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California Capitol Hill Bulletin

                           Volume 7, Bulletin 6 -- February 17, 2000    [or see pdf version]

House Passes Bill Calling for Boost in Information Technology Research Spending
E-Signatures Bill Going to Conference
Ways and Means Holds Hearing on China's NTR and WTO Status
Senate Consideration of Export Administration Act May Be Slowed
Pentagon May Not Be Ready for June National Missile Defense Decision
Napa Valley Field Hearing to Discuss Effects of Pierce's Disease on State's Wine Industry; Reps. Calvert, Pombo & Thompson to Participate
House Committee Discusses Low-Income Housing; Rep. Lee Focuses on Middle Income Families Living in Bay Area Shelters
House Ways and Means Panel Hears From Private Sector on Medical Records Confidentiality; HHS May Revise Ruling
House Commerce Takes Up Copyright and Intellectual Property Rights for On-Line Video
Institute for Healthcare Advancement: Education As Way to Reduce Healthcare Costs
National Geothermal Initiative Announced

To expand communications between Washington and California, the California Institute provides periodic faxed bulletins regarding current activity on Capitol Hill which directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods. The e-mail edition is made possible in part by in kind donations from Sun Microsystems and QUALCOMM, Inc.

House Passes Bill Calling for Boost in Information Technology Research Spending

By voice vote on Tuesday, February 15, 2000, the House passed H.R. 2086, the Networking and Information Technology Research and Development Act. The bill calls for boosting federal research of information technology by $4.8 billion over the next five years. In all, six federal agencies would see their research funding increase, with the Nation Science Foundation taking the bulk of the increase with $3.6 billion.

The bill encourages the establishment of public-private partnerships, with the federal government doing the basic R&D on information technology, and the industry figuring out how to apply the results of those efforts.

The bill also calls for federal studies on the impact of the bill on minorities, women, and low income families, and the ability of the elderly and handicapped to access the Internet. In addition, the bill would authorize $111 million of its total funding for the Next Generation Internet Program.

E-Signatures Bill Going to Conference

The House appointed conferees to the digital signature bill on Wednesday, February 16. The move was a welcome sign to the information technology industry, who wondered why conferees had not been named earlier for the bills (H.R. 1714 on the House side, and S. 761 in the Senate.) H.R. 1714 overwhelmingly passed the House last November with a vote of 356-66. The House bill, as well as S. 761, gives full force of law to a digital signature over the Internet, on the same footing as with a written signature. The House bill also includes language that will allow mandatory disclosures of information to be sent electronically rather than by mail. The Senate bill does not include similar language. The Administration has stated its opposition to the House bill, but is apparently working with congressional staff to work out a suitable compromise.

The House conferees, all from the Commerce Committee, are: Chairman Thomas Bliley (VA); Ranking Democrat John Dingell (MI); Reps. Billy Tauzin (LA); Michael Oxley (OH); and Ed Markey (MA). The Senate is expected to select its conferees next week. Members of the Senate Banking Committee may be named, in addition to Commerce Committee members.

Ways and Means Holds Hearing on China's NTR and WTO Status

On Wednesday, February 16, the House Ways and Means Committee held a hearing to examine the recent U.S.-China bilateral trade agreement and efforts to extend Permanent Normal Trade Relations (PNTR) status on China.

During the hearing, Rep. Sander Levin (MI) offered a five-prong proposal that would allow Congress a continued say in China trade relations. The five-prongs are: 1) a congressional-executive branch committee to keep the pressure on China to improve human rights, labor standards, and trade laws; 2) an annual WTO review process to monitor China's compliance with trade laws; 3) urging the establishment of a WTO working group on labor standards; 4) greater transparency and public disclosure by the WTO; and 5) stand alone congressional legislation to enact protections against dramatic upswings in imports from China. Several members of the Committee, including Rep. Bill Thomas (Bakersfield) and Bob Matsui (Sacramento) indicated that at least some, if not all of the five prongs, should be given serious consideration.

The Committee heard from several witnesses, including: Rep. Nancy Pelosi (San Francisco); Charlene Barshefsky, U.S. Trade Representative; Steve Appel, American Farm Bureau; Leon Trammell, U.S. Chamber of Commerce; Chuck Mack, International Brotherhood of Teamsters (who also heads Teamsters Local 70 in Oakland); and John Chen, Business Software Alliance.

Rep. Pelosi opposed granting China PNTR at this point. She argued that Congress should wait to see if China takes steps to implement the bilateral agreement, pointing out that it will be phased in over five years. Ambassador Barshefsky reiterated the Administration's position that the bilateral agreement is a "clear economic win" for the U.S., granting substantially greater market access across the spectrum of industrial goods, services, and agriculture. In return, she stated the U.S. agrees only to maintain its current market access policies toward China, and grant it PNTR.

Mr. Appel on behalf of the American Farm Bureau testified in support of PNTR for China and its accession to the WTO. He pointed out that many of the commitments China makes in the U.S.-China agreement go beyond those currently mandated by the WTO for agriculture. He stated that "even the more conservative estimates point to these commitments as placing China in the 'top five' of U.S. agricultural export markets by the close of the decade." Mr. Trammell representing the U.S. Chamber also testified in strong support for PNTR. He pointed out that 96 percent of the Chamber's business members employ fewer than 100 workers and the U.S-China agreement and PNTR will give "an enormous boost" to small businesses dealing with China.

Mr. Mack of the Teamsters testified in opposition to the bilateral agreement and granting PNTR to China. He pointed out that since 1980, the "U.S. has gone from enjoying a small trade surplus with China to suffering an enormous $60 billion trade deficit." He also argued that China has never upheld the commitments it has made to the U.S. in other trade agreements, and granting it permanent NTR will eliminate U.S. bargaining leverage.

On behalf of the Business Software Alliance, and the High-Tech Industry Coalition on China, John Chen testified in strong support of granting China PNTR. He pointed out that despite the overall trade deficit with China, the U.S. software industry is expected to generate a trade surplus with China of more than $20 billion this year.

Copies of all the witnesses testimony can be obtained from the Committee's website at: .

Rep. David Dreier (San Dimas) announced this week that the House will vote on PNTR for China in either June or July. He stated: "We want the vote as early as possible. We want the vote when we have all the votes necessary to win."

Senate Consideration of Export Administration Act May Be Slowed

A letter from four prominent Senate Chairmen may succeed in slowing Senate floor action on S. 1712, which would reauthorize the Export Administration Act. The letter is signed by Armed Services' Chair John Warner (VA), Foreign Relations' Chair Jesse Helms (NC), Select Intelligence Chair Richard Shelby (AL), and Governmental Affairs' Chair Fred Thompson (TN). Addressed to Majority Leader Trent Lott (LA), it urges him not to bring the bill to the Senate floor until their committees have had the opportunity to hold hearings on its impact on U.S. national security and intelligence needs.

The bill would revamp the EAA, which expired in 1994. It controls exports of dual-use commodities (i.e., products that have both a commercial and military use), and is considered quite outdated by most U.S. businesses, especially the information technology industry. On the other hand, some members of Congress are concerned that it goes too far in overturning the export control system established during the Cold War. The bill enjoyed overwhelming support in the Senate Banking Committee, where it was reported out by a vote of 20-0 on September 23, 1999.

Senator Lott has indicated he will meet with the signatories to the letter and the bill's sponsors next week to see if a compromise can be worked out.

Pentagon May Not Be Ready for June National Missile Defense Decision

Published reports are indicating that high-level officials at the Department of Defense feel unprepared to make a decision regarding whether or not to build a National Missile Defense (NMD) system by the previously anticipated June deadline. Reportedly, a June decision is important because of the short construction season in Alaska, where missile interceptor facilities are to be built during Summer 2001. Pentagon officials and other decision postponement advocates have praised the program, but suggest that a delay may be in order to allow for further evaluation. They also note that while delaying the decision would slow facility construction, other development activities could continue to progress.

During a House Armed Services Committee hearing on Wednesday, General Robert Kadish, director of the Ballistic Missile Defense Organization, said the NMD program would otherwise remain on track for its scheduled deployment in 2005 if the Administration decides to move forward. Despite reports to the contrary, Kadish expressed confidence that there would be adequate information to make a decision in June. The U.S. has devoted more than $60 billion to NMD and related research and development, much of which has been spent in California.

Napa Valley Field Hearing to Discuss Effects of Pierce's Disease on State's Wine Industry; Reps. Calvert, Pombo & Thompson to Participate

On Tuesday, February 22, 2000, the House Agriculture's Subcommittee on Livestock and Horticulture will meet at St. Supery Vineyards and Winery in Rutherford. Chaired by Rep. Richard Pombo (Tracy), the Committee will discuss efforts to combat Pierce's Disease, which has already caused more than $33 million in damages to Napa, Sonoma, and Mendocino counties. The hearing is designed to evaluate federal, state, and local efforts to fight the disease. The panel will hear testimony from researchers, industry leaders and government officials.

Witnesses testifying at the hearing include: The Hon. Rod Pacheco (Riverside), California State Assemblymember; William J. Lyons, Jr., Secretary of the California Department of Food and Agriculture; Dr. Enrique E. Figeroa, Deputy Under Secretary for Marketing and Regulatory Programs, USDA; William Pauli, President, California Farm Bureau; John DeLuca, President, Wine Institute; Karen Ross, President, California Association of Winegrape Growers; Peter Opatz, Director of Viticulture, Clos du Bois Vineyard and Winery; Craig Weaver, Vineyard Manager, Callaway Vineyards and Winery; Matthew Blua, Dept. of Entomology, University of California, Riverside; Patrick Gleason, American Vineyard Foundation; and James S. Kamas, Assistant Professor and Extension Specialist, Texas Agricultural Extension Service.

Pierce's Disease, carried by the glassy winged sharpshooter, is projected to cause $50 million in total damages this year. Due to the unlimited flight range of the Sharpshooter, the disease may have already spread to the Central Valley, coastal regions, and northern California. The pest, which originated in the Gulf Coast, attacks 73plant species and kills a plant by spreading the disease which, in turn, clogs the plant's water transportation system.

Partially as a result of the efforts of Reps. Mike Thompson (St. Helena), Ken Calvert (Corona), Richard Pombo (Tracy) and others, the U.S. Department of Agriculture (USDA) drew upon the Animal and Plant Health Inspection Service (APHIS) contingency fund to fight the disease, in addition to the provision of $100,000 from the Agriculture Research Service fund. Another $360,000 from the USDA contingency fund was provided to apply pesticides on two occasions to Temecula. At the local level, California has made available $750,000 towards the fight against Pierce's Disease.

House Committee Discusses Low-Income Housing; Rep. Lee Focuses on Middle Income Families Living in Bay Area Shelters

On Tuesday, the House Banking and Financial Services Housing and Community Opportunity Subcommittee met to mark-up HR 1776, passing the bill by voice vote after approving an amendment authored by Chairman Lazio (NY). The bill would revise and reauthorize several federal housing programs, including Community Development Block Grants, the Home Investment Partnership Program, section 8 home ownership subsidies, Local Home ownership Initiatives, and the Indian Housing Home ownership program. Some of these programs have been operating without authorizing legislation since fiscal year 1994. Chairman Lazio's amendment would expand home ownership for the disabled and teachers, as well as set up a pilot program intended to reduce barriers preventing some law enforcement officials from owning a home.

During her opening statement, Rep. Barbara Lee (Oakland) directed the committee's attention to a specialized problem occurring in California and Massachusetts. She noted that some Californians earning $35,000 or more per year end up living in homeless shelters, because the average cost of buying a home in California is $250,000. She pointed to the economic recovery and rental rate increases as reasons for the high numbers of middle income wage earners living in shelters.

Rep. Lee's comments reflect a larger phenomenon of working adults and families who are unable to buy and rent homes. In Silicon Valley, only 40,000 new housing units have been constructed since 1992, even though 250,000 jobs have been created in that same time period. According to a Washington Post report, one shelter in San Jose which houses 250 people is nearly empty during midday due to its residents' working schedules. Due to astronomical housing prices, a family of three is considered to be low-income if it earns $47,800 annually.

For more information on the hearing, contact the Housing and Community Opportunity Subcommittee at (202) 225-6634 or their web site: .

House Ways and Means Panel Hears From Private Sector on Medical Records Confidentiality; HHS May Revise Ruling

On Thursday, February 17, the Health Subcommittee of the House Ways and Means Committee held what may be its final hearing regarding the Department of Health and Human Services' (HHS) proposed regulation on medical records confidentiality. After Congress missed the August 21, 1999 statutory deadline for enacting medical privacy legislation under the Health Insurance Portability and Accountability Act (HIPAA), HHS implemented its own regulations on the confidentiality of electronic medical records. HHS has received more than 40,000 comments, many of them negative, about their proposed rules.

The proposed standards for privacy of individually identifiable health information, released in November 1999, would allow: health information to be used and shared in the case of treatment and for payment of health care; disclosure without an individual's authorization for national priority purposes, including research, public health and oversight, under specific defined circumstances; require written authorization for use and disclosure of health information for all other purposes; and an information system that would allow consumers to understand how their medical information is being disclosed while requiring that health plans and providers maintain administrative and physical safeguards to protect the confidentiality of health information and against unauthorized access. Public comment on the proposed regulations ended on Thursday, February 17. HHS has received criticism for the vagueness of some rules, such as one requiring "reasonable efforts not to use or disclose more than the minimum amount of protected health information necessary to accomplish the intended purpose." However, different critics urge differing changes.

Thursday's hearing focused largely on concerns with the HHS proposed standards. Subcommittee Chairman Bill Thomas (Bakersfield) pointed out that the only entities covered by the HHS proposed rule are health plans and clearinghouses, and only electronic transmissions of medical information (not written transmissions) are covered.

The Health Subcommittee heard from a number of witnesses discussing the HHS proposal and their concerns with that proposal, primarily from the private sector. The panel of witnesses included: Dr. Margaret Hamburg, Assistant Secretary of HHS for planning and evaluation; William G. Plested, III, Board of Trustees, American Medical Association; Alissa Fox, Executive Director, Legislative Policy, Blue Cross Blue Shield Association; Janlori Goldman, Director, Health Privacy Project, Institute for Health Care Research and Policy, Georgetown University; Mary R. Grealy, President, Healthcare Leadership Council; and N. Stephen Ober, President and CEO, Synergy.

One witness, William Plested of the American Medical Association, opposed the HHS proposal, stating that it is impractical and even impossible in some instances. He expressed concern with the requirement of informed consent before personally identifiable information is used, and relayed that this requirement would make physicians liable and impose an administrative burden and cost. Plested believes that the current practices of the AMA should prevail because they aim at striking a balance between all interests at stake.

Alissa Fox, Executive Director of the Office of Policy and Representation at Blue Cross Blue Shield Association, supported the administrations efforts, but hopes to work with them towards a proposal that would allow for the health care system to provide health care services efficiently. Fox stated that without significant revision, the current HHS proposal is operationally infeasible and extremely costly. She added that the proposed rules may overstep the authority of HHS.

Another witness, Janlori Goldman, Director of the Health Privacy Project at the Institute for Health Care Research and Policy expressed the need to expand the scope of those covered as well as apply regulations to paper records, not just electronic ones. She also recommended that Congress enact a private right of action for individuals.

Mary R. Grealy, of the Healthcare Leadership Council, testified that the regulations do not distinguish between uses of medical information and disclosure of that information. She explained that the attempt to restrict all uses of information is unworkable. Grealy also questioned the regulations requirement of individual authorizations for "research unrelated to treatment" and the overly broad use of the that term. Lastly, she testified against the overwhelming costs these regulations will impose on the health care system.

The last witness, N. Stephen Ober of Synergy Health Care, expressed his concern over the impact the regulations will have on claims' clearinghouses and their business partners. Mainly, Ober's concern was with a provision that would require a covered entity, when acting as a clearinghouse, to be bound by health information policies and procedures of its partners.

The issue is of considerable concern to the biomedical industry, one-third of which is housed in California. For more information, see Bulletin, Vol. 6, Nos. 13 (4/23/99), 14 (4/30/99), 18 (5/28/99), 23 (7/16/99), and 24 (7/23/99).

Some members, including Chairman Thomas, have expressed strong interest in continuing to pursue a legislative solution to the issue of medical records confidentiality.

For more information and witness testimony, contact the Health Subcommittee of the House Ways and Means Committee at: (202) 225-3625 or at the web site: .

House Commerce Takes Up Copyright and Intellectual Property Rights for On-Line Video

On Wednesday, February 16, 2000, the Telecommunications, Trade and Consumer Protection Subcommittee of the House Commerce Committee held a hearing on copyright and intellectual property issues pertaining to on-line network feeds and webcasting. In opening remarks, the committee stressed the global nature of the Internet, and the thus complicated nature of regulating in a global community.

During the hearing, Rep. Anna Eshoo (Atherton) noted two key questions: how will current laws apply to webcasting and on line network feeds, and whether or not the current laws protect broadcast content producers from infringement. She stated that current cable law should not automatically extend to webcasting and the Internet. Rep. Christopher Cox (Newport Beach) commented that webcasting is good for consumers, creative content providers, and distributors. Rep. Cox believes that Congress needs to guard against resistance to competition from those who wish to protect the status quo.

Witnesses at the hearing included: Jack Valenti, President and CEO of the Motion Picture Association of America; Bob Robak, President of LAUNCH Media; Paul Karpowicz, Vice President, LIN Television; David Bozen, President at the University of Oklahoma; Alex Alben, Vice President, Governmental Affairs, Real Networks; Stuart J. Beck, President of Granite Broadcasting Corporation; Peter Jaszi, Professor of Law at Washington College of Law, American University; and Ian McCallum, Vice President of Corporate Sales and Development of TVRadioNow Corporation.

Mr. Valenti of the MPAA stressed the importance of copyright laws, and expressed his concern over the illegitimate intentions of pirates who disregard rules and laws that govern the U.S. He pointed out that cable and the Internet are two very different entities, as different as "lightning and the lightning bug" and therefore regulations that govern each should be considered carefully. Mr. Robak of California-based LAUNCH Media, an Internet music company, argued that technology based laws for other forms of media should not apply to the Internet, thereby allowing for open competition.

For the testimony of all the witnesses, contact the House Commerce Committee's Telecommunications, Trade and Consumer Protection Subcommittee at (202)225-2927, or at their web site: .

Institute for Healthcare Advancement: Education As Way to Reduce Healthcare Costs

On Wednesday, February 16, the Institute for Healthcare Advancement released the first of a series of low literate, preventive care, healthcare booklets. The booklets seek to reduce healthcare spending costs and better American healthcare needs in general. They believe that education on prevention methods for young infants and children can help improve healthcare in America.

The first booklet, titled "What To Do When Your Child Gets Sick" is written at a third to fifth grade reading level, to cater to the 40 million Americans - one third of the nation's total population - who are low literate. The book is written in both Spanish and English, and hopes to reach some of the growing number of uninsured Americans. The Institute cites a Kaiser study that recently showed a decrease by 20% in primary and emergency care by providing patients with self-help healthcare tools.

The Whittier-based Institute for Healthcare Advancement is chaired by Albert E. Barnet, MD. He and the Institute's President, Dr. Gloria Mayer, co-authored the first booklet and presented their findings at a meeting with staff to California Congressional delegation members and others on Wednesday in Washington.

For more information, contact the Institute for Healthcare Advancement at (562) 693-9721 or at their web site: .

National Geothermal Initiative Announced

On January 24, Secretary of Energy Bill Richardson and U.S. Senator Harry Reid (NV) announced a initiative, known as "GeoPowering the West" in order to increase the use of geothermal electricity and geothermal heat, in addition to spreading awareness of geothermal energy. Over $4.8 million will be awarded for geothermal projects in California and five other western states: Nevada, Texas, Utah, Idaho, and North Dakota.

Geothermal systems inject water into a hole underground, then extract it as steam, followed by pumping the condensed water back underground. Geothermal energy uses high temperature resources to produce electricity and lower temperature to generate heating for homes, industrial applications, and commercial establishments. While geothermal energy is renewable, reliable and clean, the focus has been at driving production costs down and increasing output. Geothermal energy must compete with natural gas, which, for the time being, is a much more economical form of renewable energy.

By 2020, the GeoPowering the West initiative hopes to supply at least 10 percent of the electricity needs of the Western U.S. with 20,000 megawatts of geothermal energy installed. GeoPowering the West additionally aims to supply the power and heating needs of at least 7 million U.S. households through geopower by 2010, and to double the number of states with geothermal electric power facilities to eight by 2006.

As home of The Geysers, California is the world's top producer of geothermal energy. The Geysers plant, located in Santa Rosa, produces 1,600 megawatts of power, providing about 7% of the state's annual demand in power. According to an LA Times report, $4.4 million of the $4.8 million in total geothermal grants has already been awarded to projects and activities in each of the six western states. A one year grant of $150,380 to Geomechanics International, Inc. in California will be used to determine the relationship between stress and productivity in a fracture-dominated geothermal reservoir at Dixie Valley, Nevada. Additionally, two more projects in California have been selected for further contract negotiations, intending on devising a way to reduce maintenance and operation costs for geothermal power plants and improve energy. The work on the project will occur in Nevada, where scientists believe geothermal energy has its future. They speculate that Nevada has the most geothermal production potential because it contains a considerable amount of heat reservoirs. The majority of the $4.4 million in grants already awarded went to the University of Utah totaling $3.3 million for four, three year grants.
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