[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1808 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1808

                    To control Federal spending now.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 20, 2009

 Mr. Feingold introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
                    To control Federal spending now.

    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 ``Control Spending 
Now Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
           TITLE I--REFORMING THE BUDGET AND SPENDING PROCESS

              Subtitle A--Targeting Congressional Earmarks

Sec. 1101. Short title.
Sec. 1102. Reform of consideration of appropriations bills in the 
                            Senate.
   Subtitle B--Giving the President the Power to Eliminate Wasteful 
                                Spending

Sec. 1201. Short title.
Sec. 1202. Legislative line-item veto.
Sec. 1203. Technical and conforming amendments.
Sec. 1204. Sense of Congress on abuse of proposed repeals and 
                            cancellations.
        Subtitle C--Restoring Strong Pay-As-You-Go Requirements

Sec. 1301. Definitions.
Sec. 1302. PAYGO estimates and PAYGO scorecards.
Sec. 1303. Annual report and sequestration order.
Sec. 1304. Calculating a sequestration.
Sec. 1305. Application of BBEDCA.
Sec. 1306. Technical corrections.
Sec. 1307. Conforming amendments.
Sec. 1308. Exempt programs and activities.
Sec. 1309. Expiration.
                Subtitle D--Reforming the Budget Process

Sec. 1401. Short title.
Sec. 1402. Revision of timetable.
Sec. 1403. Amendments to the Congressional Budget and Impoundment 
                            Control Act of 1974.
Sec. 1404. Amendments to title 31, United States Code.
Sec. 1405. Two-year appropriations; title and style of appropriations 
                            Acts.
Sec. 1406. Multiyear authorizations.
Sec. 1407. Government plans on a biennial basis.
Sec. 1408. Biennial appropriations bills.
Sec. 1409. Report on two-year fiscal period.
Sec. 1410. Effective date.
               TITLE II--MAKING CONGRESS TIGHTEN ITS BELT

Sec. 2001. Ending automatic pay raises for Members of Congress.
Sec. 2002. Cutting spending on congressional offices.
Sec. 2003. Improving Senate efficiency and transparency.
                  TITLE III--ENDING CORPORATE WELFARE

Sec. 3001. Ending the Wall Street bail-out.
Sec. 3002. Ending subsidies for private student loan companies.
Sec. 3003. Bringing down prices for prescription drugs by permitting 
                            drug reimportation.
Sec. 3004. Bringing down prices for prescription drugs by extending 
                            340B discounted drug pricing to managed 
                            care organizations.
Sec. 3005. Bringing down prices for prescription drugs by increasing 
                            the Medicaid drug rebate.
Sec. 3006. Ending taxpayer subsidies for exporters.
Sec. 3007. Reducing taxpayer subsidies for exporters of agriculture 
                            commodities.
Sec. 3008. Making companies pay when they fail FDA quality inspections.
       TITLE IV--ENDING TAXPAYER SUBSIDIES FOR BIG AGRIBUSINESSES

Sec. 4001. Reforming irrigation subsidies.
Sec. 4002. Reforming crop insurance subsidies.
Sec. 4003. Reducing direct payments to large landowners.
Sec. 4004. Cutting farm subsidies for high-income individuals.
Sec. 4005. Eliminating the cotton storage subsidy.
Sec. 4006. Ending subsidized grazing fees.
TITLE V--ENDING TAXPAYER SUBSIDIES FOR THE USE OF PUBLIC RESOURCES AND 
                          GOVERNMENT SERVICES

Sec. 5001. Preventing giveaways of the public spectrum.
Sec. 5002. Eliminating double subsidies for hardrock mining by 
                            repealing percentage depletion allowances.
Sec. 5003. Ending subsidies for hardrock mining on public lands by 
                            imposing mining royalties and claim fees.
Sec. 5004. Reducing State subsidies for onshore oil, gas, coal, and 
                            mineral leases on public lands.
Sec. 5005. Reducing subsidies for oil, gas, and geothermal energy 
                            production on public lands.
Sec. 5006. Reducing aviation subsidies.
Sec. 5007. Targeting Medicare prescription drug assistance to those who 
                            need it most.
    TITLE VI--TARGETING WASTEFUL OR UNNECESSARY GOVERNMENT SPENDING

Sec. 6001. Delaying a lunar mission.
Sec. 6002. Eliminating the V-22 Osprey.
Sec. 6003. Cutting C-17s.
Sec. 6004. Ending spending for high-risk satellites.
Sec. 6005. Reducing cost overruns and delays on major weapons systems.
Sec. 6006. Reducing spending on unneeded defense spare parts.
Sec. 6007. Reducing overpayments to defense contractors.
Sec. 6008. Ending wasteful intelligence spending.
Sec. 6009. Ending the IRS slush fund.
Sec. 6010. Rescinding unspent earmarks.
Sec. 6011. Repealing the rail-line relocation program.
Sec. 6012. Eliminating Radio/TV marti at the Office of Cuba 
                            Broadcasting.
Sec. 6013. Ending support for the Colombian military.

           TITLE I--REFORMING THE BUDGET AND SPENDING PROCESS

              Subtitle A--Targeting Congressional Earmarks

SEC. 1101. SHORT TITLE.

    This subtitle may be cited as the ``Fiscal Discipline, Earmark 
Reform, and Accountability Act''.

SEC. 1102. REFORM OF CONSIDERATION OF APPROPRIATIONS BILLS IN THE 
              SENATE.

    (a) In General.--Rule XVI of the Standing Rules of the Senate is 
amended by adding at the end the following:
    ``9.(a) On a point of order made by any Senator:
            ``(1) No new or general legislation nor any unauthorized 
        appropriation may be included in any general appropriation 
        bill.
            ``(2) No amendment may be received to any general 
        appropriation bill the effect of which will be to add an 
        unauthorized appropriation to the bill.
            ``(3) No unauthorized appropriation may be included in any 
        amendment between the Houses, or any amendment thereto, in 
        relation to a general appropriation bill.
    ``(b)(1) If a point of order under subparagraph (a)(1) against a 
Senate bill or amendment is sustained--
            ``(A) the new or general legislation or unauthorized 
        appropriation shall be struck from the bill or amendment; and
            ``(B) any modification of total amounts appropriated 
        necessary to reflect the deletion of the matter struck from the 
        bill or amendment shall be made.
    ``(2) If a point of order under subparagraph (a)(1) against an Act 
of the House of Representatives is sustained when the Senate is not 
considering an amendment in the nature of a substitute, an amendment to 
the House bill is deemed to have been adopted that--
            ``(A) strikes the new or general legislation or 
        unauthorized appropriation from the bill; and
            ``(B) modifies, if necessary, the total amounts 
        appropriated by the bill to reflect the deletion of the matter 
        struck from the bill.
    ``(c) If the point of order against an amendment under subparagraph 
(a)(2) is sustained, the amendment shall be out of order and may not be 
considered.
    ``(d)(1) If a point of order under subparagraph (a)(3) against a 
Senate amendment is sustained--
            ``(A) the unauthorized appropriation shall be struck from 
        the amendment;
            ``(B) any modification of total amounts appropriated 
        necessary to reflect the deletion of the matter struck from the 
        amendment shall be made; and
            ``(C) after all other points of order under this paragraph 
        have been disposed of, the Senate shall proceed to consider the 
        amendment as so modified.
    ``(2) If a point of order under subparagraph (a)(3) against a House 
of Representatives amendment is sustained--
            ``(A) an amendment to the House amendment is deemed to have 
        been adopted that--
                    ``(i) strikes the new or general legislation or 
                unauthorized appropriation from the House amendment; 
                and
                    ``(ii) modifies, if necessary, the total amounts 
                appropriated by the bill to reflect the deletion of the 
                matter struck from the House amendment; and
            ``(B) after all other points of order under this paragraph 
        have been disposed of, the Senate shall proceed to consider the 
        question of whether to concur with further amendment.
    ``(e) The disposition of a point of order made under any other 
paragraph of this rule, or under any other Standing Rule of the Senate, 
that is not sustained, or is waived, does not preclude, or affect, a 
point of order made under subparagraph (a) with respect to the same 
matter.
    ``(f) A point of order under subparagraph (a) may be waived only by 
a motion agreed to by the affirmative vote of three-fifths of the 
Senators duly chosen and sworn. If an appeal is taken from the ruling 
of the Presiding Officer with respect to such a point of order, the 
ruling of the Presiding Officer shall be sustained absent an 
affirmative vote of three-fifths of the Senators duly chosen and sworn.
    ``(g) Notwithstanding any other rule of the Senate, it shall be in 
order for a Senator to raise a single point of order that several 
provisions of a general appropriation bill or an amendment between the 
Houses on a general appropriation bill violate subparagraph (a). The 
Presiding Officer may sustain the point of order as to some or all of 
the provisions against which the Senator raised the point of order. If 
the Presiding Officer so sustains the point of order as to some or all 
of the provisions against which the Senator raised the point of order, 
then only those provisions against which the Presiding Officer sustains 
the point of order shall be deemed stricken pursuant to this paragraph. 
Before the Presiding Officer rules on such a point of order, any 
Senator may move to waive such a point of order, in accordance with 
subparagraph (f), as it applies to some or all of the provisions 
against which the point of order was raised. Such a motion to waive is 
amendable in accordance with the rules and precedents of the Senate. 
After the Presiding Officer rules on such a point of order, any Senator 
may appeal the ruling of the Presiding Officer on such a point of order 
as it applies to some or all of the provisions on which the Presiding 
Officer ruled.
    ``(h) For purposes of this paragraph:
            ``(1) The term `new or general legislation' has the meaning 
        given that term when it is used in paragraph 2 of this rule.
            ``(2) The term `new matter' means matter not committed to 
        conference by either House of Congress.
            ``(3)(A) The term `unauthorized appropriation' means a 
        `congressionally directed spending item' as defined in rule 
        XLIV--
                    ``(i) that is not specifically authorized by law or 
                Treaty stipulation (unless the appropriation has been 
                specifically authorized by an Act or resolution 
                previously passed by the Senate during the same session 
                or proposed in pursuance of an estimate submitted in 
                accordance with law); or
                    ``(ii) the amount of which exceeds the amount 
                specifically authorized by law or Treaty stipulation 
                (or specifically authorized by an Act or resolution 
                previously passed by the Senate during the same session 
                or proposed in pursuance of an estimate submitted in 
                accordance with law) to be appropriated.
            ``(B) An appropriation is not specifically authorized if it 
        is restricted or directed to, or authorized to be obligated or 
        expended for the benefit of, an identifiable person, program, 
        project, entity, or jurisdiction by earmarking or other 
        specification, whether by name or description, in a manner that 
        is so restricted, directed, or authorized that it applies only 
        to a single identifiable person, program, project, entity, or 
        jurisdiction, unless the identifiable person, program, project, 
        entity, or jurisdiction to which the restriction, direction, or 
        authorization applies is described or otherwise clearly 
        identified in a law or Treaty stipulation (or an Act or 
        resolution previously passed by the Senate during the same 
        session or in the estimate submitted in accordance with law) 
        that specifically provides for the restriction, direction, or 
        authorization of appropriation for such person, program, 
        project, entity, or jurisdiction.
    ``10. (a) On a point of order made by any Senator, no new or 
general legislation, nor any unauthorized appropriation, new matter, or 
nongermane matter may be included in any conference report on a general 
appropriation bill.
    ``(b) If the point of order against a conference report under 
subparagraph (a) is sustained--
            ``(1) the new or general legislation, unauthorized 
        appropriation, new matter, or nongermane matter in such 
        conference report shall be deemed to have been struck;
            ``(2) any modification of total amounts appropriated 
        necessary to reflect the deletion of the matter struck shall be 
        deemed to have been made;
            ``(3) when all other points of order under this paragraph 
        have been disposed of--
                    ``(A) the Senate shall proceed to consider the 
                question of whether the Senate should recede from its 
                amendment to the House bill, or its disagreement to the 
                amendment of the House, and concur with a further 
                amendment, which further amendment shall consist of 
                only that portion of the conference report not deemed 
                to have been struck (together with any modification of 
                total amounts appropriated);
                    ``(B) the question shall be debatable; and
                    ``(C) no further amendment shall be in order; and
            ``(4) if the Senate agrees to the amendment, then the bill 
        and the Senate amendment thereto shall be returned to the House 
        for its concurrence in the amendment of the Senate.
    ``(c) The disposition of a point of order made under any other 
paragraph of this rule, or under any other Standing Rule of the Senate, 
that is not sustained, or is waived, does not preclude, or affect, a 
point of order made under subparagraph (a) with respect to the same 
matter.
    ``(d) A point of order under subparagraph (a) may be waived only by 
a motion agreed to by the affirmative vote of three-fifths of the 
Senators duly chosen and sworn. If an appeal is taken from the ruling 
of the Presiding Officer with respect to such a point of order, the 
ruling of the Presiding Officer shall be sustained absent an 
affirmative vote of three-fifths of the Senators duly chosen and sworn.
    ``(e) Notwithstanding any other rule of the Senate, it shall be in 
order for a Senator to raise a single point of order that several 
provisions of a conference report on a general appropriation bill 
violate subparagraph (a). The Presiding Officer may sustain the point 
of order as to some or all of the provisions against which the Senator 
raised the point of order. If the Presiding Officer so sustains the 
point of order as to some or all of the provisions against which the 
Senator raised the point of order, then only those provisions against 
which the Presiding Officer sustains the point of order shall be deemed 
stricken pursuant to this paragraph. Before the Presiding Officer rules 
on such a point of order, any Senator may move to waive such a point of 
order, in accordance with subparagraph (d), as it applies to some or 
all of the provisions against which the point of order was raised. Such 
a motion to waive is amendable in accordance with the rules and 
precedents of the Senate. After the Presiding Officer rules on such a 
point of order, any Senator may appeal the ruling of the Presiding 
Officer on such a point of order as it applies to some or all of the 
provisions on which the Presiding Officer ruled.
    ``(f) For purposes of this paragraph:
            ``(1) The terms `new or general legislation', `new matter', 
        and `unauthorized appropriation' have the same meaning as in 
        paragraph 9.
            ``(2) The term `nongermane matter' has the same meaning as 
        in rule XXII and under the precedents attendant thereto, as of 
        the beginning of the 110th Congress.''.
    (b) Requiring Conference Reports To Be Searchable Online.--
Paragraph 3(a)(2) of rule XLIV of the Standing Rules of the Senate is 
amended by inserting ``in an searchable format'' after ``available''.

   Subtitle B--Giving the President the Power to Eliminate Wasteful 
                                Spending

SEC. 1201. SHORT TITLE.

    This subtitle may be cited as the ``Congressional Accountability 
and Line-Item Veto Act of 2009''.

SEC. 1202. LEGISLATIVE LINE-ITEM VETO.

    Title X of the Congressional Budget and Impoundment Control Act of 
1974 (2 U.S.C. 621 et seq.) is amended by striking all of part B 
(except for sections 1016 and 1013, which are redesignated as sections 
1019 and 1020, respectively) and part C and inserting the following:

                  ``Part B--Legislative Line-Item Veto

                       ``line-item veto authority

    ``Sec. 1011.  (a) Proposed Cancellations.--Within 30 calendar days 
after the enactment of any bill or joint resolution containing any 
congressional earmark or providing any limited tariff benefit or 
targeted tax benefit, the President may propose, in the manner provided 
in subsection (b), the repeal of the congressional earmark or the 
cancellation of any limited tariff benefit or targeted tax benefit. If 
the 30 calendar-day period expires during a period where either House 
of Congress stands adjourned sine die at the end of Congress or for a 
period greater than 30 calendar days, the President may propose a 
cancellation under this section and transmit a special message under 
subsection (b) on the first calendar day of session following such a 
period of adjournment.
    ``(b) Transmittal of Special Message.--
            ``(1) Special message.--
                    ``(A) In general.--The President may transmit to 
                the Congress a special message proposing to repeal any 
                congressional earmarks or to cancel any limited tariff 
                benefits or targeted tax benefits.
                    ``(B) Contents of special message.--Each special 
                message shall specify, with respect to the 
                congressional earmarks, limited tariff benefits, or 
                targeted tax benefits to be repealed or canceled--
                            ``(i) the congressional earmark that the 
                        President proposes to repeal or the limited 
                        tariff benefit or the targeted tax benefit that 
                        the President proposes be canceled;
                            ``(ii) the specific project or governmental 
                        functions involved;
                            ``(iii) the reasons why such congressional 
                        earmark should be repealed or such limited 
                        tariff benefit or targeted tax benefit should 
                        be canceled;
                            ``(iv) to the maximum extent practicable, 
                        the estimated fiscal, economic, and budgetary 
                        effect (including the effect on outlays and 
                        receipts in each fiscal year) of the proposed 
                        repeal or cancellation;
                            ``(v) to the maximum extent practicable, 
                        all facts, circumstances, and considerations 
                        relating to or bearing upon the proposed repeal 
                        or cancellation and the decision to propose the 
                        repeal or cancellation, and the estimated 
                        effect of the proposed repeal or cancellation 
                        upon the objects, purposes, or programs for 
                        which the congressional earmark, limited tariff 
                        benefit, or the targeted tax benefit is 
                        provided;
                            ``(vi) a numbered list of repeals and 
                        cancellations to be included in an approval 
                        bill that, if enacted, would repeal 
                        congressional earmarks and cancel limited 
                        tariff benefits or targeted tax benefits 
                        proposed in that special message; and
                            ``(vii) if the special message is 
                        transmitted subsequent to or at the same time 
                        as another special message, a detailed 
                        explanation why the proposed repeals or 
                        cancellations are not substantially similar to 
                        any other proposed repeal or cancellation in 
                        such other message.
                    ``(C) Duplicative proposals prohibited.--The 
                President may not propose to repeal or cancel the same 
                or substantially similar congressional earmark, limited 
                tariff benefit, or targeted tax benefit more than one 
                time under this Act.
                    ``(D) Maximum number of special messages.--The 
                President may not transmit to the Congress more than 
                one special message under this subsection related to 
                any bill or joint resolution described in subsection 
                (a), but may transmit not more than 2 special messages 
                for any omnibus budget reconciliation or appropriation 
                measure.
            ``(2) Enactment of approval bill.--
                    ``(A) Deficit reduction.--Congressional earmarks, 
                limited tariff benefits, or targeted tax benefits which 
                are repealed or canceled pursuant to enactment of a 
                bill as provided under this section shall be dedicated 
                only to reducing the deficit or increasing the surplus.
                    ``(B) Adjustment of levels in the concurrent 
                resolution on the budget.--Not later than 5 days after 
                the date of enactment of an approval bill as provided 
                under this section, the chairs of the Committees on the 
                Budget of the Senate and the House of Representatives 
                shall revise allocations and aggregates and other 
                appropriate levels under the appropriate concurrent 
                resolution on the budget to reflect the repeal or 
                cancellation, and the applicable committees shall 
                report revised suballocations pursuant to section 
                302(b), as appropriate.
                    ``(C) Adjustments to statutory limits.--After 
                enactment of an approval bill as provided under this 
                section, the Office of Management and Budget shall 
                revise applicable limits under the Balanced Budget and 
                Emergency Deficit Control Act of 1985, as appropriate.
                    ``(D) Trust funds and special funds.--
                Notwithstanding subparagraph (A), nothing in this part 
                shall be construed to require or allow the deposit of 
                amounts derived from a trust fund or special fund which 
                are canceled pursuant to enactment of a bill as 
                provided under this section to any other fund.

                ``procedures for expedited consideration

    ``Sec. 1012.  (a) Expedited Consideration.--
            ``(1) In general.--The majority leader or minority leader 
        of each House or his designee shall (by request) introduce an 
        approval bill as defined in section 1017 not later than the 
        third day of session of that House after the date of receipt of 
        a special message transmitted to the Congress under section 
        1011(b). If the bill is not introduced as provided in the 
        preceding sentence in either House, then, on the fourth day of 
        session of that House after the date of receipt of the special 
        message, any Member of that House may introduce the bill.
            ``(2) Consideration in the house of representatives.--
                    ``(A) Referral and reporting.--Any committee of the 
                House of Representatives to which an approval bill is 
                referred shall report it to the House without amendment 
                not later than the seventh legislative day after the 
                date of its introduction. If a committee fails to 
                report the bill within that period or the House has 
                adopted a concurrent resolution providing for 
                adjournment sine die at the end of a Congress, such 
                committee shall be automatically discharged from 
                further consideration of the bill and it shall be 
                placed on the appropriate calendar.
                    ``(B) Proceeding to consideration.--After an 
                approval bill is reported by or discharged from 
                committee or the House has adopted a concurrent 
                resolution providing for adjournment sine die at the 
                end of a Congress, it shall be in order to move to 
                proceed to consider the approval bill in the House. 
                Such a motion shall be in order only at a time 
                designated by the Speaker in the legislative schedule 
                within two legislative days after the day on which the 
                proponent announces his intention to offer the motion. 
                Such a motion shall not be in order after the House has 
                disposed of a motion to proceed with respect to that 
                special message. The previous question shall be 
                considered as ordered on the motion to its adoption 
                without intervening motion. A motion to reconsider the 
                vote by which the motion is disposed of shall not be in 
                order.
                    ``(C) Consideration.--The approval bill shall be 
                considered as read. All points of order against an 
                approval bill and against its consideration are waived. 
                The previous question shall be considered as ordered on 
                an approval bill to its passage without intervening 
                motion except five hours of debate equally divided and 
                controlled by the proponent and an opponent and one 
                motion to limit debate on the bill. A motion to 
                reconsider the vote on passage of the bill shall not be 
                in order.
                    ``(D) Senate bill.--An approval bill received from 
                the Senate shall not be referred to committee.
            ``(3) Consideration in the senate.--
                    ``(A) Referral and reporting.--Any committee of the 
                Senate to which an approval bill is referred shall 
                report it to the Senate without amendment not later 
                than the seventh legislative day after the date of its 
                introduction. If a committee fails to report the bill 
                within that period or the Senate has adopted a 
                concurrent resolution providing for adjournment sine 
                die at the end of a Congress, such committee shall be 
                automatically discharged from further consideration of 
                the bill and it shall be placed on the appropriate 
                calendar.
                    ``(B) Motion to proceed to consideration.--After an 
                approval bill is reported by or discharged from 
                committee or the Senate has adopted a concurrent 
                resolution providing for adjournment sine die at the 
                end of a Congress, it shall be in order to move to 
                proceed to consider the approval bill in the Senate. A 
                motion to proceed to the consideration of a bill under 
                this subsection in the Senate shall not be debatable. 
                It shall not be in order to move to reconsider the vote 
                by which the motion to proceed is agreed to or 
                disagreed to.
                    ``(C) Limits on debate.--Debate in the Senate on a 
                bill under this subsection, and all debatable motions 
                and appeals in connection therewith (including debate 
                pursuant to subparagraph (D)), shall not exceed 10 
                hours, equally divided and controlled in the usual 
                form.
                    ``(D) Appeals.--Debate in the Senate on any 
                debatable motion or appeal in connection with a bill 
                under this subsection shall be limited to not more than 
                1 hour, to be equally divided and controlled in the 
                usual form.
                    ``(E) Motion to limit debate.--A motion in the 
                Senate to further limit debate on a bill under this 
                subsection is not debatable.
                    ``(F) Motion to recommit.--A motion to recommit a 
                bill under this subsection is not in order.
                    ``(G) Consideration of the house bill.--
                            ``(i) In general.--If the Senate has 
                        received the House companion bill to the bill 
                        introduced in the Senate prior to a vote under 
                        subparagraph (C), then the Senate may consider, 
                        and the vote under subparagraph (C) may occur 
                        on, the House companion bill.
                            ``(ii) Procedure after vote on senate 
                        bill.--If the Senate votes, pursuant to 
                        subparagraph (C), on the bill introduced in the 
                        Senate, then immediately following that vote, 
                        or upon receipt of the House companion bill, 
                        the House bill shall be deemed to be 
                        considered, read the third time, and the vote 
                        on passage of the Senate bill shall be 
                        considered to be the vote on the bill received 
                        from the House.
    ``(b) Amendments Prohibited.--No amendment to, or motion to strike 
a provision from, a bill considered under this section shall be in 
order in either the Senate or the House of Representatives.

                   ``presidential deferral authority

    ``Sec. 1013.  (a) Temporary Presidential Authority To Withhold 
Congressional Earmarks.--
            ``(1) In general.--At the same time as the President 
        transmits to the Congress a special message pursuant to section 
        1011(b), the President may direct that any congressional 
        earmark to be repealed in that special message shall not be 
        made available for obligation for a period of 45 calendar days 
        of continuous session of the Congress after the date on which 
        the President transmits the special message to the Congress.
            ``(2) Early availability.--The President shall make any 
        congressional earmark deferred pursuant to paragraph (1) 
        available at a time earlier than the time specified by the 
        President if the President determines that continuation of the 
        deferral would not further the purposes of this Act.
    ``(b) Temporary Presidential Authority To Suspend a Limited Tariff 
Benefit.--
            ``(1) In general.--At the same time as the President 
        transmits to the Congress a special message pursuant to section 
        1011(b), the President may suspend the implementation of any 
        limited tariff benefit proposed to be canceled in that special 
        message for a period of 45 calendar days of continuous session 
        of the Congress after the date on which the President transmits 
        the special message to the Congress.
            ``(2) Early availability.--The President shall terminate 
        the suspension of any limited tariff benefit at a time earlier 
        than the time specified by the President if the President 
        determines that continuation of the suspension would not 
        further the purposes of this Act.
    ``(c) Temporary Presidential Authority To Suspend a Targeted Tax 
Benefit.--
            ``(1) In general.--At the same time as the President 
        transmits to the Congress a special message pursuant to section 
        1011(b), the President may suspend the implementation of any 
        targeted tax benefit proposed to be repealed in that special 
        message for a period of 45 calendar days of continuous session 
        of the Congress after the date on which the President transmits 
        the special message to the Congress.
            ``(2) Early availability.--The President shall terminate 
        the suspension of any targeted tax benefit at a time earlier 
        than the time specified by the President if the President 
        determines that continuation of the suspension would not 
        further the purposes of this Act.

               ``identification of targeted tax benefits

    ``Sec. 1014.  (a) Statement.--The chairman of the Committee on Ways 
and Means of the House of Representatives and the chairman of the 
Committee on Finance of the Senate acting jointly (hereafter in this 
subsection referred to as the `chairmen') shall review any revenue or 
reconciliation bill or joint resolution which includes any amendment to 
the Internal Revenue Code of 1986 that is being prepared for filing by 
a committee of conference of the two Houses, and shall identify whether 
such bill or joint resolution contains any targeted tax benefits. The 
chairmen shall provide to the committee of conference a statement 
identifying any such targeted tax benefits or declaring that the bill 
or joint resolution does not contain any targeted tax benefits. Any 
such statement shall be made available to any Member of Congress by the 
chairmen immediately upon request.
    ``(b) Statement Included in Legislation.--
            ``(1) In general.--Notwithstanding any other rule of the 
        House of Representatives or any rule or precedent of the 
        Senate, any revenue or reconciliation bill or joint resolution 
        which includes any amendment to the Internal Revenue Code of 
        1986 reported by a committee of conference of the two Houses 
        may include, as a separate section of such bill or joint 
        resolution, the information contained in the statement of the 
        chairmen, but only in the manner set forth in paragraph (2).
            ``(2) Applicability.--The separate section permitted under 
        subparagraph (A) shall read as follows: `Section 1021 of the 
        Congressional Budget and Impoundment Control Act of 1974 shall 
        ______ apply to ________.', with the blank spaces being filled 
        in with--
                    ``(A) in any case in which the chairmen identify 
                targeted tax benefits in the statement required under 
                subsection (a), the word `only' in the first blank 
                space and a list of all of the specific provisions of 
                the bill or joint resolution in the second blank space; 
                or
                    ``(B) in any case in which the chairmen declare 
                that there are no targeted tax benefits in the 
                statement required under subsection (a), the word `not' 
                in the first blank space and the phrase `any provision 
                of this Act' in the second blank space.
    ``(c) Identification in Revenue Estimate.--With respect to any 
revenue or reconciliation bill or joint resolution with respect to 
which the chairmen provide a statement under subsection (a), the Joint 
Committee on Taxation shall--
            ``(1) in the case of a statement described in subsection 
        (b)(2)(A), list the targeted tax benefits in any revenue 
        estimate prepared by the Joint Committee on Taxation for any 
        conference report which accompanies such bill or joint 
        resolution, or
            ``(2) in the case of a statement described in 13 subsection 
        (b)(2)(B), indicate in such revenue estimate that no provision 
        in such bill or joint resolution has been identified as a 
        targeted tax benefit.
    ``(d) President's Authority.--If any revenue or reconciliation bill 
or joint resolution is signed into law--
            ``(1) with a separate section described in subsection 
        (b)(2), then the President may use the authority granted in 
        this section only with respect to any targeted tax benefit in 
        that law, if any, identified in such separate section; or
            ``(2) without a separate section described in subsection 
        (b)(2), then the President may use the authority granted in 
        this section with respect to any targeted tax benefit in that 
        law.

                      ``treatment of cancellations

    ``Sec. 1015. The repeal of any congressional earmark or 
cancellation of any limited tariff benefit or targeted tax benefit 
shall take effect only upon enactment of the applicable approval bill. 
If an approval bill is not enacted into law before the end of the 
applicable period under section 1013, then all proposed repeals and 
cancellations contained in that bill shall be null and void and any 
such congressional earmark, limited tariff benefit, or targeted tax 
benefit shall be effective as of the original date provided in the law 
to which the proposed repeals or cancellations applied.

                    ``reports by comptroller general

    ``Sec. 1016. With respect to each special message under this part, 
the Comptroller General shall issue to the Congress a report 
determining whether any congressional earmark is not repealed or 
limited tariff benefit or targeted tax benefit continues to be 
suspended after the deferral authority set forth in section 1013 of the 
President has expired.

                             ``definitions

    ``Sec. 1017. As used in this part:
            ``(1) Appropriation law.--The term `appropriation law' 
        means an Act referred to in section 105 of title 1, United 
        States Code, including any general or special appropriation 
        Act, or any Act making supplemental, deficiency, or continuing 
        appropriations, that has been signed into law pursuant to 
        Article I, section 7, of the Constitution of the United States.
            ``(2) Approval bill.--The term `approval bill' means a bill 
        or joint resolution which only approves proposed repeals of 
        congressional earmarks or cancellations of limited tariff 
        benefits or targeted tax benefits in a special message 
        transmitted by the President under this part and--
                    ``(A) the title of which is as follows: `A bill 
                approving the proposed repeals and cancellations 
                transmitted by the President on ___', the blank space 
                being filled in with the date of transmission of the 
                relevant special message and the public law number to 
                which the message relates;
                    ``(B) which does not have a preamble;
                    ``(C) which provides only the following after the 
                enacting clause: `That the Congress approves of 
                proposed repeals and cancellations ___', the blank 
                space being filled in with a list of the repeals and 
                cancellations contained in the President's special 
                message, `as transmitted by the President in a special 
                message on ____', the blank space being filled in with 
                the appropriate date, `regarding ____.', the blank 
                space being filled in with the public law number to 
                which the special message relates;
                    ``(D) which only includes proposed repeals and 
                cancellations that are estimated by CBO to meet the 
                definition of congressional earmark or limited tariff 
                benefits, or that are identified as targeted tax 
                benefits pursuant to section 1014; and
                    ``(E) if no CBO estimate is available, then the 
                entire list of legislative provisions proposed by the 
                President is inserted in the second blank space in 
                subparagraph (C).
            ``(3) Calendar day.--The term `calendar day' means a 
        standard 24-hour period beginning at midnight.
            ``(4) Cancel or cancellation.--The terms `cancel' or 
        `cancellation' means to prevent--
                    ``(A) a limited tariff benefit from having legal 
                force or effect, and to make any necessary, conforming 
                statutory change to ensure that such limited tariff 
                benefit is not implemented; or
                    ``(B) a targeted tax benefit from having legal 
                force or effect, and to make any necessary, conforming 
                statutory change to ensure that such targeted tax 
                benefit is not implemented and that any budgetary 
                resources are appropriately canceled.
            ``(5) CBO.--The term `CBO' means the Director of the 
        Congressional Budget Office.
            ``(6) Congressional earmark.--The term `congressional 
        earmark' means a provision or report language included 
        primarily at the request of a Member, Delegate, Resident 
        Commissioner, or Senator providing, authorizing or recommending 
        a specific amount of discretionary budget authority, credit 
        authority, or other spending authority for a contract, loan, 
        loan guarantee, grant, loan authority, or other expenditure 
        with or to an entity, or targeted to a specific State, locality 
        or Congressional district, other than through a statutory or 
        administrative formula-driven or competitive award process.
            ``(7) Entity.--As used in paragraph (6), the term `entity' 
        includes a private business, State, territory or locality, or 
        Federal entity.
            ``(8) Limited tariff benefit.--The term `limited tariff 
        benefit' means any provision of law that modifies the 
        Harmonized Tariff Schedule of the United States in a manner 
        that benefits 10 or fewer entities (as defined in paragraph 
        (12)(B)).
            ``(9) OMB.--The term `OMB' means the Director of the Office 
        of Management and Budget.
            ``(10) Omnibus reconciliation or appropriation measure.--
        The term `omnibus reconciliation or appropriation measure' 
        means--
                    ``(A) in the case of a reconciliation bill, any 
                such bill that is reported to its House by the 
                Committee on the Budget; or
                    ``(B) in the case of an appropriation measure, any 
                such measure that provides appropriations for programs, 
                projects, or activities falling within 2 or more 
                section 302(b) suballocations.
            ``(11) Targeted tax benefit.--The term `targeted tax 
        benefit' means--
                    ``(A) any revenue provision that--
                            ``(i) provides a Federal tax deduction, 
                        credit, exclusion, or preference to a 
                        particular beneficiary or limited group of 
                        beneficiaries under the Internal Revenue Code 
                        of 1986; and
                            ``(ii) contains eligibility criteria that 
                        are not uniform in application with respect to 
                        potential beneficiaries of such provision; or
                    ``(B) any Federal tax provision which provides one 
                beneficiary temporary or permanent transition relief 
                from a change to the Internal Revenue Code of 1986.

                              ``expiration

    ``Sec. 1018. This title shall have no force or effect on or after 
December 31, 2014''.

SEC. 1203. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Exercise of Rulemaking Powers.--Section 904 of the 
Congressional Budget Act of 1974 (2 U.S.C. 621 note) is amended--
            (1) in subsection (a), by striking ``1017'' and inserting 
        ``1012''; and
            (2) in subsection (d), by striking ``section 1017'' and 
        inserting ``section 1012''.
    (b) Analysis by Congressional Budget Office.--Section 402 of the 
Congressional Budget Act of 1974 is amended by inserting ``(a)'' after 
``402.'' and by adding at the end the following new subsection:
    ``(b) Upon the receipt of a special message under section 1011 
proposing to repeal any congressional earmark, the Director of the 
Congressional Budget Office shall prepare an estimate of the savings in 
budget authority or outlays resulting from such proposed repeal 
relative to the most recent levels calculated consistent with the 
methodology used to calculate a baseline under section 257 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 and included 
with a budget submission under section 1105(a) of title 31, United 
States Code, and transmit such estimate to the chairmen of the 
Committees on the Budget of the House of Representatives and Senate.''.
    (c) Clerical Amendments.--(1) Section 1(a) of the Congressional 
Budget and Impoundment Control Act of 1974 is amended by striking the 
last sentence.
    (2) Section 1022(c) of such Act (as redesignated) is amended is 
amended by striking ``rescinded or that is to be reserved'' and insert 
``canceled'' and by striking ``1012'' and inserting ``1011''.
    (3) Table of Contents.--The table of contents set forth in section 
1(b) of the Congressional Budget and Impoundment Control Act of 1974 is 
amended by deleting the contents for parts B and C of title X and 
inserting the following:

                  ``Part B--Legislative Line-Item Veto

``Sec. 1011. Line-item veto authority.
``Sec. 1012. Procedures for expedited consideration.
``Sec. 1013. Presidential deferral authority.
``Sec. 1014. Identification of targeted tax benefits.
``Sec. 1015. Treatment of cancellations.
``Sec. 1016. Reports by Comptroller General.
``Sec. 1017. Definitions.
``Sec. 1018. Expiration.
``Sec. 1019. Suits by Comptroller General.
``Sec. 1020. Proposed Deferrals of budget authority.''.
    (d) Effective Date.--The amendments made by this subtitle shall 
take effect on the date of its enactment and apply only to any 
congressional earmark, limited tariff benefit, or targeted tax benefit 
provided in an Act enacted on or after the date of enactment of this 
Act.

SEC. 1204. SENSE OF CONGRESS ON ABUSE OF PROPOSED REPEALS AND 
              CANCELLATIONS.

    It is the sense of Congress no President or any executive branch 
official should condition the inclusion or exclusion or threaten to 
condition the inclusion or exclusion of any proposed repeal or 
cancellation in any special message under this section upon any vote 
cast or to be cast

        Subtitle C--Restoring Strong Pay-As-You-Go Requirements

SEC. 1301. DEFINITIONS.

    As used in this subtitle--
            (1) The term ``BBEDCA'' means the Balanced Budget and 
        Emergency Deficit Control Act of 1985.
            (2) The definitions set forth in section 3 of the 
        Congressional Budget and Impoundment Control Act of 1974 and in 
        section 250 of BBEDCA shall apply to this subtitle, except to 
        the extent that they are specifically modified as follows:
                    (A) The term ``outyear'' means a fiscal year that 
                occurs one or more years after the budget year.
                    (B) In section 250(c)(8)(C), the reference to the 
                food stamp program shall be deemed to be a reference to 
                the Supplemental Nutrition Assistance Program.
            (3)(A) The term ``budgetary effects'' means the amounts by 
        which PAYGO legislation changes direct spending or revenues 
        relative to the baseline and shall be determined on the basis 
        of estimates included by reference in the PAYGO Act or prepared 
        under section 4(d)(3), as applicable. Budgetary effects that 
        increase direct spending or decrease revenues are termed 
        ``costs'' and budgetary effects that increase revenues or 
        decrease direct spending are termed ``savings''.
            (B) For purposes of these definitions, off-budget effects 
        shall be counted as budgetary effects unless such changes flow 
        directly from amendments to title II of the Social Security Act 
        and related provisions of the Internal Revenue Code of 1986 and 
        debt service effects shall not be counted as budgetary effects.
            (C) Solely for purposes of recording entries on a PAYGO 
        scorecard, provisions in appropriations Acts are also 
        considered to be budgetary effects for purposes of this 
        subtitle if such provisions make outyear modifications to 
        substantive law, except that provisions for which the outlay 
        effects net to zero over a period consisting of the current 
        year, the budget year, and the 4 subsequent years shall not be 
        considered budgetary effects. For purposes of this paragraph, 
        the term, ``modifications to substantive law'' refers to 
        changes to or restrictions on entitlement law or other 
        mandatory spending contained in appropriations Acts, 
        notwithstanding section 250(c)(8) of BBEDCA. Provisions in 
        appropriations Acts that are neither outyear modifications to 
        substantive law nor changes in revenues have no budgetary 
        effects for purposes of this subtitle.
            (D) If a provision is designated as an emergency 
        requirement under this subtitle and is also designated as an 
        emergency requirement under the applicable rules of the House 
        of Representatives, CBO shall not include the cost of such a 
        provision in its estimate of the PAYGO legislation's budgetary 
        effects.
            (4) The term ``debit'' refers to the net total amount, when 
        positive, by which costs recorded on the PAYGO scorecards for a 
        fiscal year exceed savings recorded on those scorecards for 
        that year.
            (5) The term ``entitlement law'' refers to a section of law 
        which provides entitlement authority.
            (6) The term ``PAYGO legislation'' or a ``PAYGO Act'' 
        refers to a bill or joint resolution that affects direct 
        spending or revenue relative to the baseline. The budgetary 
        effects of changes in revenues and outyear modifications to 
        substantive law included in appropriation Acts as defined in 
        paragraph (4) shall be treated as if they were contained in 
        PAYGO legislation.
            (7) The term ``timing shift'' refers to a delay of the date 
        on which direct spending would otherwise occur from the ninth 
        outyear to the tenth outyear or an acceleration of the date on 
        which revenues would otherwise occur from the tenth outyear to 
        the ninth outyear.

SEC. 1302. PAYGO ESTIMATES AND PAYGO SCORECARDS.

    (a) PAYGO Estimates.--(1) A PAYGO Act shall include by reference an 
estimate of its budgetary effects as determined under section 308(a)(3) 
of the Congressional Budget Act of 1974, if timely submitted for 
printing in the Congressional Record by the chairs of the Committees on 
the Budget of the House of Representatives and the Senate, as 
applicable, before the vote on the PAYGO legislation. The Clerk of the 
House or the Secretary of the Senate, as applicable, shall also 
incorporate by reference such estimate printed in the relevant portion 
of the Congressional Record under section 308(a)(3) of the 
Congressional Budget Act of 1974 into the enrollment of a PAYGO Act. 
Budgetary effects that are not so included shall be determined under 
section 1304(d)(3).
    (2)(A) Section 308(a) of the Congressional Budget Act of 1974 is 
amended by adding at the end the following new paragraph:
            ``(3) CBO paygo estimates.--Before a vote in either House 
        on a PAYGO Act that, if determined in the affirmative, would 
        clear such Act for enrollment, the chairs of the Committees on 
        the Budget of the House and Senate, as applicable, shall 
        request from the Director of the Congressional Budget Office an 
        estimate of the budgetary effects of such Act under the Control 
        Spending Now Act. If such an estimate is timely provided, the 
        chairs of the Committees on the Budget of the House of 
        Representatives and the Senate shall post such estimate on 
        their respective committee websites and cause it to be printed 
        in the Congressional Record under the heading `PAYGO ESTIMATE'. 
        For purposes of this section, the Director of the Congressional 
        Budget Office shall not count timing shifts in his estimates of 
        the budgetary effects of PAYGO legislation (as defined in 
        section 1301 of the Control Spending Now Act).''.
    (B) The side heading of section 308(a) of the Congressional Budget 
Act of 1974 is amended by striking ``Reports on''.
    (b) Section 308 of the Congressional Budget Act of 1974 is amended 
by adding at the end the following new subsection:
    ``(d) Scorekeeping Guidelines.--The Director of the Congressional 
Budget Office shall provide estimates under this section in accordance 
with the scorekeeping guidelines determined under section 252(d)(5) of 
the Balanced Budget and Emergency Deficit Control Act of 1985. Upon 
agreement, the chairs of the Committees on the Budget of the House of 
Representatives and the Senate shall submit updates to such guidelines 
for printing in the Congressional Record.''.
    (c) OMB PAYGO Scorecards.--
            (1) In general.--OMB shall maintain and make publicly 
        available a continuously updated document containing two PAYGO 
        scorecards displaying the budgetary effects of PAYGO 
        legislation as determined under section 308 of the 
        Congressional Budget Act of 1974, applying the look-back 
        requirement in subsection (e) and the averaging requirement in 
        subsection (f), and a separate addendum displaying the 
        estimates of the costs of provisions designated in statute as 
        emergency requirements.
            (2) Estimates in legislation.--Except as provided in 
        paragraph (3), in making the calculations for the PAYGO 
        scorecards, OMB shall use the budgetary effects included by 
        reference in the applicable legislation.
            (3) OMB estimates.--If legislation does not contain the 
        estimate of budgetary effects under paragraph (2), then OMB 
        shall score the budgetary effects of that legislation upon its 
        enactment, based on the approaches to scorekeeping set forth in 
        this subtitle.
            (4) 5-year scorecard.--The first scorecard shall display 
        the budgetary effects of PAYGO legislation in each year over 
        the 5-year period beginning in the budget year.
            (5) 10-year scorecard.--The second scorecard shall display 
        the budgetary effects of PAYGO legislation in each year over 
        the 10-year period beginning in the budget year.
    (d) Look-Back To Capture Current-Year Effects.--For purposes of 
this section, OMB shall treat the budgetary effects of PAYGO 
legislation enacted during a session of Congress that occur during the 
current year as though they occurred in the budget year.
    (e) Averaging Used to Measure Compliance Over 5-Year and 10-Year 
Periods.--OMB shall cumulate the budgetary effects of a PAYGO Act over 
the budget year (which includes any look-back effects under subsection 
(d)) and--
            (1) for purposes of the 5-year scorecard referred to in 
        subsection (c)(4), the four subsequent outyears, divide that 
        cumulative total by five, and enter the quotient in the budget-
        year column and in each subsequent column of the 5-year PAYGO 
        scorecard; and
            (2) for purposes of the 10-year scorecard referred to in 
        subsection (c)(5), the nine subsequent outyears, divide that 
        cumulative total by ten, and enter the quotient in the budget-
        year column and in each subsequent column of the 10-year PAYGO 
        scorecard.

SEC. 1303. ANNUAL REPORT AND SEQUESTRATION ORDER.

    (a) Annual Report.--Not later than 14 days (excluding weekends and 
holidays) after Congress adjourns to end a session, OMB shall make 
publicly available and cause to be printed in the Federal Register an 
annual PAYGO report. The report shall include an up-to-date document 
containing the PAYGO scorecards, information about emergency 
legislation (if any) designated under this subtitle, information about 
any sequestration if required by subsection (b), and other data and 
explanations that enhance public understanding of this subtitle and 
actions taken under it.
    (b) Sequestration Order.--If the annual report issued at the end of 
a session of Congress under subsection (a) shows a debit on either 
PAYGO scorecard for the budget year, OMB shall prepare and the 
President shall issue and include in that report a sequestration order 
that, upon issuance, shall reduce budgetary resources of direct 
spending programs by enough to offset that debit as prescribed in 
section 1306. If there is a debit on both scorecards, the order shall 
fully offset the larger of the two debits. OMB shall include that order 
in the annual report and transmit it to the House of Representatives 
and the Senate. If the President issues a sequestration order, the 
annual report shall contain, for each budget account to be sequestered, 
estimates of the baseline level of budgetary resources subject to 
sequestration, the amount of budgetary resources to be sequestered, and 
the outlay reductions that will occur in the budget year and the 
subsequent fiscal year because of that sequestration.

SEC. 1304. CALCULATING A SEQUESTRATION.

    (a) Reducing Nonexempt Budgetary Resources by a Uniform 
Percentage.--OMB shall calculate the uniform percentage by which the 
budgetary resources of nonexempt direct spending programs are to be 
sequestered such that the outlay savings resulting from that 
sequestration, as calculated under subsection (b), shall offset the 
budget-year debit, if any on the applicable PAYGO scorecard. If the 
uniform percentage calculated under the prior sentence exceeds 4 
percent, the Medicare programs described in section 256(d) of BBEDCA 
shall be reduced by 4 percent and the uniform percentage by which the 
budgetary resources of all other nonexempt direct spending programs are 
to be sequestered shall be increased, as necessary, so that the 
sequestration of Medicare and of all other nonexempt direct spending 
programs together produce the required outlay savings.
    (b) Outlay Savings.--In determining the amount by which a 
sequestration offsets a budget-year debit, OMB shall count--
            (1) the amount by which the sequestration in a crop year of 
        crop support payments, pursuant to section 256(j) of BBEDCA, 
        reduces outlays in the budget year and the subsequent fiscal 
        year;
            (2) the amount by which the sequestration of Medicare 
        payments in the 12-month period following the sequestration 
        order, pursuant to section 256(d) of BBEDCA, reduces outlays in 
        the budget year and the subsequent fiscal year; and
            (3) the amount by which the sequestration in the budget 
        year of the budgetary resources of other nonexempt mandatory 
        programs reduces outlays in the budget year and in the 
        subsequent fiscal year.

SEC. 1305. APPLICATION OF BBEDCA.

    For purposes of this subtitle--
            (1) notwithstanding section 275 of BBEDCA, the provisions 
        of sections 255, 256, 257, and 274 of BBEDCA, as amended by 
        this subtitle, shall apply to the provisions of this subtitle;
            (2) references in sections 255, 256, 257, and 274 to ``this 
        part'' or ``this title'' shall be interpreted as applying to 
        this subtitle;
            (3) references in sections 255, 256, 257, and 274 of BBEDCA 
        to ``section 254'' shall be interpreted as referencing section 
        1303 of this subtitle;
            (4) the reference in section 256(b) of BBEDCA to ``section 
        252 or 253'' shall be interpreted as referencing section 1303 
        of this subtitle;
            (5) the reference in section 256(d)(1) of BBEDCA to 
        ``section 252 or 253'' shall be interpreted as referencing 
        section 1304 of this subtitle;
            (6) the reference in section 256(d)(4) of BBEDCA to 
        ``section 252 or 253'' shall be interpreted as referencing 
        section 1303 of this subtitle;
            (7) section 256(k) of BBEDCA shall apply to a 
        sequestration, if any, under this subtitle; and
            (8) references in section 257(e) of BBEDCA to ``section 
        251, 252, or 253'' shall be interpreted as referencing section 
        1302 of this subtitle.

SEC. 1306. TECHNICAL CORRECTIONS.

    (a) Section 250(c)(18) of BBEDCA is amended by striking ``the 
expenses the Federal deposit insurance agencies'' and inserting ``the 
expenses of the Federal deposit insurance agencies''.
    (b) Section 256(k)(1) of BBEDCA is amended by striking ``in 
paragraph (5)'' and inserting ``in paragraph (6)''.

SEC. 1307. CONFORMING AMENDMENTS.

    (a) Section 256(a) of BBEDCA is repealed.
    (b) Section 256(b) of BBEDCA is amended by striking ``origination 
fees under sections 438(c)(2) and 455(c) of that Act shall each be 
increased by 0.50 percentage point.'' and inserting in lieu thereof 
``origination fees under sections 438(c) (2) and (6) and 455(c) and 
loan processing and issuance fees under section 428(f)(1)(A)(ii) of 
that Act shall each be increased by the uniform percentage specified in 
that sequestration order, and, for student loans originated during the 
period of the sequestration, special allowance payments under section 
438(b) of that Act accruing during the period of the sequestration 
shall be reduced by the uniform percentage specified in that 
sequestration order.''.
    (c) Section 256(c) of BBEDCA is repealed.
    (d) Section 256(d) of BBEDCA is amended--
            (1) by redesignating paragraphs (2), (3), and (4) as 
        paragraphs (3), (5), and (6);
            (2) by amending paragraph (1) to read as follows:
            ``(1) Calculation of reduction in payment amounts.--To 
        achieve the total percentage reduction in those programs 
        required by section 252 or 253, subject to paragraph (2), and 
        notwithstanding section 710 of the Social Security Act, OMB 
        shall determine, and the applicable Presidential order under 
        section 254 shall implement, the percentage reduction that 
        shall apply, with respect to the health insurance programs 
        under title XVIII of the Social Security Act--
                    ``(A) in the case of parts A and B of such title, 
                to individual payments for services furnished during 
                the one-year period beginning on the first day of the 
                first month beginning after the date the order is 
                issued (or, if later, the date specified in paragraph 
                (4)); and
                    ``(B) in the case of parts C and D, to monthly 
                payments under contracts under such parts for the same 
                one-year period;
        such that the reduction made in payments under that order shall 
        achieve the required total percentage reduction in those 
        payments for that period.'';
            (3) by inserting after paragraph (1) the following:
            ``(2) Uniform reduction rate; maximum permissible 
        reduction.--Reductions in payments for programs and activities 
        under such title XVIII pursuant to a sequestration order under 
        section 254 shall be at a uniform rate, which shall not exceed 
        4 percent, across all such programs and activities subject to 
        such order.'';
            (4) by inserting after paragraph (3), as redesignated, the 
        following:
            ``(4) Timing of subsequent sequestration order.--A 
        sequestration order required by section 252 or 253 with respect 
        to programs under such title XVIII shall not take effect until 
        the first month beginning after the end of the effective period 
        of any prior sequestration order with respect to such programs, 
        as determined in accordance with paragraph (1).'';
            (5) in paragraph (6), as redesignated, to read as follows:
            ``(6) Sequestration disregarded in computing payment 
        amounts.--The Secretary of Health and Human Services shall not 
        take into account any reductions in payment amounts which have 
        been or may be effected under this part, for purposes of 
        computing any adjustments to payment rates under such title 
        XVIII, specifically including--
                    ``(A) the part C growth percentage under section 
                1853(c)(6);
                    ``(B) the part D annual growth rate under section 
                1860D-2(b)(6); and
                    ``(C) application of risk corridors to part D 
                payment rates under section 1860D-15(e).''; and
            (6) by adding after paragraph (6), as redesignated, the 
        following:
            ``(7) Exemptions from sequestration.--In addition to the 
        programs and activities specified in section 255, the following 
        shall be exempt from sequestration under this part:
                    ``(A) Part d low-income subsidies.--Premium and 
                cost-sharing subsidies under section 1860D-14 of the 
                Social Security Act.
                    ``(B) Part d catastrophic subsidy.--Payments under 
                section 1860D-15(b) and (e)(2)(B) of the Social 
                Security Act.
                    ``(C) Qualified individual (qi) premiums.--Payments 
                to States for coverage of Medicare cost-sharing for 
                certain low-income Medicare beneficiaries under section 
                1933 of the Social Security Act.''.

SEC. 1308. EXEMPT PROGRAMS AND ACTIVITIES.

    (a) Designations.--Section 255 of BBEDCA is amended by 
redesignating subsection (i) as (j) and striking ``1998'' and inserting 
in lieu thereof ``2010''.
    (b) Social Security, Veterans Programs, Net Interest, and Tax 
Credits.--Subsections (a) through (d) of section 255 of BBEDCA are 
amended to read as follows:
    ``(a) Social Security Benefits and Tier I Railroad Retirement 
Benefits.--Benefits payable under the old-age, survivors, and 
disability insurance program established under title II of the Social 
Security Act (42 U.S.C. 401 et seq.), and benefits payable under 
section 231b(a), 231b(f)(2), 231c(a), and 231c(f) of title 45 United 
States Code, shall be exempt from reduction under any order issued 
under this part.
    ``(b) Veterans Programs.--The following program shall be exempt 
from reduction under any order issued under this part--
            ``All programs administered by the Department of Veterans 
        Affairs.
            ``Special Benefits for Certain World War II Veterans (28-
        0401-0-1-701).
    ``(c) Net Interest.--No reduction of payments for net interest (all 
of major functional category 900) shall be made under any order issued 
under this part.
    ``(d) Refundable Income Tax Credits.--Payments to individuals made 
pursuant to provisions of the Internal Revenue Code of 1986 
establishing refundable tax credits shall be exempt from reduction 
under any order issued under this part.''.
    (c) Other Programs and Activities, Low-Income Programs, and 
Economic Recovery Programs.--Subsections (g) and (h) of section 255 of 
BBEDCA are amended to read as follows:
    ``(g) Other Programs and Activities.--
            ``(1)(A) The following budget accounts and activities shall 
        be exempt from reduction under any order issued under this 
        part:
                    ``Activities resulting from private donations, 
                bequests, or voluntary contributions to the Government.
                    ``Activities financed by voluntary payments to the 
                Government for goods or services to be provided for 
                such payments.
                    ``Administration of Territories, Northern Mariana 
                Islands Covenant grants (14-0412-0-1-808).
                    ``Advances to the Unemployment Trust Fund and Other 
                Funds (16-0327-0-1-600).
                    ``Black Lung Disability Trust Fund Refinancing (16-
                0329-0-1-601).
                    ``Bonneville Power Administration Fund and 
                borrowing authority established pursuant to section 13 
                of Public Law 93-454 (1974), as amended (89-4045-0-3-
                271).
                    ``Claims, Judgments, and Relief Acts (20-1895-0-1-
                808).
                    ``Compact of Free Association (14-0415-0-1-808).
                    ``Compensation of the President (11-0209-01-1-802).
                    ``Comptroller of the Currency, Assessment Funds 
                (20-8413-0-8-373).
                    ``Continuing Fund, Southeastern Power 
                Administration (89-5653-0-2-271).
                    ``Continuing Fund, Southwestern Power 
                Administration (89-5649-0-2-271).
                    ``Dual Benefits Payments Account (60-0111-0-1-601).
                    ``Emergency Fund, Western Area Power Administration 
                (89-5069-0-2-271).
                    ``Exchange Stabilization Fund (20-4444-0-3-155).
                    ``Federal Deposit Insurance Corporation, Deposit 
                Insurance Fund (51-4596-4-4-373).
                    ``Federal Deposit Insurance Corporation, FSLIC 
                Resolution Fund (51-4065-0-3-373).
                    ``Federal Deposit Insurance Corporation, 
                Noninterest Bearing Transaction Account Guarantee (51-
                4458-0-3-373).
                    ``Federal Deposit Insurance Corporation, Senior 
                Unsecured Debt Guarantee (51-4457-0-3-373).
                    ``Federal Housing Finance Agency, Administrative 
                Expenses (95-5532-0-2-371).
                    ``Federal Payment to the District of Columbia 
                Judicial Retirement and Survivors Annuity Fund (20-
                1713-0-1-752).
                    ``Federal Payment to the District of Columbia 
                Pension Fund (20-1714-0-1-601).
                    ``Federal Payments to the Railroad Retirement 
                Accounts (60-0113-0-1-601).
                    ``Federal Reserve Bank Reimbursement Fund (20-1884-
                0-1-803).
                    ``Financial Agent Services (20-1802-0-1-803).
                    ``Foreign Military Sales Trust Fund (11-8242-0-7-
                155).
                    ``Hazardous Waste Management, Conservation Reserve 
                Program (12-4336-0-3-999).
                    ``Host Nation Support Fund for Relocation (97-8337-
                0-7-051).
                    ``Internal Revenue Collections for Puerto Rico (20-
                5737-0-2-806).
                    ``Intragovernmental funds, including those from 
                which the outlays are derived primarily from resources 
                paid in from other government accounts, except to the 
                extent such funds are augmented by direct 
                appropriations for the fiscal year during which an 
                order is in effect.
                    ``Medical Facilities Guarantee and Loan Fund (75-
                9931-0-3-551).
                    ``National Credit Union Administration, Central 
                Liquidity Facility (25-4470-0-3-373).
                    ``National Credit Union Administration, Corporate 
                Credit Union Share Guarantee Program (25-4476-0-3-376).
                    ``National Credit Union Administration, Credit 
                Union Homeowners Affordability Relief Program (25-4473-
                0-3-371).
                    ``National Credit Union Administration, Credit 
                Union Share Insurance Fund (25-4468-0-3-373).
                    ``National Credit Union Administration, Credit 
                Union System Investment Program (25-4474-0-3-376).
                    ``National Credit Union Administration, Operating 
                fund (25-4056-0-3-373).
                    ``National Credit Union Administration, Share 
                Insurance Fund Corporate Debt Guarantee Program (25-
                4469-0-3-376).
                    ``National Credit Union Administration, U.S. 
                Central Federal Credit Union Capital Program (25-4475-
                0-3-376).
                    ``Office of Thrift Supervision (20-4108-0-3-373).
                    ``Panama Canal Commission Compensation Fund (16-
                5155-0-2-602).
                    ``Payment of Vietnam and USS Pueblo prisoner-of-war 
                claims within the Salaries and Expenses, Foreign Claims 
                Settlement account (15-0100-0-1-153).
                    ``Payment to Civil Service Retirement and 
                Disability Fund (24-0200-0-1-805).
                    ``Payment to Department of Defense Medicare-
                Eligible Retiree Health Care Fund (97-0850-0-1-054).
                    ``Payment to Judiciary Trust Funds (10-0941-0-1-
                752).
                    ``Payment to Military Retirement Fund (97-0040-0-1-
                054).
                    ``Payment to the Foreign Service Retirement and 
                Disability Fund (19-0540-0-1-153).
                    ``Payments to Copyright Owners (03-5175-0-2-376).
                    ``Payments to Health Care Trust Funds (75-0580-0-1-
                571).
                    ``Payment to Radiation Exposure Compensation Trust 
                Fund (15-0333-0-1-054).
                    ``Payments to Social Security Trust Funds (28-0404-
                0-1-651).
                    ``Payments to the United States Territories, Fiscal 
                Assistance (14-0418-0-1-806).
                    ``Payments to trust funds from excise taxes or 
                other receipts properly creditable to such trust funds.
                    ``Payments to widows and heirs of deceased Members 
                of Congress (00-0215-0-1-801).
                    ``Postal Service Fund (18-4020-0-3-372).
                    ``Radiation Exposure Compensation Trust Fund (15-
                8116-0-1-054).
                    ``Reimbursement to Federal Reserve Banks (20-0562-
                0-1-803).
                    ``Salaries of Article III judges.
                    ``Soldiers and Airmen's Home, payment of claims 
                (84-8930-0-7-705).
                    ``Tennessee Valley Authority Fund, except nonpower 
                programs and activities (64-4110-0-3-999).
                    ``Tribal and Indian trust accounts within the 
                Department of the Interior which fund prior legal 
                obligations of the Government or which are established 
                pursuant to Acts of Congress regarding Federal 
                management of tribal real property or other fiduciary 
                responsibilities, including but not limited to Tribal 
                Special Fund (14-5265-0-2-452), Tribal Trust Fund (14-
                8030-0-7-452), White Earth Settlement (14-2204-0-1-
                452), and Indian Water Rights and Habitat Acquisition 
                (14-5505-0-2-303).
                    ``United Mine Workers of America 1992 Benefit Plan 
                (95-8260-0-7-551).
                    ``United Mine Workers of America 1993 Benefit Plan 
                (95-8535-0-7-551).
                    ``United Mine Workers of America Combined Benefit 
                Fund (95-8295-0-7-551).
                    ``United States Enrichment Corporation Fund (95-
                4054-0-3-271).
                    ``Universal Service Fund (27-5183-0-2-376).
                    ``Vaccine Injury Compensation (75-0320-0-1-551).
                    ``Vaccine Injury Compensation Program Trust Fund 
                (20-8175-0-7-551).
            ``(B) The following Federal retirement and disability 
        accounts and activities shall be exempt from reduction under 
        any order issued under this part:
                    ``Black Lung Disability Trust Fund (20-8144-0-7-
                601).
                    ``Central Intelligence Agency Retirement and 
                Disability System Fund (56-3400-0-1-054).
                    ``Civil Service Retirement and Disability Fund (24-
                8135-0-7-602).
                    ``Comptrollers general retirement system (05-0107-
                0-1-801).
                    ``Contributions to U.S. Park Police annuity 
                benefits, Other Permanent Appropriations (14-9924-0-2-
                303).
                    ``Court of Appeals for Veterans Claims Retirement 
                Fund (95-8290-0-7-705).
                    ``Department of Defense Medicare-Eligible Retiree 
                Health Care Fund (97-5472-0-2-551).
                    ``District of Columbia Federal Pension Fund (20-
                5511-0-2-601).
                    ``District of Columbia Judicial Retirement and 
                Survivors Annuity Fund (20-8212-0-7-602).
                    ``Energy Employees Occupational Illness 
                Compensation Fund (16-1523-0-1-053).
                    ``Foreign National Employees Separation Pay (97-
                8165-0-7-051).
                    ``Foreign Service National Defined Contributions 
                Retirement Fund (19-5497-0-2-602).
                    ``Foreign Service National Separation Liability 
                Trust Fund (19-8340-0-7-602).
                    ``Foreign Service Retirement and Disability Fund 
                (19-8186-0-7-602).
                    ``Government Payment for Annuitants, Employees 
                Health Benefits (24-0206-0-1-551).
                    ``Government Payment for Annuitants, Employee Life 
                Insurance (24-0500-0-1-602).
                    ``Judicial Officers' Retirement Fund (10-8122-0-7-
                602).
                    ``Judicial Survivors' Annuities Fund (10-8110-0-7-
                602).
                    ``Military Retirement Fund (97-8097-0-7-602).
                    ``National Railroad Retirement Investment Trust 
                (60-8118-0-7-601).
                    ``National Oceanic and Atmospheric Administration 
                retirement (13-1450-0-1-306).
                    ``Pensions for former Presidents (47-0105-0-1-802).
                    ``Postal Service Retiree Health Benefits Fund (24-
                5391-0-2-551).
                    ``Public Safety Officer Benefits (15-0403-0-1-754).
                    ``Rail Industry Pension Fund (60-8011-0-7-601).
                    ``Retired Pay, Coast Guard (70-0602-0-1-403).
                    ``Retirement Pay and Medical Benefits for 
                Commissioned Officers, Public Health Service (75-0379-
                0-1-551).
                    ``Special Benefits for Disabled Coal Miners (16-
                0169-0-1-601).
                    ``Special Benefits, Federal Employees' Compensation 
                Act (16-1521-0-1-600).
                    ``Special Workers Compensation Expenses (16-9971-0-
                7-601).
                    ``Tax Court Judges Survivors Annuity Fund (23-8115-
                0-7-602).
                    ``United States Court of Federal Claims Judges' 
                Retirement Fund (10-8124-0-7-602).
                    ``United States Secret Service, DC Annuity (70-
                0400-0-1-751).
                    ``Voluntary Separation Incentive Fund (97-8335-0-7-
                051).
            ``(2) Prior legal obligations of the Government in the 
        following budget accounts and activities shall be exempt from 
        any order issued under this part:
                    ``Biomass Energy Development (20-0114-0-1-271).
                    ``Check Forgery Insurance Fund (20-4109-0-3-803).
                    ``Credit liquidating accounts.
                    ``Credit reestimates.
                    ``Employees Life Insurance Fund (24-8424-0-8-602).
                    ``Federal Aviation Insurance Revolving Fund (69-
                4120-0-3-402).
                    ``Federal Crop Insurance Corporation Fund (12-4085-
                0-3-351).
                    ``Federal Emergency Management Agency, National 
                Flood Insurance Fund (58-4236-0-3-453).
                    ``Federal Home Loan Mortgage Corporation (Freddie 
                Mac).
                    ``Federal National Mortgage Corporation (Fannie 
                Mae).
                    ``Geothermal resources development fund (89-0206-0-
                1-271).
                    ``Low-Rent Public Housing--Loans and Other Expenses 
                (86-4098-0-3-604).
                    ``Maritime Administration, War Risk Insurance 
                Revolving Fund (69-4302-0-3-403).
                    ``Natural Resource Damage Assessment Fund (14-1618-
                0-1-302).
                    ``Overseas Private Investment Corporation, 
                Noncredit Account (71-4184-0-3-151).
                    ``Pension Benefit Guaranty Corporation Fund (16-
                4204-0-3-601).
                    ``San Joaquin Restoration Fund (14-5537-0-2-301).
                    ``Servicemembers' Group Life Insurance Fund (36-
                4009-0-3-701).
                    ``Terrorism Insurance Program (20-0123-0-1-376).
    ``(h) Low-income Programs.--The following programs shall be exempt 
from reduction under any order issued under this part:
            ``Academic Competitiveness/Smart Grant Program (91-0205-0-
        1-502).
            ``Child Care Entitlement to States (75-1550-0-1-609).
            ``Child Enrollment Contingency Fund (75-5551-0-2-551).
            ``Child Nutrition Programs (with the exception of special 
        milk programs) (12-3539-0-1-605).
            ``Children's Health Insurance Fund (75-0515-0-1-551).
            ``Commodity Supplemental Food Program (12-3507-0-1-605).
            ``Contingency Fund (75-1522-0-1-609).
            ``Family Support Programs (75-1501-0-1-609).
            ``Federal Pell Grants under section 401 Title IV of the 
        Higher Education Act.
            ``Grants to States for Medicaid (75-0512-0-1-551).
            ``Payments for Foster Care and Permanency (75-1545-0-1-
        609).
            ``Supplemental Nutrition Assistance Program (12-3505-0-1-
        605).
            ``Supplemental Security Income Program (28-0406-0-1-609).
            ``Temporary Assistance for Needy Families (75-1552-0-1-
        609).''.
    (d) Economic Recovery Programs.--Section 255 of BBEDCA is amended 
by adding the following after subsection (h):
    ``(i) Economic Recovery Programs.--The following programs shall be 
exempt from reduction under any order issued under this part:
            ``All programs enacted in, or increases in programs 
        provided by, the American Recovery and Reinvestment Act of 
        2009.
            ``Exchange Stabilization Fund-Money Market Mutual Fund 
        Guaranty Facility (20-4274-0-3-376).
            ``Financial Stabilization Reserve (20-0131-4-1-376).
            ``GSE Mortgage-Backed Securities Purchase Program Account 
        (20-0126-0-1-371).
            ``GSE Preferred Stock Purchase Agreements (20-0125-0-1-
        371).
            ``Office of Financial Stability (20-0128-0-1-376).
            ``Special Inspector General for the Troubled Asset Relief 
        Program (20-0133-0-1-376).
            ``Troubled Asset Relief Program Account (20-0132-0-1-376).
            ``Troubled Asset Relief Program Equity Purchase Program 
        (20-0134-0-1-376).
            ``Troubled Asset Relief Program, Home Affordable 
        Modification Program (20-0136-0-1-604).''.

SEC. 1309. EXPIRATION.

    This subtitle and the amendments made by this subtitle shall expire 
September 30, 2014.

                Subtitle D--Reforming the Budget Process

SEC. 1401. SHORT TITLE.

    This subtitle may be cited as the ``Biennial Budgeting and 
Appropriations Act''.

SEC. 1402. REVISION OF TIMETABLE.

    Section 300 of the Congressional Budget Act of 1974 (2 U.S.C. 631) 
is amended to read as follows:

                              ``timetable

    ``Sec. 300.  (a) In General.--Except as provided by subsection (b), 
the timetable with respect to the congressional budget process for any 
Congress (beginning with the One Hundred Eleventh Congress) is as 
follows:


                                                 ``First Session
On or before:                             Action to be completed:
First Monday in February................  President submits budget recommendations.
February 15.............................  Congressional Budget Office submits report to Budget Committees.
Not later than 6 weeks after budget       Committees submit views and estimates to Budget Committees.
 submission.
April 1.................................  Budget Committees report concurrent resolution on the biennial budget.
May 15..................................  Congress completes action on concurrent resolution on the biennial
                                           budget.
May 15..................................  Biennial appropriation bills may be considered in the House.
June 10.................................  House Appropriations Committee reports last biennial appropriation
                                           bill.
June 30.................................  House completes action on biennial appropriation bills.
August 1................................  Congress completes action on reconciliation legislation.
October 1...............................  Biennium begins.
 



                                                ``Second Session
On or before:                             Action to be completed:
February 15.............................  President submits budget review.
Not later than 6 weeks after President    Congressional Budget Office submits report to Budget Committees.
 submits budget review.
The last day of the session.............  Congress completes action on bills and resolutions authorizing new
                                           budget authority for the succeeding biennium.
 

    ``(b) Special Rule.--In the case of any first session of Congress 
that begins in any year immediately following a leap year and during 
which the term of a President (except a President who succeeds himself 
or herself) begins, the following dates shall supersede those set forth 
in subsection (a):


                                                 ``First Session
On or before:                             Action to be completed:
First Monday in April...................  President submits budget recommendations.
April 20................................  Committees submit views and estimates to Budget Committees.
May 15..................................  Budget Committees report concurrent resolution on the biennial budget.
June 1..................................  Congress completes action on concurrent resolution on the biennial
                                           budget.
July 1..................................  Biennial appropriation bills may be considered in the House.
July 20.................................  House completes action on biennial appropriation bills.
August 1................................  Congress completes action on reconciliation legislation.
October 1...............................  Biennium begins.''.
 

SEC. 1403. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND IMPOUNDMENT 
              CONTROL ACT OF 1974.

    (a) Declaration of Purpose.--Section 2(2) of the Congressional 
Budget and Impoundment Control Act of 1974 (2 U.S.C. 621(2)) is amended 
by striking ``each year'' and inserting ``biennially''.
    (b) Definitions.--
            (1) Budget resolution.--Section 3(4) of such Act (2 U.S.C. 
        622(4)) is amended by striking ``fiscal year'' each place it 
        appears and inserting ``biennium''.
            (2) Biennium.--Section 3 of such Act (2 U.S.C. 622) is 
        further amended by adding at the end the following new 
        paragraph:
            ``(11) The term `biennium' means the period of 2 
        consecutive fiscal years beginning on October 1 of any odd-
        numbered year.''.
    (c) Biennial Concurrent Resolution on the Budget.--
            (1) Section heading.--The section heading of section 301 of 
        such Act is amended by striking ``annual'' and inserting 
        ``biennial''.
            (2) Contents of resolution.--Section 301(a) of such Act (2 
        U.S.C. 632(a)) is amended--
                    (A) in the matter preceding paragraph (1) by--
                            (i) striking ``April 15 of each year'' and 
                        inserting ``May 15 of each odd-numbered year'';
                            (ii) striking ``the fiscal year beginning 
                        on October 1 of such year'' the first place it 
                        appears and inserting ``the biennium beginning 
                        on October 1 of such year''; and
                            (iii) striking ``the fiscal year beginning 
                        on October 1 of such year'' the second place it 
                        appears and inserting ``each fiscal year in 
                        such period'';
                    (B) in paragraph (6), by striking ``for the fiscal 
                year'' and inserting ``for each fiscal year in the 
                biennium''; and
                    (C) in paragraph (7), by striking ``for the fiscal 
                year'' and inserting ``for each fiscal year in the 
                biennium''.
            (3) Additional matters.--Section 301(b)(3) of such Act (2 
        U.S.C. 632(b)) is amended by striking ``for such fiscal year'' 
        and inserting ``for either fiscal year in such biennium''.
            (4) Views of other committees.--Section 301(d) of such Act 
        (2 U.S.C. 632(d)) is amended by inserting ``(or, if applicable, 
        as provided by section 300(b))'' after ``United States Code''.
            (5) Hearings.--Section 301(e)(1) of such Act (2 U.S.C. 
        632(e)) is amended by--
                    (A) striking ``fiscal year'' and inserting 
                ``biennium''; and
                    (B) inserting after the second sentence the 
                following: ``On or before April 1 of each odd-numbered 
                year (or, if applicable, as provided by section 
                300(b)), the Committee on the Budget of each House 
                shall report to its House the concurrent resolution on 
                the budget referred to in subsection (a) for the 
                biennium beginning on October 1 of that year.''.
            (6) Goals for reducing unemployment.--Section 301(f) of 
        such Act (2 U.S.C. 632(f)) is amended by striking ``fiscal 
        year'' each place it appears and inserting ``biennium''.
            (7) Economic assumptions.--Section 301(g)(1) of such Act (2 
        U.S.C. 632(g)(1)) is amended by striking ``for a fiscal year'' 
        and inserting ``for a biennium''.
            (8) Table of contents.--The item relating to section 301 in 
        the table of contents set forth in section 1(b) of such Act is 
        amended by striking ``Annual'' and inserting ``Biennial''.
    (d) Committee Allocations.--Section 302 of such Act (2 U.S.C. 633) 
is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by--
                            (i) striking ``for the first fiscal year of 
                        the resolution,'' and inserting ``for each 
                        fiscal year in the biennium,'';
                            (ii) striking ``for that period of fiscal 
                        years'' and inserting ``for all fiscal years 
                        covered by the resolution''; and
                            (iii) striking ``for the fiscal year of 
                        that resolution'' and inserting ``for each 
                        fiscal year in the biennium''; and
                    (B) in paragraph (5), by striking ``April 15'' and 
                inserting ``May 15 or June 1 (under section 300(b))'';
            (2) in subsection (b), by striking ``budget year'' and 
        inserting ``biennium'';
            (3) in subsection (c) by striking ``for a fiscal year'' 
        each place it appears and inserting ``for each fiscal year in 
        the biennium'';
            (4) in subsection (f)(1), by striking ``for a fiscal year'' 
        and inserting ``for a biennium'';
            (5) in subsection (f)(1), by striking ``the first fiscal 
        year'' and inserting ``each fiscal year of the biennium'';
            (6) in subsection (f)(2)(A), by--
                    (A) striking ``the first fiscal year'' and 
                inserting ``each fiscal year of the biennium''; and
                    (B) striking ``the total of fiscal years'' and 
                inserting ``the total of all fiscal years covered by 
                the resolution''; and
            (7) in subsection (g)(1)(A), by striking ``April'' and 
        inserting ``May''.
    (e) Section 303 Point of Order.--
            (1) In general.--Section 303(a) of such Act (2 U.S.C. 
        634(a)) is amended by--
                    (A) striking ``the first fiscal year'' and 
                inserting ``each fiscal year of the biennium''; and
                    (B) striking ``that fiscal year'' each place it 
                appears and inserting ``that biennium''.
            (2) Exceptions in the house.--Section 303(b)(1) of such Act 
        (2 U.S.C. 634(b)) is amended--
                    (A) in subparagraph (A), by striking ``the budget 
                year'' and inserting ``the biennium''; and
                    (B) in subparagraph (B), by striking ``the fiscal 
                year'' and inserting ``the biennium''.
            (3) Application to the senate.--Section 303(c)(1) of such 
        Act (2 U.S.C. 634(c)) is amended by--
                    (A) striking ``fiscal year'' and inserting 
                ``biennium''; and
                    (B) striking ``that year'' and inserting ``each 
                fiscal year of that biennium''.
    (f) Permissible Revisions of Concurrent Resolutions on the 
Budget.--Section 304(a) of such Act (2 U.S.C. 635) is amended--
            (1) by striking ``fiscal year'' the first two places it 
        appears and inserting ``biennium''; and
            (2) by striking ``for such fiscal year'' and inserting 
        ``for such biennium''.
    (g) Procedures for Consideration of Budget Resolutions.--Section 
305 of such Act (2 U.S.C. 636(3)) is amended--
            (1) in subsection (a)(3), by striking ``fiscal year'' and 
        inserting ``biennium''; and
            (2) in subsection (b)(3), by striking ``fiscal year'' and 
        inserting ``biennium''.
    (h) Completion of House Action on Appropriation Bills.--Section 307 
of such Act (2 U.S.C. 638) is amended--
            (1) by striking ``each year'' and inserting ``each odd-
        numbered year'';
            (2) by striking ``annual'' and inserting ``biennial'';
            (3) by striking ``fiscal year'' and inserting ``biennium''; 
        and
            (4) by striking ``that year'' and inserting ``each odd-
        numbered year''.
    (i) Completion of Action on Regular Appropriation Bills.--Section 
309 of such Act (2 U.S.C. 640) is amended--
            (1) by inserting ``of any odd-numbered calendar year'' 
        after ``July'';
            (2) by striking ``annual'' and inserting ``biennial''; and
            (3) by striking ``fiscal year'' and inserting ``biennium''.
    (j) Reconciliation Process.--Section 310(a) of such Act (2 U.S.C. 
641(a)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``any fiscal year'' and inserting ``any biennium''; and
            (2) in paragraph (1) by striking ``such fiscal year'' each 
        place it appears and inserting ``any fiscal year covered by 
        such resolution''.
    (k) Section 311 Point of Order.--
            (1) In the house.--Section 311(a)(1) of such Act (2 U.S.C. 
        642(a)) is amended--
                    (A) by striking ``for a fiscal year'' and inserting 
                ``for a biennium'';
                    (B) by striking ``the first fiscal year'' each 
                place it appears and inserting ``either fiscal year of 
                the biennium''; and
                    (C) by striking ``that first fiscal year'' and 
                inserting ``each fiscal year in the biennium''.
            (2) In the senate.--Section 311(a)(2) of such Act is 
        amended--
                    (A) in subparagraph (A), by striking ``for the 
                first fiscal year'' and inserting ``for either fiscal 
                year of the biennium''; and
                    (B) in subparagraph (B)--
                            (i) by striking ``that first fiscal year'' 
                        the first place it appears and inserting ``each 
                        fiscal year in the biennium''; and
                            (ii) by striking ``that first fiscal year 
                        and the ensuing fiscal years'' and inserting 
                        ``all fiscal years''.
            (3) Social security levels.--Section 311(a)(3) of such Act 
        is amended by--
                    (A) striking ``for the first fiscal year'' and 
                inserting ``each fiscal year in the biennium''; and
                    (B) striking ``that fiscal year and the ensuing 
                fiscal years'' and inserting ``all fiscal years''.
    (l) MDA Point of Order.--Section 312(c) of the Congressional Budget 
Act of 1974 (2 U.S.C. 643) is amended--
            (1) by striking ``for a fiscal year'' and inserting ``for a 
        biennium'';
            (2) in paragraph (1), by striking ``the first fiscal year'' 
        and inserting ``either fiscal year in the biennium'';
            (3) in paragraph (2), by striking ``that fiscal year'' and 
        inserting ``either fiscal year in the biennium''; and
            (4) in the matter following paragraph (2), by striking 
        ``that fiscal year'' and inserting ``the applicable fiscal 
        year''.

SEC. 1404. AMENDMENTS TO TITLE 31, UNITED STATES CODE.

    (a) Definition.--Section 1101 of title 31, United States Code, is 
amended by adding at the end thereof the following new paragraph:
            ``(3) `biennium' has the meaning given to such term in 
        paragraph (11) of section 3 of the Congressional Budget and 
        Impoundment Control Act of 1974 (2 U.S.C. 622(11)).''.
    (b) Budget Contents and Submission to the Congress.--
            (1) Schedule.--The matter preceding paragraph (1) in 
        section 1105(a) of title 31, United States Code, is amended to 
        read as follows:
    ``(a) On or before the first Monday in February of each odd-
numbered year (or, if applicable, as provided by section 300(b) of the 
Congressional Budget Act of 1974), beginning with the One Hundred 
Twelfth Congress, the President shall transmit to the Congress, the 
budget for the biennium beginning on October 1 of such calendar year. 
The budget of the United States Government transmitted under this 
subsection shall include a budget message and summary and supporting 
information. The President shall include in each budget the 
following:''.
            (2) Expenditures.--Section 1105(a)(5) of title 31, United 
        States Code, is amended by striking ``the fiscal year for which 
        the budget is submitted and the 4 fiscal years after that 
        year'' and inserting ``each fiscal year in the biennium for 
        which the budget is submitted and in the succeeding 4 fiscal 
        years''.
            (3) Receipts.--Section 1105(a)(6) of title 31, United 
        States Code, is amended by striking ``the fiscal year for which 
        the budget is submitted and the 4 fiscal years after that 
        year'' and inserting ``each fiscal year in the biennium for 
        which the budget is submitted and in the succeeding 4 years''.
            (4) Balance statements.--Section 1105(a)(9)(C) of title 31, 
        United States Code, is amended by striking ``the fiscal year'' 
        and inserting ``each fiscal year in the biennium''.
            (5) Functions and activities.--Section 1105(a)(12) of title 
        31, United States Code, is amended in subparagraph (A), by 
        striking ``the fiscal year'' and inserting ``each fiscal year 
        in the biennium''.
            (6) Allowances.--Section 1105(a)(13) of title 31, United 
        States Code, is amended by striking ``the fiscal year'' and 
        inserting ``each fiscal year in the biennium''.
            (7) Allowances for uncontrolled expenditures.--Section 
        1105(a)(14) of title 31, United States Code, is amended by 
        striking ``that year'' and inserting ``each fiscal year in the 
        biennium for which the budget is submitted''.
            (8) Tax expenditures.--Section 1105(a)(16) of title 31, 
        United States Code, is amended by striking ``the fiscal year'' 
        and inserting ``each fiscal year in the biennium''.
            (9) Future years.--Section 1105(a)(17) of title 31, United 
        States Code, is amended--
                    (A) by striking ``the fiscal year following the 
                fiscal year'' and inserting ``each fiscal year in the 
                biennium following the biennium'';
                    (B) by striking ``that following fiscal year'' and 
                inserting ``each such fiscal year''; and
                    (C) by striking ``fiscal year before the fiscal 
                year'' and inserting ``biennium before the biennium''.
            (10) Prior year outlays.--Section 1105(a)(18) of title 31, 
        United States Code, is amended--
                    (A) by striking ``the prior fiscal year'' and 
                inserting ``each of the 2 most recently completed 
                fiscal years,'';
                    (B) by striking ``for that year'' and inserting 
                ``with respect to those fiscal years''; and
                    (C) by striking ``in that year'' and inserting ``in 
                those fiscal years''.
            (11) Prior year receipts.--Section 1105(a)(19) of title 31, 
        United States Code, is amended--
                    (A) by striking ``the prior fiscal year'' and 
                inserting ``each of the 2 most recently completed 
                fiscal years'';
                    (B) by striking ``for that year'' and inserting 
                ``with respect to those fiscal years''; and
                    (C) by striking ``in that year'' each place it 
                appears and inserting ``in those fiscal years''.
    (c) Estimated Expenditures of Legislative and Judicial Branches.--
Section 1105(b) of title 31, United States Code, is amended by striking 
``each year'' and inserting ``each even-numbered year''.
    (d) Recommendations To Meet Estimated Deficiencies.--Section 
1105(c) of title 31, United States Code, is amended--
            (1) by striking ``the fiscal year for'' the first place it 
        appears and inserting ``each fiscal year in the biennium for'';
            (2) by striking ``the fiscal year for'' the second place it 
        appears and inserting ``each fiscal year of the biennium, as 
        the case may be, for''; and
            (3) by striking ``for that year'' and inserting ``for each 
        fiscal year of the biennium''.
    (e) Capital Investment Analysis.--Section 1105(e)(1) of title 31, 
United States Code, is amended by striking ``ensuing fiscal year'' and 
inserting ``biennium to which such budget relates''.
    (f) Supplemental Budget Estimates and Changes.--
            (1) In general.--Section 1106(a) of title 31, United States 
        Code, is amended--
                    (A) in the matter preceding paragraph (1), by--
                            (i) inserting after ``Before July 16 of 
                        each year'' the following: ``and February 15 of 
                        each even-numbered year''; and
                            (ii) striking ``fiscal year'' and inserting 
                        ``biennium'';
                    (B) in paragraph (1), by striking ``that fiscal 
                year'' and inserting ``each fiscal year in such 
                biennium'';
                    (C) in paragraph (2), by striking ``fiscal year'' 
                and inserting ``biennium''; and
                    (D) in paragraph (3), by striking ``fiscal year'' 
                and inserting ``biennium''.
            (2) Changes.--Section 1106(b) of title 31, United States 
        Code, is amended by--
                    (A) striking ``the fiscal year'' and inserting 
                ``each fiscal year in the biennium'';
                    (B) inserting after ``Before July 16 of each year'' 
                the following: ``and February 15 of each even-numbered 
                year''; and
                    (C) striking ``submitted before July 16'' and 
                inserting ``required by this subsection''.
    (g) Current Programs and Activities Estimates.--
            (1) In general.--Section 1109(a) of title 31, United States 
        Code, is amended--
                    (A) by striking ``On or before the first Monday 
                after January 3 of each year (on or before February 5 
                in 1986)'' and inserting ``At the same time the budget 
                required by section 1105 is submitted for a biennium''; 
                and
                    (B) by striking ``the following fiscal year'' and 
                inserting ``each fiscal year of such period''.
            (2) Joint economic committee.--Section 1109(b) of title 31, 
        United States Code, is amended by striking ``March 1 of each 
        year'' and inserting ``within 6 weeks of the President's budget 
        submission for each odd-numbered year (or, if applicable, as 
        provided by section 300(b) of the Congressional Budget Act of 
        1974)''.
    (h) Year-Ahead Requests for Authorizing Legislation.--Section 1110 
of title 31, United States Code, is amended by--
            (1) striking ``May 16'' and inserting ``March 31''; and
            (2) striking ``year before the year in which the fiscal 
        year begins'' and inserting ``calendar year preceding the 
        calendar year in which the biennium begins''.

SEC. 1405. TWO-YEAR APPROPRIATIONS; TITLE AND STYLE OF APPROPRIATIONS 
              ACTS.

    Section 105 of title 1, United States Code, is amended to read as 
follows:
``Sec. 105. Title and style of appropriations Acts
    ``(a) The style and title of all Acts making appropriations for the 
support of the Government shall be as follows: `An Act making 
appropriations (here insert the object) for each fiscal year in the 
biennium of fiscal years (here insert the fiscal years of the 
biennium).'.
    ``(b) All Acts making regular appropriations for the support of the 
Government shall be enacted for a biennium and shall specify the amount 
of appropriations provided for each fiscal year in such period.
    ``(c) For purposes of this section, the term `biennium' has the 
same meaning as in section 3(11) of the Congressional Budget and 
Impoundment Control Act of 1974 (2 U.S.C. 622(11)).''.

SEC. 1406. MULTIYEAR AUTHORIZATIONS.

    (a) In General.--Title III of the Congressional Budget Act of 1974 
is amended by adding at the end the following new section:

                   ``authorizations of appropriations

    ``Sec. 316.  (a) Point of Order.--It shall not be in order in the 
House of Representatives or the Senate to consider--
            ``(1) any bill, joint resolution, amendment, motion, or 
        conference report that authorizes appropriations for a period 
        of less than 2 fiscal years, unless the program, project, or 
        activity for which the appropriations are authorized will 
        require no further appropriations and will be completed or 
        terminated after the appropriations have been expended; and
            ``(2) in any odd-numbered year, any authorization or 
        revenue bill or joint resolution until Congress completes 
        action on the biennial budget resolution, all regular biennial 
        appropriations bills, and all reconciliation bills.
    ``(b) Applicability.--In the Senate, subsection (a) shall not apply 
to--
            ``(1) any measure that is privileged for consideration 
        pursuant to a rule or statute;
            ``(2) any matter considered in Executive Session; or
            ``(3) an appropriations measure or reconciliation bill.''.
    (b) Amendment to Table of Contents.--The table of contents set 
forth in section 1(b) of the Congressional Budget and Impoundment 
Control Act of 1974 is amended by adding after the item relating to 
section 315 the following new item:

``Sec. 316. Authorizations of appropriations.''.

SEC. 1407. GOVERNMENT PLANS ON A BIENNIAL BASIS.

    (a) Strategic Plans.--Section 306 of title 5, United States Code, 
is amended--
            (1) in subsection (a), by striking ``September 30, 1997'' 
        and inserting ``September 30, 2011'';
            (2) in subsection (b)--
                    (A) by striking ``five years forward'' and 
                inserting ``6 years forward'';
                    (B) by striking ``at least every three years'' and 
                inserting ``at least every 4 years''; and
                    (C) by striking beginning with ``, except that'' 
                through ``four years''; and
            (3) in subsection (c), by inserting a comma after 
        ``section'' the second place it appears and adding ``including 
        a strategic plan submitted by September 30, 2011 meeting the 
        requirements of subsection (a)''.
    (b) Budget Contents and Submission to Congress.--Paragraph (28) of 
section 1105(a) of title 31, United States Code, is amended by striking 
``beginning with fiscal year 1999, a'' and inserting ``beginning with 
fiscal year 2010, a biennial''.
    (c) Performance Plans.--Section 1115 of title 31, United States 
Code, is amended--
            (1) in subsection (a)--
                    (A) in the matter before paragraph (1)--
                            (i) by striking ``section 1105(a)(29)'' and 
                        inserting ``section 1105(a)(28)''; and
                            (ii) by striking ``an annual'' and 
                        inserting ``a biennial'';
                    (B) in paragraph (1) by inserting after ``program 
                activity'' the following: ``for both years 1 and 2 of 
                the biennial plan'';
                    (C) in paragraph (5) by striking ``and'' after the 
                semicolon;
                    (D) in paragraph (6) by striking the period and 
                inserting a semicolon; and inserting ``and'' after the 
                inserted semicolon; and
                    (E) by adding after paragraph (6) the following:
            ``(7) cover a 2-year period beginning with the first fiscal 
        year of the next biennial budget cycle.'';
            (2) in subsection (d) by striking ``annual'' and inserting 
        ``biennial''; and
            (3) in paragraph (6) of subsection (f) by striking 
        ``annual'' and inserting ``biennial''.
    (d) Managerial Accountability and Flexibility.--Section 9703 of 
title 31, United States Code, relating to managerial accountability, is 
amended--
            (1) in subsection (a)--
                    (A) in the first sentence by striking ``annual''; 
                and
                    (B) by striking ``section 1105(a)(29)'' and 
                inserting ``section 1105(a)(28)'';
            (2) in subsection (e)--
                    (A) in the first sentence by striking ``one or'' 
                before ``years'';
                    (B) in the second sentence by striking ``a 
                subsequent year'' and inserting ``a subsequent 2-year 
                period''; and
                    (C) in the third sentence by striking ``three'' and 
                inserting ``4''.
    (e) Pilot Projects for Performance Budgeting.--Section 1119 of 
title 31, United States Code, is amended--
            (1) in paragraph (1) of subsection (d), by striking 
        ``annual'' and inserting ``biennial''; and
            (2) in subsection (e), by striking ``annual'' and inserting 
        ``biennial''.
    (f) Strategic Plans.--Section 2802 of title 39, United States Code, 
is amended--
            (1) is subsection (a), by striking ``September 30, 1997'' 
        and inserting ``September 30, 2011'';
            (2) by striking ``five years forward'' and inserting ``6 
        years forward'';
            (3) in subsection (b), by striking ``at least every three 
        years'' and inserting ``at least every 4 years''; and
            (4) in subsection (c), by inserting a comma after 
        ``section'' the second place it appears and inserting 
        ``including a strategic plan submitted by September 30, 2011 
        meeting the requirements of subsection (a)''.
    (g) Performance Plans.--Section 2803(a) of title 39, United States 
Code, is amended--
            (1) in the matter before paragraph (1), by striking ``an 
        annual'' and inserting ``a biennial'';
            (2) in paragraph (1), by inserting after ``program 
        activity'' the following: ``for both years 1 and 2 of the 
        biennial plan'';
            (3) in paragraph (5), by striking ``and'' after the 
        semicolon;
            (4) in paragraph (6), by striking the period and inserting 
        ``; and''; and
            (5) by adding after paragraph (6) the following:
            ``(7) cover a 2-year period beginning with the first fiscal 
        year of the next biennial budget cycle.''.
    (h) Committee Views of Plans and Reports.--Section 301(d) of the 
Congressional Budget Act (2 U.S.C. 632(d)) is amended by adding at the 
end ``Each committee of the Senate or the House of Representatives 
shall review the strategic plans, performance plans, and performance 
reports, required under section 306 of title 5, United States Code, and 
sections 1115 and 1116 of title 31, United States Code, of all agencies 
under the jurisdiction of the committee. Each committee may provide its 
views on such plans or reports to the Committee on the Budget of the 
applicable House.''.
    (i) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on March 1, 2011.
            (2) Agency actions.--Effective on and after the date of 
        enactment of this Act, each agency shall take such actions as 
        necessary to prepare and submit any plan or report in 
        accordance with the amendments made by this Act.

SEC. 1408. BIENNIAL APPROPRIATIONS BILLS.

    (a) In General.--Title III of the Congressional Budget Act of 1974 
(2 U.S.C. 631 et seq.) is amended by adding at the end the following:

            ``consideration of biennial appropriations bills

    ``Sec. 317. It shall not be in order in the House of 
Representatives or the Senate in any odd-numbered year to consider any 
regular bill providing new budget authority or a limitation on 
obligations under the jurisdiction of any of the subcommittees of the 
Committees on Appropriations for only the first fiscal year of a 
biennium, unless the program, project, or activity for which the new 
budget authority or obligation limitation is provided will require no 
additional authority beyond 1 year and will be completed or terminated 
after the amount provided has been expended.''.
    (b) Amendment to Table of Contents.--The table of contents set 
forth in section 1(b) of the Congressional Budget and Impoundment 
Control Act of 1974 is amended by adding after the item relating to 
section 316 the following new item:

``Sec. 317. Consideration of biennial appropriations bills.''.

SEC. 1409. REPORT ON TWO-YEAR FISCAL PERIOD.

    Not later than 180 days after the date of enactment of this Act, 
the Director of OMB shall--
            (1) determine the impact and feasibility of changing the 
        definition of a fiscal year and the budget process based on 
        that definition to a 2-year fiscal period with a biennial 
        budget process based on the 2-year period; and
            (2) report the findings of the study to the Committees on 
        the Budget of the House of Representatives and the Senate.

SEC. 1410. EFFECTIVE DATE.

    Except as provided in section 1407, this subtitle and the 
amendments made by this subtitle shall take effect on January 1, 2011, 
and shall apply to budget resolutions and appropriations for the 
biennium beginning with fiscal year 2012.

               TITLE II--MAKING CONGRESS TIGHTEN ITS BELT

SEC. 2001. ENDING AUTOMATIC PAY RAISES FOR MEMBERS OF CONGRESS.

    (a) In General.--Paragraph (2) of section 601(a) of the Legislative 
Reorganization Act of 1946 (2 U.S.C. 31) is repealed.
    (b) Technical and Conforming Amendments.--Section 601(a)(1) of such 
Act is amended--
            (1) by striking ``(a)(1)'' and inserting ``(a)'';
            (2) by redesignating subparagraphs (A), (B), and (C) as 
        paragraphs (1), (2), and (3), respectively; and
            (3) by striking ``as adjusted by paragraph (2) of this 
        subsection'' and inserting ``adjusted as provided by law''.

SEC. 2002. CUTTING SPENDING ON CONGRESSIONAL OFFICES.

    (a) Senators' Official Personnel and Office Expense Account.--Of 
the amounts appropriated under the heading ``senators' official 
personnel and office expense account'' under the heading ``Contingent 
Expenses of the Senate'' under title I of the Legislative Branch 
Appropriations Act, 2010, $21,100,000 are rescinded.
    (b) Members' Clerk Hire, Official Expenses of Members, and Official 
Mail.--Of the amounts appropriated under the heading ``including 
members' clerk hire, official expenses of members, and official mail'' 
under the heading ``Members' Representational Allowances'' under title 
I of the Legislative Branch Appropriations Act, 2010, $33,000,000 are 
rescinded.

SEC. 2003. IMPROVING SENATE EFFICIENCY AND TRANSPARENCY.

    Section 302(g) of the Federal Election Campaign Act of 1971 (2 
U.S.C. 432(g)) is amended to read as follows:
            ``(g) Filing With the Commission.--All designations, 
        statements, and reports required to be filed under this Act 
        shall be filed with the Commission.''.

                  TITLE III--ENDING CORPORATE WELFARE

SEC. 3001. ENDING THE WALL STREET BAIL-OUT.

    Notwithstanding paragraph (3) of section 115(a) of the Emergency 
Economic Stabilization Act of 2008 (12 U.S.C. 5225(a)(3)), no amount 
may be obligated by the Secretary of the Treasury under that paragraph 
(3), or any other provision of the Emergency Economic Stabilization Act 
of 2008, on or after the date of enactment of this Act.

SEC. 3002. ENDING SUBSIDIES FOR PRIVATE STUDENT LOAN COMPANIES.

    (a) Short Title.--This section may be cited as the ``Student Loan 
Reform Act''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this section an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
    (c) Federal Family Education Loan Appropriations.--Section 421 (20 
U.S.C. 1071) is amended--
            (1) in subsection (b), in the matter following paragraph 
        (6), by inserting ``, except that no sums may be expended after 
        June 30, 2010, with respect to loans under this part for which 
        the first disbursement would be made after such date'' after 
        ``expended''; and
            (2) by adding at the end the following new subsection:
    ``(d) Termination of Authority To Make or Insure New Loans.--
Notwithstanding paragraphs (1) through (6) of subsection (b) or any 
other provision of law--
            ``(1) no new loans (including consolidation loans) may be 
        made or insured under this part after June 30, 2010; and
            ``(2) no funds are authorized to be appropriated, or may be 
        expended, under this Act or any other Act to make or insure 
        loans under this part (including consolidation loans) for which 
        the first disbursement would be made after June 30, 2010,
except as expressly authorized by an Act of Congress enacted after the 
date of enactment of the Student Loan Reform Act.''.
    (d) Scope and Duration of Federal Loan Insurance Program.--Section 
424(a) (20 U.S.C. 1074(a)) is amended by striking ``September 30, 
1976,'' and all that follows and inserting ``September 30, 1976, for 
each of the succeeding fiscal years ending prior to October 1, 2009, 
and for the period from October 1, 2009, to June 30, 2010, for loans 
first disbursed on or before June 30, 2010.''.
    (e) Applicable Interest Rates.--Section 427A(l) (20 U.S.C. 
1077a(l)) is amended--
            (1) in paragraph (1), by inserting ``and before July 1, 
        2010,'' after ``July 1, 2006,'';
            (2) in paragraph (2), by inserting ``and before July 1, 
        2010,'' after ``July 1, 2006,'';
            (3) in paragraph (3), by inserting ``and that was disbursed 
        before July 1, 2010,'' after ``July 1, 2006,''; and
            (4) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``July 1, 2012'' and inserting ``July 1, 
                2010''; and
                    (B) by repealing subparagraphs (D) and (E).
    (f) Federal Payments To Reduce Student Interest Costs.--
            (1) Higher education act of 1965.--Section 428 (20 U.S.C. 
        1078) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (1), in the matter 
                        preceding subparagraph (A), by inserting ``for 
                        which the first disbursement is made before 
                        July 1, 2010, and'' after ``eligible 
                        institution''; and
                            (ii) in paragraph (5), by striking 
                        ``September 30, 2014,'' and all that follows 
                        through the period and inserting ``June 30, 
                        2010.'';
                    (B) in subsection (b)(1)--
                            (i) in subparagraph (G)(ii), by inserting 
                        ``and before July 1, 2010,'' after ``July 1, 
                        2006,''; and
                            (ii) in subparagraph (H)(ii), by inserting 
                        ``and that are first disbursed before July 1, 
                        2010,'' after ``July 1, 2006,'';
                    (C) in subsection (f)(1)(A)(ii)--
                            (i) by striking ``during fiscal years 
                        beginning''; and
                            (ii) by inserting ``and first disbursed 
                        before July 1, 2010,'' after ``October 1, 
                        2003,''; and
                    (D) in subsection (j)(1), by inserting ``, before 
                July 1, 2010,'' after ``section 435(d)(1)(D) of this 
                Act shall''.
            (2) College cost reduction and access act.--Section 303 of 
        the College Cost Reduction and Access Act (Public Law 110-84) 
        is repealed.
    (g) Federal PLUS Loans.--Section 428B(a)(1) (20 U.S.C. 1078-
2(a)(1)) is amended by striking ``A graduate'' and inserting ``Prior to 
July 1, 2010, a graduate''.
    (h) Federal Consolidation Loan.--
            (1) Amendments.--Section 428C (20 U.S.C. 1078-3) is 
        amended--
                    (A) in subsection (a)(4)(A), by inserting ``, and 
                first disbursed before July 1, 2010'' after ``under 
                this part'';
                    (B) in subsection (b)--
                            (i) in paragraph (1)(E), by inserting 
                        before the semicolon ``, and before July 1, 
                        2010''; and
                            (ii) in paragraph (5), by striking ``In the 
                        event that'' and inserting ``If, before July 1, 
                        2010,'';
                    (C) in subsection (c)(1)--
                            (i) in subparagraph (A)(ii), by inserting 
                        ``and that is disbursed before July 1, 2010,'' 
                        after ``2006,''; and
                            (ii) in subparagraph (C), by inserting 
                        ``and first disbursed before July 1, 2010,'' 
                        after ``1994,''; and
                    (D) in subsection (e), by striking ``September 30, 
                2014.'' and inserting ``June 30, 2010. No loan may be 
                made under this section for which the first 
                disbursement would be on or after July 1, 2010.''.
            (2) Effective date.--The amendments made by paragraph 
        (1)(A) shall be effective at the close of June 30, 2010.
    (i) Unsubsidized Stafford Loans for Middle-Income Borrowers.--
Section 428H (20 U.S.C. 1078-8) is amended--
            (1) in subsection (a), by inserting ``that are first 
        disbursed before July 1, 2010,'' after ``under this part'';
            (2) in subsection (b)--
                    (A) by striking ``Any student'' and inserting 
                ``Prior to July 1, 2010, any student''; and
                    (B) by inserting ``for which the first disbursement 
                is made before such date'' after ``unsubsidized Federal 
                Stafford Loan''; and
            (3) in subsection (h), by inserting ``and that are first 
        disbursed before July 1, 2010,'' after ``July 1, 2006,''.
    (j) Loan Repayment for Civil Legal Assistance Attorneys.--Section 
428L(b)(2)(A) (20 U.S.C. 1078-12(b)(2)(A)) is amended--
            (1) by amending clause (i) to read as follows:
                            ``(i) subject to clause (ii)--
                                    ``(I) a loan made, insured, or 
                                guaranteed under this part, and that is 
                                first disbursed before July 1, 2010; or
                                    ``(II) a loan made under part D or 
                                part E; and''; and
            (2) in clause (ii)--
                    (A) by striking ``428C or 455(g)'' and inserting 
                ``428C that is disbursed before July 1, 2010, or 
                section 455(g)''; and
                    (B) in subclause (II), by inserting ``for which the 
                first disbursement is made before July 1, 2010'' after 
                ``or 428H''.
    (k) Special Allowances.--Section 438 (20 U.S.C. 1087-1) is 
amended--
            (1) in subsection (b)(2)(I)--
                    (A) in the header, by inserting ``, and before july 
                1, 2010'' after ``2000'';
                    (B) in clause (i), by inserting ``and before July 
                1, 2010,'' after ``2000,'';
                    (C) in clause (ii)(II), by inserting ``and before 
                July 1, 2010,'' after ``2006,'';
                    (D) in clause (iii), by inserting ``and before July 
                1, 2010,'' after ``2000,'';
                    (E) in clause (iv), by inserting ``and that is 
                disbursed before July 1, 2010,'' after ``2000,'';
                    (F) in clause (v)(I), by inserting ``and before 
                July 1, 2010,'' after ``2006,''; and
                    (G) in clause (vi)--
                            (i) in the header, by inserting ``, and 
                        before july 1, 2010'' after ``2007''; and
                            (ii) in the matter preceding subclause (I), 
                        by inserting ``and before July 1, 2010,'' after 
                        ``2007,'';
            (2) in subsection (c)--
                    (A) in paragraph (2)(B)--
                            (i) in clause (iii), by inserting ``and'' 
                        after the semicolon;
                            (ii) in clause (iv), by striking ``; and'' 
                        and inserting a period; and
                            (iii) by striking clause (v); and
                    (B) in paragraph (6), by inserting ``and first 
                disbursed before July 1, 2010,'' after ``1992,''; and
            (3) in subsection (d)(2)(B), by inserting ``, and before 
        July 1, 2010'' after ``2007''.
    (l) Revised Special Allowance Calculation.--
            (1) Revised calculation rule.--Section 438(b)(2)(I) of the 
        Higher Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(I)) is 
        amended by adding at the end the following new clause:
                            ``(vii) Revised calculation rule to reflect 
                        financial market conditions.--
                                    ``(I) Calculation based on libor.--
                                For the calendar quarter beginning on 
                                October 1, 2009, and each subsequent 
                                calendar quarter, in computing the 
                                special allowance paid pursuant to this 
                                subsection with respect to loans 
                                described in subclause (II), clause 
                                (i)(I) of this subparagraph shall be 
                                applied by substituting `of the 1-month 
                                London Inter Bank Offered Rate (LIBOR) 
                                for United States dollars in effect for 
                                each of the days in such quarter as 
                                compiled and released by the British 
                                Bankers Association' for `of the quotes 
                                of the 3-month commercial paper 
                                (financial) rates in effect for each of 
                                the days in such quarter as reported by 
                                the Federal Reserve in Publication H-15 
                                (or its successor) for such 3-month 
                                period'.
                                    ``(II) Loans eligible for libor-
                                based calculation.--The special 
                                allowance paid pursuant to this 
                                subsection shall be calculated as 
                                described in subclause (I) with respect 
                                to special allowance payments for the 
                                3-month period ending December 31, 
                                2009, and each succeeding 3-month 
                                period, on loans for which the first 
                                disbursement is made--
                                            ``(aa) on or after the date 
                                        of enactment of the Student 
                                        Loan Reform Act, and before 
                                        July 1, 2010; or
                                            ``(bb) on or after January 
                                        1, 2000, and before the date of 
                                        enactment of the Student Loan 
                                        Reform Act, if, not later than 
                                        the last day of the second full 
                                        fiscal quarter after the date 
                                        of enactment of such Act, the 
                                        holder of the loan (or, if the 
                                        holder acts as eligible lender 
                                        trustee for the beneficial 
                                        owner of the loan, the 
                                        beneficial owner of the loan), 
                                        affirmatively and permanently 
                                        waives all contractual, 
                                        statutory or other legal rights 
                                        to a special allowance paid 
                                        pursuant to this subsection 
                                        that is calculated using the 
                                        formula in effect at the time 
                                        the loans were first disbursed.
                                    ``(III) Terms of waiver.--
                                            ``(aa) In general.--A 
                                        waiver pursuant to subclause 
                                        (II)(bb) shall be in a form 
                                        (printed or electronic) 
                                        prescribed by the Secretary, 
                                        and shall be applicable to--

                                                    ``(AA) all loans 
                                                described in such 
                                                subclause that the 
                                                lender holds solely in 
                                                its own right under any 
                                                lender identification 
                                                number associated with 
                                                the holder (pursuant to 
                                                section 487B);

                                                    ``(BB) all loans 
                                                described in such 
                                                subclause for which the 
                                                beneficial owner has 
                                                the authority to make 
                                                an election of a waiver 
                                                under such subclause, 
                                                regardless of the 
                                                lender identification 
                                                number associated with 
                                                the loan or the lender 
                                                that holds the loan as 
                                                eligible lender trustee 
                                                on behalf of such 
                                                beneficial owner; and

                                                    ``(CC) all future 
                                                calculations of the 
                                                special allowance on 
                                                loans that, on the date 
                                                of such waiver, are 
                                                loans described in 
                                                subitem (AA) or (BB), 
                                                or that, after such 
                                                date, become loans 
                                                described in subitem 
                                                (AA) or (BB).

                                            ``(bb) Exceptions.--Any 
                                        waiver pursuant to subclause 
                                        (II)(bb) that is elected for 
                                        loans described in subitem (AA) 
                                        or (BB) of item (aa) shall not 
                                        apply to any loan described in 
                                        such subitem for which the 
                                        lender or beneficial owner of 
                                        the loan demonstrates to the 
                                        satisfaction of the Secretary 
                                        that--

                                                    ``(AA) in 
                                                accordance with an 
                                                agreement entered into 
                                                before the date of 
                                                enactment of the 
                                                Student Loan Reform Act 
                                                by which such lender or 
                                                owner is governed and 
                                                that applies to such 
                                                loans, such lender or 
                                                owner is not legally 
                                                permitted to make an 
                                                election of such waiver 
                                                with respect to such 
                                                loans without the 
                                                approval of one or more 
                                                third parties with an 
                                                interest in the loans, 
                                                and that the lender or 
                                                owner followed all 
                                                available options under 
                                                such agreement to 
                                                obtain such approval, 
                                                and was unable to do 
                                                so; or

                                                    ``(BB) such lender 
                                                or beneficial owner 
                                                presented the proposal 
                                                of electing such a 
                                                waiver applicable to 
                                                such loans associated 
                                                with an obligation 
                                                rated by a nationally 
                                                recognized statistical 
                                                rating organization (as 
                                                defined in section 
                                                3(a)(62) of the 
                                                Securities Exchange Act 
                                                of 1934), and such 
                                                rating organization 
                                                provided a written 
                                                opinion that the agency 
                                                would downgrade the 
                                                rating applicable to 
                                                such obligation if the 
                                                lender or owner elected 
                                                such a waiver.

                                    ``(IV) Participant's yield.--For 
                                the calendar quarter beginning on 
                                October 1, 2009, and each subsequent 
                                calendar quarter, the Secretary's 
                                participant yield in any loan in which 
                                the Secretary has purchased a 
                                participation interest and for which 
                                the first disbursement is made on or 
                                after January 1, 2000, and before 
                                October 1, 2009, shall be determined by 
                                using the LIBOR-based rate described in 
                                subclause (I) as the substitute rate 
                                (for the commercial paper rate) 
                                referred to in the participation 
                                agreement between the Secretary and 
                                such lender.''.
            (2) Conforming amendment.--Section 438(b)(2)(I) (20 U.S.C. 
        1087-1(b)(2)(I)) is further amended--
                    (A) in clause (i)(II), by striking ``such average 
                bond equivalent rate'' and inserting ``the rate 
                determined under subclause (I)''; and
                    (B) in clause (v)(III) by striking ``(iv), and 
                (vi)'' and inserting ``(iv), (vi), and (vii)''.
    (m) Origination of Direct Loans at Institutions Located Outside the 
United States.--
            (1) Loans for students attending institutions located 
        outside the united states.--Section 452 (20 U.S.C. 1087b) is 
        amended by adding at the end the following:
    ``(d) Institutions Located Outside the United States.--Loan funds 
for students (and parents of students) attending institutions located 
outside the United States shall be disbursed through a financial 
institution located in the United States and designated by the 
Secretary to serve as the agent of such institutions with respect to 
the receipt of the disbursements of such loan funds and the transfer of 
such funds to such institutions. To be eligible to receive funds under 
this part, an otherwise eligible institution located outside the United 
States shall make arrangements, subject to regulations by the 
Secretary, with the agent designated by the Secretary under this 
subsection to receive funds under this part.''.
            (2) Conforming amendments.--
                    (A) Amendments.--Section 102 (20 U.S.C. 1002), as 
                amended by section 102 of the Higher Education 
                Opportunity Act (Public Law 110-315) and section 101 of 
                Public Law 111-39, is amended--
                            (i) by striking ``part B'' each place it 
                        appears and inserting ``part D'';
                            (ii) in subsection (a)(1)(C), by inserting 
                        ``, consistent with the requirements of section 
                        452(d)'' before the period at the end; and
                            (iii) in subsection (a)(2)(A)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``made, insured, or 
                                guaranteed'' and inserting ``made''; 
                                and
                                    (II) in clause (iii)--
                                            (aa) in subclause (III), by 
                                        striking ``only Federal 
                                        Stafford'' and all that follows 
                                        through ``section 428B'' and 
                                        inserting ``only Federal Direct 
                                        Stafford Loans under section 
                                        455(a)(2)(A), Federal Direct 
                                        Unsubsidized Stafford Loans 
                                        under section 455(a)(2)(D), or 
                                        Federal Direct PLUS Loans under 
                                        section 455(a)(2)(B)''; and
                                            (bb) in subclause (V), by 
                                        striking ``a Federal Stafford'' 
                                        and all that follows through 
                                        ``section 428B'' and inserting 
                                        ``a Federal Direct Stafford 
                                        Loan under section 
                                        455(a)(2)(A), a Federal Direct 
                                        Unsubsidized Stafford Loan 
                                        under section 455(a)(2)(D), or 
                                        a Federal Direct PLUS Loan 
                                        under section 455(a)(2)(B)''.
                    (B) Effective date.--The amendments made by 
                subparagraph (A)(iii) shall be effective as if enacted 
                as part of section 102(a)(1) of the Higher Education 
                Opportunity Act, in accordance with section 102(e) of 
                such Act, as amended by section 101(a)(2) of Public Law 
                111-39.
    (n) Agreements With Institutions.--Section 454 (20 U.S.C. 1087d) is 
amended--
            (1) in subsection (a), by striking paragraph (4) and 
        redesignating the succeeding paragraphs accordingly; and
            (2) in subsection (b)(2), by striking ``(5), (6), and (7)'' 
        and inserting ``(5), and (6)''.
    (o) Terms and Conditions of Loans.--
            (1) Amendments.--Section 455 (20 U.S.C. 1087e) is amended--
                    (A) in subsection (a)(1), by inserting ``, and 
                first disbursed on June 30, 2010,'' before ``under 
                sections 428''; and
                    (B) in subsection (g)--
                            (i) by inserting ``, including any loan 
                        made under part B and first disbursed before 
                        July 1, 2010'' after ``section 428C(a)(4)''; 
                        and
                            (ii) by striking the third sentence.
            (2) Effective date.--The amendment made by subsection 
        (a)(1) shall apply with respect to loans first disbursed under 
        part D of title IV of the Higher Education Act of 1965 (20 
        U.S.C. 1087a et seq.) on or after July 1, 2010.
    (p) Technical Assistance to Institutions of Higher Education.--
Section 458(a) (20 U.S.C. 1087h(a)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Technical assistance to institutions of higher 
        education.--
                    ``(A) Provision of assistance.--The Secretary shall 
                provide institutions of higher education participating, 
                or seeking to participate, in the loan programs under 
                this part with technical assistance in establishing and 
                administering such programs, including assistance for 
                an institution of higher education during such 
                institution's transition into such programs. Such 
                assistance may include technical support, training for 
                personnel, customized assistance to individual 
                institutions of higher education, development of 
                informational materials, and other services the 
                Secretary determines to be appropriate.
                    ``(B) Funds.--There are authorized to be 
                appropriated, and there are appropriated, to carry out 
                this paragraph (in addition to any other amounts 
                appropriated to carry out this subparagraph and out of 
                any money in the Treasury not otherwise appropriated), 
                $50,000,000 for fiscal year 2010.''.
    (q) Outreach Efforts.--
            (1) Outreach activities required.--The Secretary of 
        Education shall conduct outreach activities in accordance with 
        this section to inform and educate students and their families 
        about the transition to Federal Direct lending under the 
        amendments made by this section to title IV of the Higher 
        Education Act of 1965.
            (2) Required components of outreach.--The Secretary shall 
        provide for the broad dissemination of information on such 
        amendments and shall--
                    (A) operate and maintain an Internet website 
                through which individuals may obtain information on 
                changes made to the Federal Family Education Loan 
                programs and the Federal Direct Loan programs;
                    (B) develop and disseminate information to high 
                school seniors and their parents concerning student 
                loans and student aid;
                    (C) provide assistance to institutions of higher 
                education to educate students on the repayment of 
                Federal Direct loans; and
                    (D) ensure that all outreach efforts are developed 
                using plain language and are culturally- and language-
                appropriate.
            (3) Use of other entities.--In carrying out this 
        subsection, the Secretary may work with other appropriate 
        entities to facilitate the dissemination of information under 
        this section and to provide assistance as described in this 
        section.

SEC. 3003. BRINGING DOWN PRICES FOR PRESCRIPTION DRUGS BY PERMITTING 
              DRUG REIMPORTATION.

    (a) Short Title.--This section may be cited as the ``Pharmaceutical 
Market Access and Drug Safety Act of 2009''.
    (b) Findings.--Congress finds that--
            (1) Americans unjustly pay up to 5 times more to fill their 
        prescriptions than consumers in other countries;
            (2) the United States is the largest market for 
        pharmaceuticals in the world, yet American consumers pay the 
        highest prices for brand pharmaceuticals in the world;
            (3) a prescription drug is neither safe nor effective to an 
        individual who cannot afford it;
            (4) allowing and structuring the importation of 
        prescription drugs to ensure access to safe and affordable 
        drugs approved by the Food and Drug Administration will provide 
        a level of safety to American consumers that they do not 
        currently enjoy;
            (5) American spend more than $200,000,000,000 on 
        prescription drugs every year;
            (6) the Congressional Budget Office has found that the cost 
        of prescription drugs are between 35 to 55 percent less in 
        other highly developed countries than in the United States; and
            (7) promoting competitive market pricing would both 
        contribute to health care savings and allow greater access to 
        therapy, improving health and saving lives.
    (c) Repeal of Certain Section Regarding Importation of Prescription 
Drugs.--Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 381 et seq.) is amended by striking section 804.
    (d) Importation of Prescription Drugs; Waiver of Certain Import 
Restrictions.--
            (1) In general.--Chapter VIII of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by section 
        3, is further amended by inserting after section 803 the 
        following:

``SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF PRESCRIPTION DRUGS.

    ``(a) Importation of Prescription Drugs.--
            ``(1) In general.--In the case of qualifying drugs imported 
        or offered for import into the United States from registered 
        exporters or by registered importers--
                    ``(A) the limitation on importation that is 
                established in section 801(d)(1) is waived; and
                    ``(B) the standards referred to in section 801(a) 
                regarding admission of the drugs are subject to 
                subsection (g) of this section (including with respect 
                to qualifying drugs to which section 801(d)(1) does not 
                apply).
            ``(2) Importers.--A qualifying drug may not be imported 
        under paragraph (1) unless--
                    ``(A) the drug is imported by a pharmacy, group of 
                pharmacies, or a wholesaler that is a registered 
                importer; or
                    ``(B) the drug is imported by an individual for 
                personal use or for the use of a family member of the 
                individual (not for resale) from a registered exporter.
            ``(3) Rule of construction.--This section shall apply only 
        with respect to a drug that is imported or offered for import 
        into the United States--
                    ``(A) by a registered importer; or
                    ``(B) from a registered exporter to an individual.
            ``(4) Definitions.--
                    ``(A) Registered exporter; registered importer.--
                For purposes of this section:
                            ``(i) The term `registered exporter' means 
                        an exporter for which a registration under 
                        subsection (b) has been approved and is in 
                        effect.
                            ``(ii) The term `registered importer' means 
                        a pharmacy, group of pharmacies, or a 
                        wholesaler for which a registration under 
                        subsection (b) has been approved and is in 
                        effect.
                            ``(iii) The term `registration condition' 
                        means a condition that must exist for a 
                        registration under subsection (b) to be 
                        approved.
                    ``(B) Qualifying drug.--For purposes of this 
                section, the term `qualifying drug' means a drug for 
                which there is a corresponding U.S. label drug.
                    ``(C) U.S. label drug.--For purposes of this 
                section, the term `U.S. label drug' means a 
                prescription drug that--
                            ``(i) with respect to a qualifying drug, 
                        has the same active ingredient or ingredients, 
                        route of administration, dosage form, and 
                        strength as the qualifying drug;
                            ``(ii) with respect to the qualifying drug, 
                        is manufactured by or for the person that 
                        manufactures the qualifying drug;
                            ``(iii) is approved under section 505(c); 
                        and
                            ``(iv) is not--
                                    ``(I) a controlled substance, as 
                                defined in section 102 of the 
                                Controlled Substances Act (21 U.S.C. 
                                802);
                                    ``(II) a biological product, as 
                                defined in section 351 of the Public 
                                Health Service Act (42 U.S.C. 262), 
                                including--
                                            ``(aa) a therapeutic DNA 
                                        plasmid product;
                                            ``(bb) a therapeutic 
                                        synthetic peptide product;
                                            ``(cc) a monoclonal 
                                        antibody product for in vivo 
                                        use; and
                                            ``(dd) a therapeutic 
                                        recombinant DNA-derived 
                                        product;
                                    ``(III) an infused drug, including 
                                a peritoneal dialysis solution;
                                    ``(IV) an injected drug;
                                    ``(V) a drug that is inhaled during 
                                surgery;
                                    ``(VI) a drug that is the listed 
                                drug referred to in 2 or more 
                                abbreviated new drug applications under 
                                which the drug is commercially 
                                marketed; or
                                    ``(VII) a sterile opthlamic drug 
                                intended for topical use on or in the 
                                eye.
                    ``(D) Other definitions.--For purposes of this 
                section:
                            ``(i)(I) The term `exporter' means a person 
                        that is in the business of exporting a drug to 
                        individuals in the United States from Canada or 
                        from a permitted country designated by the 
                        Secretary under subclause (II), or that, 
                        pursuant to submitting a registration under 
                        subsection (b), seeks to be in such business.
                            ``(II) The Secretary shall designate a 
                        permitted country under subparagraph (E) (other 
                        than Canada) as a country from which an 
                        exporter may export a drug to individuals in 
                        the United States if the Secretary determines 
                        that--
                                    ``(aa) the country has statutory or 
                                regulatory standards that are 
                                equivalent to the standards in the 
                                United States and Canada with respect 
                                to--
                                            ``(AA) the training of 
                                        pharmacists;
                                            ``(BB) the practice of 
                                        pharmacy; and
                                            ``(CC) the protection of 
                                        the privacy of personal medical 
                                        information; and
                                    ``(bb) the importation of drugs to 
                                individuals in the United States from 
                                the country will not adversely affect 
                                public health.
                            ``(ii) The term `importer' means a 
                        pharmacy, a group of pharmacies, or a 
                        wholesaler that is in the business of importing 
                        a drug into the United States or that, pursuant 
                        to submitting a registration under subsection 
                        (b), seeks to be in such business.
                            ``(iii) The term `pharmacist' means a 
                        person licensed by a State to practice 
                        pharmacy, including the dispensing and selling 
                        of prescription drugs.
                            ``(iv) The term `pharmacy' means a person 
                        that--
                                    ``(I) is licensed by a State to 
                                engage in the business of selling 
                                prescription drugs at retail; and
                                    ``(II) employs 1 or more 
                                pharmacists.
                            ``(v) The term `prescription drug' means a 
                        drug that is described in section 503(b)(1).
                            ``(vi) The term `wholesaler'--
                                    ``(I) means a person licensed as a 
                                wholesaler or distributor of 
                                prescription drugs in the United States 
                                under section 503(e)(2)(A); and
                                    ``(II) does not include a person 
                                authorized to import drugs under 
                                section 801(d)(1).
                    ``(E) Permitted country.--The term `permitted 
                country' means--
                            ``(i) Australia;
                            ``(ii) Canada;
                            ``(iii) a member country of the European 
                        Union, but does not include a member country 
                        with respect to which--
                                    ``(I) the country's Annex to the 
                                Treaty of Accession to the European 
                                Union 2003 includes a transitional 
                                measure for the regulation of human 
                                pharmaceutical products that has not 
                                expired; or
                                    ``(II) the Secretary determines 
                                that the requirements described in 
                                subclauses (I) and (II) of clause (vii) 
                                will not be met by the date on which 
                                such transitional measure for the 
                                regulation of human pharmaceutical 
                                products expires;
                            ``(iv) Japan;
                            ``(v) New Zealand;
                            ``(vi) Switzerland; and
                            ``(vii) a country in which the Secretary 
                        determines the following requirements are met:
                                    ``(I) The country has statutory or 
                                regulatory requirements--
                                            ``(aa) that require the 
                                        review of drugs for safety and 
                                        effectiveness by an entity of 
                                        the government of the country;
                                            ``(bb) that authorize the 
                                        approval of only those drugs 
                                        that have been determined to be 
                                        safe and effective by experts 
                                        employed by or acting on behalf 
                                        of such entity and qualified by 
                                        scientific training and 
                                        experience to evaluate the 
                                        safety and effectiveness of 
                                        drugs on the basis of adequate 
                                        and well-controlled 
                                        investigations, including 
                                        clinical investigations, 
                                        conducted by experts qualified 
                                        by scientific training and 
                                        experience to evaluate the 
                                        safety and effectiveness of 
                                        drugs;
                                            ``(cc) that require the 
                                        methods used in, and the 
                                        facilities and controls used 
                                        for the manufacture, 
                                        processing, and packing of 
                                        drugs in the country to be 
                                        adequate to preserve their 
                                        identity, quality, purity, and 
                                        strength;
                                            ``(dd) for the reporting of 
                                        adverse reactions to drugs and 
                                        procedures to withdraw approval 
                                        and remove drugs found not to 
                                        be safe or effective; and
                                            ``(ee) that require the 
                                        labeling and promotion of drugs 
                                        to be in accordance with the 
                                        approval of the drug.
                                    ``(II) The valid marketing 
                                authorization system in the country is 
                                equivalent to the systems in the 
                                countries described in clauses (i) 
                                through (vi).
                                    ``(III) The importation of drugs to 
                                the United States from the country will 
                                not adversely affect public health.
    ``(b) Registration of Importers and Exporters.--
            ``(1) Registration of importers and exporters.--A 
        registration condition is that the importer or exporter 
        involved (referred to in this subsection as a `registrant') 
        submits to the Secretary a registration containing the 
        following:
                    ``(A)(i) In the case of an exporter, the name of 
                the exporter and an identification of all places of 
                business of the exporter that relate to qualifying 
                drugs, including each warehouse or other facility owned 
                or controlled by, or operated for, the exporter.
                    ``(ii) In the case of an importer, the name of the 
                importer and an identification of the places of 
                business of the importer at which the importer 
                initially receives a qualifying drug after importation 
                (which shall not exceed 3 places of business except by 
                permission of the Secretary).
                    ``(B) Such information as the Secretary determines 
                to be necessary to demonstrate that the registrant is 
                in compliance with registration conditions under--
                            ``(i) in the case of an importer, 
                        subsections (c), (d), (e), (g), and (j) 
                        (relating to the sources of imported qualifying 
                        drugs; the inspection of facilities of the 
                        importer; the payment of fees; compliance with 
                        the standards referred to in section 801(a); 
                        and maintenance of records and samples); or
                            ``(ii) in the case of an exporter, 
                        subsections (c), (d), (f), (g), (h), (i), and 
                        (j) (relating to the sources of exported 
                        qualifying drugs; the inspection of facilities 
                        of the exporter and the marking of compliant 
                        shipments; the payment of fees; and compliance 
                        with the standards referred to in section 
                        801(a); being licensed as a pharmacist; 
                        conditions for individual importation; and 
                        maintenance of records and samples).
                    ``(C) An agreement by the registrant that the 
                registrant will not under subsection (a) import or 
                export any drug that is not a qualifying drug.
                    ``(D) An agreement by the registrant to--
                            ``(i) notify the Secretary of a recall or 
                        withdrawal of a qualifying drug distributed in 
                        a permitted country that the registrant has 
                        exported or imported, or intends to export or 
                        import, to the United States under subsection 
                        (a);
                            ``(ii) provide for the return to the 
                        registrant of such drug; and
                            ``(iii) cease, or not begin, the 
                        exportation or importation of such drug unless 
                        the Secretary has notified the registrant that 
                        exportation or importation of such drug may 
                        proceed.
                    ``(E) An agreement by the registrant to ensure and 
                monitor compliance with each registration condition, to 
                promptly correct any noncompliance with such a 
                condition, and to promptly report to the Secretary any 
                such noncompliance.
                    ``(F) A plan describing the manner in which the 
                registrant will comply with the agreement under 
                subparagraph (E).
                    ``(G) An agreement by the registrant to enforce a 
                contract under subsection (c)(3)(B) against a party in 
                the chain of custody of a qualifying drug with respect 
                to the authority of the Secretary under clauses (ii) 
                and (iii) of that subsection.
                    ``(H) An agreement by the registrant to notify the 
                Secretary not more than 30 days before the registrant 
                intends to make the change, of--
                            ``(i) any change that the registrant 
                        intends to make regarding information provided 
                        under subparagraph (A) or (B); and
                            ``(ii) any change that the registrant 
                        intends to make in the compliance plan under 
                        subparagraph (F).
                    ``(I) In the case of an exporter:
                            ``(i) An agreement by the exporter that a 
                        qualifying drug will not under subsection (a) 
                        be exported to any individual not authorized 
                        pursuant to subsection (a)(2)(B) to be an 
                        importer of such drug.
                            ``(ii) An agreement to post a bond, payable 
                        to the Treasury of the United States that is 
                        equal in value to the lesser of--
                                    ``(I) the value of drugs exported 
                                by the exporter to the United States in 
                                a typical 4-week period over the course 
                                of a year under this section; or
                                    ``(II) $1,000,000.
                            ``(iii) An agreement by the exporter to 
                        comply with applicable provisions of Canadian 
                        law, or the law of the permitted country 
                        designated under subsection (a)(4)(D)(i)(II) in 
                        which the exporter is located, that protect the 
                        privacy of personal information with respect to 
                        each individual importing a prescription drug 
                        from the exporter under subsection (a)(2)(B).
                            ``(iv) An agreement by the exporter to 
                        report to the Secretary--
                                    ``(I) not later than August 1 of 
                                each fiscal year, the total price and 
                                the total volume of drugs exported to 
                                the United States by the exporter 
                                during the 6-month period from January 
                                1 through June 30 of that year; and
                                    ``(II) not later than January 1 of 
                                each fiscal year, the total price and 
                                the total volume of drugs exported to 
                                the United States by the exporter 
                                during the previous fiscal year.
                    ``(J) In the case of an importer, an agreement by 
                the importer to report to the Secretary--
                            ``(i) not later than August 1 of each 
                        fiscal year, the total price and the total 
                        volume of drugs imported to the United States 
                        by the importer during the 6-month period from 
                        January 1 through June 30 of that fiscal year; 
                        and
                            ``(ii) not later than January 1 of each 
                        fiscal year, the total price and the total 
                        volume of drugs imported to the United States 
                        by the importer during the previous fiscal 
                        year.
                    ``(K) Such other provisions as the Secretary may 
                require by regulation to protect the public health 
                while permitting--
                            ``(i) the importation by pharmacies, groups 
                        of pharmacies, and wholesalers as registered 
                        importers of qualifying drugs under subsection 
                        (a); and
                            ``(ii) importation by individuals of 
                        qualifying drugs under subsection (a).
            ``(2) Approval or disapproval of registration.--
                    ``(A) In general.--Not later than 90 days after the 
                date on which a registrant submits to the Secretary a 
                registration under paragraph (1), the Secretary shall 
                notify the registrant whether the registration is 
                approved or is disapproved. The Secretary shall 
                disapprove a registration if there is reason to believe 
                that the registrant is not in compliance with one or 
                more registration conditions, and shall notify the 
                registrant of such reason. In the case of a disapproved 
                registration, the Secretary shall subsequently notify 
                the registrant that the registration is approved if the 
                Secretary determines that the registrant is in 
                compliance with such conditions.
                    ``(B) Changes in registration information.--Not 
                later than 30 days after receiving a notice under 
                paragraph (1)(H) from a registrant, the Secretary shall 
                determine whether the change involved affects the 
                approval of the registration of the registrant under 
                paragraph (1), and shall inform the registrant of the 
                determination.
            ``(3) Publication of contact information for registered 
        exporters.--Through the Internet website of the Food and Drug 
        Administration and a toll-free telephone number, the Secretary 
        shall make readily available to the public a list of registered 
        exporters, including contact information for the exporters. 
        Promptly after the approval of a registration submitted under 
        paragraph (1), the Secretary shall update the Internet website 
        and the information provided through the toll-free telephone 
        number accordingly.
            ``(4) Suspension and termination.--
                    ``(A) Suspension.--With respect to the 
                effectiveness of a registration submitted under 
                paragraph (1):
                            ``(i) Subject to clause (ii), the Secretary 
                        may suspend the registration if the Secretary 
                        determines, after notice and opportunity for a 
                        hearing, that the registrant has failed to 
                        maintain substantial compliance with a 
                        registration condition.
                            ``(ii) If the Secretary determines that, 
                        under color of the registration, the exporter 
                        has exported a drug or the importer has 
                        imported a drug that is not a qualifying drug, 
                        or a drug that does not comply with subsection 
                        (g)(2)(A) or (g)(4), or has exported a 
                        qualifying drug to an individual in violation 
                        of subsection (i)(2)(F), the Secretary shall 
                        immediately suspend the registration. A 
                        suspension under the preceding sentence is not 
                        subject to the provision by the Secretary of 
                        prior notice, and the Secretary shall provide 
                        to the registrant an opportunity for a hearing 
                        not later than 10 days after the date on which 
                        the registration is suspended.
                            ``(iii) The Secretary may reinstate the 
                        registration, whether suspended under clause 
                        (i) or (ii), if the Secretary determines that 
                        the registrant has demonstrated that further 
                        violations of registration conditions will not 
                        occur.
                    ``(B) Termination.--The Secretary, after notice and 
                opportunity for a hearing, may terminate the 
                registration under paragraph (1) of a registrant if the 
                Secretary determines that the registrant has engaged in 
                a pattern or practice of violating 1 or more 
                registration conditions, or if on 1 or more occasions 
                the Secretary has under subparagraph (A)(ii) suspended 
                the registration of the registrant. The Secretary may 
                make the termination permanent, or for a fixed period 
                of not less than 1 year. During the period in which the 
                registration is terminated, any registration submitted 
                under paragraph (1) by the registrant, or a person that 
                is a partner in the export or import enterprise, or a 
                principal officer in such enterprise, and any 
                registration prepared with the assistance of the 
                registrant or such a person, has no legal effect under 
                this section.
            ``(5) Default of bond.--A bond required to be posted by an 
        exporter under paragraph (1)(I)(ii) shall be defaulted and paid 
        to the Treasury of the United States if, after opportunity for 
        an informal hearing, the Secretary determines that the exporter 
        has--
                    ``(A) exported a drug to the United States that is 
                not a qualifying drug or that is not in compliance with 
                subsection (g)(2)(A), (g)(4), or (i); or
                    ``(B) failed to permit the Secretary to conduct an 
                inspection described under subsection (d).
    ``(c) Sources of Qualifying Drugs.--A registration condition is 
that the exporter or importer involved agrees that a qualifying drug 
will under subsection (a) be exported or imported into the United 
States only if there is compliance with the following:
            ``(1) The drug was manufactured in an establishment--
                    ``(A) required to register under subsection (h) or 
                (i) of section 510; and
                    ``(B)(i) inspected by the Secretary; or
                    ``(ii) for which the Secretary has elected to rely 
                on a satisfactory report of a good manufacturing 
                practice inspection of the establishment from a 
                permitted country whose regulatory system the Secretary 
                recognizes as equivalent under a mutual recognition 
                agreement, as provided for under section 510(i)(3), 
                section 803, or part 26 of title 21, Code of Federal 
                Regulations (or any corresponding successor rule or 
                regulation).
            ``(2) The establishment is located in any country, and the 
        establishment manufactured the drug for distribution in the 
        United States or for distribution in 1 or more of the permitted 
        countries (without regard to whether in addition the drug is 
        manufactured for distribution in a foreign country that is not 
        a permitted country).
            ``(3) The exporter or importer obtained the drug--
                    ``(A) directly from the establishment; or
                    ``(B) directly from an entity that, by contract 
                with the exporter or importer--
                            ``(i) provides to the exporter or importer 
                        a statement (in such form and containing such 
                        information as the Secretary may require) that, 
                        for the chain of custody from the 
                        establishment, identifies each prior sale, 
                        purchase, or trade of the drug (including the 
                        date of the transaction and the names and 
                        addresses of all parties to the transaction);
                            ``(ii) agrees to permit the Secretary to 
                        inspect such statements and related records to 
                        determine their accuracy;
                            ``(iii) agrees, with respect to the 
                        qualifying drugs involved, to permit the 
                        Secretary to inspect warehouses and other 
                        facilities, including records, of the entity 
                        for purposes of determining whether the 
                        facilities are in compliance with any standards 
                        under this Act that are applicable to 
                        facilities of that type in the United States; 
                        and
                            ``(iv) has ensured, through such 
                        contractual relationships as may be necessary, 
                        that the Secretary has the same authority 
                        regarding other parties in the chain of custody 
                        from the establishment that the Secretary has 
                        under clauses (ii) and (iii) regarding such 
                        entity.
            ``(4)(A) The foreign country from which the importer will 
        import the drug is a permitted country; or
            ``(B) The foreign country from which the exporter will 
        export the drug is the permitted country in which the exporter 
        is located.
            ``(5) During any period in which the drug was not in the 
        control of the manufacturer of the drug, the drug did not enter 
        any country that is not a permitted country.
            ``(6) The exporter or importer retains a sample of each lot 
        of the drug for testing by the Secretary.
    ``(d) Inspection of Facilities; Marking of Shipments.--
            ``(1) Inspection of facilities.--A registration condition 
        is that, for the purpose of assisting the Secretary in 
        determining whether the exporter involved is in compliance with 
        all other registration conditions--
                    ``(A) the exporter agrees to permit the Secretary--
                            ``(i) to conduct onsite inspections, 
                        including monitoring on a day-to-day basis, of 
                        places of business of the exporter that relate 
                        to qualifying drugs, including each warehouse 
                        or other facility owned or controlled by, or 
                        operated for, the exporter;
                            ``(ii) to have access, including on a day-
                        to-day basis, to--
                                    ``(I) records of the exporter that 
                                relate to the export of such drugs, 
                                including financial records; and
                                    ``(II) samples of such drugs;
                            ``(iii) to carry out the duties described 
                        in paragraph (3); and
                            ``(iv) to carry out any other functions 
                        determined by the Secretary to be necessary 
                        regarding the compliance of the exporter; and
                    ``(B) the Secretary has assigned 1 or more 
                employees of the Secretary to carry out the functions 
                described in this subsection for the Secretary 
                randomly, but not less than 12 times annually, on the 
                premises of places of businesses referred to in 
                subparagraph (A)(i), and such an assignment remains in 
                effect on a continuous basis.
            ``(2) Marking of compliant shipments.--A registration 
        condition is that the exporter involved agrees to affix to each 
        shipping container of qualifying drugs exported under 
        subsection (a) such markings as the Secretary determines to be 
        necessary to identify the shipment as being in compliance with 
        all registration conditions. Markings under the preceding 
        sentence shall--
                    ``(A) be designed to prevent affixation of the 
                markings to any shipping container that is not 
                authorized to bear the markings; and
                    ``(B) include anticounterfeiting or track-and-trace 
                technologies, taking into account the economic and 
                technical feasibility of those technologies.
            ``(3) Certain duties relating to exporters.--Duties of the 
        Secretary with respect to an exporter include the following:
                    ``(A) Inspecting, randomly, but not less than 12 
                times annually, the places of business of the exporter 
                at which qualifying drugs are stored and from which 
                qualifying drugs are shipped.
                    ``(B) During the inspections under subparagraph 
                (A), verifying the chain of custody of a statistically 
                significant sample of qualifying drugs from the 
                establishment in which the drug was manufactured to the 
                exporter, which shall be accomplished or supplemented 
                by the use of anticounterfeiting or track-and-trace 
                technologies, taking into account the economic and 
                technical feasibility of those technologies, except 
                that a drug that lacks such technologies from the point 
                of manufacture shall not for that reason be excluded 
                from importation by an exporter.
                    ``(C) Randomly reviewing records of exports to 
                individuals for the purpose of determining whether the 
                drugs are being imported by the individuals in 
                accordance with the conditions under subsection (i). 
                Such reviews shall be conducted in a manner that will 
                result in a statistically significant determination of 
                compliance with all such conditions.
                    ``(D) Monitoring the affixing of markings under 
                paragraph (2).
                    ``(E) Inspecting as the Secretary determines is 
                necessary the warehouses and other facilities, 
                including records, of other parties in the chain of 
                custody of qualifying drugs.
                    ``(F) Determining whether the exporter is in 
                compliance with all other registration conditions.
            ``(4) Prior notice of shipments.--A registration condition 
        is that, not less than 8 hours and not more than 5 days in 
        advance of the time of the importation of a shipment of 
        qualifying drugs, the importer involved agrees to submit to the 
        Secretary a notice with respect to the shipment of drugs to be 
        imported or offered for import into the United States under 
        subsection (a). A notice under the preceding sentence shall 
        include--
                    ``(A) the name and complete contact information of 
                the person submitting the notice;
                    ``(B) the name and complete contact information of 
                the importer involved;
                    ``(C) the identity of the drug, including the 
                established name of the drug, the quantity of the drug, 
                and the lot number assigned by the manufacturer;
                    ``(D) the identity of the manufacturer of the drug, 
                including the identity of the establishment at which 
                the drug was manufactured;
                    ``(E) the country from which the drug is shipped;
                    ``(F) the name and complete contact information for 
                the shipper of the drug;
                    ``(G) anticipated arrival information, including 
                the port of arrival and crossing location within that 
                port, and the date and time;
                    ``(H) a summary of the chain of custody of the drug 
                from the establishment in which the drug was 
                manufactured to the importer;
                    ``(I) a declaration as to whether the Secretary has 
                ordered that importation of the drug from the permitted 
                country cease under subsection (g)(2)(C) or (D); and
                    ``(J) such other information as the Secretary may 
                require by regulation.
            ``(5) Marking of compliant shipments.--A registration 
        condition is that the importer involved agrees, before 
        wholesale distribution (as defined in section 503(e)) of a 
        qualifying drug that has been imported under subsection (a), to 
        affix to each container of such drug such markings or other 
        technology as the Secretary determines necessary to identify 
        the shipment as being in compliance with all registration 
        conditions, except that the markings or other technology shall 
        not be required on a drug that bears comparable, compatible 
        markings or technology from the manufacturer of the drug. 
        Markings or other technology under the preceding sentence 
        shall--
                    ``(A) be designed to prevent affixation of the 
                markings or other technology to any container that is 
                not authorized to bear the markings; and
                    ``(B) shall include anticounterfeiting or track-
                and-trace technologies, taking into account the 
                economic and technical feasibility of such 
                technologies.
            ``(6) Certain duties relating to importers.--Duties of the 
        Secretary with respect to an importer include the following:
                    ``(A) Inspecting, randomly, but not less than 12 
                times annually, the places of business of the importer 
                at which a qualifying drug is initially received after 
                importation.
                    ``(B) During the inspections under subparagraph 
                (A), verifying the chain of custody of a statistically 
                significant sample of qualifying drugs from the 
                establishment in which the drug was manufactured to the 
                importer, which shall be accomplished or supplemented 
                by the use of anticounterfeiting or track-and-trace 
                technologies, taking into account the economic and 
                technical feasibility of those technologies, except 
                that a drug that lacks such technologies from the point 
                of manufacture shall not for that reason be excluded 
                from importation by an importer.
                    ``(C) Reviewing notices under paragraph (4).
                    ``(D) Inspecting as the Secretary determines is 
                necessary the warehouses and other facilities, 
                including records of other parties in the chain of 
                custody of qualifying drugs.
                    ``(E) Determining whether the importer is in 
                compliance with all other registration conditions.
    ``(e) Importer Fees.--
            ``(1) Registration fee.--A registration condition is that 
        the importer involved pays to the Secretary a fee of $10,000 
        due on the date on which the importer first submits the 
        registration to the Secretary under subsection (b).
            ``(2) Inspection fee.--A registration condition is that the 
        importer involved pays a fee to the Secretary in accordance 
        with this subsection. Such fee shall be paid not later than 
        October 1 and April 1 of each fiscal year in the amount 
        provided for under paragraph (3).
            ``(3) Amount of inspection fee.--
                    ``(A) Aggregate total of fees.--Not later than 30 
                days before the start of each fiscal year, the 
                Secretary, in consultation with the Secretary of 
                Homeland Security and the Secretary of the Treasury, 
                shall establish an aggregate total of fees to be 
                collected under paragraph (2) for importers for that 
                fiscal year that is sufficient, and not more than 
                necessary, to pay the costs for that fiscal year of 
                administering this section with respect to registered 
                importers, including the costs associated with--
                            ``(i) inspecting the facilities of 
                        registered importers, and of other entities in 
                        the chain of custody of a qualifying drug as 
                        necessary, under subsection (d)(6);
                            ``(ii) developing, implementing, and 
                        operating under such subsection an electronic 
                        system for submission and review of the notices 
                        required under subsection (d)(4) with respect 
                        to shipments of qualifying drugs under 
                        subsection (a) to assess compliance with all 
                        registration conditions when such shipments are 
                        offered for import into the United States; and
                            ``(iii) inspecting such shipments as 
                        necessary, when offered for import into the 
                        United States to determine if such a shipment 
                        should be refused admission under subsection 
                        (g)(5).
                    ``(B) Limitation.--Subject to subparagraph (C), the 
                aggregate total of fees collected under paragraph (2) 
                for a fiscal year shall not exceed 2.5 percent of the 
                total price of qualifying drugs imported during that 
                fiscal year into the United States by registered 
                importers under subsection (a).
                    ``(C) Total price of drugs.--
                            ``(i) Estimate.--For the purposes of 
                        complying with the limitation described in 
                        subparagraph (B) when establishing under 
                        subparagraph (A) the aggregate total of fees to 
                        be collected under paragraph (2) for a fiscal 
                        year, the Secretary shall estimate the total 
                        price of qualifying drugs imported into the 
                        United States by registered importers during 
                        that fiscal year by adding the total price of 
                        qualifying drugs imported by each registered 
                        importer during the 6-month period from January 
                        1 through June 30 of the previous fiscal year, 
                        as reported to the Secretary by each registered 
                        importer under subsection (b)(1)(J).
                            ``(ii) Calculation.--Not later than March 1 
                        of the fiscal year that follows the fiscal year 
                        for which the estimate under clause (i) is 
                        made, the Secretary shall calculate the total 
                        price of qualifying drugs imported into the 
                        United States by registered importers during 
                        that fiscal year by adding the total price of 
                        qualifying drugs imported by each registered 
                        importer during that fiscal year, as reported 
                        to the Secretary by each registered importer 
                        under subsection (b)(1)(J).
                            ``(iii) Adjustment.--If the total price of 
                        qualifying drugs imported into the United 
                        States by registered importers during a fiscal 
                        year as calculated under clause (ii) is less 
                        than the aggregate total of fees collected 
                        under paragraph (2) for that fiscal year, the 
                        Secretary shall provide for a pro-rata 
                        reduction in the fee due from each registered 
                        importer on April 1 of the subsequent fiscal 
                        year so that the limitation described in 
                        subparagraph (B) is observed.
                    ``(D) Individual importer fee.--Subject to the 
                limitation described in subparagraph (B), the fee under 
                paragraph (2) to be paid on October 1 and April 1 by an 
                importer shall be an amount that is proportional to a 
                reasonable estimate by the Secretary of the semiannual 
                share of the importer of the volume of qualifying drugs 
                imported by importers under subsection (a).
            ``(4) Use of fees.--
                    ``(A) In general.--Subject to appropriations Acts, 
                fees collected by the Secretary under paragraphs (1) 
                and (2) shall be credited to the appropriation account 
                for salaries and expenses of the Food and Drug 
                Administration until expended (without fiscal year 
                limitation), and the Secretary may, in consultation 
                with the Secretary of Homeland Security and the 
                Secretary of the Treasury, transfer some proportion of 
                such fees to the appropriation account for salaries and 
                expenses of the Bureau of Customs and Border Protection 
                until expended (without fiscal year limitation).
                    ``(B) Sole purpose.--Fees collected by the 
                Secretary under paragraphs (1) and (2) are only 
                available to the Secretary and, if transferred, to the 
                Secretary of Homeland Security, and are for the sole 
                purpose of paying the costs referred to in paragraph 
                (3)(A).
            ``(5) Collection of fees.--In any case where the Secretary 
        does not receive payment of a fee assessed under paragraph (1) 
        or (2) within 30 days after it is due, such fee shall be 
        treated as a claim of the United States Government subject to 
        subchapter II of chapter 37 of title 31, United States Code.
    ``(f) Exporter Fees.--
            ``(1) Registration fee.--A registration condition is that 
        the exporter involved pays to the Secretary a fee of $10,000 
        due on the date on which the exporter first submits that 
        registration to the Secretary under subsection (b).
            ``(2) Inspection fee.--A registration condition is that the 
        exporter involved pays a fee to the Secretary in accordance 
        with this subsection. Such fee shall be paid not later than 
        October 1 and April 1 of each fiscal year in the amount 
        provided for under paragraph (3).
            ``(3) Amount of inspection fee.--
                    ``(A) Aggregate total of fees.--Not later than 30 
                days before the start of each fiscal year, the 
                Secretary, in consultation with the Secretary of 
                Homeland Security and the Secretary of the Treasury, 
                shall establish an aggregate total of fees to be 
                collected under paragraph (2) for exporters for that 
                fiscal year that is sufficient, and not more than 
                necessary, to pay the costs for that fiscal year of 
                administering this section with respect to registered 
                exporters, including the costs associated with--
                            ``(i) inspecting the facilities of 
                        registered exporters, and of other entities in 
                        the chain of custody of a qualifying drug as 
                        necessary, under subsection (d)(3);
                            ``(ii) developing, implementing, and 
                        operating under such subsection a system to 
                        screen marks on shipments of qualifying drugs 
                        under subsection (a) that indicate compliance 
                        with all registration conditions, when such 
                        shipments are offered for import into the 
                        United States; and
                            ``(iii) screening such markings, and 
                        inspecting such shipments as necessary, when 
                        offered for import into the United States to 
                        determine if such a shipment should be refused 
                        admission under subsection (g)(5).
                    ``(B) Limitation.--Subject to subparagraph (C), the 
                aggregate total of fees collected under paragraph (2) 
                for a fiscal year shall not exceed 2.5 percent of the 
                total price of qualifying drugs imported during that 
                fiscal year into the United States by registered 
                exporters under subsection (a).
                    ``(C) Total price of drugs.--
                            ``(i) Estimate.--For the purposes of 
                        complying with the limitation described in 
                        subparagraph (B) when establishing under 
                        subparagraph (A) the aggregate total of fees to 
                        be collected under paragraph (2) for a fiscal 
                        year, the Secretary shall estimate the total 
                        price of qualifying drugs imported into the 
                        United States by registered exporters during 
                        that fiscal year by adding the total price of 
                        qualifying drugs exported by each registered 
                        exporter during the 6-month period from January 
                        1 through June 30 of the previous fiscal year, 
                        as reported to the Secretary by each registered 
                        exporter under subsection (b)(1)(I)(iv).
                            ``(ii) Calculation.--Not later than March 1 
                        of the fiscal year that follows the fiscal year 
                        for which the estimate under clause (i) is 
                        made, the Secretary shall calculate the total 
                        price of qualifying drugs imported into the 
                        United States by registered exporters during 
                        that fiscal year by adding the total price of 
                        qualifying drugs exported by each registered 
                        exporter during that fiscal year, as reported 
                        to the Secretary by each registered exporter 
                        under subsection (b)(1)(I)(iv).
                            ``(iii) Adjustment.--If the total price of 
                        qualifying drugs imported into the United 
                        States by registered exporters during a fiscal 
                        year as calculated under clause (ii) is less 
                        than the aggregate total of fees collected 
                        under paragraph (2) for that fiscal year, the 
                        Secretary shall provide for a pro-rata 
                        reduction in the fee due from each registered 
                        exporter on April 1 of the subsequent fiscal 
                        year so that the limitation described in 
                        subparagraph (B) is observed.
                    ``(D) Individual exporter fee.--Subject to the 
                limitation described in subparagraph (B), the fee under 
                paragraph (2) to be paid on October 1 and April 1 by an 
                exporter shall be an amount that is proportional to a 
                reasonable estimate by the Secretary of the semiannual 
                share of the exporter of the volume of qualifying drugs 
                exported by exporters under subsection (a).
            ``(4) Use of fees.--
                    ``(A) In general.--Subject to appropriations Acts, 
                fees collected by the Secretary under paragraphs (1) 
                and (2) shall be credited to the appropriation account 
                for salaries and expenses of the Food and Drug 
                Administration until expended (without fiscal year 
                limitation), and the Secretary may, in consultation 
                with the Secretary of Homeland Security and the 
                Secretary of the Treasury, transfer some proportion of 
                such fees to the appropriation account for salaries and 
                expenses of the Bureau of Customs and Border Protection 
                until expended (without fiscal year limitation).
                    ``(B) Sole purpose.--Fees collected by the 
                Secretary under paragraphs (1) and (2) are only 
                available to the Secretary and, if transferred, to the 
                Secretary of Homeland Security, and are for the sole 
                purpose of paying the costs referred to in paragraph 
                (3)(A).
            ``(5) Collection of fees.--In any case where the Secretary 
        does not receive payment of a fee assessed under paragraph (1) 
        or (2) within 30 days after it is due, such fee shall be 
        treated as a claim of the United States Government subject to 
        subchapter II of chapter 37 of title 31, United States Code.
    ``(g) Compliance With Section 801(a).--
            ``(1) In general.--A registration condition is that each 
        qualifying drug exported under subsection (a) by the registered 
        exporter involved or imported under subsection (a) by the 
        registered importer involved is in compliance with the 
        standards referred to in section 801(a) regarding admission of 
        the drug into the United States, subject to paragraphs (2), 
        (3), and (4).
            ``(2) Section 505; approval status.--
                    ``(A) In general.--A qualifying drug that is 
                imported or offered for import under subsection (a) 
                shall comply with the conditions established in the 
                approved application under section 505(b) for the U.S. 
                label drug as described under this subsection.
                    ``(B) Notice by manufacturer; general provisions.--
                            ``(i) In general.--The person that 
                        manufactures a qualifying drug that is, or will 
                        be, introduced for commercial distribution in a 
                        permitted country shall in accordance with this 
                        paragraph submit to the Secretary a notice 
                        that--
                                    ``(I) includes each difference in 
                                the qualifying drug from a condition 
                                established in the approved application 
                                for the U.S. label drug beyond--
                                            ``(aa) the variations 
                                        provided for in the 
                                        application; and
                                            ``(bb) any difference in 
                                        labeling (except ingredient 
                                        labeling); or
                                    ``(II) States that there is no 
                                difference in the qualifying drug from 
                                a condition established in the approved 
                                application for the U.S. label drug 
                                beyond--
                                            ``(aa) the variations 
                                        provided for in the 
                                        application; and
                                            ``(bb) any difference in 
                                        labeling (except ingredient 
                                        labeling).
                            ``(ii) Information in notice.--A notice 
                        under clause (i)(I) shall include the 
                        information that the Secretary may require 
                        under section 506A, any additional information 
                        the Secretary may require (which may include 
                        data on bioequivalence if such data are not 
                        required under section 506A), and, with respect 
                        to the permitted country that approved the 
                        qualifying drug for commercial distribution, or 
                        with respect to which such approval is sought, 
                        include the following:
                                    ``(I) The date on which the 
                                qualifying drug with such difference 
                                was, or will be, introduced for 
                                commercial distribution in the 
                                permitted country.
                                    ``(II) Information demonstrating 
                                that the person submitting the notice 
                                has also notified the government of the 
                                permitted country in writing that the 
                                person is submitting to the Secretary a 
                                notice under clause (i)(I), which 
                                notice describes the difference in the 
                                qualifying drug from a condition 
                                established in the approved application 
                                for the U.S. label drug.
                                    ``(III) The information that the 
                                person submitted or will submit to the 
                                government of the permitted country for 
                                purposes of obtaining approval for 
                                commercial distribution of the drug in 
                                the country which, if in a language 
                                other than English, shall be 
                                accompanied by an English translation 
                                verified to be complete and accurate, 
                                with the name, address, and a brief 
                                statement of the qualifications of the 
                                person that made the translation.
                            ``(iii) Certifications.--The chief 
                        executive officer and the chief medical officer 
                        of the manufacturer involved shall each certify 
                        in the notice under clause (i) that--
                                    ``(I) the information provided in 
                                the notice is complete and true; and
                                    ``(II) a copy of the notice has 
                                been provided to the Federal Trade 
                                Commission and to the State attorneys 
                                general.
                            ``(iv) Fee.--If a notice submitted under 
                        clause (i) includes a difference that would, 
                        under section 506A, require the submission of a 
                        supplemental application if made as a change to 
                        the U.S. label drug, the person that submits 
                        the notice shall pay to the Secretary a fee in 
                        the same amount as would apply if the person 
                        were paying a fee pursuant to section 
                        736(a)(1)(A)(ii). Subject to appropriations 
                        Acts, fees collected by the Secretary under the 
                        preceding sentence are available only to the 
                        Secretary and are for the sole purpose of 
                        paying the costs of reviewing notices submitted 
                        under clause (i).
                            ``(v) Timing of submission of notices.--
                                    ``(I) Prior approval notices.--A 
                                notice under clause (i) to which 
                                subparagraph (C) applies shall be 
                                submitted to the Secretary not later 
                                than 120 days before the qualifying 
                                drug with the difference is introduced 
                                for commercial distribution in a 
                                permitted country, unless the country 
                                requires that distribution of the 
                                qualifying drug with the difference 
                                begin less than 120 days after the 
                                country requires the difference.
                                    ``(II) Other approval notices.--A 
                                notice under clause (i) to which 
                                subparagraph (D) applies shall be 
                                submitted to the Secretary not later 
                                than the day on which the qualifying 
                                drug with the difference is introduced 
                                for commercial distribution in a 
                                permitted country.
                                    ``(III) Other notices.--A notice 
                                under clause (i) to which subparagraph 
                                (E) applies shall be submitted to the 
                                Secretary on the date that the 
                                qualifying drug is first introduced for 
                                commercial distribution in a permitted 
                                country and annually thereafter.
                            ``(vi) Review by secretary.--
                                    ``(I) In general.--In this 
                                paragraph, the difference in a 
                                qualifying drug that is submitted in a 
                                notice under clause (i) from the U.S. 
                                label drug shall be treated by the 
                                Secretary as if it were a manufacturing 
                                change to the U.S. label drug under 
                                section 506A.
                                    ``(II) Standard of review.--Except 
                                as provided in subclause (III), the 
                                Secretary shall review and approve or 
                                disapprove the difference in a notice 
                                submitted under clause (i), if required 
                                under section 506A, using the safe and 
                                effective standard for approving or 
                                disapproving a manufacturing change 
                                under section 506A.
                                    ``(III) Bioequivalence.--If the 
                                Secretary would approve the difference 
                                in a notice submitted under clause (i) 
                                using the safe and effective standard 
                                under section 506A and if the Secretary 
                                determines that the qualifying drug is 
                                not bioequivalent to the U.S. label 
                                drug, the Secretary shall--
                                            ``(aa) include in the 
                                        labeling provided under 
                                        paragraph (3) a prominent 
                                        advisory that the qualifying 
                                        drug is safe and effective but 
                                        is not bioequivalent to the 
                                        U.S. label drug if the 
                                        Secretary determines that such 
                                        an advisory is necessary for 
                                        health care practitioners and 
                                        patients to use the qualifying 
                                        drug safely and effectively; or
                                            ``(bb) decline to approve 
                                        the difference if the Secretary 
                                        determines that the 
                                        availability of both the 
                                        qualifying drug and the U.S. 
                                        label drug would pose a threat 
                                        to the public health.
                                    ``(IV) Review by the secretary.--
                                The Secretary shall review and approve 
                                or disapprove the difference in a 
                                notice submitted under clause (i), if 
                                required under section 506A, not later 
                                than 120 days after the date on which 
                                the notice is submitted.
                                    ``(V) Establishment inspection.--If 
                                review of such difference would require 
                                an inspection of the establishment in 
                                which the qualifying drug is 
                                manufactured--
                                            ``(aa) such inspection by 
                                        the Secretary shall be 
                                        authorized; and
                                            ``(bb) the Secretary may 
                                        rely on a satisfactory report 
                                        of a good manufacturing 
                                        practice inspection of the 
                                        establishment from a permitted 
                                        country whose regulatory system 
                                        the Secretary recognizes as 
                                        equivalent under a mutual 
                                        recognition agreement, as 
                                        provided under section 
                                        510(i)(3), section 803, or part 
                                        26 of title 21, Code of Federal 
                                        Regulations (or any 
                                        corresponding successor rule or 
                                        regulation).
                            ``(vii) Publication of information on 
                        notices.--
                                    ``(I) In general.--Through the 
                                Internet website of the Food and Drug 
                                Administration and a toll-free 
                                telephone number, the Secretary shall 
                                readily make available to the public a 
                                list of notices submitted under clause 
                                (i).
                                    ``(II) Contents.--The list under 
                                subclause (I) shall include the date on 
                                which a notice is submitted and 
                                whether--
                                            ``(aa) a notice is under 
                                        review;
                                            ``(bb) the Secretary has 
                                        ordered that importation of the 
                                        qualifying drug from a 
                                        permitted country cease; or
                                            ``(cc) the importation of 
                                        the drug is permitted under 
                                        subsection (a).
                                    ``(III) Update.--The Secretary 
                                shall promptly update the Internet 
                                website with any changes to the list.
                    ``(C) Notice; drug difference requiring prior 
                approval.--In the case of a notice under subparagraph 
                (B)(i) that includes a difference that would, under 
                section 506A(c) or (d)(3)(B)(i), require the approval 
                of a supplemental application before the difference 
                could be made to the U.S. label drug the following 
                shall occur:
                            ``(i) Promptly after the notice is 
                        submitted, the Secretary shall notify 
                        registered exporters, registered importers, the 
                        Federal Trade Commission, and the State 
                        attorneys general that the notice has been 
                        submitted with respect to the qualifying drug 
                        involved.
                            ``(ii) If the Secretary has not made a 
                        determination whether such a supplemental 
                        application regarding the U.S. label drug would 
                        be approved or disapproved by the date on which 
                        the qualifying drug involved is to be 
                        introduced for commercial distribution in a 
                        permitted country, the Secretary shall--
                                    ``(I) order that the importation of 
                                the qualifying drug involved from the 
                                permitted country not begin until the 
                                Secretary completes review of the 
                                notice; and
                                    ``(II) promptly notify registered 
                                exporters, registered importers, the 
                                Federal Trade Commission, and the State 
                                attorneys general of the order.
                            ``(iii) If the Secretary determines that 
                        such a supplemental application regarding the 
                        U.S. label drug would not be approved, the 
                        Secretary shall--
                                    ``(I) order that the importation of 
                                the qualifying drug involved from the 
                                permitted country cease, or provide 
                                that an order under clause (ii), if 
                                any, remains in effect;
                                    ``(II) notify the permitted country 
                                that approved the qualifying drug for 
                                commercial distribution of the 
                                determination; and
                                    ``(III) promptly notify registered 
                                exporters, registered importers, the 
                                Federal Trade Commission, and the State 
                                attorneys general of the determination.
                            ``(iv) If the Secretary determines that 
                        such a supplemental application regarding the 
                        U.S. label drug would be approved, the 
                        Secretary shall--
                                    ``(I) vacate the order under clause 
                                (ii), if any;
                                    ``(II) consider the difference to 
                                be a variation provided for in the 
                                approved application for the U.S. label 
                                drug;
                                    ``(III) permit importation of the 
                                qualifying drug under subsection (a); 
                                and
                                    ``(IV) promptly notify registered 
                                exporters, registered importers, the 
                                Federal Trade Commission, and the State 
                                attorneys general of the determination.
                    ``(D) Notice; drug difference not requiring prior 
                approval.--In the case of a notice under subparagraph 
                (B)(i) that includes a difference that would, under 
                section 506A(d)(3)(B)(ii), not require the approval of 
                a supplemental application before the difference could 
                be made to the U.S. label drug the following shall 
                occur:
                            ``(i) During the period in which the notice 
                        is being reviewed by the Secretary, the 
                        authority under this subsection to import the 
                        qualifying drug involved continues in effect.
                            ``(ii) If the Secretary determines that 
                        such a supplemental application regarding the 
                        U.S. label drug would not be approved, the 
                        Secretary shall--
                                    ``(I) order that the importation of 
                                the qualifying drug involved from the 
                                permitted country cease;
                                    ``(II) notify the permitted country 
                                that approved the qualifying drug for 
                                commercial distribution of the 
                                determination; and
                                    ``(III) promptly notify registered 
                                exporters, registered importers, the 
                                Federal Trade Commission, and the State 
                                attorneys general of the determination.
                            ``(iii) If the Secretary determines that 
                        such a supplemental application regarding the 
                        U.S. label drug would be approved, the 
                        difference shall be considered to be a 
                        variation provided for in the approved 
                        application for the U.S. label drug.
                    ``(E) Notice; drug difference not requiring 
                approval; no difference.--In the case of a notice under 
                subparagraph (B)(i) that includes a difference for 
                which, under section 506A(d)(1)(A), a supplemental 
                application would not be required for the difference to 
                be made to the U.S. label drug, or that States that 
                there is no difference, the Secretary--
                            ``(i) shall consider such difference to be 
                        a variation provided for in the approved 
                        application for the U.S. label drug;
                            ``(ii) may not order that the importation 
                        of the qualifying drug involved cease; and
                            ``(iii) shall promptly notify registered 
                        exporters and registered importers.
                    ``(F) Differences in active ingredient, route of 
                administration, dosage form, or strength.--
                            ``(i) In general.--A person who 
                        manufactures a drug approved under section 
                        505(b) shall submit an application under 
                        section 505(b) for approval of another drug 
                        that is manufactured for distribution in a 
                        permitted country by or for the person that 
                        manufactures the drug approved under section 
                        505(b) if--
                                    ``(I) there is no qualifying drug 
                                in commercial distribution in permitted 
                                countries whose combined population 
                                represents at least 50 percent of the 
                                total population of all permitted 
                                countries with the same active 
                                ingredient or ingredients, route of 
                                administration, dosage form, and 
                                strength as the drug approved under 
                                section 505(b); and
                                    ``(II) each active ingredient of 
                                the other drug is related to an active 
                                ingredient of the drug approved under 
                                section 505(b), as defined in clause 
                                (v).
                            ``(ii) Application under section 505(b).--
                        The application under section 505(b) required 
                        under clause (i) shall--
                                    ``(I) request approval of the other 
                                drug for the indication or indications 
                                for which the drug approved under 
                                section 505(b) is labeled;
                                    ``(II) include the information that 
                                the person submitted to the government 
                                of the permitted country for purposes 
                                of obtaining approval for commercial 
                                distribution of the other drug in that 
                                country, which if in a language other 
                                than English, shall be accompanied by 
                                an English translation verified to be 
                                complete and accurate, with the name, 
                                address, and a brief statement of the 
                                qualifications of the person that made 
                                the translation;
                                    ``(III) include a right of 
                                reference to the application for the 
                                drug approved under section 505(b); and
                                    ``(IV) include such additional 
                                information as the Secretary may 
                                require.
                            ``(iii) Timing of submission of 
                        application.--An application under section 
                        505(b) required under clause (i) shall be 
                        submitted to the Secretary not later than the 
                        day on which the information referred to in 
                        clause (ii)(II) is submitted to the government 
                        of the permitted country.
                            ``(iv) Notice of decision on application.--
                        The Secretary shall promptly notify registered 
                        exporters, registered importers, the Federal 
                        Trade Commission, and the State attorneys 
                        general of a determination to approve or to 
                        disapprove an application under section 505(b) 
                        required under clause (i).
                            ``(v) Related active ingredients.--For 
                        purposes of clause (i)(II), 2 active 
                        ingredients are related if they are--
                                    ``(I) the same; or
                                    ``(II) different salts, esters, or 
                                complexes of the same moiety.
            ``(3) Section 502; labeling.--
                    ``(A) Importation by registered importer.--
                            ``(i) In general.--In the case of a 
                        qualifying drug that is imported or offered for 
                        import by a registered importer, such drug 
                        shall be considered to be in compliance with 
                        section 502 and the labeling requirements under 
                        the approved application for the U.S. label 
                        drug if the qualifying drug bears--
                                    ``(I) a copy of the labeling 
                                approved for the U.S. label drug under 
                                section 505, without regard to whether 
                                the copy bears any trademark involved;
                                    ``(II) the name of the manufacturer 
                                and location of the manufacturer;
                                    ``(III) the lot number assigned by 
                                the manufacturer;
                                    ``(IV) the name, location, and 
                                registration number of the importer; 
                                and
                                    ``(V) the National Drug Code number 
                                assigned to the qualifying drug by the 
                                Secretary.
                            ``(ii) Request for copy of the labeling.--
                        The Secretary shall provide such copy to the 
                        registered importer involved, upon request of 
                        the importer.
                            ``(iii) Requested labeling.--The labeling 
                        provided by the Secretary under clause (ii) 
                        shall--
                                    ``(I) include the established name, 
                                as defined in section 502(e)(3), for 
                                each active ingredient in the 
                                qualifying drug;
                                    ``(II) not include the proprietary 
                                name of the U.S. label drug or any 
                                active ingredient thereof;
                                    ``(III) if required under paragraph 
                                (2)(B)(vi)(III), a prominent advisory 
                                that the qualifying drug is safe and 
                                effective but not bioequivalent to the 
                                U.S. label drug; and
                                    ``(IV) if the inactive ingredients 
                                of the qualifying drug are different 
                                from the inactive ingredients for the 
                                U.S. label drug, include--
                                            ``(aa) a prominent notice 
                                        that the ingredients of the 
                                        qualifying drug differ from the 
                                        ingredients of the U.S. label 
                                        drug and that the qualifying 
                                        drug must be dispensed with an 
                                        advisory to people with 
                                        allergies about this difference 
                                        and a list of ingredients; and
                                            ``(bb) a list of the 
                                        ingredients of the qualifying 
                                        drug as would be required under 
                                        section 502(e).
                    ``(B) Importation by individual.--
                            ``(i) In general.--In the case of a 
                        qualifying drug that is imported or offered for 
                        import by a registered exporter to an 
                        individual, such drug shall be considered to be 
                        in compliance with section 502 and the labeling 
                        requirements under the approved application for 
                        the U.S. label drug if the packaging and 
                        labeling of the qualifying drug complies with 
                        all applicable regulations promulgated under 
                        sections 3 and 4 of the Poison Prevention 
                        Packaging Act of 1970 (15 U.S.C. 1471 et seq.) 
                        and the labeling of the qualifying drug 
                        includes--
                                    ``(I) directions for use by the 
                                consumer;
                                    ``(II) the lot number assigned by 
                                the manufacturer;
                                    ``(III) the name and registration 
                                number of the exporter;
                                    ``(IV) if required under paragraph 
                                (2)(B)(vi)(III), a prominent advisory 
                                that the drug is safe and effective but 
                                not bioequivalent to the U.S. label 
                                drug;
                                    ``(V) if the inactive ingredients 
                                of the drug are different from the 
                                inactive ingredients for the U.S. label 
                                drug--
                                            ``(aa) a prominent advisory 
                                        that persons with an allergy 
                                        should check the ingredient 
                                        list of the drug because the 
                                        ingredients of the drug differ 
                                        from the ingredients of the 
                                        U.S. label drug; and
                                            ``(bb) a list of the 
                                        ingredients of the drug as 
                                        would be required under section 
                                        502(e); and
                                    ``(VI) a copy of any special 
                                labeling that would be required by the 
                                Secretary had the U.S. label drug been 
                                dispensed by a pharmacist in the United 
                                States, without regard to whether the 
                                special labeling bears any trademark 
                                involved.
                            ``(ii) Packaging.--A qualifying drug 
                        offered for import to an individual by an 
                        exporter under this section that is packaged in 
                        a unit-of-use container (as those items are 
                        defined in the United States Pharmacopeia and 
                        National Formulary) shall not be repackaged, 
                        provided that--
                                    ``(I) the packaging complies with 
                                all applicable regulations under 
                                sections 3 and 4 of the Poison 
                                Prevention Packaging Act of 1970 (15 
                                U.S.C. 1471 et seq.); or
                                    ``(II) the consumer consents to 
                                waive the requirements of such Act, 
                                after being informed that the packaging 
                                does not comply with such Act and that 
                                the exporter will provide the drug in 
                                packaging that is compliant at no 
                                additional cost.
                            ``(iii) Request for copy of special 
                        labeling and ingredient list.--The Secretary 
                        shall provide to the registered exporter 
                        involved a copy of the special labeling, the 
                        advisory, and the ingredient list described 
                        under clause (i), upon request of the exporter.
                            ``(iv) Requested labeling and ingredient 
                        list.--The labeling and ingredient list 
                        provided by the Secretary under clause (iii) 
                        shall--
                                    ``(I) include the established name, 
                                as defined in section 502(e)(3), for 
                                each active ingredient in the drug; and
                                    ``(II) not include the proprietary 
                                name of the U.S. label drug or any 
                                active ingredient thereof.
            ``(4) Section 501; adulteration.--A qualifying drug that is 
        imported or offered for import under subsection (a) shall be 
        considered to be in compliance with section 501 if the drug is 
        in compliance with subsection (c).
            ``(5) Standards for refusing admission.--A drug exported 
        under subsection (a) from a registered exporter or imported by 
        a registered importer may be refused admission into the United 
        States if 1 or more of the following applies:
                    ``(A) The drug is not a qualifying drug.
                    ``(B) A notice for the drug required under 
                paragraph (2)(B) has not been submitted to the 
                Secretary.
                    ``(C) The Secretary has ordered that importation of 
                the drug from the permitted country cease under 
                paragraph (2) (C) or (D).
                    ``(D) The drug does not comply with paragraph (3) 
                or (4).
                    ``(E) The shipping container appears damaged in a 
                way that may affect the strength, quality, or purity of 
                the drug.
                    ``(F) The Secretary becomes aware that--
                            ``(i) the drug may be counterfeit;
                            ``(ii) the drug may have been prepared, 
                        packed, or held under insanitary conditions; or
                            ``(iii) the methods used in, or the 
                        facilities or controls used for, the 
                        manufacturing, processing, packing, or holding 
                        of the drug do not conform to good 
                        manufacturing practice.
                    ``(G) The Secretary has obtained an injunction 
                under section 302 that prohibits the distribution of 
                the drug in interstate commerce.
                    ``(H) The Secretary has under section 505(e) 
                withdrawn approval of the drug.
                    ``(I) The manufacturer of the drug has instituted a 
                recall of the drug.
                    ``(J) If the drug is imported or offered for import 
                by a registered importer without submission of a notice 
                in accordance with subsection (d)(4).
                    ``(K) If the drug is imported or offered for import 
                from a registered exporter to an individual and 1 or 
                more of the following applies:
                            ``(i) The shipping container for such drug 
                        does not bear the markings required under 
                        subsection (d)(2).
                            ``(ii) The markings on the shipping 
                        container appear to be counterfeit.
                            ``(iii) The shipping container or markings 
                        appear to have been tampered with.
    ``(h) Exporter Licensure in Permitted Country.--A registration 
condition is that the exporter involved agrees that a qualifying drug 
will be exported to an individual only if the Secretary has verified 
that--
            ``(1) the exporter is authorized under the law of the 
        permitted country in which the exporter is located to dispense 
        prescription drugs; and
            ``(2) the exporter employs persons that are licensed under 
        the law of the permitted country in which the exporter is 
        located to dispense prescription drugs in sufficient number to 
        dispense safely the drugs exported by the exporter to 
        individuals, and the exporter assigns to those persons 
        responsibility for dispensing such drugs to individuals.
    ``(i) Individuals; Conditions for Importation.--
            ``(1) In general.--For purposes of subsection (a)(2)(B), 
        the importation of a qualifying drug by an individual is in 
        accordance with this subsection if the following conditions are 
        met:
                    ``(A) The drug is accompanied by a copy of a 
                prescription for the drug, which prescription--
                            ``(i) is valid under applicable Federal and 
                        State laws; and
                            ``(ii) was issued by a practitioner who, 
                        under the law of a State of which the 
                        individual is a resident, or in which the 
                        individual receives care from the practitioner 
                        who issues the prescription, is authorized to 
                        administer prescription drugs.
                    ``(B) The drug is accompanied by a copy of the 
                documentation that was required under the law or 
                regulations of the permitted country in which the 
                exporter is located, as a condition of dispensing the 
                drug to the individual.
                    ``(C) The copies referred to in subparagraphs 
                (A)(i) and (B) are marked in a manner sufficient--
                            ``(i) to indicate that the prescription, 
                        and the equivalent document in the permitted 
                        country in which the exporter is located, have 
                        been filled; and
                            ``(ii) to prevent a duplicative filling by 
                        another pharmacist.
                    ``(D) The individual has provided to the registered 
                exporter a complete list of all drugs used by the 
                individual for review by the individuals who dispense 
                the drug.
                    ``(E) The quantity of the drug does not exceed a 
                90-day supply.
                    ``(F) The drug is not an ineligible subpart H drug. 
                For purposes of this section, a prescription drug is an 
                `ineligible subpart H drug' if the drug was approved by 
                the Secretary under subpart H of part 314 of title 21, 
                Code of Federal Regulations (relating to accelerated 
                approval), with restrictions under section 520 of such 
                part to assure safe use, and the Secretary has 
                published in the Federal Register a notice that the 
                Secretary has determined that good cause exists to 
                prohibit the drug from being imported pursuant to this 
                subsection.
            ``(2) Notice regarding drug refused admission.--If a 
        registered exporter ships a drug to an individual pursuant to 
        subsection (a)(2)(B) and the drug is refused admission to the 
        United States, a written notice shall be sent to the individual 
        and to the exporter that informs the individual and the 
        exporter of such refusal and the reason for the refusal.
    ``(j) Maintenance of Records and Samples.--
            ``(1) In general.--A registration condition is that the 
        importer or exporter involved shall--
                    ``(A) maintain records required under this section 
                for not less than 2 years; and
                    ``(B) maintain samples of each lot of a qualifying 
                drug required under this section for not more than 2 
                years.
            ``(2) Place of record maintenance.--The records described 
        under paragraph (1) shall be maintained--
                    ``(A) in the case of an importer, at the place of 
                business of the importer at which the importer 
                initially receives the qualifying drug after 
                importation; or
                    ``(B) in the case of an exporter, at the facility 
                from which the exporter ships the qualifying drug to 
                the United States.
    ``(k) Drug Recalls.--
            ``(1) Manufacturers.--A person that manufactures a 
        qualifying drug imported from a permitted country under this 
        section shall promptly inform the Secretary--
                    ``(A) if the drug is recalled or withdrawn from the 
                market in a permitted country;
                    ``(B) how the drug may be identified, including lot 
                number; and
                    ``(C) the reason for the recall or withdrawal.
            ``(2) Secretary.--With respect to each permitted country, 
        the Secretary shall--
                    ``(A) enter into an agreement with the government 
                of the country to receive information about recalls and 
                withdrawals of qualifying drugs in the country; or
                    ``(B) monitor recalls and withdrawals of qualifying 
                drugs in the country using any information that is 
                available to the public in any media.
            ``(3) Notice.--The Secretary may notify, as appropriate, 
        registered exporters, registered importers, wholesalers, 
        pharmacies, or the public of a recall or withdrawal of a 
        qualifying drug in a permitted country.
    ``(l) Drug Labeling and Packaging.--
            ``(1) In general.--When a qualifying drug that is imported 
        into the United States by an importer under subsection (a) is 
        dispensed by a pharmacist to an individual, the pharmacist 
        shall provide that the packaging and labeling of the drug 
        complies with all applicable regulations promulgated under 
        sections 3 and 4 of the Poison Prevention Packaging Act of 1970 
        (15 U.S.C. 1471 et seq.) and shall include with any other 
        labeling provided to the individual the following:
                    ``(A) The lot number assigned by the manufacturer.
                    ``(B) The name and registration number of the 
                importer.
                    ``(C) If required under paragraph (2)(B)(vi)(III) 
                of subsection (g), a prominent advisory that the drug 
                is safe and effective but not bioequivalent to the U.S. 
                label drug.
                    ``(D) If the inactive ingredients of the drug are 
                different from the inactive ingredients for the U.S. 
                label drug--
                            ``(i) a prominent advisory that persons 
                        with allergies should check the ingredient list 
                        of the drug because the ingredients of the drug 
                        differ from the ingredients of the U.S. label 
                        drug; and
                            ``(ii) a list of the ingredients of the 
                        drug as would be required under section 502(e).
            ``(2) Packaging.--A qualifying drug that is packaged in a 
        unit-of-use container (as those terms are defined in the United 
        States Pharmacopeia and National Formulary) shall not be 
        repackaged, provided that--
                    ``(A) the packaging complies with all applicable 
                regulations under sections 3 and 4 of the Poison 
                Prevention Packaging Act of 1970 (15 U.S.C. 1471 et 
                seq.); or
                    ``(B) the consumer consents to waive the 
                requirements of such Act, after being informed that the 
                packaging does not comply with such Act and that the 
                pharmacist will provide the drug in packaging that is 
                compliant at no additional cost.
    ``(m) Charitable Contributions.--Notwithstanding any other 
provision of this section, this section does not authorize the 
importation into the United States of a qualifying drug donated or 
otherwise supplied for free or at nominal cost by the manufacturer of 
the drug to a charitable or humanitarian organization, including the 
United Nations and affiliates, or to a government of a foreign country.
    ``(n) Unfair and Discriminatory Acts and Practices.--
            ``(1) In general.--It is unlawful for a manufacturer, 
        directly or indirectly (including by being a party to a 
        licensing agreement or other agreement), to--
                    ``(A) discriminate by charging a higher price for a 
                prescription drug sold to a registered exporter or 
                other person in a permitted country that exports a 
                qualifying drug to the United States under this section 
                than the price that is charged, inclusive of rebates or 
                other incentives to the permitted country or other 
                person, to another person that is in the same country 
                and that does not export a qualifying drug into the 
                United States under this section;
                    ``(B) discriminate by charging a higher price for a 
                prescription drug sold to a registered importer or 
                other person that distributes, sells, or uses a 
                qualifying drug imported into the United States under 
                this section than the price that is charged to another 
                person in the United States that does not import a 
                qualifying drug under this section, or that does not 
                distribute, sell, or use such a drug;
                    ``(C) discriminate by denying, restricting, or 
                delaying supplies of a prescription drug to a 
                registered exporter or other person in a permitted 
                country that exports a qualifying drug to the United 
                States under this section or to a registered importer 
                or other person that distributes, sells, or uses a 
                qualifying drug imported into the United States under 
                this section;
                    ``(D) discriminate by publicly, privately, or 
                otherwise refusing to do business with a registered 
                exporter or other person in a permitted country that 
                exports a qualifying drug to the United States under 
                this section or with a registered importer or other 
                person that distributes, sells, or uses a qualifying 
                drug imported into the United States under this 
                section;
                    ``(E) knowingly fail to submit a notice under 
                subsection (g)(2)(B)(i), knowingly fail to submit such 
                a notice on or before the date specified in subsection 
                (g)(2)(B)(v) or as otherwise required under subsection 
                (e) (3), (4), and (5) of section 4 of the 
                Pharmaceutical Market Access and Drug Safety Act of 
                2009, knowingly submit such a notice that makes a 
                materially false, fictitious, or fraudulent statement, 
                or knowingly fail to provide promptly any information 
                requested by the Secretary to review such a notice;
                    ``(F) knowingly fail to submit an application 
                required under subsection (g)(2)(F), knowingly fail to 
                submit such an application on or before the date 
                specified in subsection (g)(2)(F)(ii), knowingly submit 
                such an application that makes a materially false, 
                fictitious, or fraudulent statement, or knowingly fail 
                to provide promptly any information requested by the 
                Secretary to review such an application;
                    ``(G) cause there to be a difference (including a 
                difference in active ingredient, route of 
                administration, dosage form, strength, formulation, 
                manufacturing establishment, manufacturing process, or 
                person that manufactures the drug) between a 
                prescription drug for distribution in the United States 
                and the drug for distribution in a permitted country;
                    ``(H) refuse to allow an inspection authorized 
                under this section of an establishment that 
                manufactures a qualifying drug that is, or will be, 
                introduced for commercial distribution in a permitted 
                country;
                    ``(I) fail to conform to the methods used in, or 
                the facilities used for, the manufacturing, processing, 
                packing, or holding of a qualifying drug that is, or 
                will be, introduced for commercial distribution in a 
                permitted country to good manufacturing practice under 
                this Act;
                    ``(J) become a party to a licensing agreement or 
                other agreement related to a qualifying drug that fails 
                to provide for compliance with all requirements of this 
                section with respect to such drug;
                    ``(K) enter into a contract that restricts, 
                prohibits, or delays the importation of a qualifying 
                drug under this section;
                    ``(L) engage in any other action to restrict, 
                prohibit, or delay the importation of a qualifying drug 
                under this section; or
                    ``(M) engage in any other action that the Federal 
                Trade Commission determines to discriminate against a 
                person that engages or attempts to engage in the 
                importation of a qualifying drug under this section.
            ``(2) Referral of potential violations.--The Secretary 
        shall promptly refer to the Federal Trade Commission each 
        potential violation of subparagraph (E), (F), (G), (H), or (I) 
        of paragraph (1) that becomes known to the Secretary.
            ``(3) Affirmative defense.--
                    ``(A) Discrimination.--It shall be an affirmative 
                defense to a charge that a manufacturer has 
                discriminated under subparagraph (A), (B), (C), (D), or 
                (M) of paragraph (1) that the higher price charged for 
                a prescription drug sold to a person, the denial, 
                restriction, or delay of supplies of a prescription 
                drug to a person, the refusal to do business with a 
                person, or other discriminatory activity against a 
                person, is not based, in whole or in part, on--
                            ``(i) the person exporting or importing a 
                        qualifying drug into the United States under 
                        this section; or
                            ``(ii) the person distributing, selling, or 
                        using a qualifying drug imported into the 
                        United States under this section.
                    ``(B) Drug differences.--It shall be an affirmative 
                defense to a charge that a manufacturer has caused 
                there to be a difference described in subparagraph (G) 
                of paragraph (1) that--
                            ``(i) the difference was required by the 
                        country in which the drug is distributed;
                            ``(ii) the Secretary has determined that 
                        the difference was necessary to improve the 
                        safety or effectiveness of the drug;
                            ``(iii) the person manufacturing the drug 
                        for distribution in the United States has given 
                        notice to the Secretary under subsection 
                        (g)(2)(B)(i) that the drug for distribution in 
                        the United States is not different from a drug 
                        for distribution in permitted countries whose 
                        combined population represents at least 50 
                        percent of the total population of all 
                        permitted countries; or
                            ``(iv) the difference was not caused, in 
                        whole or in part, for the purpose of 
                        restricting importation of the drug into the 
                        United States under this section.
            ``(4) Effect of subsection.--
                    ``(A) Sales in other countries.--This subsection 
                applies only to the sale or distribution of a 
                prescription drug in a country if the manufacturer of 
                the drug chooses to sell or distribute the drug in the 
                country. Nothing in this subsection shall be construed 
                to compel the manufacturer of a drug to distribute or 
                sell the drug in a country.
                    ``(B) Discounts to insurers, health plans, pharmacy 
                benefit managers, and covered entities.--Nothing in 
                this subsection shall be construed to--
                            ``(i) prevent or restrict a manufacturer of 
                        a prescription drug from providing discounts to 
                        an insurer, health plan, pharmacy benefit 
                        manager in the United States, or covered entity 
                        in the drug discount program under section 340B 
                        of the Public Health Service Act (42 U.S.C. 
                        256b) in return for inclusion of the drug on a 
                        formulary;
                            ``(ii) require that such discounts be made 
                        available to other purchasers of the 
                        prescription drug; or
                            ``(iii) prevent or restrict any other 
                        measures taken by an insurer, health plan, or 
                        pharmacy benefit manager to encourage 
                        consumption of such prescription drug.
                    ``(C) Charitable contributions.--Nothing in this 
                subsection shall be construed to--
                            ``(i) prevent a manufacturer from donating 
                        a prescription drug, or supplying a 
                        prescription drug at nominal cost, to a 
                        charitable or humanitarian organization, 
                        including the United Nations and affiliates, or 
                        to a government of a foreign country; or
                            ``(ii) apply to such donations or supplying 
                        of a prescription drug.
            ``(5) Enforcement.--
                    ``(A) Unfair or deceptive act or practice.--A 
                violation of this subsection shall be treated as a 
                violation of a rule defining an unfair or deceptive act 
                or practice prescribed under section 18(a)(1)(B) of the 
                Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
                    ``(B) Actions by the commission.--The Federal Trade 
                Commission--
                            ``(i) shall enforce this subsection in the 
                        same manner, by the same means, and with the 
                        same jurisdiction, powers, and duties as though 
                        all applicable terms and provisions of the 
                        Federal Trade Commission Act (15 U.S.C. 41 et 
                        seq.) were incorporated into and made a part of 
                        this section; and
                            ``(ii) may seek monetary relief threefold 
                        the damages sustained, in addition to any other 
                        remedy available to the Federal Trade 
                        Commission under the Federal Trade Commission 
                        Act (15 U.S.C. 41 et seq.).
            ``(6) Actions by states.--
                    ``(A) In general.--
                            ``(i) Civil actions.--In any case in which 
                        the attorney general of a State has reason to 
                        believe that an interest of the residents of 
                        that State have been adversely affected by any 
                        manufacturer that violates paragraph (1), the 
                        attorney general of a State may bring a civil 
                        action on behalf of the residents of the State, 
                        and persons doing business in the State, in a 
                        district court of the United States of 
                        appropriate jurisdiction to--
                                    ``(I) enjoin that practice;
                                    ``(II) enforce compliance with this 
                                subsection;
                                    ``(III) obtain damages, 
                                restitution, or other compensation on 
                                behalf of residents of the State and 
                                persons doing business in the State, 
                                including threefold the damages; or
                                    ``(IV) obtain such other relief as 
                                the court may consider to be 
                                appropriate.
                            ``(ii) Notice.--
                                    ``(I) In general.--Before filing an 
                                action under clause (i), the attorney 
                                general of the State involved shall 
                                provide to the Federal Trade 
                                Commission--
                                            ``(aa) written notice of 
                                        that action; and
                                            ``(bb) a copy of the 
                                        complaint for that action.
                                    ``(II) Exemption.--Subclause (I) 
                                shall not apply with respect to the 
                                filing of an action by an attorney 
                                general of a State under this 
                                paragraph, if the attorney general 
                                determines that it is not feasible to 
                                provide the notice described in that 
                                subclause before filing of the action. 
                                In such case, the attorney general of a 
                                State shall provide notice and a copy 
                                of the complaint to the Federal Trade 
                                Commission at the same time as the 
                                attorney general files the action.
                    ``(B) Intervention.--
                            ``(i) In general.--On receiving notice 
                        under subparagraph (A)(ii), the Federal Trade 
                        Commission shall have the right to intervene in 
                        the action that is the subject of the notice.
                            ``(ii) Effect of intervention.--If the 
                        Federal Trade Commission intervenes in an 
                        action under subparagraph (A), it shall have 
                        the right--
                                    ``(I) to be heard with respect to 
                                any matter that arises in that action; 
                                and
                                    ``(II) to file a petition for 
                                appeal.
                    ``(C) Construction.--For purposes of bringing any 
                civil action under subparagraph (A), nothing in this 
                subsection shall be construed to prevent an attorney 
                general of a State from exercising the powers conferred 
                on the attorney general by the laws of that State to--
                            ``(i) conduct investigations;
                            ``(ii) administer oaths or affirmations; or
                            ``(iii) compel the attendance of witnesses 
                        or the production of documentary and other 
                        evidence.
                    ``(D) Actions by the commission.--In any case in 
                which an action is instituted by or on behalf of the 
                Federal Trade Commission for a violation of paragraph 
                (1), a State may not, during the pendency of that 
                action, institute an action under subparagraph (A) for 
                the same violation against any defendant named in the 
                complaint in that action.
                    ``(E) Venue.--Any action brought under subparagraph 
                (A) may be brought in the district court of the United 
                States that meets applicable requirements relating to 
                venue under section 1391 of title 28, United States 
                Code.
                    ``(F) Service of process.--In an action brought 
                under subparagraph (A), process may be served in any 
                district in which the defendant--
                            ``(i) is an inhabitant; or
                            ``(ii) may be found.
                    ``(G) Measurement of damages.--In any action under 
                this paragraph to enforce a cause of action under this 
                subsection in which there has been a determination that 
                a defendant has violated a provision of this 
                subsection, damages may be proved and assessed in the 
                aggregate by statistical or sampling methods, by the 
                computation of illegal overcharges or by such other 
                reasonable system of estimating aggregate damages as 
                the court in its discretion may permit without the 
                necessity of separately proving the individual claim 
                of, or amount of damage to, persons on whose behalf the 
                suit was brought.
                    ``(H) Exclusion on duplicative relief.--The 
                district court shall exclude from the amount of 
                monetary relief awarded in an action under this 
                paragraph brought by the attorney general of a State 
                any amount of monetary relief which duplicates amounts 
                which have been awarded for the same injury.
            ``(7) Effect on antitrust laws.--Nothing in this subsection 
        shall be construed to modify, impair, or supersede the 
        operation of the antitrust laws. For the purpose of this 
        subsection, the term `antitrust laws' has the meaning given it 
        in the first section of the Clayton Act, except that it 
        includes section 5 of the Federal Trade Commission Act to the 
        extent that such section 5 applies to unfair methods of 
        competition.
            ``(8) Manufacturer.--In this subsection, the term 
        `manufacturer' means any entity, including any affiliate or 
        licensee of that entity, that is engaged in--
                    ``(A) the production, preparation, propagation, 
                compounding, conversion, or processing of a 
                prescription drug, either directly or indirectly by 
                extraction from substances of natural origin, or 
                independently by means of chemical synthesis, or by a 
                combination of extraction and chemical synthesis; or
                    ``(B) the packaging, repackaging, labeling, 
                relabeling, or distribution of a prescription drug.''.
            (2) Prohibited acts.--The Federal Food, Drug, and Cosmetic 
        Act is amended--
                    (A) in section 301 (21 U.S.C. 331), by striking 
                paragraph (aa) and inserting the following:
    ``(aa)(1) The sale or trade by a pharmacist, or by a business 
organization of which the pharmacist is a part, of a qualifying drug 
that under section 804(a)(2)(A) was imported by the pharmacist, other 
than--
            ``(A) a sale at retail made pursuant to dispensing the drug 
        to a customer of the pharmacist or organization; or
            ``(B) a sale or trade of the drug to a pharmacy or a 
        wholesaler registered to import drugs under section 804.
    ``(2) The sale or trade by an individual of a qualifying drug that 
under section 804(a)(2)(B) was imported by the individual.
    ``(3) The making of a materially false, fictitious, or fraudulent 
statement or representation, or a material omission, in a notice under 
clause (i) of section 804(g)(2)(B) or in an application required under 
section 804(g)(2)(F), or the failure to submit such a notice or 
application.
    ``(4) The importation of a drug in violation of a registration 
condition or other requirement under section 804, the falsification of 
any record required to be maintained, or provided to the Secretary, 
under such section, or the violation of any registration condition or 
other requirement under such section.''; and
                    (B) in section 303(a) (21 U.S.C. 333(a)), by 
                striking paragraph (6) and inserting the following:
    ``(6) Notwithstanding subsection (a), any person that knowingly 
violates section 301(i) (2) or (3) or section 301(aa)(4) shall be 
imprisoned not more than 10 years, or fined in accordance with title 
18, United States Code, or both.''.
            (3) Amendment of certain provisions.--
                    (A) In general.--Section 801 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 381) is amended by 
                striking subsection (g) and inserting the following:
    ``(g) With respect to a prescription drug that is imported or 
offered for import into the United States by an individual who is not 
in the business of such importation, that is not shipped by a 
registered exporter under section 804, and that is refused admission 
under subsection (a), the Secretary shall notify the individual that--
            ``(1) the drug has been refused admission because the drug 
        was not a lawful import under section 804;
            ``(2) the drug is not otherwise subject to a waiver of the 
        requirements of subsection (a);
            ``(3) the individual may under section 804 lawfully import 
        certain prescription drugs from exporters registered with the 
        Secretary under section 804; and
            ``(4) the individual can find information about such 
        importation, including a list of registered exporters, on the 
        Internet website of the Food and Drug Administration or through 
        a toll-free telephone number required under section 804.''.
                    (B) Establishment registration.--Section 510(i) of 
                the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                360(i)) is amended in paragraph (1) by inserting after 
                ``import into the United States'' the following: ``, 
                including a drug that is, or may be, imported or 
                offered for import into the United States under section 
                804,''.
                    (C) Effective date.--The amendments made by this 
                subsection shall take effect on the date that is 90 
                days after the date of enactment of this Act.
            (4) Exhaustion.--
                    (A) In general.--Section 271 of title 35, United 
                States Code, is amended--
                            (i) by redesignating subsections (h) and 
                        (i) as (i) and (j), respectively; and
                            (ii) by inserting after subsection (g) the 
                        following:
    ``(h) It shall not be an act of infringement to use, offer to sell, 
or sell within the United States or to import into the United States 
any patented invention under section 804 of the Federal Food, Drug, and 
Cosmetic Act that was first sold abroad by or under authority of the 
owner or licensee of such patent.''.
                    (B) Rule of construction.--Nothing in the amendment 
                made by subparagraph (A) shall be construed to affect 
                the ability of a patent owner or licensee to enforce 
                their patent, subject to such amendment.
            (5) Effect of section 804.--
                    (A) In general.--Section 804 of the Federal Food, 
                Drug, and Cosmetic Act, as added by subsection (a), 
                shall permit the importation of qualifying drugs (as 
                defined in such section 804) into the United States 
                without regard to the status of the issuance of 
                implementing regulations--
                            (i) from exporters registered under such 
                        section 804 on the date that is 90 days after 
                        the date of enactment of this Act; and
                            (ii) from permitted countries, as defined 
                        in such section 804, by importers registered 
                        under such section 804 on the date that is 1 
                        year after the date of enactment of this Act.
                    (B) Review of registration by certain exporters.--
                            (i) Review priority.--In the review of 
                        registrations submitted under subsection (b) of 
                        such section 804, registrations submitted by 
                        entities in Canada that are significant 
                        exporters of prescription drugs to individuals 
                        in the United States as of the date of 
                        enactment of this Act will have priority during 
                        the 90-day period that begins on such date of 
                        enactment.
                            (ii) Period for review.--During such 90-day 
                        period, the reference in subsection (b)(2)(A) 
                        of such section 804 to 90 days (relating to 
                        approval or disapproval of registrations) is, 
                        as applied to such entities, deemed to be 30 
                        days.
                            (iii) Limitation.--That an exporter in 
                        Canada exports, or has exported, prescription 
                        drugs to individuals in the United States on or 
                        before the date that is 90 days after the date 
                        of enactment of this Act shall not serve as a 
                        basis, in whole or in part, for disapproving a 
                        registration under such section 804 from the 
                        exporter.
                            (iv) First year limit on number of 
                        exporters.--During the 1-year period beginning 
                        on the date of enactment of this Act, the 
                        Secretary of Health and Human Services 
                        (referred to in this section as the 
                        ``Secretary'') may limit the number of 
                        registered exporters under such section 804 to 
                        not less than 50, so long as the Secretary 
                        gives priority to those exporters with 
                        demonstrated ability to process a high volume 
                        of shipments of drugs to individuals in the 
                        United States.
                            (v) Second year limit on number of 
                        exporters.--During the 1-year period beginning 
                        on the date that is 1 year after the date of 
                        enactment of this Act, the Secretary may limit 
                        the number of registered exporters under such 
                        section 804 to not less than 100, so long as 
                        the Secretary gives priority to those exporters 
                        with demonstrated ability to process a high 
                        volume of shipments of drugs to individuals in 
                        the United States.
                            (vi) Further limit on number of 
                        exporters.--During any 1-year period beginning 
                        on a date that is 2 or more years after the 
                        date of enactment of this Act, the Secretary 
                        may limit the number of registered exporters 
                        under such section 804 to not less than 25 more 
                        than the number of such exporters during the 
                        previous 1-year period, so long as the 
                        Secretary gives priority to those exporters 
                        with demonstrated ability to process a high 
                        volume of shipments of drugs to individuals in 
                        the United States.
                    (C) Limits on number of importers.--
                            (i) First year limit on number of 
                        importers.--During the 1-year period beginning 
                        on the date that is 1 year after the date of 
                        enactment of this Act, the Secretary may limit 
                        the number of registered importers under such 
                        section 804 to not less than 100 (of which at 
                        least a significant number shall be groups of 
                        pharmacies, to the extent feasible given the 
                        applications submitted by such groups), so long 
                        as the Secretary gives priority to those 
                        importers with demonstrated ability to process 
                        a high volume of shipments of drugs imported 
                        into the United States.
                            (ii) Second year limit on number of 
                        importers.--During the 1-year period beginning 
                        on the date that is 2 years after the date of 
                        enactment of this Act, the Secretary may limit 
                        the number of registered importers under such 
                        section 804 to not less than 200 (of which at 
                        least a significant number shall be groups of 
                        pharmacies, to the extent feasible given the 
                        applications submitted by such groups), so long 
                        as the Secretary gives priority to those 
                        importers with demonstrated ability to process 
                        a high volume of shipments of drugs into the 
                        United States.
                            (iii) Further limit on number of 
                        importers.--During any 1-year period beginning 
                        on a date that is 3 or more years after the 
                        date of enactment of this Act, the Secretary 
                        may limit the number of registered importers 
                        under such section 804 to not less than 50 more 
                        (of which at least a significant number shall 
                        be groups of pharmacies, to the extent feasible 
                        given the applications submitted by such 
                        groups) than the number of such importers 
                        during the previous 1-year period, so long as 
                        the Secretary gives priority to those importers 
                        with demonstrated ability to process a high 
                        volume of shipments of drugs to the United 
                        States.
                    (D) Notices for drugs for import from canada.--The 
                notice with respect to a qualifying drug introduced for 
                commercial distribution in Canada as of the date of 
                enactment of this Act that is required under subsection 
                (g)(2)(B)(i) of such section 804 shall be submitted to 
                the Secretary not later than 30 days after the date of 
                enactment of this Act if--
                            (i) the U.S. label drug (as defined in such 
                        section 804) for the qualifying drug is 1 of 
                        the 100 prescription drugs with the highest 
                        dollar volume of sales in the United States 
                        based on the 12 calendar month period most 
                        recently completed before the date of enactment 
                        of this Act; or
                            (ii) the notice is a notice under 
                        subsection (g)(2)(B)(i)(II) of such section 
                        804.
                    (E) Notice for drugs for import from other 
                countries.--The notice with respect to a qualifying 
                drug introduced for commercial distribution in a 
                permitted country other than Canada as of the date of 
                enactment of this Act that is required under subsection 
                (g)(2)(B)(i) of such section 804 shall be submitted to 
                the Secretary not later than 180 days after the date of 
                enactment of this Act if--
                            (i) the U.S. label drug for the qualifying 
                        drug is 1 of the 100 prescription drugs with 
                        the highest dollar volume of sales in the 
                        United States based on the 12 calendar month 
                        period that is first completed on the date that 
                        is 120 days after the date of enactment of this 
                        Act; or
                            (ii) the notice is a notice under 
                        subsection (g)(2)(B)(i)(II) of such section 
                        804.
                    (F) Notice for other drugs for import.--
                            (i) Guidance on submission dates.--The 
                        Secretary shall by guidance establish a series 
                        of submission dates for the notices under 
                        subsection (g)(2)(B)(i) of such section 804 
                        with respect to qualifying drugs introduced for 
                        commercial distribution as of the date of 
                        enactment of this Act and that are not required 
                        to be submitted under paragraph (4) or (5).
                            (ii) Consistent and efficient use of 
                        resources.--The Secretary shall establish the 
                        dates described under subparagraph (A) so that 
                        such notices described under subparagraph (A) 
                        are submitted and reviewed at a rate that 
                        allows consistent and efficient use of the 
                        resources and staff available to the Secretary 
                        for such reviews. The Secretary may condition 
                        the requirement to submit such a notice, and 
                        the review of such a notice, on the submission 
                        by a registered exporter or a registered 
                        importer to the Secretary of a notice that such 
                        exporter or importer intends to import such 
                        qualifying drug to the United States under such 
                        section 804.
                            (iii) Priority for drugs with higher 
                        sales.--The Secretary shall establish the dates 
                        described under subparagraph (A) so that the 
                        Secretary reviews the notices described under 
                        such subparagraph with respect to qualifying 
                        drugs with higher dollar volume of sales in the 
                        United States before the notices with respect 
                        to drugs with lower sales in the United States.
                    (G) Notices for drugs approved after effective 
                date.--The notice required under subsection 
                (g)(2)(B)(i) of such section 804 for a qualifying drug 
                first introduced for commercial distribution in a 
                permitted country (as defined in such section 804) 
                after the date of enactment of this Act shall be 
                submitted to and reviewed by the Secretary as provided 
                under subsection (g)(2)(B) of such section 804, without 
                regard to paragraph (4), (5), or (6).
                    (H) Report.--Beginning with the first full fiscal 
                year after the date of enactment of this Act, not later 
                than 90 days after the end of each fiscal year during 
                which the Secretary reviews a notice referred to in 
                subparagraph (D), (E), or (F), the Secretary shall 
                submit a report to Congress concerning the progress of 
                the Food and Drug Administration in reviewing the 
                notices referred to in such subparagraphs.
                    (I) User fees.--
                            (i) Exporters.--When establishing an 
                        aggregate total of fees to be collected from 
                        exporters under subsection (f)(2) of such 
                        section 804, the Secretary shall, under 
                        subsection (f)(3)(C)(i) of such section 804, 
                        estimate the total price of drugs imported 
                        under subsection (a) of such section 804 into 
                        the United States by registered exporters 
                        during the first fiscal year in which this Act 
                        takes effect to be an amount equal to the 
                        amount which bears the same ratio to 
                        $1,000,000,000 as the number of days in such 
                        fiscal year during which this Act is effective 
                        bears to 365.
                            (ii) Importers.--When establishing an 
                        aggregate total of fees to be collected from 
                        importers under subsection (e)(2) of such 
                        section 804, the Secretary shall, under 
                        subsection (e)(3)(C)(i) of such section 804, 
                        estimate the total price of drugs imported 
                        under subsection (a) of such section 804 into 
                        the United States by registered importers 
                        during--
                                    (I) the first fiscal year in which 
                                this Act takes effect to be an amount 
                                equal to the amount which bears the 
                                same ratio to $1,000,000,000 as the 
                                number of days in such fiscal year 
                                during which this Act is effective 
                                bears to 365; and
                                    (II) the second fiscal year in 
                                which this Act is in effect to be 
                                $3,000,000,000.
                            (iii) Second year adjustment.--
                                    (I) Reports.--Not later than 
                                February 20 of the second fiscal year 
                                in which this Act is in effect, 
                                registered importers shall report to 
                                the Secretary the total price and the 
                                total volume of drugs imported to the 
                                United States by the importer during 
                                the 4-month period from October 1 
                                through January 31 of such fiscal year.
                                    (II) Reestimate.--Notwithstanding 
                                subsection (e)(3)(C)(ii) of such 
                                section 804 or subparagraph (B), the 
                                Secretary shall reestimate the total 
                                price of qualifying drugs imported 
                                under subsection (a) of such section 
                                804 into the United States by 
                                registered importers during the second 
                                fiscal year in which this Act is in 
                                effect. Such reestimate shall be equal 
                                to--
                                            (aa) the total price of 
                                        qualifying drugs imported by 
                                        each importer as reported under 
                                        clause (i); multiplied by
                                            (bb) 3.
                                    (III) Adjustment.--The Secretary 
                                shall adjust the fee due on April 1 of 
                                the second fiscal year in which this 
                                Act is in effect, from each importer so 
                                that the aggregate total of fees 
                                collected under subsection (e)(2) for 
                                such fiscal year does not exceed the 
                                total price of qualifying drugs 
                                imported under subsection (a) of such 
                                section 804 into the United States by 
                                registered importers during such fiscal 
                                year as reestimated under clause (ii).
                            (iv) Failure to pay fees.--Notwithstanding 
                        any other provision of this subsection, the 
                        Secretary may prohibit a registered importer or 
                        exporter that is required to pay user fees 
                        under subsection (e) or (f) of such section 804 
                        and that fails to pay such fees within 30 days 
                        after the date on which it is due, from 
                        importing or offering for importation a 
                        qualifying drug under such section 804 until 
                        such fee is paid.
                            (v) Annual report.--
                                    (I) Food and drug administration.--
                                Not later than 180 days after the end 
                                of each fiscal year during which fees 
                                are collected under subsection (e), 
                                (f), or (g)(2)(B)(iv) of such section 
                                804, the Secretary shall prepare and 
                                submit to the House of Representatives 
                                and the Senate a report on the 
                                implementation of the authority for 
                                such fees during such fiscal year and 
                                the use, by the Food and Drug 
                                Administration, of the fees collected 
                                for the fiscal year for which the 
                                report is made and credited to the Food 
                                and Drug Administration.
                                    (II) Customs and border control.--
                                Not later than 180 days after the end 
                                of each fiscal year during which fees 
                                are collected under subsection (e) or 
                                (f) of such section 804, the Secretary 
                                of Homeland Security, in consultation 
                                with the Secretary of the Treasury, 
                                shall prepare and submit to the House 
                                of Representatives and the Senate a 
                                report on the use, by the Bureau of 
                                Customs and Border Protection, of the 
                                fees, if any, transferred by the 
                                Secretary to the Bureau of Customs and 
                                Border Protection for the fiscal year 
                                for which the report is made.
                    (J) Special rule regarding importation by 
                individuals.--
                            (i) In general.--Notwithstanding any 
                        provision of this Act (or an amendment made by 
                        this Act), the Secretary shall expedite the 
                        designation of any additional countries from 
                        which an individual may import a qualifying 
                        drug into the United States under such section 
                        804 if any action implemented by the Government 
                        of Canada has the effect of limiting or 
                        prohibiting the importation of qualifying drugs 
                        into the United States from Canada.
                            (ii) Timing and criteria.--The Secretary 
                        shall designate such additional countries under 
                        clause (i)--
                                    (I) not later than 6 months after 
                                the date of the action by the 
                                Government of Canada described under 
                                such subparagraph; and
                                    (II) using the criteria described 
                                under subsection (a)(4)(D)(i)(II) of 
                                such section 804.
            (6) Implementation of section 804.--
                    (A) Interim rule.--The Secretary may promulgate an 
                interim rule for implementing section 804 of the 
                Federal Food, Drug, and Cosmetic Act, as added by 
                subsection (a) of this section.
                    (B) No notice of proposed rulemaking.--The interim 
                rule described under paragraph (1) may be developed and 
                promulgated by the Secretary without providing general 
                notice of proposed rulemaking.
                    (C) Final rule.--Not later than 1 year after the 
                date on which the Secretary promulgates an interim rule 
                under subparagraph (A), the Secretary shall, in 
                accordance with procedures under section 553 of title 
                5, United States Code, promulgate a final rule for 
                implementing such section 804, which may incorporate by 
                reference provisions of the interim rule provided for 
                under subparagraph (A), to the extent that such 
                provisions are not modified.
            (7) Consumer education.--The Secretary shall carry out 
        activities that educate consumers--
                    (A) with regard to the availability of qualifying 
                drugs for import for personal use from an exporter 
                registered with and approved by the Food and Drug 
                Administration under section 804 of the Federal Food, 
                Drug, and Cosmetic Act, as added by this section, 
                including information on how to verify whether an 
                exporter is registered and approved by use of the 
                Internet website of the Food and Drug Administration 
                and the toll-free telephone number required by this 
                Act;
                    (B) that drugs that consumers attempt to import 
                from an exporter that is not registered with and 
                approved by the Food and Drug Administration can be 
                seized by the United States Customs Service and 
                destroyed, and that such drugs may be counterfeit, 
                unapproved, unsafe, or ineffective;
                    (C) with regard to the suspension and termination 
                of any registration of a registered importer or 
                exporter under such section 804; and
                    (D) with regard to the availability at domestic 
                retail pharmacies of qualifying drugs imported under 
                such section 804 by domestic wholesalers and pharmacies 
                registered with and approved by the Food and Drug 
                Administration.
            (8) Effect on administration practices.--Notwithstanding 
        any provision of this Act (and the amendments made by this 
        Act), the practices and policies of the Food and Drug 
        Administration and Bureau of Customs and Border Protection, in 
        effect on January 1, 2004, with respect to the importation of 
        prescription drugs into the United States by an individual, on 
        the person of such individual, for personal use, shall remain 
        in effect.
            (9) Report to congress.--The Federal Trade Commission 
        shall, on an annual basis, submit to Congress a report that 
        describes any action taken during the period for which the 
        report is being prepared to enforce the provisions of section 
        804(n) of the Federal Food, Drug, and Cosmetic Act (as added by 
        this Act), including any pending investigations or civil 
        actions under such section.
    (e) Disposition of Certain Drugs Denied Admission Into United 
States.--
            (1) In general.--Chapter VIII of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by section 
        4, is further amended by adding at the end the following 
        section:

``SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION.

    ``(a) In General.--The Secretary of Homeland Security shall deliver 
to the Secretary a shipment of drugs that is imported or offered for 
import into the United States if--
            ``(1) the shipment has a declared value of less than 
        $10,000; and
            ``(2)(A) the shipping container for such drugs does not 
        bear the markings required under section 804(d)(2); or
            ``(B) the Secretary has requested delivery of such shipment 
        of drugs.
    ``(b) No Bond or Export.--Section 801(b) does not authorize the 
delivery to the owner or consignee of drugs delivered to the Secretary 
under subsection (a) pursuant to the execution of a bond, and such 
drugs may not be exported.
    ``(c) Destruction of Violative Shipment.--The Secretary shall 
destroy a shipment of drugs delivered by the Secretary of Homeland 
Security to the Secretary under subsection (a) if--
            ``(1) in the case of drugs that are imported or offered for 
        import from a registered exporter under section 804, the drugs 
        are in violation of any standard described in section 
        804(g)(5); or
            ``(2) in the case of drugs that are not imported or offered 
        for import from a registered exporter under section 804, the 
        drugs are in violation of a standard referred to in section 
        801(a) or 801(d)(1).
    ``(d) Certain Procedures.--
            ``(1) In general.--The delivery and destruction of drugs 
        under this section may be carried out without notice to the 
        importer, owner, or consignee of the drugs except as required 
        by section 801(g) or section 804(i)(2). The issuance of 
        receipts for the drugs, and recordkeeping activities regarding 
        the drugs, may be carried out on a summary basis.
            ``(2) Objective of procedures.--Procedures promulgated 
        under paragraph (1) shall be designed toward the objective of 
        ensuring that, with respect to efficiently utilizing Federal 
        resources available for carrying out this section, a 
        substantial majority of shipments of drugs subject to described 
        in subsection (c) are identified and destroyed.
    ``(e) Evidence Exception.--Drugs may not be destroyed under 
subsection (c) to the extent that the Attorney General of the United 
States determines that the drugs should be preserved as evidence or 
potential evidence with respect to an offense against the United 
States.
    ``(f) Rule of Construction.--This section may not be construed as 
having any legal effect on applicable law with respect to a shipment of 
drugs that is imported or offered for import into the United States and 
has a declared value equal to or greater than $10,000.''.
            (2) Procedures.--Procedures for carrying out section 805 of 
        the Federal Food, Drug, and Cosmetic Act, as added by 
        subsection (a), shall be established not later than 90 days 
        after the date of the enactment of this Act.
            (3) Effective date.--The amendments made by this section 
        shall take effect on the date that is 90 days after the date of 
        enactment of this Act.
    (f) Wholesale Distribution of Drugs; Statements Regarding Prior 
Sale, Purchase, or Trade.--
            (1) Striking of exemptions; applicability to registered 
        exporters.--Section 503(e) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 353(e)) is amended--
                    (A) in paragraph (1)--
                            (i) by striking ``and who is not the 
                        manufacturer or an authorized distributor of 
                        record of such drug'';
                            (ii) by striking ``to an authorized 
                        distributor of record or''; and
                            (iii) by striking subparagraph (B) and 
                        inserting the following:
    ``(B) The fact that a drug subject to subsection (b) is exported 
from the United States does not with respect to such drug exempt any 
person that is engaged in the business of the wholesale distribution of 
the drug from providing the statement described in subparagraph (A) to 
the person that receives the drug pursuant to the export of the drug.
    ``(C)(i) The Secretary shall by regulation establish requirements 
that supersede subparagraph (A) (referred to in this subparagraph as 
`alternative requirements') to identify the chain of custody of a drug 
subject to subsection (b) from the manufacturer of the drug throughout 
the wholesale distribution of the drug to a pharmacist who intends to 
sell the drug at retail if the Secretary determines that the 
alternative requirements, which may include standardized anti-
counterfeiting or track-and-trace technologies, will identify such 
chain of custody or the identity of the discrete package of the drug 
from which the drug is dispensed with equal or greater certainty to the 
requirements of subparagraph (A), and that the alternative requirements 
are economically and technically feasible.
    ``(ii) When the Secretary promulgates a final rule to establish 
such alternative requirements, the final rule in addition shall, with 
respect to the registration condition established in clause (i) of 
section 804(c)(3)(B), establish a condition equivalent to the 
alternative requirements, and such equivalent condition may be met in 
lieu of the registration condition established in such clause (i).'';
                    (B) in paragraph (2)(A), by adding at the end the 
                following: ``The preceding sentence may not be 
                construed as having any applicability with respect to a 
                registered exporter under section 804.''; and
                    (C) in paragraph (3), by striking ``and subsection 
                (d)--'' in the matter preceding subparagraph (A) and 
                all that follows through ``the term `wholesale 
                distribution' means'' in subparagraph (B) and inserting 
                the following: ``and subsection (d), the term 
                `wholesale distribution' means''.
            (2) Conforming amendment.--Section 503(d) of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by 
        adding at the end the following:
    ``(4) Each manufacturer of a drug subject to subsection (b) shall 
maintain at its corporate offices a current list of the authorized 
distributors of record of such drug.
    ``(5) For purposes of this subsection, the term `authorized 
distributors of record' means those distributors with whom a 
manufacturer has established an ongoing relationship to distribute such 
manufacturer's products.''.
            (3) Effective date.--
                    (A) In general.--The amendments made by 
                subparagraphs (A) and (C) of paragraph (1) and by 
                paragraph (2) shall take effect on January 1, 2012.
                    (B) Drugs imported by registered importers under 
                section 804.--Notwithstanding subparagraph (A), the 
                amendments made by subparagraphs (A) and (C) of 
                paragraph (1) and by paragraph (2) shall take effect on 
                the date that is 90 days after the date of enactment of 
                this Act with respect to qualifying drugs imported 
                under section 804 of the Federal Food, Drug, and 
                Cosmetic Act, as added by subsection (d).
                    (C) Effect with respect to registered exporters.--
                The amendment made by paragraph (1)(B) shall take 
                effect on the date that is 90 days after the date of 
                enactment of this Act.
                    (D) Alternative requirements.--The Secretary shall 
                issue regulations to establish the alternative 
                requirements, referred to in the amendment made by 
                paragraph (1)(A), that take effect not later than 
                January 1, 2012.
                    (E) Intermediate requirements.--The Secretary shall 
                by regulation require the use of standardized anti-
                counterfeiting or track-and-trace technologies on 
                prescription drugs at the case and pallet level 
                effective not later than 1 year after the date of 
                enactment of this Act.
                    (F) Additional requirements.--
                            (i) In general.--Notwithstanding any other 
                        provision of this subsection, the Secretary 
                        shall, not later than 18 months after the date 
                        of enactment of this Act, require that the 
                        packaging of any prescription drug 
                        incorporates--
                                    (I) a standardized numerical 
                                identifier unique to each package of 
                                such drug, applied at the point of 
                                manufacturing and repackaging (in which 
                                case the numerical identifier shall be 
                                linked to the numerical identifier 
                                applied at the point of manufacturing); 
                                and
                                    (II)(aa) overt optically variable 
                                counterfeit-resistant technologies 
                                that--
                                            (AA) are visible to the 
                                        naked eye, providing for visual 
                                        identification of product 
                                        authenticity without the need 
                                        for readers, microscopes, 
                                        lighting devices, or scanners;
                                            (BB) are similar to that 
                                        used by the Bureau of Engraving 
                                        and Printing to secure United 
                                        States currency;
                                            (CC) are manufactured and 
                                        distributed in a highly secure, 
                                        tightly controlled environment; 
                                        and
                                            (DD) incorporate additional 
                                        layers of nonvisible convert 
                                        security features up to and 
                                        including forensic capability, 
                                        as described in subparagraph 
                                        (B); or
                                    (bb) technologies that have a 
                                function of security comparable to that 
                                described in item (aa), as determined 
                                by the Secretary.
                            (ii) Standards for packaging.--For the 
                        purpose of making it more difficult to 
                        counterfeit the packaging of drugs subject to 
                        this paragraph, the manufacturers of such drugs 
                        shall incorporate the technologies described in 
                        clause (i) into at least 1 additional element 
                        of the physical packaging of the drugs, 
                        including blister packs, shrink wrap, package 
                        labels, package seals, bottles, and boxes.
    (g) Internet Sales of Prescription Drugs.--
            (1) In general.--Chapter V of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
        after section 503B the following:

``SEC. 503C. INTERNET SALES OF PRESCRIPTION DRUGS.

    ``(a) Requirements Regarding Information on Internet Site.--
            ``(1) In general.--A person may not dispense a prescription 
        drug pursuant to a sale of the drug by such person if--
                    ``(A) the purchaser of the drug submitted the 
                purchase order for the drug, or conducted any other 
                part of the sales transaction for the drug, through an 
                Internet site;
                    ``(B) the person dispenses the drug to the 
                purchaser by mailing or shipping the drug to the 
                purchaser; and
                    ``(C) such site, or any other Internet site used by 
                such person for purposes of sales of a prescription 
                drug, fails to meet each of the requirements specified 
                in paragraph (2), other than a site or pages on a site 
                that--
                            ``(i) are not intended to be accessed by 
                        purchasers or prospective purchasers; or
                            ``(ii) provide an Internet information 
                        location tool within the meaning of section 
                        231(e)(5) of the Communications Act of 1934 (47 
                        U.S.C. 231(e)(5)).
            ``(2) Requirements.--With respect to an Internet site, the 
        requirements referred to in subparagraph (C) of paragraph (1) 
        for a person to whom such paragraph applies are as follows:
                    ``(A) Each page of the site shall include either 
                the following information or a link to a page that 
                provides the following information:
                            ``(i) The name of such person.
                            ``(ii) Each State in which the person is 
                        authorized by law to dispense prescription 
                        drugs.
                            ``(iii) The address and telephone number of 
                        each place of business of the person with 
                        respect to sales of prescription drugs through 
                        the Internet, other than a place of business 
                        that does not mail or ship prescription drugs 
                        to purchasers.
                            ``(iv) The name of each individual who 
                        serves as a pharmacist for prescription drugs 
                        that are mailed or shipped pursuant to the 
                        site, and each State in which the individual is 
                        authorized by law to dispense prescription 
                        drugs.
                            ``(v) If the person provides for medical 
                        consultations through the site for purposes of 
                        providing prescriptions, the name of each 
                        individual who provides such consultations; 
                        each State in which the individual is licensed 
                        or otherwise authorized by law to provide such 
                        consultations or practice medicine; and the 
                        type or types of health professions for which 
                        the individual holds such licenses or other 
                        authorizations.
                    ``(B) A link to which paragraph (1) applies shall 
                be displayed in a clear and prominent place and manner, 
                and shall include in the caption for the link the words 
                `licensing and contact information'.
    ``(b) Internet Sales Without Appropriate Medical Relationships.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        person may not dispense a prescription drug, or sell such a 
        drug, if--
                    ``(A) for purposes of such dispensing or sale, the 
                purchaser communicated with the person through the 
                Internet;
                    ``(B) the patient for whom the drug was dispensed 
                or purchased did not, when such communications began, 
                have a prescription for the drug that is valid in the 
                United States;
                    ``(C) pursuant to such communications, the person 
                provided for the involvement of a practitioner, or an 
                individual represented by the person as a practitioner, 
                and the practitioner or such individual issued a 
                prescription for the drug that was purchased;
                    ``(D) the person knew, or had reason to know, that 
                the practitioner or the individual referred to in 
                subparagraph (C) did not, when issuing the 
                prescription, have a qualifying medical relationship 
                with the patient; and
                    ``(E) the person received payment for the 
                dispensing or sale of the drug.
        For purposes of subparagraph (E), payment is received if money 
        or other valuable consideration is received.
            ``(2) Exceptions.--Paragraph (1) does not apply to--
                    ``(A) the dispensing or selling of a prescription 
                drug pursuant to telemedicine practices sponsored by--
                            ``(i) a hospital that has in effect a 
                        provider agreement under title XVIII of the 
                        Social Security Act (relating to the Medicare 
                        program); or
                            ``(ii) a group practice that has not fewer 
                        than 100 physicians who have in effect provider 
                        agreements under such title; or
                    ``(B) the dispensing or selling of a prescription 
                drug pursuant to practices that promote the public 
                health, as determined by the Secretary by regulation.
            ``(3) Qualifying medical relationship.--
                    ``(A) In general.--With respect to issuing a 
                prescription for a drug for a patient, a practitioner 
                has a qualifying medical relationship with the patient 
                for purposes of this section if--
                            ``(i) at least one in-person medical 
                        evaluation of the patient has been conducted by 
                        the practitioner; or
                            ``(ii) the practitioner conducts a medical 
                        evaluation of the patient as a covering 
                        practitioner.
                    ``(B) In-person medical evaluation.--A medical 
                evaluation by a practitioner is an in-person medical 
                evaluation for purposes of this section if the 
                practitioner is in the physical presence of the patient 
                as part of conducting the evaluation, without regard to 
                whether portions of the evaluation are conducted by 
                other health professionals.
                    ``(C) Covering practitioner.--With respect to a 
                patient, a practitioner is a covering practitioner for 
                purposes of this section if the practitioner conducts a 
                medical evaluation of the patient at the request of a 
                practitioner who has conducted at least one in-person 
                medical evaluation of the patient and is temporarily 
                unavailable to conduct the evaluation of the patient. A 
                practitioner is a covering practitioner without regard 
                to whether the practitioner has conducted any in-person 
                medical evaluation of the patient involved.
            ``(4) Rules of construction.--
                    ``(A) Individuals represented as practitioners.--A 
                person who is not a practitioner (as defined in 
                subsection (e)(1)) lacks legal capacity under this 
                section to have a qualifying medical relationship with 
                any patient.
                    ``(B) Standard practice of pharmacy.--Paragraph (1) 
                may not be construed as prohibiting any conduct that is 
                a standard practice in the practice of pharmacy.
                    ``(C) Applicability of requirements.--Paragraph (3) 
                may not be construed as having any applicability beyond 
                this section, and does not affect any State law, or 
                interpretation of State law, concerning the practice of 
                medicine.
    ``(c) Actions by States.--
            ``(1) In general.--Whenever an attorney general of any 
        State has reason to believe that the interests of the residents 
        of that State have been or are being threatened or adversely 
        affected because any person has engaged or is engaging in a 
        pattern or practice that violates section 301(l), the State may 
        bring a civil action on behalf of its residents in an 
        appropriate district court of the United States to enjoin such 
        practice, to enforce compliance with such section (including a 
        nationwide injunction), to obtain damages, restitution, or 
        other compensation on behalf of residents of such State, to 
        obtain reasonable attorneys fees and costs if the State 
        prevails in the civil action, or to obtain such further and 
        other relief as the court may deem appropriate.
            ``(2) Notice.--The State shall serve prior written notice 
        of any civil action under paragraph (1) or (5)(B) upon the 
        Secretary and provide the Secretary with a copy of its 
        complaint, except that if it is not feasible for the State to 
        provide such prior notice, the State shall serve such notice 
        immediately upon instituting such action. Upon receiving a 
        notice respecting a civil action, the Secretary shall have the 
        right--
                    ``(A) to intervene in such action;
                    ``(B) upon so intervening, to be heard on all 
                matters arising therein; and
                    ``(C) to file petitions for appeal.
            ``(3) Construction.--For purposes of bringing any civil 
        action under paragraph (1), nothing in this chapter shall 
        prevent an attorney general of a State from exercising the 
        powers conferred on the attorney general by the laws of such 
        State to conduct investigations or to administer oaths or 
        affirmations or to compel the attendance of witnesses or the 
        production of documentary and other evidence.
            ``(4) Venue; service of process.--Any civil action brought 
        under paragraph (1) in a district court of the United States 
        may be brought in the district in which the defendant is found, 
        is an inhabitant, or transacts business or wherever venue is 
        proper under section 1391 of title 28, United States Code. 
        Process in such an action may be served in any district in 
        which the defendant is an inhabitant or in which the defendant 
        may be found.
            ``(5) Actions by other state officials.--
                    ``(A) Nothing contained in this section shall 
                prohibit an authorized State official from proceeding 
                in State court on the basis of an alleged violation of 
                any civil or criminal statute of such State.
                    ``(B) In addition to actions brought by an attorney 
                general of a State under paragraph (1), such an action 
                may be brought by officers of such State who are 
                authorized by the State to bring actions in such State 
                on behalf of its residents.
    ``(d) Effect of Section.--This section shall not apply to a person 
that is a registered exporter under section 804.
    ``(e) General Definitions.--For purposes of this section:
            ``(1) The term `practitioner' means a practitioner referred 
        to in section 503(b)(1) with respect to issuing a written or 
        oral prescription.
            ``(2) The term `prescription drug' means a drug that is 
        described in section 503(b)(1).
            ``(3) The term `qualifying medical relationship', with 
        respect to a practitioner and a patient, has the meaning 
        indicated for such term in subsection (b).
    ``(f) Internet-Related Definitions.--
            ``(1) In general.--For purposes of this section:
                    ``(A) The term `Internet' means collectively the 
                myriad of computer and telecommunications facilities, 
                including equipment and operating software, which 
                comprise the interconnected world-wide network of 
                networks that employ the transmission control protocol/
                internet protocol, or any predecessor or successor 
                protocols to such protocol, to communicate information 
                of all kinds by wire or radio.
                    ``(B) The term `link', with respect to the 
                Internet, means one or more letters, words, numbers, 
                symbols, or graphic items that appear on a page of an 
                Internet site for the purpose of serving, when 
                activated, as a method for executing an electronic 
                command--
                            ``(i) to move from viewing one portion of a 
                        page on such site to another portion of the 
                        page;
                            ``(ii) to move from viewing one page on 
                        such site to another page on such site; or
                            ``(iii) to move from viewing a page on one 
                        Internet site to a page on another Internet 
                        site.
                    ``(C) The term `page', with respect to the 
                Internet, means a document or other file accessed at an 
                Internet site.
                    ``(D)(i) The terms `site' and `address', with 
                respect to the Internet, mean a specific location on 
                the Internet that is determined by Internet Protocol 
                numbers. Such term includes the domain name, if any.
                    ``(ii) The term `domain name' means a method of 
                representing an Internet address without direct 
                reference to the Internet Protocol numbers for the 
                address, including methods that use designations such 
                as `.com', `.edu', `.gov', `.net', or `.org'.
                    ``(iii) The term `Internet Protocol numbers' 
                includes any successor protocol for determining a 
                specific location on the Internet.
            ``(2) Authority of secretary.--The Secretary may by 
        regulation modify any definition under paragraph (1) to take 
        into account changes in technology.
    ``(g) Interactive Computer Service; Advertising.--No provider of an 
interactive computer service, as defined in section 230(f)(2) of the 
Communications Act of 1934 (47 U.S.C. 230(f)(2)), or of advertising 
services shall be liable under this section for dispensing or selling 
prescription drugs in violation of this section on account of another 
person's selling or dispensing such drugs, provided that the provider 
of the interactive computer service or of advertising services does not 
own or exercise corporate control over such person.''.
            (2) Inclusion as prohibited act.--Section 301 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is amended 
        by inserting after paragraph (k) the following:
    ``(l) The dispensing or selling of a prescription drug in violation 
of section 503C.''.
            (3) Internet sales of prescription drugs; consideration by 
        secretary of practices and procedures for certification of 
        legitimate businesses.--In carrying out section 503C of the 
        Federal Food, Drug, and Cosmetic Act (as added by paragraph 
        (1)), the Secretary of Health and Human Services shall take 
        into consideration the practices and procedures of public or 
        private entities that certify that businesses selling 
        prescription drugs through Internet sites are legitimate 
        businesses, including practices and procedures regarding 
        disclosure formats and verification programs.
            (4) Reports regarding internet-related violations of 
        federal and state laws on dispensing of drugs.--
                    (A) In general.--The Secretary of Health and Human 
                Services (referred to in this paragraph as the 
                ``Secretary'') shall, pursuant to the submission of an 
                application meeting the criteria of the Secretary, make 
                an award of a grant or contract to the National 
                Clearinghouse on Internet Prescribing (operated by the 
                Federation of State Medical Boards) for the purpose 
                of--
                            (i) identifying Internet sites that appear 
                        to be in violation of Federal or State laws 
                        concerning the dispensing of drugs;
                            (ii) reporting such sites to State medical 
                        licensing boards and State pharmacy licensing 
                        boards, and to the Attorney General and the 
                        Secretary, for further investigation; and
                            (iii) submitting, for each fiscal year for 
                        which the award under this subsection is made, 
                        a report to the Secretary describing 
                        investigations undertaken with respect to 
                        violations described in clause (i).
                    (B) Authorization of appropriations.--For the 
                purpose of carrying out subparagraph (A), there is 
                authorized to be appropriated $100,000 for each of the 
                first 3 fiscal years in which this section is in 
                effect.
            (5) Effective date.--The amendments made by paragraphs (1) 
        and (2) take effect 90 days after the date of enactment of this 
        Act, without regard to whether a final rule to implement such 
        amendments has been promulgated by the Secretary of Health and 
        Human Services under section 701(a) of the Federal Food, Drug, 
        and Cosmetic Act. The preceding sentence may not be construed 
        as affecting the authority of such Secretary to promulgate such 
        a final rule.
    (h) Prohibiting Payments to Unregistered Foreign Pharmacies.--
            (1) In general.--Section 303 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 333) is amended by adding at the end 
        the following:
    ``(h) Restricted Transactions.--
            ``(1) In general.--The introduction of restricted 
        transactions into a payment system or the completion of 
        restricted transactions using a payment system is prohibited.
            ``(2) Payment system.--
                    ``(A) In general.--The term `payment system' means 
                a system used by a person described in subparagraph (B) 
                to effect a credit transaction, electronic fund 
                transfer, or money transmitting service that may be 
                used in connection with, or to facilitate, a restricted 
                transaction, and includes--
                            ``(i) a credit card system;
                            ``(ii) an international, national, 
                        regional, or local network used to effect a 
                        credit transaction, an electronic fund 
                        transfer, or a money transmitting service; and
                            ``(iii) any other system that is centrally 
                        managed and is primarily engaged in the 
                        transmission and settlement of credit 
                        transactions, electronic fund transfers, or 
                        money transmitting services.
                    ``(B) Persons described.--A person referred to in 
                subparagraph (A) is--
                            ``(i) a creditor;
                            ``(ii) a credit card issuer;
                            ``(iii) a financial institution;
                            ``(iv) an operator of a terminal at which 
                        an electronic fund transfer may be initiated;
                            ``(v) a money transmitting business; or
                            ``(vi) a participant in an international, 
                        national, regional, or local network used to 
                        effect a credit transaction, electronic fund 
                        transfer, or money transmitting service.
            ``(3) Restricted transaction.--The term `restricted 
        transaction' means a transaction or transmittal, on behalf of 
        an individual who places an unlawful drug importation request 
        to any person engaged in the operation of an unregistered 
        foreign pharmacy, of--
                    ``(A) credit, or the proceeds of credit, extended 
                to or on behalf of the individual for the purpose of 
                the unlawful drug importation request (including credit 
                extended through the use of a credit card);
                    ``(B) an electronic fund transfer or funds 
                transmitted by or through a money transmitting 
                business, or the proceeds of an electronic fund 
                transfer or money transmitting service, from or on 
                behalf of the individual for the purpose of the 
                unlawful drug importation request;
                    ``(C) a check, draft, or similar instrument which 
                is drawn by or on behalf of the individual for the 
                purpose of the unlawful drug importation request and is 
                drawn on or payable at or through any financial 
                institution; or
                    ``(D) the proceeds of any other form of financial 
                transaction (identified by the Board by regulation) 
                that involves a financial institution as a payor or 
                financial intermediary on behalf of or for the benefit 
                of the individual for the purpose of the unlawful drug 
                importation request.
            ``(4) Unlawful drug importation request.--The term 
        `unlawful drug importation request' means the request, or 
        transmittal of a request, made to an unregistered foreign 
        pharmacy for a prescription drug by mail (including a private 
        carrier), facsimile, phone, or electronic mail, or by a means 
        that involves the use, in whole or in part, of the Internet.
            ``(5) Unregistered foreign pharmacy.--The term 
        `unregistered foreign pharmacy' means a person in a country 
        other than the United States that is not a registered exporter 
        under section 804.
            ``(6) Other definitions.--
                    ``(A) Credit; creditor; credit card.--The terms 
                `credit', `creditor', and `credit card' have the 
                meanings given the terms in section 103 of the Truth in 
                Lending Act (15 U.S.C. 1602).
                    ``(B) Access device; electronic fund transfer.--The 
                terms `access device' and `electronic fund transfer'--
                            ``(i) have the meaning given the term in 
                        section 903 of the Electronic Fund Transfer Act 
                        (15 U.S.C. 1693a); and
                            ``(ii) the term `electronic fund transfer' 
                        also includes any fund transfer covered under 
                        Article 4A of the Uniform Commercial Code, as 
                        in effect in any State.
                    ``(C) Financial institution.--The term `financial 
                institution'--
                            ``(i) has the meaning given the term in 
                        section 903 of the Electronic Transfer Fund Act 
                        (15 U.S.C. 1693a); and
                            ``(ii) includes a financial institution (as 
                        defined in section 509 of the Gramm-Leach-
                        Bliley Act (15 U.S.C. 6809)).
                    ``(D) Money transmitting business; money 
                transmitting service.--The terms `money transmitting 
                business' and `money transmitting service' have the 
                meaning given the terms in section 5330(d) of title 31, 
                United States Code.
                    ``(E) Board.--The term `Board' means the Board of 
                Governors of the Federal Reserve System.
            ``(7) Policies and procedures required to prevent 
        restricted transactions.--
                    ``(A) Regulations.--The Board shall promulgate 
                regulations requiring--
                            ``(i) an operator of a credit card system;
                            ``(ii) an operator of an international, 
                        national, regional, or local network used to 
                        effect a credit transaction, an electronic fund 
                        transfer, or a money transmitting service;
                            ``(iii) an operator of any other payment 
                        system that is centrally managed and is 
                        primarily engaged in the transmission and 
                        settlement of credit transactions, electronic 
                        transfers or money transmitting services where 
                        at least one party to the transaction or 
                        transfer is an individual; and
                            ``(iv) any other person described in 
                        paragraph (2)(B) and specified by the Board in 
                        such regulations,
                to establish policies and procedures that are 
                reasonably designed to prevent the introduction of a 
                restricted transaction into a payment system or the 
                completion of a restricted transaction using a payment 
                system.
                    ``(B) Requirements for policies and procedures.--In 
                promulgating regulations under subparagraph (A), the 
                Board shall--
                            ``(i) identify types of policies and 
                        procedures, including nonexclusive examples, 
                        that shall be considered to be reasonably 
                        designed to prevent the introduction of 
                        restricted transactions into a payment system 
                        or the completion of restricted transactions 
                        using a payment system; and
                            ``(ii) to the extent practicable, permit 
                        any payment system, or person described in 
                        paragraph (2)(B), as applicable, to choose 
                        among alternative means of preventing the 
                        introduction or completion of restricted 
                        transactions.
                    ``(C) No liability for blocking or refusing to 
                honor restricted transaction.--
                            ``(i) In general.--A payment system, or a 
                        person described in paragraph (2)(B) that is 
                        subject to a regulation issued under this 
                        subsection, and any participant in such payment 
                        system that prevents or otherwise refuses to 
                        honor transactions in an effort to implement 
                        the policies and procedures required under this 
                        subsection or to otherwise comply with this 
                        subsection shall not be liable to any party for 
                        such action.
                            ``(ii) Compliance.--A person described in 
                        paragraph (2)(B) meets the requirements of this 
                        subsection if the person relies on and complies 
                        with the policies and procedures of a payment 
                        system of which the person is a member or in 
                        which the person is a participant, and such 
                        policies and procedures of the payment system 
                        comply with the requirements of the regulations 
                        promulgated under subparagraph (A).
                    ``(D) Enforcement.--
                            ``(i) In general.--This section shall be 
                        enforced by the Federal functional regulators 
                        and the Federal Trade Commission under 
                        applicable law in the manner provided in 
                        section 505(a) of the Gramm-Leach-Bliley Act 
                        (15 U.S.C. 6805(a)).
                            ``(ii) Factors to be considered.--In 
                        considering any enforcement action under this 
                        subsection against a payment system or person 
                        described in paragraph (2)(B), the Federal 
                        functional regulators and the Federal Trade 
                        Commission shall consider the following 
                        factors:
                                    ``(I) The extent to which the 
                                payment system or person knowingly 
                                permits restricted transactions.
                                    ``(II) The history of the payment 
                                system or person in connection with 
                                permitting restricted transactions.
                                    ``(III) The extent to which the 
                                payment system or person has 
                                established and is maintaining policies 
                                and procedures in compliance with 
                                regulations prescribed under this 
                                subsection.
            ``(8) Transactions permitted.--A payment system, or a 
        person described in paragraph (2)(B) that is subject to a 
        regulation issued under this subsection, is authorized to 
        engage in transactions with foreign pharmacies in connection 
        with investigating violations or potential violations of any 
        rule or requirement adopted by the payment system or person in 
        connection with complying with paragraph (7). A payment system, 
        or such a person, and its agents and employees shall not be 
        found to be in violation of, or liable under, any Federal, 
        State or other law by virtue of engaging in any such 
        transaction.
            ``(9) Relation to state laws.--No requirement, prohibition, 
        or liability may be imposed on a payment system, or a person 
        described in paragraph (2)(B) that is subject to a regulation 
        issued under this subsection, under the laws of any State with 
        respect to any payment transaction by an individual because the 
        payment transaction involves a payment to a foreign pharmacy.
            ``(10) Timing of requirements.--A payment system, or a 
        person described in paragraph (2)(B) that is subject to a 
        regulation issued under this subsection, must adopt policies 
        and procedures reasonably designed to comply with any 
        regulations required under paragraph (7) within 60 days after 
        such regulations are issued in final form.''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect on the day that is 90 days after the date of 
        enactment of this Act.
            (3) Implementation.--The Board of Governors of the Federal 
        Reserve System shall promulgate regulations as required by 
        subsection (h)(7) of section 303 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 333), as added by paragraph (1), not 
        later than 90 days after the date of enactment of this Act.
    (i) Importation Exemption Under Controlled Substances Import and 
Export Act.--Section 1006(a)(2) of the Controlled Substances Import and 
Export Act (21 U.S.C. 956(a)(2)) is amended by striking ``not import 
the controlled substance into the United States in an amount that 
exceeds 50 dosage units of the controlled substance.'' and inserting 
``import into the United States not more than 10 dosage units combined 
of all such controlled substances.''.
    (j) Severability.--If any provision of this section, an amendment 
by this section, or the application of such provision or amendment to 
any person or circumstance is held to be unconstitutional, the 
remainder of this section, the amendments made by this section, and the 
application of the provisions of such to any person or circumstance 
shall not affected thereby.

SEC. 3004. BRINGING DOWN PRICES FOR PRESCRIPTION DRUGS BY EXTENDING 
              340B DISCOUNTED DRUG PRICING TO MANAGED CARE 
              ORGANIZATIONS.

    (a) Short Title.--This section may be cited as the ``Drug Rebate 
Equalization Act of 2009''.
    (b) Extension of Prescription Drug Discounts to Enrollees of 
Medicaid Managed Care Organizations.--
            (1) In general.--Section 1903(m)(2)(A) (42 U.S.C. 
        1396b(m)(2)(A)) is amended--
                    (A) in clause (xi), by striking ``and'' at the end;
                    (B) in clause (xii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(xiii) such contract provides that (I) 
                        payment for covered outpatient drugs dispensed 
                        to individuals eligible for medical assistance 
                        who are enrolled with the entity shall be 
                        subject to the same rebate required by the 
                        agreement entered into under section 1927 as 
                        the State is subject to, and (II) capitation 
                        rates paid to the entity shall be based on 
                        actual cost experience related to rebates and 
                        subject to the Federal regulations requiring 
                        actuarially sound rates.''.
            (2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-
        8) is amended--
                    (A) in subsection (d)--
                            (i) in paragraph (1), by adding at the end 
                        the following:
                    ``(C) Notwithstanding the subparagraphs (A) and 
                (B)--
                            ``(i) a Medicaid managed care organization 
                        with a contract under section 1903(m) may 
                        exclude or otherwise restrict coverage of a 
                        covered outpatient drug on the basis of 
                        policies or practices of the organization, such 
                        as those affecting utilization management, 
                        formulary adherence, and cost sharing or 
                        dispute resolution, in lieu of any State 
                        policies or practices relating to the exclusion 
                        or restriction of coverage of such drugs, 
                        provided, however, that any such exclusions and 
                        restrictions of coverage shall be subject to 
                        any contractual requirements and oversight by 
                        the State as contained in the Medicaid managed 
                        care organization's contract with the State, 
                        and the State shall maintain approval authority 
                        over the formulary used by the Medicaid managed 
                        care organization; and
                            ``(ii) nothing in this section or paragraph 
                        (2)(A)(xiii) of section 1903(m) shall be 
                        construed as requiring a Medicaid managed care 
                        organization with a contract under such section 
                        to maintain the same such policies and 
                        practices as those established by the State for 
                        purposes of individuals who receive medical 
                        assistance for covered outpatient drugs on a 
                        fee-for-service basis.''; and
                            (ii) in paragraph (4), by inserting after 
                        subparagraph (E) the following:
                    ``(F) Notwithstanding the preceding subparagraphs 
                of this paragraph, any formulary established by 
                Medicaid managed care organization with a contract 
                under section 1903(m) may be based on positive 
                inclusion of drugs selected by a formulary committee 
                consisting of physicians, pharmacists, and other 
                individuals with appropriate clinical experience as 
                long as drugs excluded from the formulary are available 
                through prior authorization, as described in paragraph 
                (5).''; and
                    (B) in subsection (j), by striking paragraph (1) 
                and inserting the following:
            ``(1) Covered outpatients drugs are not subject to the 
        requirements of this section if such drugs are--
                    ``(A) dispensed by health maintenance 
                organizations, including Medicaid managed care 
                organizations that contract under section 1903(m); and
                    ``(B) subject to discounts under section 340B of 
                the Public Health Service Act.''.
            (3) Reports.--Each State with a contract with a Medicaid 
        managed care organization under section 1903(m) of the Social 
        Security Act (42 U.S.C. 1396b(m)) shall report to the Secretary 
        on a quarterly basis the total amount of rebates in dollars and 
        volume received from manufacturers (as defined in section 
        1927(k)(5) of such Act (42 U.S.C. 1396r-8(k)(5)) for drugs 
        provided to individuals enrolled with such an organization as a 
        result of the amendments made by this section for both brand-
        name and generic drugs. The Secretary shall review the reports 
        submitted by States under this subsection and, after such 
        review, make publically available the aggregate data contained 
        in such reports.
            (4) Effective date.--This section and the amendments made 
        by this section take effect on the date of enactment of this 
        Act and apply to rebate agreements entered into or renewed 
        under section 1927 of the Social Security Act (42 U.S.C. 1396r-
        8) on or after such date.

SEC. 3005. BRINGING DOWN PRICES FOR PRESCRIPTION DRUGS BY INCREASING 
              THE MEDICAID DRUG REBATE.

    Section 1927(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 
1396r-8(c)(1)(B)(i)) is amended--
            (1) in subclause (IV), by striking ``and'' after the 
        semicolon;
            (2) in subclause (V)--
                    (A) by inserting ``and before January 1, 2010,'' 
                after ``1995,''; and
                    (B) by striking the period and inserting ``; and''; 
                and
            (3) by adding at the end the following:
                                    ``(VI) after December 31, 2009, is 
                                20 percent.''.

SEC. 3006. ENDING TAXPAYER SUBSIDIES FOR EXPORTERS.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Commerce shall develop and 
implement a program to impose fees on businesses that benefit from the 
trade promotion activities of the International Trade Administration.
    (b) Budget Neutrality.--The fees shall be imposed in an amount that 
ensures that any Federal expenditures on trade promotion activities of 
the International Trade Administration are offset by the fees collected 
under the program in a budget neutral manner.

SEC. 3007. REDUCING TAXPAYER SUBSIDIES FOR EXPORTERS OF AGRICULTURE 
              COMMODITIES.

    Section 211(c)(1)(A) of the Agricultural Trade Act of 1978 (7 
U.S.C. 5641(c)(1)(A)) is amended by striking ``and $200,000,000 for 
each of fiscal years 2008 through 2012'' and inserting ``$200,000,000 
for each of fiscal years 2008 and 2009, and $160,000,000 for each of 
fiscal years 2010 through 2012''.

SEC. 3008. MAKING COMPANIES PAY WHEN THEY FAIL FDA QUALITY INSPECTIONS.

    (a) In General.--The Secretary shall assess and collect a user fee 
from each facility registered under section 415 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 350d), establishment registered under 
section 510 of such Act (21 U.S.C. 360), and facility described in 
section 351(a)(1)(C) of the Public Health Service Act (42 U.S.C. 
262(1)(C)) for which a followup reinspection is required to ensure 
correction of a violation found by the Secretary during initial 
inspection of the facility or establishment of a good manufacturing 
practices requirement under the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 301 et seq.).
    (b) Payment of Fee.--The user fee required under subsection (a) 
shall be due from a facility or establishment described in such 
subsection upon the reinspection of such facility or establishment, as 
described in subsection (a).
    (c) Amount of User Fee.--The amount of the user fee required under 
subsection (a) shall be established by the Secretary.
    (d) Definitions.--For purposes of this section--
            (1) the terms ``animal drug'', ``device'', ``drug'', and 
        ``food'' have the meanings given those terms in section 201 of 
        the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321);
            (2) the term ``biological product'' has the meaning given 
        the term in section 351 of the Public Health Service Act (42 
        U.S.C. 262); and
            (3) the term ``Secretary'' means the Secretary of Health 
        and Human Services.

       TITLE IV--ENDING TAXPAYER SUBSIDIES FOR BIG AGRIBUSINESSES

SEC. 4001. REFORMING IRRIGATION SUBSIDIES.

    (a) Definitions.--Section 202 of the Reclamation Reform Act of 1982 
(43 U.S.C. 390bb) is amended--
            (1) by redesignating paragraphs (7), (8), (9), (10), and 
        (11) as paragraphs (9), (10), (11), (12), and (13), 
        respectively;
            (2) in paragraph (6), by striking ``owned or operated under 
        a lease which'' and inserting ``that is owned, leased, or 
        operated by an individual or legal entity and that'';
            (3) by inserting after paragraph (6) the following:
            ``(7) Legal entity.--The term `legal entity' includes a 
        corporation, association, partnership, trust, joint tenancy, or 
        tenancy in common, or any other entity that owns, leases, or 
        operates a farm operation for the benefit of more than 1 
        individual under any form of agreement or arrangement.
            ``(8) Operator.--
                    ``(A) In general.--The term `operator'--
                            ``(i) means an individual or legal entity 
                        that operates a single farm operation on a 
                        parcel (or parcels) of land that is owned or 
                        leased by another person (or persons) under any 
                        form of agreement or arrangement (or agreements 
                        or arrangements); and
                            ``(ii) if the individual or legal entity--
                                    ``(I) is an employee of an 
                                individual or legal entity, includes 
                                the individual or legal entity; or
                                    ``(II) is a legal entity that 
                                controls, is controlled by, or is under 
                                common control with another legal 
                                entity, includes each such other legal 
                                entity.
                    ``(B) Operation of a farm operation.--For the 
                purposes of subparagraph (A), an individual or legal 
                entity shall be considered to operate a farm operation 
                if the individual or legal entity is the person that 
                performs the greatest proportion of the decisionmaking 
                for and supervision of the agricultural enterprise on 
                land served with irrigation water.''; and
            (4) by adding at the end the following:
            ``(14) Single farm operation.--
                    ``(A) In general.--The term `single farm operation' 
                means the total acreage of land served with irrigation 
                water for which an individual or legal entity is the 
                operator.
                    ``(B) Rules for determining whether separate 
                parcels are operated as a single farm operation.--
                            ``(i) Equipment- and labor-sharing 
                        activities.--The conduct of equipment- and 
                        labor-sharing activities on separate parcels of 
                        land by separate individuals or legal entities 
                        shall not by itself serve as a basis for 
                        concluding that the farming operations of the 
                        individuals or legal entities constitute a 
                        single farm operation.
                            ``(ii) Performance of certain services.--
                        The performance by an individual or legal 
                        entity of an agricultural chemical application, 
                        pruning, or harvesting for a farm operation on 
                        a parcel of land shall not by itself serve as a 
                        basis for concluding that the farm operation on 
                        that parcel of land is part of a single farm 
                        operation operated by the individual or entity 
                        on other parcels of land.''.
    (b) Identification of Owners, Lessees, and Operators and of Single 
Farm Operations.--The Reclamation Reform Act of 1982 (43 U.S.C. 390aa 
et seq.) is amended by inserting after section 201 the following:

``SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS AND OF 
              SINGLE FARM OPERATIONS.

    ``(a) In General.--Subject to subsection (b), for each parcel of 
land to which irrigation water is delivered or proposed to be 
delivered, the Secretary shall identify a single individual or legal 
entity as the owner, lessee, or operator.
    ``(b) Shared Decisionmaking and Supervision.--If the Secretary 
determines that no single individual or legal entity is the owner, 
lessee, or other individual that performs the greatest proportion of 
decisionmaking for and supervision of the agricultural enterprise on a 
parcel of land--
            ``(1) all individuals and legal entities that own, lease, 
        or perform a proportion of decisonmaking and supervision that 
        is equal as among themselves but greater than the proportion 
        performed by any other individual or legal entity shall be 
        considered jointly to be the owner, lessee, or operator; and
            ``(2) all parcels of land of which any such individual or 
        legal entity is the owner, lessee, or operator shall be 
        considered to be part of the single farm operation of the 
        owner, lessee, or operator identified under subsection (1).''.
    (c) Pricing.--Section 205 of the Reclamation Reform Act of 1982 (43 
U.S.C. 390ee) is amended by adding at the end the following:
    ``(d) Single Farm Operations Generating More Than $500,000 in Gross 
Farm Income.--
            ``(1) In general.--Notwithstanding subsections (a), (b), 
        and (c), in the case of--
                    ``(A) a qualified recipient that reports gross farm 
                income from a single farm operation in excess of 
                $500,000 for a taxable year; or
                    ``(B) a limited recipient that received irrigation 
                water on or before October 1, 1981, and that reports 
                gross farm income from a single farm operation in 
                excess of $500,000 for a taxable year;
        irrigation water may be delivered to the single farm operation 
        of the qualified recipient or limited recipient at less than 
        full cost to a number of acres that does not exceed the number 
        of acres determined under paragraph (2).
            ``(2) Maximum number of acres to which irrigation water may 
        be delivered at less than full cost.--The number of acres 
        determined under this subparagraph is the number equal to the 
        number of acres of the single farm operation multiplied by a 
        fraction, the numerator of which is $500,000 and the 
        denominator of which is the amount of gross farm income 
        reported by the qualified recipient or limited recipient in the 
        most recent taxable year.
            ``(3) Inflation adjustment.--
                    ``(A) In general.--The $500,000 amount under 
                paragraphs (1) and (2) for any taxable year beginning 
                in a calendar year after 2004 shall be equal to the 
                product of--
                            ``(i) $500,000, multiplied by
                            ``(ii) the inflation adjustment factor for 
                        the taxable year.
                    ``(B) Inflation adjustment factor.--The term 
                `inflation adjustment factor' means, with respect to 
                any calendar year, a fraction the numerator of which is 
                the GDP implicit price deflator for the preceding 
                calendar year and the denominator of which is the GDP 
                implicit price deflator for 2004. Not later than April 
                1 of any calendar year, the Secretary shall publish the 
                inflation adjustment factor for the preceding calendar 
                year.
                    ``(C) GDP implicit price deflator.--For purposes of 
                subparagraph (B), the term `GDP implicit price 
                deflator' means the first revision of the implicit 
                price deflator for the gross domestic product as 
                computed and published by the Secretary of Commerce.
                    ``(D) Rounding.--If any increase determined under 
                subparagraph (A) is not a multiple of $100, the 
                increase shall be rounded to the next lowest multiple 
                of $100.''.
    (d) Certification of Compliance.--Section 206 of the Reclamation 
Reform Act of 1982 (43 U.S.C. 390ff) is amended to read as follows:

``SEC. 206. CERTIFICATION OF COMPLIANCE.

    ``(a) In General.--As a condition to the receipt of irrigation 
water for land in a district that has a contract described in section 
203, each owner, lessee, or operator in the district shall furnish the 
district, in a form prescribed by the Secretary, a certificate that the 
owner, lessee, or operator is in compliance with this title, including 
a statement of the number of acres owned, leased, or operated, the 
terms of any lease or agreement pertaining to the operation of a farm 
operation, and, in the case of a lessee or operator, a certification 
that the rent or other fees paid reflect the reasonable value of the 
irrigation water to the productivity of the land.
    ``(b) Documentation.--The Secretary may require a lessee or 
operator to submit for the Secretary's examination--
            ``(1) a complete copy of any lease or other agreement 
        executed by each of the parties to the lease or other 
        agreement; and
            ``(2) a copy of the return of income tax imposed by chapter 
        1 of the Internal Revenue Code of 1986 for any taxable year in 
        which the single farm operation of the lessee or operator 
        received irrigation water at less than full cost.''.
    (e) Trusts.--Section 214 of the Reclamation Reform Act of 1982 (43 
U.S.C. 390nn) is repealed.
    (f) Administrative Provisions.--
            (1) Penalties.--Section 224(c) of the Reclamation Reform 
        Act of 1982 (43 U.S.C. 390ww(c)) is amended--
                    (A) by striking ``(c) The Secretary'' and inserting 
                the following:
    ``(c) Regulations; Data Collection; Penalties.--
            ``(1) Regulations; data collection.--The Secretary''; and
                    (B) by adding at the end the following:
            ``(2) Penalties.--Notwithstanding any other provision of 
        law, the Secretary shall establish appropriate and effective 
        penalties for failure to comply with any provision of this Act 
        or any regulation issued under this Act.''.
            (2) Interest.--Section 224(i) of the Reclamation Reform Act 
        of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last 
        sentence and inserting the following: ``The interest rate 
        applicable to underpayments shall be equal to the rate 
        applicable to expenditures under section 202(3)(C).''.
    (g) Reporting.--Section 228 of the Reclamation Reform Act of 1982 
(43 U.S.C. 390zz) is amended by inserting ``operator or'' before 
``contracting entity'' each place it appears.
    (h) Memorandum of Understanding.--The Reclamation Reform Act of 
1982 (43 U.S.C. 390aa et seq.) is amended--
            (1) by redesignating sections 229 and 230 as sections 230 
        and 231; and
            (2) by inserting after section 228 the following:

``SEC. 229. MEMORANDUM OF UNDERSTANDING.

    ``The Secretary, the Secretary of the Treasury, and the Secretary 
of Agriculture shall enter into a memorandum of understanding or other 
appropriate instrument to permit the Secretary, notwithstanding section 
6103 of the Internal Revenue Code of 1986, to have access to and use of 
available information collected or maintained by the Department of the 
Treasury and the Department of Agriculture that would aid enforcement 
of the ownership and pricing limitations of Federal reclamation law.''.

SEC. 4002. REFORMING CROP INSURANCE SUBSIDIES.

    (a) Federal Share of Risk.--Section 508(k)(3) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(k)(3)) is amended--
            (1) by striking ``require the'' and inserting ``require--
                    ``(A) the'';
            (2) by striking the period at the end and inserting ``; 
        and''; and
            (3) by adding at the end the following:
                    ``(B) the cumulative underwriting gain or loss, and 
                the associated premium and losses with such amount, 
                calculated under any reinsurance agreement (except 
                livestock) ceded to the Corporation by each approved 
                insurance provider to be not less than 20 percent.''.
    (b) Reimbursement Rate.--Section 508 of the Federal Crop Insurance 
Act (7 U.S.C. 1508) is amended--
            (1) in subsection (b)(11), by striking ``6 percent'' and 
        inserting ``4 percent''; and
            (2) in subsection (k)(4)--
                    (A) in subparagraph (E)--
                            (i) by striking ``2009'' and inserting 
                        ``2011''; and
                            (ii) by striking ``2.3 percent'' and 
                        inserting ``4.3 percent''; and
                    (B) in subparagraph (F)--
                            (i) by striking ``2009'' and inserting 
                        ``2011''; and
                            (ii) by striking ``12 percent'' and 
                        inserting ``10 percent''.

SEC. 4003. REDUCING DIRECT PAYMENTS TO LARGE LANDOWNERS.

    (a) In General.--Section 1001(b)(1)(A) of the Food Security Act of 
1985 (7 U.S.C. 1308(b)(1)(A)) is amended by striking ``of that Act, 
$40,0000; or'' and inserting ``of that Act--
                            ``(i) $40,000; or
                            ``(ii) if the national average market price 
                        received by producers during the 12-month 
                        marketing year for a covered commodity (as 
                        determined by the Secretary) is more than 110 
                        percent of the target price for the covered 
                        commodity (as determined under section 1104(c) 
                        of the Food, Conservation, and Energy Act of 
                        2008 (7 U.S.C. 8714(c)), $20,000; or''.
    (b) Peanuts.--Section 1001(c)(1)(A) of the Food Security Act of 
1985 (7 U.S.C. 1308(c)(1)(A)) is amended by striking ``of that Act, 
$40,000; or'' and inserting ``of that Act--
                            ``(i) $40,000; or
                            ``(ii) if the national average market price 
                        received by producers during the 12-month 
                        marketing year for peanuts (as determined by 
                        the Secretary) is more than 110 percent of the 
                        target price for peanuts (as determined under 
                        section 1304(c) of the Food, Conservation, and 
                        Energy Act of 2008 (7 U.S.C. 8754(c)), $20,000; 
                        or''.

SEC. 4004. CUTTING FARM SUBSIDIES FOR HIGH-INCOME INDIVIDUALS.

    Section 1001D(b)(1) of the Food Security Act of 1985 (7 U.S.C. 
1308-3a(b)(1)) is amended--
            (1) by striking subparagraphs (A) and (B) and inserting the 
        following:
                    ``(A) Nonfarm limitations.--
                            ``(i) Prohibition.--Notwithstanding any 
                        other provision of law, a person or legal 
                        entity shall not be eligible to receive any 
                        benefit described in subparagraph (C) during a 
                        crop, fiscal, or program year, as appropriate, 
                        if the average adjusted gross nonfarm income of 
                        the person or legal entity exceeds $250,000.
                            ``(ii) Partial eligibility.--
                        Notwithstanding any other provision of law, a 
                        person or legal entity the average adjusted 
                        gross nonfarm income of which is more than 
                        $100,000 but less than $250,000 shall be 
                        eligible to receive only 66 percent of any 
                        benefit described in subparagraph (C) during a 
                        crop, fiscal, or program year, as appropriate.
                    ``(B) Farm limitation.--
                            ``(i) Prohibition.--Notwithstanding any 
                        other provision of law, a person or legal 
                        entity shall not be eligible to receive any 
                        benefit described in subparagraph (C) during a 
                        crop, fiscal, or program year, as appropriate, 
                        if the average adjusted gross farm income of 
                        the person or legal entity exceeds $750,000.
                            ``(ii) Partial eligibility.--
                        Notwithstanding any other provision of law, a 
                        person or legal entity the average adjusted 
                        gross farm income of which is more than 
                        $500,000 but less than $750,000 shall be 
                        eligible to receive only 66 percent of any 
                        benefit described in subparagraph (C) during a 
                        crop, fiscal, or program year, as 
                        appropriate.''; and
            (2) in subparagraph (C), by striking ``Subparagraph (A) 
        applies'' and inserting ``Subparagraphs (A) and (B) apply''.

SEC. 4005. ELIMINATING THE COTTON STORAGE SUBSIDY.

    (a) In General.--Section 1204 of the Food, Conservation, and Energy 
Act of 2008 (7 U.S.C. 8734) is amended--
            (1) by striking subsection (g); and
            (2) by redesignating subsection (h) as subsection (g).
    (b) Application.--The amendments made by subsection (a) apply 
effective beginning with the 2010 crop year.

SEC. 4006. ENDING SUBSIDIZED GRAZING FEES.

    Section 6(a) of the Public Rangelands Improvement Act of 1978 (43 
U.S.C. 1905) is amended--
            (1) by striking ``For the grazing years 1979 through 1985, 
        the'' and inserting ``The''; and
            (2) by striking ``the $1.23 base'' and all that follows 
        through ``previous year's fee'' and inserting ``an amount that 
        is at the same level as the State in which the land is located 
        charges for public grazing on land owned by the State, as 
        determined by the Secretary of Agriculture and the Secretary of 
        the Interior, as appropriate''.

TITLE V--ENDING TAXPAYER SUBSIDIES FOR THE USE OF PUBLIC RESOURCES AND 
                          GOVERNMENT SERVICES

SEC. 5001. PREVENTING GIVEAWAYS OF THE PUBLIC SPECTRUM.

    Section 309(j)(11) of the Communications Act of 1934 (47 U.S.C. 
309(j)(11)) is amended by striking ``2012'' and inserting ``2019''.

SEC. 5002. ELIMINATING DOUBLE SUBSIDIES FOR HARDROCK MINING BY 
              REPEALING PERCENTAGE DEPLETION ALLOWANCES.

    (a) In General.--Section 613(a) of the Internal Revenue Code of 
1986 (relating to percentage depletion) is amended by inserting 
``(other than hardrock mines located on lands subject to the general 
mining laws or on land patented under the general mining laws)'' after 
``In the case of the mines''.
    (b) General Mining Laws Defined.--Section 613 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following:
    ``(f) General Mining Laws.--For purposes of subsection (a), the 
term `general mining laws' means those Acts which generally comprise 
chapters 2, 12A, and 16, and sections 161 and 162 of title 30 of the 
United States Code.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

SEC. 5003. ENDING SUBSIDIES FOR HARDROCK MINING ON PUBLIC LANDS BY 
              IMPOSING MINING ROYALTIES AND CLAIM FEES.

    (a) Royalty for Hardrock Mining.--The Revised Statutes are amended 
by inserting after section 2352 (30 U.S.C. 76) the following:

``SEC. 2353. RESERVATION OF ROYALTY.

    ``(a) Definition of Locatable Mineral.--In this section:
            ``(1) In general.--The term `locatable mineral' means any 
        mineral, the legal and beneficial title to which remains in the 
        United States and that is not subject to disposition under--
                    ``(A) the Mineral Leasing Act (30 U.S.C. 181 et 
                seq.);
                    ``(B) the Act of August 7, 1947 (commonly known as 
                the `Mineral Leasing Act for Acquired Lands') (30 
                U.S.C. 351 et seq.);
                    ``(C) the Act of July 31, 1947 (commonly known as 
                the `Materials Act of 1947') (30 U.S.C. 601 et seq.); 
                or
                    ``(D) the Geothermal Steam Act of 1970 (30 U.S.C. 
                1001 et seq.).
            ``(2) Exclusions.--The term `locatable mineral' does not 
        include any mineral that is subject to a restriction against 
        alienation imposed by the United States and is--
                    ``(A) held in trust by the United States for any 
                Indian or Indian tribe (as defined in section 2 of the 
                Indian Mineral Development Act of 1982 (25 U.S.C. 
                2101)); or
                    ``(B) owned by any Indian or Indian tribe (s 
                defined in section 2 of that Act).
    ``(b) Royalty.--Production of all locatable minerals from any 
mining claim located under the general mining laws, or mineral 
concentrates or products derived from locatable minerals from any such 
mining claim, as the case may be, shall be subject to a royalty of 8 
percent of the gross income from mining.
    ``(c) Liability for Payment.--The claim holder or any operator to 
whom the claim holder has assigned the obligation to make royalty 
payments under the claim, and any person who controls the claim holder 
or operator, shall be liable for payment of royalties under this 
section.
    ``(d) Deposit.--Amounts received by the United States as royalties 
under this section shall be deposited into the general fund of the 
Treasury.''.
    (b) Hardrock Mining Claim Maintenance Fee.--Subtitle B of title X 
of the Omnibus Budget Reconciliation Act of 1993 (30 U.S.C. 28f et 
seq.) is amended to read as follows:

         ``Subchapter B--Hardrock Mining Claim Maintenance Fee

``SEC. 10101. HARDROCK MINING CLAIM MAINTENANCE FEE.

    ``(a) Fee.--
            ``(1) In general.--Except as provided in section 2511(e)(2) 
        of the Energy Policy Act of 1992 (30 U.S.C. 242(e)(2)), for 
        each unpatented mining claim, mill, or tunnel site on federally 
        owned land, whether located before, on, or after enactment of 
        this Act, each claimant shall pay to the Secretary, on or 
        before August 31 of each year, a claim maintenance fee of $150 
        per claim to hold the unpatented mining claim, mill, or tunnel 
        site for the assessment year beginning at noon on September 1.
            ``(2) Relation to other law.--A claim maintenance fee 
        described in paragraph (1) shall be in lieu of--
                    ``(A) the assessment work requirement in section 
                2324 of the Revised Statutes (30 U.S.C. 28); and
                    ``(B) the related filing requirements in 
                subsections (a) and (c) of section 314 of the Federal 
                Land Policy and Management Act of 1976 (43 U.S.C. 
                1744).
            ``(3) Waiver.--
                    ``(A) In general.--The claim maintenance fee 
                required under paragraph (1) shall be waived for a 
                claimant who certifies in writing to the Secretary that 
                on the date the payment was due, the claimant and all 
                related parties--
                            ``(i) held not more than 10 mining claims, 
                        mill sites, or tunnel sites, or any combination 
                        of mining claims, mill sites, or tunnel sites, 
                        on public land; and
                            ``(ii) have performed assessment work 
                        required under section 2324 of the Revised 
                        Statutes (30 U.S.C. 28) to maintain the mining 
                        claims held by the claimant and all related 
                        parties for the assessment year ending on noon 
                        of September 1 of the calendar year in which 
                        payment of the claim maintenance fee was due.
                    ``(B) Definition of all related parties.--In 
                subparagraph (A), with the respect to any claimant, the 
                term `all related parties' means--
                            ``(i) the spouse and dependent children (as 
                        defined in section 152 of the Internal Revenue 
                        Code of 1986), of the claimant; or
                            ``(ii) a person affiliated with the 
                        claimant, including--
                                    ``(I) a person controlled by, 
                                controlling, or under common control 
                                with the claimant; or
                                    ``(II) a subsidiary or parent 
                                company or corporation of the claimant.
            ``(4) Adjustment.--
                    ``(A) In general.--Not less than 5 years after the 
                date of enactment of the Control Spending Now Act, and 
                every 5 years thereafter, or more frequently if the 
                Secretary determines an adjustment to be reasonable, 
                the Secretary shall adjust the claim maintenance fee 
                required under paragraph (1) to reflect changes for the 
                12-month period ending the preceding November 30 in the 
                Consumer Price Index for All Urban Consumers published 
                by the Bureau of Labor Statistics of the Department of 
                Labor.
                    ``(B) Notification.--Not later than July 1 of any 
                year in which an adjustment is made under subparagraph 
                (A), the Secretary shall provide claimants notice of 
                the adjustment.
                    ``(C) Application.--A fee adjustment under 
                subparagraph (A) shall be effective beginning January 1 
                of the calendar year following the calendar year in 
                which the adjustment is made.
    ``(b) Location Fee.--Notwithstanding any other provision of law, 
for each unpatented mining claim, mill, or tunnel site located during 
the period beginning on the date of enactment of the Control Spending 
Now Act and ending on September 30, 2008, the locator shall, at the 
time the location notice is recorded with the Bureau of Land 
Management, pay to the Secretary a location fee, in addition to the fee 
required by subsection (a), of $50 per claim.
    ``(c) Deposit.--Amounts received under subsection (a) or (b) that 
are not otherwise allocated for the administration of the mining laws 
by the Department of the Interior shall be deposited into the general 
fund of the Treasury.
    ``(d) Co-Ownership.--The co-ownership provisions of section 2324 of 
the Revised Statutes (30 U.S.C. 28) shall remain in effect except that 
the annual claim maintenance fee, if applicable, shall replace 
applicable assessment requirements and expenditures.
    ``(e) Failure To Pay.--Failure to pay the claim maintenance fee 
required by subsection (a) shall conclusively constitute a forfeiture 
of the unpatented mining claim, mill, or tunnel site by the claimant 
and the claim shall be considered to be null and void by operation of 
law.
    ``(f) Relation to Other Law.--Nothing in this section changes or 
modifies the requirements of subsections (b) or (c) of section 314(b) 
of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
1744).''.

SEC. 5004. REDUCING STATE SUBSIDIES FOR ONSHORE OIL, GAS, COAL, AND 
              MINERAL LEASES ON PUBLIC LANDS.

    Section 35 of the Mineral Leasing Act (30 U.S.C. 191) is amended by 
striking subsection (b) and inserting the following:
    ``(b) Administrative Costs.--Before making a payment to a State 
under subsection (a), the Secretary of the Treasury shall deduct 2 
percent of the payment amount to reimburse the administrative costs 
incurred by the United States in managing mineral leasing activities 
under this Act.''.

SEC. 5005. REDUCING SUBSIDIES FOR OIL, GAS, AND GEOTHERMAL ENERGY 
              PRODUCTION ON PUBLIC LANDS.

    (a) Removal of Prohibition on Increasing Fees for Permits.--Section 
365 of the Energy Policy Act of 2005 (42 U.S.C. 15924) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsection (j) as subsection (i).
    (b) Disposal of Moneys From Sales, Bonuses, Rentals, and 
Royalties.--Section 20 of the Geothermal Steam Act of 1970 (30 U.S.C. 
1019) is amended to read as follows:

``SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, RENTALS, AND 
              ROYALTIES.

    ``Subject to section 35 of the Mineral Leasing Act (30 U.S.C. 191), 
all funds received from the sales, bonuses, royalties, and rentals 
under this Act (including payments referred to in section 6) shall be 
disposed of in the same manner as funds received pursuant to section 6 
of this Act or section 35 of the Mineral Leasing Act (30 U.S.C. 191), 
as the case may be.''.

SEC. 5006. REDUCING AVIATION SUBSIDIES.

    Section 44940 of title 49, United States Code, is amended--
            (1) in subsection (a)(1), by inserting ``in an amount equal 
        to $5.00 per one-way trip'' after ``uniform fee'';
            (2) by striking subsection (c); and
            (3) in subsection (d)--
                    (A) in paragraph (2), by striking ``subsection 
                (d)'' each place it appears and inserting ``this 
                subsection''; and
                    (B) in paragraph (3), by striking ``in accordance 
                with paragraph (1)'' and inserting ``under subsection 
                (a)(2)''.

SEC. 5007. TARGETING MEDICARE PRESCRIPTION DRUG ASSISTANCE TO THOSE WHO 
              NEED IT MOST.

    (a) In General.--Section 1860D-13(a) of the Social Security Act (42 
U.S.C. 1395w-113(a)) is amended by adding at the end the following new 
paragraph:
            ``(7) Reduction in premium subsidy based on income.--The 
        provisions of subsection (i) of section 1839 shall apply to the 
        monthly beneficiary premium under this subsection in the same 
        manner as they apply to the monthly premium under such section 
        except that in so applying--
                    ``(A) paragraph (1) of such subsection (i) to this 
                subsection--
                            ``(i) the reference to December 2006 is 
                        deemed a reference to December 2009; and
                            ``(ii) the reference to the monthly premium 
                        is deemed a reference to the base beneficiary 
                        premium (computed under paragraph (2) of this 
                        subsection);
                    ``(B) clause (i) of paragraph (3)(A) of such 
                subsection (i) to this subsection, the reference to 25 
                percentage points is deemed a reference to the 
                beneficiary premium percentage (as specified in 
                paragraph (3) of this subsection);
                    ``(C) clause (ii) of paragraph (3)(A) of such 
                subsection (i) to this subsection, the national average 
                monthly bid amount (computed under paragraph (4) of 
                this subsection) shall be substituted for the amount 
                specified in such clause (ii) (relating to the 
                unsubsidized part B premium amount); and
                    ``(D) subparagraph (B) of paragraph (3) of such 
                subsection (i) to this subsection, the reference to 
                2009 shall be a reference to 2010, the reference to 
                2007 shall be a reference to 2009, and the reference to 
                2008 shall be a reference to 2010.''.
    (b) Conforming Amendments.--
            (1) Medicare.--Section 1860D-13(a)(1) of the Social 
        Security Act (42 U.S.C. 1395w-113(a)(1)) is amended--
                    (A) by redesignating subparagraph (F) as 
                subparagraph (G);
                    (B) in subparagraph (G), as redesignated by 
                subparagraph (A), by striking ``(D) and (E)'' and 
                inserting ``(D), (E), and (F)''; and
                    (C) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) Increase based on income.--The base 
                beneficiary premium shall be increased pursuant to 
                paragraph (7).''.
            (2) Internal revenue code.--Section 6103(l)(20) of the 
        Internal Revenue Code of 1986 (relating to disclosure of return 
        information to carry out Medicare part B premium subsidy 
        adjustment) is amended--
                    (A) in the heading, by striking ``part b premium 
                subsidy adjustment'' and inserting ``parts b and d 
                premium subsidy adjustments'';
                    (B) in subparagraph (A)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``or 1860D-13(a)(7)'' after 
                        ``1839(i)''; and
                            (ii) in clause (vii), by inserting after 
                        ``the amount of such adjustment'' the 
                        following: ``or that the amount of the premium 
                        of the taxpayer under such subsection (as 
                        applied under section 1860D-13(a)(7)) may be 
                        subject to adjustment under such section 1860D-
                        13(a)(7) and the amount of such adjustment''; 
                        and
                    (C) in subparagraph (B), by inserting ``or such 
                section 1860D-13(a)(7)'' before the period at the end.

    TITLE VI--TARGETING WASTEFUL OR UNNECESSARY GOVERNMENT SPENDING

SEC. 6001. DELAYING A LUNAR MISSION.

    (a) In General.--Except as provided in subsection (b)--
            (1) no amounts appropriated or otherwise made available for 
        fiscal year 2010 (or for a fiscal year before fiscal year 2010 
        that remain available for obligation) may be obligated or 
        expended, and no otherwise obligated amounts that remain 
        available for expenditure may be expended, to support a human 
        lunar mission under the National Aeronautics and Space 
        Administration Constellation Program scheduled to occur before 
        the year 2025; and
            (2) no additional funds may be appropriated to support such 
        a human lunar mission.
    (b) Exceptions.--An amount otherwise covered by the prohibition 
under subsection (a) of not more than $600,000,000 may be appropriated, 
obligated, or expended each fiscal year solely for purposes in 
connection with research and technology development and maintenance of 
the manufacturing and technology base with respect to the mission 
described in subsection (a).

SEC. 6002. ELIMINATING THE V-22 OSPREY.

    (a) Prohibition.--Except as provided in subsection (b), no amounts 
appropriated or otherwise made available for fiscal year 2010 (or for a 
fiscal year before fiscal year 2010 that remain available for 
obligation) may be obligated or expended, and no otherwise obligated 
amounts that remain available for expenditure may be expended, for the 
V-22 or CV-22 Osprey tiltrotor aircraft program.
    (b) Exception for Windup of Program.--Amounts covered by the 
prohibition in subsection (a) that are available for the program 
described in that subsection may be utilized solely for purposes in 
connection with the winding up of the program.
    (c) Repeal of Superseded Authority.--Section 127 of the John Warner 
National Defense Authorization Act for Fiscal Year 2007 (Public Law 
109-364; 120 Stat. 2109) is repealed.

SEC. 6003. CUTTING C-17S.

    (a) Prohibition.--Except as provided in subsection (b), no amounts 
appropriated or otherwise made available for fiscal year 2010 (or for a 
fiscal year after 2006 and before fiscal year 2010 that remain 
available for obligation) may be obligated or expended, and no 
otherwise obligated amounts that remain available for expenditure may 
be expended, for the C-17 Globemaster III aircraft program.
    (b) Exception for Windup of Program.--Amounts covered by the 
prohibition in subsection (a) that are available for the program 
described in that subsection may be utilized solely for purposes in 
connection with the winding up of the program.

SEC. 6004. ENDING SPENDING FOR HIGH-RISK SATELLITES.

    (a) Prohibition.--Except as provided in subsection (b), no amounts 
appropriated or otherwise made available for fiscal year 2010 (or for a 
fiscal year before fiscal year 2010 that remain available for 
obligation) may be obligated or expended, and no otherwise obligated 
amounts that remain available for expenditure may be expended, to 
research, produce, deploy, or maintain a constellation of 
nondemonstration satellites under the Space Tracking and Surveillance 
System.
    (b) Exception for Windup of System.--Amounts covered by the 
prohibition in subsection (a) that are available for the system 
described in that subsection may be utilized solely for purposes in 
connection with the winding up of the system.

SEC. 6005. REDUCING COST OVERRUNS AND DELAYS ON MAJOR WEAPONS SYSTEMS.

    (a) In General.--Chapter 144 of title 10, United States Code, is 
amended by inserting after section 2435 the following new section:
``Sec. 2435a. High-risk major defense acquisition programs: alternative 
              acquisition strategies to meet essential joint military 
              requirements
    ``(a) Designation Required.--The Under Secretary of Defense for 
Acquisition, Technology, and Logistics shall designate as high-risk for 
purposes of this section a major defense acquisition program if--
            ``(1) the critical technologies of the program have not 
        been demonstrated, or are not planned to be demonstrated, in a 
        realistic environment prior to making a production decision; or
            ``(2) the program has experienced development cost growth 
        of 25 percent or more, or schedule delays of 12 months or more, 
        since receiving a certification pursuant to section 2366a of 
        this title.
    ``(b) Alternative Acquisition Strategy.--(1) Not later than 60 days 
after the date of the designation of a major defense acquisition 
program as high-risk under subsection (a), the Under Secretary for 
Acquisition, Technology, and Logistics shall--
            ``(A) review the joint military requirements intended to be 
        met by the program to determine whether or not all elements of 
        such requirements are essential; and
            ``(B) develop an alternative acquisition strategy that--
                    ``(i) achieves capabilities in increments to be 
                delivered in less than five years each; and
                    ``(ii) relies on mature technologies to meet all 
                essential elements of the joint military requirement 
                for each increment.
    ``(2) The Under Secretary shall submit to the Secretary of Defense 
and Congress each alternative acquisition strategy developed under this 
subsection. In submitting such strategy to Congress, the Under 
Secretary shall also submit a report on the results of the review 
required by paragraph (1)(B) for purposes of such strategy.
    ``(c) Continuation of Program.--(1) Upon receipt of an alternative 
acquisition strategy to meet joint military requirements under 
subsection (b)(2), the Secretary of Defense shall determine whether or 
not to terminate the major defense acquisition program otherwise 
intended to meet such requirements so as to meet such requirements 
through the alternative acquisition strategy.
    ``(2) The Secretary shall submit to Congress a report on each 
determination made under paragraph (1). The report on a determination 
shall include a detailed justification of the determination''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 144 of such title is amended by inserting after the item 
relating to section 2435 the following new item:

``2435a. High-risk major defense acquisition programs: alternative 
                            acquisition strategies to meet essential 
                            joint military requirements.''.

SEC. 6006. REDUCING SPENDING ON UNNEEDED DEFENSE SPARE PARTS.

    Of the amount appropriated for fiscal year 2010 to purchase excess 
secondary inventory for the Department of the Air Force, the amount 
available for obligation and expenditure for that purpose in fiscal 
year 2010 is hereby reduced by $50,000,000.

SEC. 6007. REDUCING OVERPAYMENTS TO DEFENSE CONTRACTORS.

    (a) Recovery.--Notwithstanding any provision of subchapter VI of 
chapter 35 of title 31, United States Code, an amount in the aggregate 
of $50,000,000 shall be derived from amounts recovered by the 
Department of Defense from erroneous payments to contractors pursuant 
to recovery audits and activities carried out by the Department under 
section 3561 of such title.
    (b) Debt Reduction.--The amount recovered under subsection (a) may 
be used only for the reduction of the public debt of the United States.

SEC. 6008. ENDING WASTEFUL INTELLIGENCE SPENDING.

    (a) Vulnerability Assessments of Major Systems.--
            (1) In general.--Title V of the National Security Act of 
        1947 (50 U.S.C. 413 et seq.), as amended by section 305 of this 
        Act, is further amended by inserting after section 506B, as 
        added by section 305(a), the following new section:

              ``vulnerability assessments of major systems

    ``Sec. 506C.  (a) Initial Vulnerability Assessments.--
            ``(1) Requirement for initial vulnerability assessments.--
        The Director of National Intelligence shall conduct an initial 
        vulnerability assessment for any major system and its 
        significant items of supply that is proposed for inclusion in 
        the National Intelligence Program prior to completion of 
        Milestone B or an equivalent acquisition decision. The initial 
        vulnerability assessment of a major system and its significant 
        items of supply shall include use of an analysis-based approach 
        to--
                    ``(A) identify vulnerabilities;
                    ``(B) define exploitation potential;
                    ``(C) examine the system's potential effectiveness;
                    ``(D) determine overall vulnerability; and
                    ``(E) make recommendations for risk reduction.
            ``(2) Limitation on obligation of funds.--For any major 
        system for which an initial vulnerability assessment is 
        required under paragraph (1) on the date of the enactment of 
        the Intelligence Authorization Act for Fiscal Year 2010, such 
        assessment shall be submitted to the congressional intelligence 
        committees within 180 days of such date of enactment. If such 
        assessment is not submitted to the congressional intelligence 
        committees within 180 days of such date of enactment, funds 
        appropriated for the acquisition of the major system may not be 
        obligated for a major contract related to the major system. 
        Such prohibition on the obligation of funds for the acquisition 
        of the major system shall cease to apply at the end of the 30-
        day period of a continuous session of Congress that begins on 
        the date on which Congress receives the initial vulnerability 
        assessment.
    ``(b) Subsequent Vulnerability Assessments.--(1) The Director of 
National Intelligence shall, periodically throughout the life span of a 
major system or if the Director determines that a change in 
circumstances warrants the issuance of a subsequent vulnerability 
assessment, conduct a subsequent vulnerability assessment of each major 
system and its significant items of supply within the National 
Intelligence Program.
    ``(2) Upon the request of a congressional intelligence committee, 
the Director of National Intelligence may conduct a subsequent 
vulnerability assessment of a particular major system and its 
significant items of supply within the National Intelligence Program.
    ``(3) Any subsequent vulnerability assessment of a major system and 
its significant items of supply shall include use of an analysis-based 
approach and, if applicable, a testing-based approach, to monitor the 
exploitation potential of such system and reexamine the factors 
described in subparagraphs (A) through (E) of subsection (a)(1).
    ``(c) Major System Management.--The Director of National 
Intelligence shall give due consideration to the vulnerability 
assessments prepared for a given major system when developing and 
determining the National Intelligence Program budget.
    ``(d) Congressional Oversight.--(1) The Director of National 
Intelligence shall provide to the congressional intelligence committees 
a copy of each vulnerability assessment conducted under subsection (a) 
or (b) not later than 10 days after the date of the completion of such 
assessment.
    ``(2) The Director of National Intelligence shall provide the 
congressional intelligence committees with a proposed schedule for 
subsequent vulnerability assessments of a major system under subsection 
(b) when providing such committees with the initial vulnerability 
assessment under subsection (a) of such system as required by paragraph 
(1).
    ``(e) Definitions.--In this section:
            ``(1) The term `items of supply'--
                    ``(A) means any individual part, component, 
                subassembly, assembly, or subsystem integral to a major 
                system, and other property which may be replaced during 
                the service life of the major system, including spare 
                parts and replenishment parts; and
                    ``(B) does not include packaging or labeling 
                associated with shipment or identification of items.
            ``(2) The term `major system' has the meaning given that 
        term in section 506A(e).
            ``(3) The term `Milestone B' means a decision to enter into 
        system development and demonstration pursuant to guidance 
        prescribed by the Director of National Intelligence.
            ``(4) The term `vulnerability assessment' means the process 
        of identifying and quantifying vulnerabilities in a major 
        system and its significant items of supply.''.
            (2) Table of contents amendment.--The table of contents in 
        the first section of the National Security Act of 1947, as 
        amended by section 305 of this Act, is further amended by 
        inserting after the item relating to section 506B, as added by 
        section 305(b), the following:

``Sec. 506C. Vulnerability assessments of major systems.''.
            (3) Definition of major system.--Paragraph (3) of section 
        506A(e) of the National Security Act of 1947 (50 U.S.C. 415a-
        1(e)) is amended to read as follows:
            ``(3) The term `major system' has the meaning given that 
        term in section 4 of the Office of Federal Procurement Policy 
        Act (41 U.S.C. 403).''.
    (b) Reports on the Acquisition of Major Systems.--
            (1) Reports.--
                    (A) In general.--Title V of the National Security 
                Act of 1947 (50 U.S.C. 413 et seq.), as amended by 
                sections 305, 321, and 322 of this Act, is further 
                amended by inserting after section 506D, as added by 
                section 322(a)(1), the following new section:

             ``reports on the acquisition of major systems

    ``Sec. 506E.  (a) Annual Reports Required.--(1) The Director of 
National Intelligence shall submit to the congressional intelligence 
committees each year, at the same time the budget of the President for 
the fiscal year beginning in such year is submitted to Congress 
pursuant to section 1105 of title 31, United States Code, a separate 
report on each acquisition of a major system by an element of the 
intelligence community.
    ``(2) Each report under this section shall be known as a `Report on 
the Acquisition of Major Systems'.
    ``(b) Elements.--Each report under this section shall include, for 
the acquisition of a major system, information on the following:
            ``(1) The current total acquisition cost for such system, 
        and the history of such cost from the date the system was first 
        included in a report under this section to the end of the 
        fiscal year immediately preceding the submission of the report 
        under this section.
            ``(2) The current development schedule for the system, 
        including an estimate of annual development costs until 
        development is completed.
            ``(3) The planned procurement schedule for the system, 
        including the best estimate of the Director of National 
        Intelligence of the annual costs and units to be procured until 
        procurement is completed.
            ``(4) A full life-cycle cost analysis for such system.
            ``(5) The result of any significant test and evaluation of 
        such major system as of the date of the submission of such 
        report, or, if a significant test and evaluation has not been 
        conducted, a statement of the reasons therefor and the results 
        of any other test and evaluation that has been conducted of 
        such system.
            ``(6) The reasons for any change in acquisition cost, or 
        schedule, for such system from the previous report under this 
        section, if applicable.
            ``(7) The major contracts or subcontracts related to the 
        major system.
            ``(8) If there is any cost or schedule variance under a 
        contract referred to in paragraph (7) since the previous report 
        under this section, the reasons for such cost or schedule 
        variance.
    ``(c) Determination of Increase in Costs.--Any determination of a 
percentage increase in the acquisition costs of a major system for 
which a report is filed under this section shall be stated in terms of 
constant dollars from the first fiscal year in which funds are 
appropriated for such contract.
    ``(d) Submission to the Congressional Armed Services Committees.--
To the extent that the report required by subsection (a) addresses an 
element of the intelligence community within the Department of Defense, 
the Director of National Intelligence shall submit that portion of the 
report, and any associated material that is necessary to make that 
portion understandable, to the Committee on Armed Services of the 
Senate and the Committee on Armed Services of the House of 
Representatives.
    ``(e) Definitions.--In this section:
            ``(1) The term `acquisition cost', with respect to a major 
        system, means the amount equal to the total cost for 
        development and procurement of, and system-specific 
        construction for, such system.
            ``(2) The term `full life-cycle cost', with respect to the 
        acquisition of a major system, means all costs of development, 
        procurement, construction, deployment, and operation and 
        support for such program, without regard to funding source or 
        management control, including costs of development and 
        procurement required to support or utilize such system.
            ``(3) The term `major contract', with respect to a major 
        system acquisition, means each of the 6 largest prime, 
        associate, or government-furnished equipment contracts under 
        the program that is in excess of $40,000,000 and that is not a 
        firm, fixed price contract.
            ``(4) The term `major system' has the meaning given that 
        term in section 506A(e).
            ``(5) The term `significant test and evaluation' means the 
        functional or environmental testing of a major system or of the 
        subsystems that combine to create a major system.''.
                    (B) Applicability date.--The first report required 
                to be submitted under section 506E(a) of the National 
                Security Act of 1947, as added by subparagraph (A), 
                shall be submitted with the budget for fiscal year 2011 
                submitted by the President under section 1105 of title 
                31, United States Code.
                    (C) Table of contents amendment.--The table of 
                contents in the first section of that Act is amended by 
                inserting after the item relating to section 506D, as 
                added by section 322(a)(2), the following new item:

``Sec. 506E. Reports on the acquisition of major systems.''.
            (2) Major defense acquisition programs.--Nothing in this 
        subsection, subsection (c), or an amendment made by such 
        subsections, shall be construed to exempt an acquisition 
        program of the Department of Defense from the requirements of 
        chapter 144 of title 10, United States Code or Department of 
        Defense Directive 5000, to the extent that such requirements 
        are otherwise applicable.
    (c) Excessive Cost Growth of Major Systems.--
            (1) Notification.--Title V of the National Security Act of 
        1947 (50 U.S.C. 413 et seq.), as amended by sections 305, 321, 
        322, and 323 of this Act, is further amended by inserting after 
        section 506E, as added by section 323(a), the following new 
        section:

                ``excessive cost growth of major systems

    ``Sec. 506F.  (a) Cost Increases of at Least 25 Percent.--(1)(A) On 
a continuing basis, and separate from the submission of any report on a 
major system required by section 506E of this Act, the program manager 
shall determine if the acquisition cost of such major system has 
increased by at least 25 percent as compared to the baseline cost of 
such major system.
    ``(B) Not later than 10 days after the date that a program manager 
determines that an increase described in subparagraph (A) has occurred, 
the program manager shall submit to the Director of National 
Intelligence notification of such increase.
    ``(2)(A) If, after receiving a notification described in paragraph 
(1)(B), the Director of National Intelligence determines that the 
acquisition cost of a major system has increased by at least 25 
percent, the Director shall submit to the congressional intelligence 
committees a written notification of such determination as described in 
subparagraph (B), a description of the amount of the increase in the 
acquisition cost of such major system, and a certification as described 
in subparagraph (C).
    ``(B) The notification required by subparagraph (A) shall include--
            ``(i) an updated cost estimate;
            ``(ii) the date on which the determination covered by such 
        notification was made;
            ``(iii) contract performance assessment information with 
        respect to each significant contract or sub-contract related to 
        such major system, including the name of the contractor, the 
        phase of the contract at the time of the report, the percentage 
        of work under the contract that has been completed, any change 
        in contract cost, the percentage by which the contract is 
        currently ahead or behind schedule, and a summary explanation 
        of significant occurrences, such as cost and schedule 
        variances, and the effect of such occurrences on future costs 
        and schedules;
            ``(iv) the prior estimate of the full life-cycle cost for 
        such major system, expressed in constant dollars and in current 
        year dollars;
            ``(v) the current estimated full life-cycle cost of such 
        major system, expressed in constant dollars and current year 
        dollars;
            ``(vi) a statement of the reasons for any increases in the 
        full life-cycle cost of such major system;
            ``(vii) the current change and the total change, in dollars 
        and expressed as a percentage, in the full life-cycle cost 
        applicable to such major system, stated both in constant 
        dollars and current year dollars;
            ``(viii) the completion status of such major system 
        expressed as the percentage--
                    ``(I) of the total number of years for which funds 
                have been appropriated for such major system compared 
                to the number of years for which it is planned that 
                such funds will be appropriated; and
                    ``(II) of the amount of funds that have been 
                appropriated for such major system compared to the 
                total amount of such funds which it is planned will be 
                appropriated;
            ``(ix) the action taken and proposed to be taken to control 
        future cost growth of such major system; and
            ``(x) any changes made in the performance or schedule of 
        such major system and the extent to which such changes have 
        contributed to the increase in full life-cycle costs of such 
        major system.
    ``(C) The certification described in this subparagraph is a written 
certification made by the Director and submitted to the congressional 
intelligence committees that--
            ``(i) the acquisition of such major system is essential to 
        the national security;
            ``(ii) there are no alternatives to such major system that 
        will provide equal or greater intelligence capability at equal 
        or lesser cost to completion;
            ``(iii) the new estimates of the full life-cycle cost for 
        such major system are reasonable; and
            ``(iv) the management structure for the acquisition of such 
        major system is adequate to manage and control full life-cycle 
        cost of such major system.
    ``(b) Cost Increases of at Least 50 Percent.--(1)(A) On a 
continuing basis, and separate from the submission of any report on a 
major system required by section 506E of this Act, the program manager 
shall determine if the acquisition cost of such major system has 
increased by at least 50 percent as compared to the baseline cost of 
such major system.
    ``(B) Not later than 10 days after the date that a program manager 
determines that an increase described in subparagraph (A) has occurred, 
the program manager shall submit to the Director of National 
Intelligence notification of such increase.
    ``(2) If, after receiving a notification described in paragraph 
(1)(B), the Director of National Intelligence determines that the 
acquisition cost of a major system has increased by at least 50 percent 
as compared to the baseline cost of such major system, the Director 
shall submit to the congressional intelligence committees a written 
certification stating that--
            ``(A) the acquisition of such major system is essential to 
        the national security;
            ``(B) there are no alternatives to such major system that 
        will provide equal or greater intelligence capability at equal 
        or lesser cost to completion;
            ``(C) the new estimates of the full life-cycle cost for 
        such major system are reasonable; and
            ``(D) the management structure for the acquisition of such 
        major system is adequate to manage and control the full life-
        cycle cost of such major system.
    ``(3) In addition to the certification required by paragraph (2), 
the Director of National Intelligence shall submit to the congressional 
intelligence committees an updated notification, with current 
accompanying information, as required by subsection (a)(2).
    ``(c) Prohibition on Obligation of Funds.--(1) If a written 
certification required under subsection (a)(2)(A) is not submitted to 
the congressional intelligence committees within 90 days of the 
notification made under subsection (a)(1)(B), funds appropriated for 
the acquisition of a major system may not be obligated for a major 
contract under the program. Such prohibition on the obligation of funds 
shall cease to apply at the end of the 30-day period of a continuous 
session of Congress that begins on the date on which Congress receives 
the notification required under subsection (a)(2).
    ``(2) If a written certification required under subsection (b)(2) 
is not submitted to the congressional intelligence committees within 90 
days of the notification made under subsection (b)(1)(B), funds 
appropriated for the acquisition of a major system may not be obligated 
for a major contract under the program. Such prohibition on the 
obligation of funds for the acquisition of a major system shall cease 
to apply at the end of the 30-day period of a continuous session of 
Congress that begins on the date on which Congress receives the 
notification required under subsection (b)(3).
    ``(d) Initial Certifications.--Notwithstanding subsection (c), for 
any major system for which a written certification is required under 
either subsection (a)(2) or (b)(2) on the date of the enactment of the 
Intelligence Authorization Act for Fiscal Year 2010, such written 
certification shall be submitted to the congressional intelligence 
committees within 180 days of such date of enactment. If such written 
certification is not submitted to the congressional intelligence 
committees within 180 days of such date of enactment, funds 
appropriated for the acquisition of a major system may not be obligated 
for a major contract under the program. Such prohibition on the 
obligation of funds for the acquisition of a major system shall cease 
to apply at the end of the 30-day period of a continuous session of 
Congress that begins on the date on which Congress receives the 
notification required under subsection (a)(2) or (b)(3).
    ``(e) Submission to the Congressional Armed Services Committees.--
To the extent that a submission required to be made to the 
congressional intelligence committees under this section addresses an 
element of the intelligence community within the Department of Defense, 
the Director of National Intelligence shall submit that portion of the 
submission, and any associated material that is necessary to make that 
portion understandable, to the Committee on Armed Services of the 
Senate and the Committee on Armed Services of the House of 
Representatives.
    ``(f) Definitions.--In this section:
            ``(1) The term `acquisition cost' has the meaning given 
        that term in section 506E(d).
            ``(2) The term `baseline cost', with respect to a major 
        system, means the projected acquisition cost of such system 
        that is approved by the Director of National Intelligence at 
        Milestone B or an equivalent acquisition decision for the 
        development, procurement, and construction of such system. The 
        baseline cost may be in the form of an independent cost 
        estimate.
            ``(3) The term `cost estimate'--
                    ``(A) means an assessment and quantification of all 
                costs and risks associated with the acquisition of a 
                major system based upon reasonably available 
                information at the time a written certification is 
                required under either subsection (a)(2) or (b)(2); and
                    ``(B) does not mean an `independent cost estimate'.
            ``(4) The term `full life-cycle cost' has the meaning given 
        that term in section 506E(d).
            ``(5) The term `independent cost estimate' has the meaning 
        given that term in section 506A(e).
            ``(6) The term `major system' has the meaning given that 
        term in section 506A(e).
            ``(7) The term `Milestone B' means a decision to enter into 
        system development and demonstration pursuant to guidance 
        prescribed by the Director of National Intelligence.
            ``(8) The term `program manager', with respect to a major 
        system, means--
                    ``(A) the head of the element of the intelligence 
                community which is responsible for the budget, cost, 
                schedule, and performance of the major system; or
                    ``(B) in the case of a major system within the 
                Office of the Director of National Intelligence, the 
                deputy who is responsible for the budget, cost, 
                schedule, and performance of the major system.''.
            (2) Table of contents amendment.--The table of contents in 
        the first section of that Act, as amended by sections 305, 321, 
        322, and 323 of this Act, is further amended by inserting after 
        the items relating to section 506E, as added by section 
        323(a)(3), the following new item:

``Sec. 506F. Excessive cost growth of major systems.''.
    (d) Future Budget Projections.--
            (1) In general.--Title V of the National Security Act of 
        1947 (50 U.S.C. 413 et seq.), as amended by sections 305, 321, 
        322, 323, and 324 of this Act, is further amended by inserting 
        after section 506F, as added by section 324(a), the following 
        new section:

                      ``future budget projections

    ``Sec. 506G.  (a) Future Year Intelligence Plans.--(1) The Director 
of National Intelligence, with the concurrence of the Office of 
Management and Budget, shall provide to the congressional intelligence 
committees a Future Year Intelligence Plan, as described in paragraph 
(2), for--
            ``(A) each expenditure center in the National Intelligence 
        Program; and
            ``(B) each major system in the National Intelligence 
        Program.
    ``(2)(A) A Future Year Intelligence Plan submitted under this 
subsection shall include the year-by-year proposed funding for each 
center or system referred to in subparagraph (A) or (B) of paragraph 
(1), for the budget year for which the Plan is submitted and not less 
than the 4 subsequent budget years.
    ``(B) A Future Year Intelligence Plan submitted under subparagraph 
(B) of paragraph (1) for a major system shall include--
            ``(i) the estimated total life-cycle cost of such major 
        system; and
            ``(ii) any major acquisition or programmatic milestones for 
        such major system.
    ``(b) Long-term Budget Projections.--(1) The Director of National 
Intelligence, with the concurrence of the Director of the Office of 
Management and Budget, shall provide to the congressional intelligence 
committees a Long-term Budget Projection for each element of the 
National Intelligence Program acquiring a major system that includes 
the budget for such element for the 5-year period following the last 
budget year for which proposed funding was submitted under subsection 
(a)(2)(A).
    ``(2) A Long-term Budget Projection submitted under paragraph (1) 
shall include projections for the appropriate element of the 
intelligence community for--
            ``(A) pay and benefits of officers and employees of such 
        element;
            ``(B) other operating and support costs and minor 
        acquisitions of such element;
            ``(C) research and technology required by such element;
            ``(D) current and planned major system acquisitions for 
        such element; and
            ``(E) any unplanned but necessary next-generation major 
        system acquisitions for such element.
    ``(c) Submission to Congress.--Each Future Year Intelligence Plan 
or Long-term Budget Projection required under subsection (a) or (b) 
shall be submitted to Congress along with the budget for a fiscal year 
submitted to Congress by the President pursuant to section 1105 of 
title 31, United States Code.
    ``(d) Content of Long-Term Budget Projections.--(1) Each Long-term 
Budget Projection submitted under subsection (b) shall include--
            ``(A) a budget projection based on constrained budgets, 
        effective cost and schedule execution of current or planned 
        major system acquisitions, and modest or no cost-growth for 
        undefined, next-generation systems; and
            ``(B) a budget projection based on constrained budgets, 
        modest cost increases in executing current and planned 
        programs, and more costly next-generation systems.
    ``(2) Each budget projection required by paragraph (1) shall 
include a description of whether, and to what extent, the total 
projection for each year exceeds the level that would result from 
applying the most recent Office of Management and Budget inflation 
estimate to the budget of that element of the intelligence community.
    ``(e) New Major System Affordability Report.--(1) Beginning on 
February 1, 2010, not later than 30 days prior to the date that an 
element of the intelligence community may proceed to Milestone A, 
Milestone B, or an analogous stage of system development, in the 
acquisition of a major system in the National Intelligence Program, the 
Director of National Intelligence, with the concurrence of the Director 
of the Office of Management and Budget, shall provide a report on such 
major system to the congressional intelligence committees.
    ``(2)(A) A report submitted under paragraph (1) shall include an 
assessment of whether, and to what extent, such acquisition, if 
developed, procured, and operated, is projected to cause an increase in 
the most recent Future Year Intelligence Plan and Long-term Budget 
Projection for that element of the intelligence community.
    ``(B) If an increase is projected under subparagraph (A), the 
report required by this subsection shall include a specific finding, 
and the reasons therefor, by the Director of National Intelligence and 
the Director of the Office of Management and Budget that such increase 
is necessary for national security.
    ``(f) Definitions.--In this section:
            ``(1) The term `major system' has the meaning given that 
        term in section 506A(e).
            ``(2) The term `Milestone A' means a decision to enter into 
        concept refinement and technology maturity demonstration 
        pursuant to guidance issued by the Director of National 
        Intelligence.
            ``(3) The term `Milestone B' means a decision to enter into 
        system development, integration, and demonstration pursuant to 
        guidance prescribed by the Director of National 
        Intelligence.''.
            (2) Applicability date.--The first Future Year Intelligence 
        Plan or Long-term Budget Projection required to be submitted 
        under subsection (a) or (b) of section 506G of the National 
        Security Act of 1947, as added by paragraph (1), shall be 
        submitted with the budget for fiscal year 2011 submitted by the 
        President under section 1105 of title 31, United States Code.
            (3) Table of contents amendment.--The table of contents in 
        the first section of that Act, as amended by sections 305, 321, 
        322, 323, and 324 of this Act, is further amended by inserting 
        after the items relating to section 506F, as added by section 
        324(b), the following new item:

``Sec. 506G. Future budget projections.''.
    (e) Correcting Long-Standing Material Weaknesses.--
            (1) Definitions.--In this subsection:
                    (A) Covered element of the intelligence 
                community.--The term ``covered element of the 
                intelligence community'' means--
                            (i) the Central Intelligence Agency;
                            (ii) the Defense Intelligence Agency;
                            (iii) the National Geospatial-Intelligence 
                        Agency;
                            (iv) the National Reconnaissance Office; or
                            (v) the National Security Agency.
                    (B) Independent auditor.--The term ``independent 
                auditor'' means an individual who--
                            (i)(I) is a Federal, State, or local 
                        government auditor who meets the independence 
                        standards included in generally accepted 
                        government auditing standards; or
                            (II) is a public accountant who meets such 
                        independence standards; and
                            (ii) is designated as an auditor by the 
                        Director of National Intelligence or the head 
                        of a covered element of the intelligence 
                        community, as appropriate.
                    (C) Long-standing, correctable material weakness.--
                The term ``long-standing, correctable material 
                weakness'' means a material weakness--
                            (i) that was first reported in the annual 
                        financial report of a covered element of the 
                        intelligence community for a fiscal year prior 
                        to fiscal year 2007; and
                            (ii) the correction of which is not 
                        substantially dependent on a business system 
                        that will not be implemented prior to the end 
                        of fiscal year 2010.
                    (D) Material weakness.--The term ``material 
                weakness'' has the meaning given that term under the 
                Office of Management and Budget Circular A-123, 
                entitled ``Management's Responsibility for Internal 
                Control,'' revised December 21, 2004.
                    (E) Covered program.--The term ``covered program'' 
                means--
                            (i) the Central Intelligence Agency 
                        Program;
                            (ii) the Consolidated Cryptologic Program;
                            (iii) the General Defense Intelligence 
                        Program;
                            (iv) the National Geospatial-Intelligence 
                        Program; or
                            (v) the National Reconnaissance Program.
                    (F) Senior intelligence management official.--The 
                term ``senior intelligence management official'' means 
                an official within a covered element of the 
                intelligence community who holds a position--
                            (i)(I) for which the level of the duties 
                        and responsibilities and the rate of pay are 
                        comparable to that of a position--
                                    (aa) above grade 15 of the General 
                                Schedule (as described in section 5332 
                                of title 5, United States Code); or
                                    (bb) at or above level IV of the 
                                Executive Level (as described in 
                                section 5315 of title 5, United States 
                                Code); or
                            (II) as the head of a covered element of 
                        the intelligence community; and
                            (ii) which is compensated for employment 
                        with funds appropriated pursuant to an 
                        authorization of appropriations in this Act.
            (2) Identification of senior intelligence management 
        officials.--
                    (A) Requirement to identify.--Not later than 30 
                days after the date of the enactment of this Act, the 
                head of a covered element of the intelligence community 
                shall identify each senior intelligence management 
                official of such element who is responsible for 
                correcting a long-standing, correctable material 
                weakness.
                    (B) Head of a covered element of the intelligence 
                community.--The head of a covered element of the 
                intelligence community may designate himself or herself 
                as the senior intelligence management official 
                responsible for correcting a long-standing, correctable 
                material weakness.
                    (C) Requirement to update designation.--In the 
                event a senior intelligence management official 
                identified under subparagraph (A) is determined by the 
                head of the appropriate covered element of the 
                intelligence community to no longer be responsible for 
                correcting a long-standing, correctable material 
                weakness, the head of such element shall identify the 
                successor to such official not later than 10 days after 
                the date of such determination.
            (3) Notification.--Not later than 10 days after the date 
        that the head of a covered element of the intelligence 
        community has identified a senior intelligence management 
        official pursuant to subsection (b)(1), the head of such 
        element shall provide written notification of such 
        identification to the Director of National Intelligence and to 
        such senior intelligence management official.
            (4) Independent review.--
                    (A) Notification of correction of deficiency.--A 
                senior intelligence management official who has 
                received a notification under paragraph (3) regarding a 
                long-standing, correctable material weakness shall 
                notify the head of the appropriate covered element of 
                the intelligence community, not later than 5 days after 
                the date that such official determines that the 
                specified material weakness is corrected.
                    (B) Requirement for independent review.--
                            (i) In general.--Not later than 10 days 
                        after the date a notification is provided under 
                        subparagraph (A), the head of the appropriate 
                        covered element of the intelligence community 
                        shall appoint an independent auditor to conduct 
                        an independent review to determine whether the 
                        specified long-standing, correctable material 
                        weakness has been corrected.
                            (ii) Review already in process.--If an 
                        independent review is already being conducted 
                        by an independent auditor, the head of the 
                        covered element of the intelligence community 
                        may approve the continuation of such review to 
                        comply with clause (i).
                            (iii) Conduct of review.--A review 
                        conducted under clause (i) or (ii) shall be 
                        conducted as expeditiously as possible and in 
                        accordance with generally accepted accounting 
                        principles.
                    (C) Notification of results of review.--Not later 
                than 5 days after the date that a review required by 
                subparagraph (B) is completed, the independent auditor 
                shall submit to the head of the covered element of the 
                intelligence community, the Director of National 
                Intelligence, and the senior intelligence management 
                official involved a notification of the results of such 
                review.
            (5) Congressional oversight.--The head of a covered element 
        of the intelligence community shall notify the congressional 
        intelligence committees not later than 30 days after the date 
        of--
                    (A) that a senior intelligence management official 
                is identified under paragraph (2)(A) and notified under 
                paragraph (3); or
                    (B) the correction of a long-standing, correctable 
                material weakness, as verified by an independent review 
                under paragraph (4)(B).

SEC. 6009. ENDING THE IRS SLUSH FUND.

    The Internal Revenue Service shall deposit in the Treasury as 
miscellaneous receipts all of the fees it receives for services.

SEC. 6010. RESCINDING UNSPENT EARMARKS.

    (a) Definition.--In this section, the term ``earmark'' means the 
following:
            (1) A congressionally directed spending item, as defined in 
        Rule XLIV of the Standing Rules of the Senate.
            (2) A congressional earmark for purposes of Rule XXI of the 
        House of Representatives.
    (b) Rescission.--Any appropriated earmark with more than 90 percent 
of the appropriated amount remaining available for obligation at the 
end of the 9th fiscal year following the fiscal year in which the 
earmark was made available is rescinded effective at the end of that 
9th fiscal year.
    (c) Agency Identification and Reports.--
            (1) Agency identification.--Each Federal agency shall 
        identify and report every project that is an earmark with an 
        unobligated balance at the end of each fiscal year to the 
        Director of OMB.
            (2) Annual report.--The Director of OMB shall submit to 
        Congress and publically post on the website of OMB an annual 
        report that includes--
                    (A) a listing and accounting for earmarks with 
                unobligated balances summarized by agency including the 
                amount of the original earmark, amount of the 
                unobligated balance and year when the funding expires, 
                if applicable;
                    (B) the number of rescissions resulting from this 
                section and the annual savings resulting from this 
                section for the previous fiscal year; and
                    (C) a listing a accounting for earmarks scheduled 
                to be rescinded at the end of the current fiscal year.

SEC. 6011. REPEALING THE RAIL-LINE RELOCATION PROGRAM.

    Section 20154 of title 49, United States Code, is repealed.

SEC. 6012. ELIMINATING RADIO/TV MARTI AT THE OFFICE OF CUBA 
              BROADCASTING.

    (a) Radio Broadcasting to Cuba Act.--The Radio Broadcasting to Cuba 
Act (22 U.S.C. 1465 et seq.) is repealed.
    (b) Television Broadcasting to Cuba Act.--The Television 
Broadcasting to Cuba Act (22 U.S.C. 1465aa et seq.) is repealed.
    (c) Report on Public Communication With Cuban People.--Not later 
than 90 days after the date of the enactment of this Act, the Secretary 
of State, in consultation with the Broadcasting Board of Governors, the 
International Broadcasting Bureau, and other relevant agencies and 
organizations, shall submit a report to the Committee on Appropriations 
of the Senate, the Committee on Foreign Relations of the Senate, the 
Committee on Appropriations of the House of Representatives, and the 
Committee on Foreign Affairs of the House of Representatives that 
describes--
            (1) alternatives to television and radio broadcasts for 
        disseminating news and information to, and otherwise 
        communicating with, the Cuban people, including DVDs, the 
        Internet, cell phones, and other handheld electronic devices; 
        and
            (2) the relative effectiveness of each of the communication 
        alternatives identified under paragraph (1).

SEC. 6013. ENDING SUPPORT FOR THE COLOMBIAN MILITARY.

    None of the funds appropriated or otherwise made available by any 
Act under the headings ``international narcotics control and law 
enforcement'' or ``foreign military financing program'' may be used for 
direct support to the military forces of the Government of Colombia.
                                 <all>