were worried," recalls Fahad Abdul-Karim, personnel manager for the detergent plant. "No one knew what would happen." Kuwait is only a few hours away by car. Helicopters and jets from a nearby Saudi airbase filled the skies. Tanks and military trucks clogged the streets.
In January, with war imminent, the decision was made to evacuate employees and their families to Jeddah and Mecca. Buses were impossible to find, making caravans of private cars necessary. Fuel, maps, tools and first-aid kits were gathered for the nearly 1,600-kilometer drive across the desert.
One hundred apartments awaited the evacuees in the west. After settling in, "we got people working" in the Jeddah plants and headquarters, says Abdul-Karim. A group of 40 employees, mostly Saudis with roots in the Dhahran region, volunteered to continue working at the plant.
Among them was Abdullah Abu-Saed, a mechanic. Dammam is his family's home, and "I felt it was my duty to stay behind in order not to shut down the plant." He and his colleagues kept a security watch to handle damage in case the plant was hit by one of the Scud missiles that passed over nightly. By the last stages of the brief war, the group managed to begin limited production at the plant.
"As Saudis," says Abu-Saed, "we served our country too, because this is a Saudi company."
By April, Saudi Arabia's Eastern Provinces were back to a semblance of normality, and the Dammam-MIC employees evacuated to Jeddah returned to work. No time was lost in reestablishing shipments to newly liberated Kuwait. Truckloads of Ariel and Tide headed for Kuwait as soon as the roads were reopened. Because of this quick action, P&G brand shares in Kuwait are today higher than pre-war levels.
As the chaos and uncertainty created by the war dissipated, MIC-Dammam could evaluate its evacuation as a job well done. "We were one of the few - if not the only - companies that really took care of its people" in providing transportation and living facilities, says Marwan Haddad, Synthetic Detergents Operations manager.
If there's any question about P&G principles providing a competitive edge in Saudi Arabia, Bader Al-Din Hossain, a Customer Services coordinator at MIC-Dammam, has an answer. "The Company has proven it values us very much. Now I want to give the maximum."
Mastery In Action
"Given the current competitive environment, unless we continually upgrade our skills and competencies, we'll become obsolete both as individuals and as a Company," says Keith Lawrence, Industrial Relations Division, who is working on the long-term worldwide vision of work systems in Product Supply. There has been a growing concern among management for the past several years that Procter & Gamble is not building the organization as deep as it could, and is losing some of its technical mastery.
Technical mastery is profound knowledge and skill used to improve business results. It is a continual improvement process necessary to remain competitive.
The gradual eroding of these technical skills is a result of several factors which tended to encourage the development of generalists at P&G, more than specialists. But the trend is changing.
At the November annual meetings, Chairman and Chief Executive Ed Artzt outlined six key strategies for P&G's future growth. One is organizational development, or said another way, building the capacity of people to keep pace with rapid business growth.
There are many examples of building, developing and recognizing organizational capability, from Advertising to R&D to Finance and beyond. All have a common purpose - to help build individuals' technical mastery and, in turn, to support the key corporate strategy of building the organization.
PRODUCT SUPPLY
Product Supply is one of the leaders in developing and recognizing technical mastery. In fact, the function even celebrates technical excellence with the coveted Worldwide Technology Achievement Awards.
Gary Simpson, Product Supply manager-Laundry & Cleaning Products, sees technical mastery as more than just expert individual knowledge. It also includes systems mastery.
"Think of it as creating a gourmet meal," says Simpson. "It takes an expert chef to first create a new entree. But he or she can only make one at a time. Now, if the chef writes down the recipe, thus creating a system to follow, others can then be taught to be technical masters of that entree. The result is many more entrees being made from one expert's knowledge."
This expert/master thinking applies directly to Product Supply's strategies. "By creating technical masters, we're enhancing the total organization's ability to execute key strategic work," says Simpson. Strategy development involves picking the critical few things which will make a significant difference in building the business. Technical mastery allows us to do those right things right - or execute all strategies with excellence. In Product Supply, this includes everything from sourcing raw materials, to how the plants are run, to improving delivery of 'perfect orders,' to getting quickly to market with the new consumer benefits.
<#FROWN:H30\>
ADMISSION CRITERIA
Jacksonville University seeks students with potential to contribute to and benefit from the institution's programs. Admission decisions are based on:
1. The secondary school academic record, including course selection, honors or AP classes, grade point average, and class rank (where available).
2. SAT or ACT test results.
3. Extracurricular involvement, leadership record, and evidence of special talents or abilities.
4. The applicant's writing sample or essay.
5. Interviews, when possible.
To be considered for admission, students must satisfactorily complete, or be in the process of completing, a satisfactory college preparatory program. Recommended minimum preparation should include 18 academic units, including:
1. 4 units of English
2. 3 units of Mathematics
3. 2 units of Natural Sciences
4. 2 units of Foreign Languages
5. 2 units of Social Sciences
A minimum GPA of 2.5 and class rank in the top half of the graduating class is recommended.
PROVISIONAL ADMISSION
Students whose records do not meet the criteria for admission but who show potential to be successful in college, e.g., low SAT scores but a good high school record, or vice versa, may be admitted to a summer session on a provisional basis. Decisions on students admitted on a provisional basis may be made by the University Admissions Committee. These students will enroll in the appropriate English course, as determined by a placement examination, and other three-credit course and a one-credit course or a four-credit course, for a total of seven (7) credits. A grade of 'C' or better must be earned in each course for the student to continue beyond the summer session. Students who meet the requirements of the provisional admission will be admitted to Jacksonville University as degree candidates. A limit of 30 students annually is placed on the number of students to be enrolled provisionally.
ADMISSION NOTIFICATION
REGULAR DECISION PLAN. Consideration of the application will follow receipt of all materials, and applicants will be notified on a rolling bases as soon as possible after January 1 of the current academic year of the decision of the Admissions Office.
EARLY DECISION PLAN. Students who declare Jacksonville University their first choice college by November 15 and have all credentials to Jacksonville University by December 1 will be notified of University action on applications by December 25. Replies from accepted applicants and deposits will be due by January 15. The Early Decision Plan of Jacksonville University is intended to serve those students with exceptional high school records, rank in class, grade point average, SAT or ACT scores, and special potential to contribute to and benefit from Jacksonville University.
EARLY ADMISSION
A gifted student of unusual maturity whose high school record shows excellent academic performance through the junior year in a college preparatory program, and whose scores on a standardized aptitude test are high may submit his application for admission to the University for enrollment after the junior year in high school. The candidate should have the support of his or her parents in writing submitted with the application. A strong recommendation from the high school is expected, and the candidate must come to the campus for a personal interview with the Director of Admissions.
DUAL ENROLLMENT
The dual enrollment program is designed primarily for high school seniors who along with their guidance counselors feel that their academic program would be enriched by college-level courses. The normal freshman application for admission to Jacksonville University is required with the indication that the student is applying for dual enrollment. The following supporting data must be submitted with the application:
1. Scholastic Aptitude Test (SAT) of the College Board (PSAT may be submitted) or the American College Test (ACT).
2. High school transcript.
3. Guidance Counselor's recommendation including a statement in support of allowing the student to attend both high school and college at the same time.
TRANSFERS APPLICATION PROCESS
Transfer applicants must submit:
1. Completed application.
2. $25.00 application fee (non-refundable).
3. Official transcripts of colleges and universities attended, sent by the Registrar of each institution.
4. High school transcripts if transferring less than 15 semester hours of college credit.
5. Statement from Dean of Students (or other appropriate official) at the last college attended full time, attesting to the candidates character and general fitness to continue university work.
6. Catalog of the institution from which the candidate transfers, if requested.
7. Medical information/immunization after admission (see below).
Art students must submit a portfolio.
Music, Theatre Arts, and Dance students must audition.
TRANSFERS ADMISSION REQUIREMENTS
A student who wishes to transfer to Jacksonville University must:
1. Have completed a semester of academic work at an accredited college or university at the time of entry, and not be concurrently enrolled in high school.
2. Be in good standing and eligible to continue or be readmitted at the last institution attended, unless all work has been completed or the student has graduated from that institution.
Jacksonville University encourages transfer applications from students with cumulative grade point averages of 2.5 or higher but will give full consideration to students with averages from 2.0 - 2.5.
Jacksonville University honors academic suspensions of the last institution, and credit will not be awarded for work taken during the suspension period.
It is the responsibility of the candidate to provide the Director of Admissions at Jacksonville University with official transcripts of work completed from all colleges attended. Concealment of previous attendance at a college or university is cause for cancellation of admission and registration.
TRANSFER OF CREDITS
Generally, occupational/vocational college level courses are not accepted as transfer credit at Jacksonville University. Academic courses completed at institutions which are approved by the regional accrediting agency are acceptable in transfer provided that they are comparable to courses offered at Jacksonville University and were completed with a grade of 'C' or better. In order for a course to be comparable, Jacksonville University must either list the course in its current catalog or offer a significant number of course offerings (minimally, four) within the division having primary responsibility for that general area of instruction. A limited number of college level courses which are not comparable because JU does not offer a minimum of four courses in the general area may still be transferred provided these courses are not occupational/vocational and meet the other criteria for acceptable transfer credit. A maximum of 12 semester hours is allowable and these hours can be applied only as elective credit in the student's academic program. Transfer credit for nursing courses counted toward BSN major requirements must be approved by Nursing faculty. Grades recorded as 'P' for Pass, 'CR' for Credit, etc., will be transferred only if verification is provided by the previous institution's Registrar that the work was completed with a 'C' or better grade. Students desiring transfer credit for courses completed at another institution may be required to provide a copy of the Catalog from that institution so that an evaluation of transfer credit may be made. Credit may also be granted for Federal Aviation Administration Aviation Certificates if the holder is enrolled in one of the Flight programs.
Any work transferred to Jacksonville University will be entered on the Jacksonville University transcript as hours earned only and will not be used in computation of the grade-point average.
A maximum of 64 semester hours of credit will be accepted from junior colleges; junior college credit will not be accepted after a student has accumulated 64 semester hour credits.
The final 30 semester hours toward a bachelor's degree must be completed at Jacksonville University.
Limited or provisional credit also may be accepted from specialized or special purpose institutions, including the United States Armed Services, provided the work is applicable to our baccalaureate degree programs and is recommended in appropriate publications of the American Council on Education. For further information see 'Credit for Military Service.'
INTERNATIONAL ADMISSION
International students must meet the same requirements as freshmen or transfer candidates, as the case warrants, with the following additions:
1. Test of English as a Foreign Language (TOEFL): A minimum score of 550 is required in all cases for further consideration.
2. Documentation: Certified copies of academic records must be accompanied by English translations where necessary.
3. International Student Form and Financial Guarantee is required.
4. Submission of Application: Due to immigration regulations and issuance of the student visa, the student's completed application and all supporting papers must be submitted no later than 60 days prior to registration.
The Experiment in International Living (English as a Second Language Program). International Students of English (ISE), a program conducted on the Jacksonville University campus by the Experiment in International Living, is an English language and orientation program designed to prepare students to study, work or travel in the United States. Eight and four-week programs are offered each calendar year, and students may enroll in successive sessions until they reach the desired proficiency.
English Language Examinations. The ISE program uses the Michigan English Language Placement Test at the beginning and end of each course to measure progress. The test of English as a Foreign Language (Institutional TOEFL) is also administered by the Experiment at the end of each course. Persons who are interested in applying for admission to the language program or who wish to take the examination would contact the Director, ISE, Jacksonville University.
MEDICAL INFORMATION/IMMUNIZATION
As a prerequisite to registration, Jacksonville University requires that all new students born after 1956 present documented proof of immunity of measles. A licensed physician or representative of a medical clinic must sign the form provided by the University.
Students who will live in University operated residence halls must also submit the STUDENT MEDICAL RECORD completed and signed by a licensed physician.
TRANSIENT STUDENTS
A student who is a degree candidate at another institution and who wishes to attend one term at Jacksonville University for transfer credit should apply to the Director of Admissions. Such a student may arrange with his/her Registrar to submit a letter of good standing to Jacksonville University. This letter serves as a substitute for the transcript required from other students. Such a student is admitted as a transient student. A transient student who decides to become a degree candidate at Jacksonville University must reapply for admission and meet the requirements for a transfer admission.
READMISSION
A former Jacksonville University student who was not enrolled at this University during the most recent fall or spring semester must apply for readmission through the Registrar's Office. Applications for readmission must be submitted as early as possible, but at least two months prior to registration for the term in which the student wishes to enroll.
The following policies apply to the readmission of undergraduate degree candidates:
1. If enrolled at another institution during the period since last enrolled at this University, an official transcript of all courses attempted must be submitted to the Registrar's Office.
2. No undergraduate degree candidate who has attended another institution since leaving this University will be readmitted unless an official transcript from that institution is received in sufficient time to permit evaluation prior to registration.
Students who have a bachelor's or higher degree must have an official transcript on file in the Registrar' Office which shows the degree(s) earned. Such students need not submit transcripts of subsequent course work taken elsewhere unless they are degree candidates at this University. Degree candidates must have copies of all transcripts on file.
A student who terminates enrollment at Jacksonville University while in a probationary or suspended status and who subsequently completes course work at another institution prior to being readmitted does so at the student's own risk. Such course work will be used in determining whether or not to readmit the student. If the decision is made to readmit the student, appropriate transfer credits will be awarded at the time of readmission. In the case of a suspended student, transfer credit will not be awarded for course work completed during the period of suspension from Jacksonville University.
ENROLLMENT DEPOSIT
Upon notification of acceptance, all new non-boarding students are required to pay a $100 tuition deposit. This is a non-refundable deposit.