California Institute Capitol Hill Bulletin, Friday, October 10, 1997 Page 1 The California Institute For Federal Policy Research 419 New Jersey Avenue, SE, Washington, D.C. 20003 202-546-3700 fax:202-546-2390 ransdell@calinst.org www.calinst.org California Capitol Hill Bulletin Volume 4, Bulletin 34 -- October 9, 1997 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 a computer server donation from Sun Microsystems. CONTENTS NSF Selects California for Earthquake Research Center 1 Judiciary Subcommittee Reports Internet Tax Moratorium Bill 2 FDA Reform Sails Through House 2 Ways and Means Passes Fast-Track; Outlook Still Uncertain 2 $30.4 Million Funded For BART Extension To SFO 3 Headwaters Agreement Clears Key Hurdle 3 Panel Studies Energy Labs; Chair Suggests ³BRAC-Like² Closures 3 Senate Debate on ISTEA Continues 4 Fusion and NIF Fare Well In Energy/Water Bill Awaiting Signature 4 Feinstein Emphasizes California Unity at Roundtable Luncheon 4 Senate Introduces Securities Litigation Reform Bill 5 9th Circuit Court of Appeals Rejects Term-Limits 5 U.S. Imposes Anti-Dumping Fees On Japanese Supercomputers 5 CSU Trustees Name New Chancellor 5 Early Preparation for El Niño Urged 6 President Vetoes $28 million From California Military Projects 6 San Diego Supercomputer Center Helps Demonstrate Internet 6 NSF Selects California for Earthquake Center On Tuesday, the National Science Foundation (NSF) selected the University of California at Berkeley as one of three sites for a new center that will conduct and coordinate earthquake research. In addition to many other supporters from the state, the California Congressional delegation worked to ensure the siting of a center in California. Berkeley's Pacific Earthquake Engineering Research Center (PEER) will develop new technologies and focus on ways to reduce urban earthquake losses. The center's projects will fill in the knowledge gaps not covered by other seismology and geology research centers by bringing in other disciplines like political science and economics to study seismic impacts on densely-developed regions. Another unique aspect is the center's Business and Industry program, that forms partnerships with private industry to focus on problem-solving and apply research to real-world situations. PEER has already formed a $2.4 million dollar partnership with PG&E to study and improve the reliability and safety of utility systems. NSF awarded each center a $2 million annual grant for five years. Last September, Governor Wilson signed legislation to provide the required matching funds -- $1.5 million from the state, and $0.5 million from the University of California. In January, the California Delegation sent a letter, signed by 41 members, to the National Science Foundation urging the selection of California as the site for a center (see Bulletin, Vol.4, No.3, 01/30/97). The state¹s proposal was developed by CUREe (California Universities for Research in Earthquake Engineering), the membership of which includes Caltech, Stanford, USC, and the UC campuses at Berkeley, Davis, Irvine, Los Angeles and San Diego. In addition to the California center, the two other sites selected by NSF were the University of Illinois' Mid-America Earthquake Center, and the State University of New York at Buffalo's Center for Advanced Technologies in Earthquake Loss Reduction. For more information, contact CUREe at 510-231-9557 or at curee@nisee.ce.berkeley.edu. Judiciary Subcommittee Reports Internet Tax Moratorium Bill The House Judiciary Subcommittee on Commercial and Administrative Law reported out by voice vote H.R. 1054, the Internet Tax Freedom Act, after substituting a Committee print for the original language introduced by Rep. Chris Cox (Newport Beach). Both bills would impose a moratorium on state and local taxes that specifically target the Internet and authorize a two-year study of U.S. and foreign taxation of Internet commerce. Additionally, they call on the Administration to pursue international agreement to keep the Internet free of taxes and tariffs. The major difference between the two bills is that the substitute places a date certain on the length of the moratorium: either six years from date of enactment of the bill, or four years from the date on which the President sends to Congress the recommendations made by the advisory commission. The Internet is already the vehicle for the exchange of more than a billion dollars in goods and services internationally, and that growth is continuing to soar day-by-day. The concern, however, is if the 30,000 state and local taxing authorities in the U.S., as well as those authorities overseas, begin to widely tax Internet transactions, it could seriously undermine the continued growth of Internet commercial traffic. FDA Reform Sails Through House On Tuesday, the House overwhelmingly passed by voice vote legislation making major reforms to the Food and Drug Administration review process. The bill, H.R. 1411, combined three bills that had been reported out of the House Commerce Committee late last month (see Bulletin Vol. 4, Nos. 29 (9/4/97), 30 ( 9/11/97), 31 (9/18/97), & 32 9/25/97). The three original bills were: H.R. 1411, reauthorizing the Prescription Drug User Fee Act; H.R. 1710, streamlining the medical device review process; and, H.R. 2469, amending food labeling procedures. The original language of H.R. 1710 was replaced with a substitute amendment in Committee authored by Rep. Anna Eshoo (Palo Alto) and Rep. Joe Barton (TX). The substitute includes compromise language on FDA review of medical devices for uses other than those the manufacturer specifies. This issue proved quite contentious during Senate consideration. Under the compromise, if the FDA determines that it is likely a product would be used for another, unapproved, use, the manufacturer would be required to state on the label the uses for which the product was not approved. The FDA could then review the product for the unapproved use to determine its safety and efficacy. The bill must now go to conference with the Senate, which passed its version last month, despite a prolonged filibuster by Sen. Edward Kennedy (MA). Ways and Means Passes Fast-Track; Outlook Still Uncertain The House Ways and Means Committee on Wednesday favorably reported out the fast-track trade negotiating authority bill on a vote of 24-14. Nevertheless, successful floor consideration of the bill is still in doubt. Only four Democrats on the Committee supported the bill, and the conventional wisdom holds that more needed to sign-off to ensure the 50-plus Democratic votes needed for passage by the full House. The Committee substituted a Chairman's mark for the bill as originally introduced. The substitute was worked out with the Administration after late night negotiations on Tuesday. It extends fast-tract authority until October 1, 2001, with an automatic extension to 2005, unless Congress votes to deny the extension. It also retains the proscription against labor and environmental standards being made a core part of a trade agreement unless they are directly related to trade. The President would have the authority to negotiate on these issues in separate agreements that would be subject to the regular legislative authorization process. The bill also extends for two more years the Trade Adjustment Assistance programs that are used to retrain workers displaced as a result of trade agreements. Finally, it includes an additional consultation period with Congress before the negotiations on a specific trade agreement begin, in order to give Congress the opportunity to help establish the negotiating objectives and goals of the agreement. The main thrust of the bill remains substantially similar to the Senate version reported by the Finance Committee last week (see Bulletin Vol. 4, No. 33, 10/2/97). $30.4 Million Funded For BART Extension To SFO On Tuesday, a conference committee charged with reconciling the Senate and House Transportation Appropriations, agreed to provide $30.4 million for the BART extension to the San Francisco International Airport in fiscal year 1998. Though the House originally appropriated $54 million for the project, the Senate had proposed $13 million, driving conferees to meet halfway between the two proposals. The appropriation is only one portion of the $750 million in total federal funding committed to the project last July by the Federal Transit Administration. The San Francisco Airport, the Metropolitan Transportation Commission, the California Transportation Commission, and the San Mateo County Transit District also fund the 8.7 mile BART extension that is expected to open for service by the end of the year 2001. Headwaters Agreement Clears Key Hurdle On Wednesday, negotiators from the House and Senate reportedly reached an agreement on how to proceed with the purchase of the Headwaters forest in Humboldt County. The 1,000-year-old Headwaters Forest is the nation¹s last privately-owned unprotected expanse of virgin old-growth redwoods and has been the subject of an often volatile, decade-long struggle between its owner, Texas financier Charles Hurwitz of the Pacific Lumber Co., and federal and state government officials who have sought to halt the logging of the forest. Wednesday¹s agreement reportedly provides for a $250 million federal procurement in the Interior Appropriations bill, as well as a land-swap offer for less environmentally and historically sensitive timber that Pacific Lumber could harvest. The agreement is not set in stone at this time, however. An important aspect of the agreement allows the House and Senate 180 days to pass additional legislation modifying the basic principles of the agreement. The key provision was agreed upon to allow the chairs of the House and Senate committees responsible for natural resources and national parks to have an opportunity to review the agreement. The state of California is expected to contribute another $130 million to acquire the forest lands. However, that amount far exceeds the state¹s annual allotment of the state budget dedicated to procuring new parklands. A ballot measure to sell the bonds necessary to acquire the land has recently been suggested by the Wilson administration. Panel Studies Energy Labs; Chair Suggests ³BRAC-Like² Closures The House Commerce Committee¹s Subcommittee on Oversight and Investigations held a hearing on Thursday to examine the U.S. Department of Energy¹s management of their national laboratories. California accounts for approximately 22% of DOE lab activities. At the hearing, Subcommittee Chair Joe Barton (TX) suggested that there may be a need for a ³BRAC-like round of lab closures² similar to the technique used to force military base closures in 1988, 1991, 1993, and 1995, through the creation of a Base Realignment and Closure Commission. The BRAC commission independently reviewed the missions and goals of military installations, and sent its closure recommendations to the Congress, which could only give an up or down vote on the overall plan. The panel heard testimony from Victor Rezendes of GAO, DOE Inspector General John Layton, DOE Energy Research Director Martha Krebs, and NRC Life Sciences Commission director Paul Gilman. Both Rezendes and Layton supported establishment of performance measures to assess the effectiveness of the Department¹s management. Layton added that it was easier to measure success in the past, when labs were asked simply to ³go build a nuclear weapon,² than in the new post-Cold War world, when labs are asked to ³go do some research on the nature of the atom.² He added that you can¹t decide how big DOE should be until Congress decides on DOE¹s mission. Ranking Minority Member Ron Klink (PA) referred to a letter dated October 9 from the lead Democrats on the House Commerce and Science Committees to Energy Secretary Federico Peña expressing concerns about the recently-announced agreement between Livermore lab and Intel to develop an advanced computer chip via extreme ultraviolet lithographic technologies. The letter questions the way in which publicly-funded labs should be used for commercial applications and expresses concerns about the use of foreign source tools in the development process. Klink suggested a GAO study of the matter, though the GAO witness doubted any review could begin before next year. (Unfortunately, the subcommittee did not hear from any Intel or lab representative to respond to specific questions.) As of 1995, nearly 13,000 of the nation¹s 59,000 DOE lab employees worked in California (including 7,300 at Lawrence Livermore Lab; 2,600 at Lawrence Berkeley Lab; 1,600 at the Stanford Linear Accelerator Center (SLAC); and, 1,300 at Sandia¹s California facility). FY96 funding for California labs represented $1.5 billion of the $6.8 billion in federal lab spending nationwide. Thus, the state accounts for 22% of both employment and funding at the DOE labs. The University of California runs both the Livermore and the Berkeley labs, Stanford University runs SLAC, and Lockheed Martin Corporation runs Sandia. U.C. also has the $1 billion contract to run the Los Alamos Lab, which is physically located in New Mexico. Senate Debate on Istea Reauthorization Continues While Congress finished most of its work on the FY98 Transportation Appropriations this week, the Senate continued debate on its version of a bill to reauthorize the nation's now-expired transportation law. Though the House passed a six-month extension of existing law last week, the Senate pressed ahead with its own six-year, $180.7 billion reauthorization bill (see Bulletin, Vol. 4, No. 32 -- 09/25/97). On Thursday afternoon, the Senate floor debate focused on the use of part of the federal gas tax to reduce the nation's deficit instead of being used to fund transportation infrastructure. Both the House and Senate have struggled to resolve differences between those who support higher-levels of spending for transportation from projected increases in tax revenues and those who want to protect the balanced budget deal. Fusion and NIF Fare Well In Energy/Water Bill Awaiting Signature After House and Senate approval of the conference report on September 30, the Energy & Water Appropriations bill awaits the President¹s signature as the White House considers where and how to use his line-item veto pen on water projects. (See Volume 4, Bulletin 33, 10/2/97.) The Fusion Energy Sciences program received $232 million for FY 98. House language which would have charged the Fusion Energy Sciences program $7.8 million of the cost of NERSC was dropped, but Senate language did prevail to charge the account $2 million for "advanced test reactor fusion irradiation." Thus, fusion received a net $5 million increase over FY97 figures -- a small but positive step following several years of budget decline. In addition, the bill fully funded the National Ignition Facility, which is now under construction at Lawrence Livermore National Laboratory, and adopted the Administration¹s request of $217 million for the Inertial Confinement Fusion program. Feinstein Emphasizes California Unity at Roundtable Luncheon At a luncheon address on Wednesday to D.C. staff of California companies, universities, public entities, Congressional delegation members, and the California Institute, Senator Dianne Feinstein stressed the need to continue movement toward bipartisan, California-focused cooperation regarding federal issues -- both on and off Capitol Hill. Feinstein lauded Congressional delegation progress to date, specifically citing broad bipartisan support for Bay-Delta funding among delegation members, but urged that there needs to be still further growth in bipartisanship within lawmakers¹ ranks. In addition, the Senator urged those diverse California private and public sector interests present at the luncheon to also close ranks around issues of importance to the state as a whole -- particularly mentioning the Title One education formula, welfare reform implementation, and federal child support enforcement funding. Many of the issues Feinstein discussed at the Golden State Roundtable event have already been focus areas for the California delegation and the Institute. Senate Introduces Securities Litigation Reform Bill Sens. Phil Gramm (TX), Pete Domenici (NM), and Chris Dodd (CT), joined by both Sens. Dianne Feinstein and Barbara Boxer, introduced the Securities Litigation Uniform Standards Act of 1997 on Tuesday. The bill, S. 1260, would require that class action suits involving nationally traded securities must be brought in federal court. It is almost identical to H.R. 1689, introduced in the House by Reps. Rick White (WA) and Anna Eshoo (Atherton), and a similar bill, H.R. 1653, introduced by Reps. Tom Campbell (Campbell), Scott Klug (WI), and Cal Dooley (Visalia). The legislation is intended to prevent future problems with initiatives like Proposition 211, which would have made it substantially easier for securities class action suits to be brought in state courts, thus exposing nationally traded companies to substantial litigation in multiple jurisdictions. Prop 211 was defeated by California's voters in November of 1996. 9th Circuit Court of Appeals Rejects Term-Limits On Tuesday, a 9th Circuit Court of Appeals three-judge appellate panel struck down in a 2-1 vote, California¹s seven-year old term limit law, which was enacted by Proposition 140. The appellate court delayed its decision from taking effect for 21 days in order to allow sufficient time for appeals to be filed. It should be noted that the ruling did not address the issue of term limits per se, as did the lower U.S. District Courts¹ earlier decision, but rather addressed the issue of the quality and veracity of the language contained in the original initiative. Specifically, the opinion, drafted by Judge Stephen Reinhardt, concluded that the voters were not properly informed that the initiative would impose ³life-time bans² on legislators. ³The Constitution requires us to invalidate an initiative if it fails to provide adequate notice to the voters that it would severely burden the people¹s fundamental rights,² noted Reinhardt in his decision. ³In matters this important, the state simply must tell citizens what they are voting on.² The ruling contradicts a 1991 state Supreme Court decision that Prop 140 imposed a constitutional life-time ban. On Monday, just one day before the appellate courts¹ decision was handed down, the U.S. Supreme Court rejected a request by Secretary of State Bill Jones to intervene and hear the case immediately. Jones¹ initial appeal to the Supreme Court to hear the case still stands and many believe the recent ruling and the subsequent specter of chaos in the State Legislature as members scramble for seats will prompt the high court to rule sooner rather than later. U.S. Imposes Anti-Dumping Fees On Japanese Supercomputers The International Trade Commission voted 3-0 late last month to impose substantial anti-dumping duties against imports of Japanese vector supercomputers. Holding that the U.S. industry was being injured or threatened with injury by Japanese companies selling supercomputers in the U.S. at less than their fair market value, the Commission held NEC and Fujitsu Ltd., as well as other possible Japanese manufacturers, liable for anti-dumping duties. The duties against NEC will be 454 percent of its supercomputers' price, and against Fujitsu at 173.08 percent of its price. All other Japanese firms would be subject to a duty of 313.54 percent of the price. The duties will be imposed for at least one year, when the Japanese companies can request a review of the decision. Cray Research Inc., a division of Silicon Graphics Co., brought the suit last year. Vector supercomputers can perform multiple mathematical tasks simultaneously and are used primarily in scientific research and weather forecasting. CSU Trustees Name New Chancellor Charles B. Reed, the head of Florida¹s 10-campus public university system, was selected on Monday by California State University trustees as CSU¹s next chancellor. Reed will succeed Barry Munitz -- who announced this summer that he will soon leave to run the J. Paul Getty Trust -- as the head of the 23-school, 335,000-student system and will assume his role at the University¹s headquarters in Long Beach on March 1, 1998. As the system¹s chancellor, Reed will have a seat on the California Institute¹s Board of Directors. Early Preparation for El Niño Urged Heeding the warnings of top scientists and meteorologists that El Niño, the dramatic ocean warming occurring off the coast of Ecuador, may cause severe weather storms in California, Reps. Ken Calvert (Corona), Rep. Buck McKeon (Santa Clarita), Sen. Barbara Boxer, and Governor Pete Wilson have each taken preemptive steps to prepare for the possible damage. During the 1982-83 season in which El Niño struck California, Los Angeles received three times the normal rainfall. Senator Boxer announced that she will host an Administration convened field hearing in Los Angeles on Tuesday, October 14, to evaluate what California, Arizona, and Nevada need to do to prepare for El Niño this winter. Governor Wilson on Monday announced that he would sign legislation authored by Assemblyman Fred Keeley (Santa Cruz) earmarking $7.5 million to assist in preparation efforts for El Niño. The funding will be used for ongoing levee work, planning for the advanced deployment of personnel and resources, and increasing staff to monitor flood forecasts and reservoir operations. In addition, Wilson signed a myriad of Executive Orders designating various departments to begin preparations for severe weather conditions, announced that he will convene a series of field hearings throughout the state in October and November to assist local communities with preparation efforts and requested that the President make similar preparations at the federal level. Both Rep. Calvert and Rep. McKeon have taken early steps to employ the Army Corps of Engineers to assist local governments in strengthening, clearing, and otherwise preparing storm drains, riverbeds, and water reservoirs for the expected deluge of rainfall in the southland. President Vetoes $28 million From California Military Projects Exercising his new line-item veto authority on Monday, President Clinton vetoed four military construction projects in California totaling $28 million. Nationwide, Clinton eliminated 38 projects totaling $287 million. Stricken from the $9.2 billion military construction bill were: two projects at Fort Irwin totaling $11.2 million that would have been dedicated to a command and control facility and a central wash facility for wheeled and tracked vehicles; one $10.1 million project at the Coronado Naval Amphibious Base that would have built two buildings and constructed a harbor for the Marine Mammal Program; and the construction of a new Marine Corps Reserve Center in Pasadena worth $6.7 million. In a letter this week, House Appropriations Committee Chair Bob Livingston (FL) wrote to criticize the President¹s ³less than sparing use² of the line-item veto, and threatened an override campaign if ³this authority continues to be handled so poorly.² That veto authority is likely to be used again soon. The President this week signed the $247.7 billion FY98 defense appropriations bill into law, but has not yet announced his line-item veto plans. He must notify Congress of such vetoes by Tuesday, October 14. San Diego Supercomputer Center Helps Demonstrate Internet2 In conjunction with a meeting in Washington this week of the 100 research universities which participate in Internet2, Members of Congress and others were given a demonstration of the potential for broadband applications devoted to scientific and academic uses. The demonstrations were connected to four centers around the nation via the very high performance Backbone Network Service or vBNS. Two demonstrations connected to NPACI (the National Partnership for Advanced Computational Infrastructure), which is led by the San Diego Supercomputer Center at UCSD. These two San Diego-based projects -- MICE (Molecular Interactive Collaborative Environment) and CMDA Telemicroscopy (Collaboratory for Microscopic Digital Anatomy) -- are examples of scientific applications that enable cross-country collaboration between researchers, and that would utilize bandwidth devoted exclusively to academic and scientific traffic, an Internet2. For further information, contact Amy Finley at NPACI, 619-822-0924, .