[Congressional Record Volume 143, Number 30 (Tuesday, March 11, 1997)]
[Senate]
[Pages S2129-S2145]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BOND (for himself, Mr. Lott, Mr. Hollings, Mr. Hutchinson, 
        Mr. Cochran, Mr. Kohl, Mr. Inouye, Mr. Moynihan, Mr. Chafee, 
        Mr. Daschle and Mr. Breaux):
  S. 419. A bill to provide surveillance, research, and services aimed 
at prevention of birth defects, and for other purposes; to the 
Committee on Labor and Human Resources.


                THE BIRTH DEFECTS PREVENTION ACT OF 1997

  Mr. BOND. Mr. President, I rise today to introduce the Birth Defects 
Prevention Act of 1997. I introduce this on behalf of myself, Senators 
Lott, Daschle, Hollings, Hutchinson of Arkansas, Cochran, Kohl, Inouye, 
Moynihan, Chafee, and Breaux.
  The March of Dimes and their volunteers are here today to lend 
support to an often overlooked, but a very compelling health care 
problem in the

[[Page S2130]]

United States today. Many people do not realize that birth defects are 
the leading cause of infant deaths in the United States. This year 
alone, an estimated 150,000 babies will be born with a serious birth 
defect, and one out of every five of these babies will die. Nationally, 
birth defects affect 3 percent of all births, and among the babies who 
survive, birth defects are a significant cause of lifelong disability. 
Depending on the particular type of problem and its severity, special 
medical treatment, education, rehabilitation and other services may be 
required into adulthood, costing billions of dollars each year.
  A 1995 Centers for Disease Control and Prevention report revealed 
that the lifetime cost for just 18 common birth defects occurring in a 
single year is $8 billion. Yet, only about 22 percent of those born 
with birth defects are included in these figures. And, of course, it is 
impossible to measure the pain and the heartache that birth defects 
cause.
  Let me share with you just a couple of experiences I have had in 
Missouri. I have worked for a long time to improve children's health. I 
appropriated money in the early 1970's in Missouri to fund the high-
cost, but highly effective, neonatal care units at our hospitals. They 
do a wonderful job of saving very-low-birth-weight babies and babies 
with severe defects. But that is not enough. We can do some things to 
lower the incidence of birth defects, and birth defects can strike any 
family.
  I know, many people say one of the real problems is we have too many 
young women, often unmarried, who do not know that you cannot use 
tobacco or alcohol or drugs during pregnancy without expecting a bad 
birth outcome.
  But there are many other things that we have only recently learned 
that are extremely important. Four hundred milligrams a day of folic 
acid, vitamin B, for women of childbearing years can substantially 
reduce the risk of a child born with spina bifida. A very good friend 
of ours had a child born with spina bifida. He was a wonderful young 
man, but he has had to go through many expensive operations. His 
parents went through much heartache, and he still is not able to move 
as the rest of us can.
  Birth defects can be dealt with if we have a concerted national 
strategy to direct the Centers for Disease Control to collect the 
information on birth defects, to provide funding and support in 
research at the State level and to set up five regional centers to deal 
with birth defects. A few years ago, the incidence of birth defects 
became a very major concern in certain Hispanic communities in 
southwest Texas, and, as a result, the Hispanic caucus joined with me 
in past years, in past sessions of Congress, to sponsor this 
legislation.
  We were able to appropriate some moneys for the Centers for Disease 
Control, but we have not been able to establish a national strategy, 
maybe because there are not lobbyists for those who have not yet been 
born who may be at risk of birth defects, but there are effective 
spokespeople, like the March of Dimes, the American Academy of 
Pediatrics, and a long list of distinguished organizations.
  The time has come to join with them, with the Easter Seals Society, 
the American Hospital Association, and all of the other organizations, 
in developing and directing the Centers for Disease Control to work 
with States and local governments to survey birth defects, to bring 
together the information on birth defects so that researchers have a 
means of dealing with it.
  Mr. President, birth defects are the leading cause of infant death in 
the United States. This year alone, an estimated 150,000 babies will be 
born with a serious birth defect, and 1 out of every 5 of these babies 
will die.
  In addition, birth defects affect 3 percent of all births nationally.
  Among babies who survive, birth defects are a significant cause of 
lifelong disability. Depending on the particular type of problem and 
its severity, special medical treatment, education, rehabilitation, and 
other services may be required into adulthood--costing billions of 
dollars each year.
  A 1995 Centers for Disease Control and Prevention report revealed 
that the lifetime cost for just 18 common birth defects occurring in a 
single year is $8 billion--yet only about 22 percent of those born with 
birth defects are included in these figures.
  And, of course, it is impossible to measure the pain and heartache 
that birth defects cause.
  It may surprise you to learn that the United States does not have a 
coordinated strategy for reducing the incidence of birth defects. It is 
both shocking and disappointing how few Federal resources are devoted 
to prevent this tragic, perhaps even partly preventable public health 
problem.
  So today, in an effort to tackle this devastating problem head on, I 
am introducing the Birth Defects Prevention Act of 1997. Congressmen 
Solomon Ortiz and Henry Bonilla are simultaneously introducing this 
bill in the House of Representatives.
  This bill will prioritize our efforts and make congressional intent 
clear--more resources should be directed to the prevention of the 
leading killer of babies, birth defects.
  An unfortunate situation in the State of Texas a few years ago 
exemplifies how the lack of a birth defects prevention strategy delayed 
the response to an outbreak of birth defects and may have needlessly 
cost innocent lives. Health professionals in Texas observed that six 
infants were born with anencephaly over a 6-week period. Anencephaly is 
a fetal birth defect characterized by an absence of brain tissue.
  The Texas Department of Health conducted a study after this 
information was reported. The study revealed that since 1989, at least 
30 infants in south Texas had been born without or with little brain 
tissue. However, because Texas did not have a birth defects 
surveillance program, the severity of the problem was not recognized 
until the incidence of anencephaly was so high that it was difficult to 
miss.
  This tragic event in south Texas underscores the need for a 
coordinated national effort to research the causes of birth defects and 
to prevent such defects from occurring in the first place. A little 
prevention goes a long way in preventing family pain and heartache. It 
is up to our Nation to seize on this excellent opportunity to protect 
our most vulnerable resources--our children.
  To achieve the goal of protecting our Nation's kids, this legislation 
does several things.
  First, the bill provides Federal grants to State health authorities 
for the purpose of collecting, analyzing, and reporting birth defects 
statistics. Today, only about half of the States have some kind of 
birth defects surveillance system.
  Second, this legislation calls for the establishment of at least five 
regional centers of birth defects prevention research. These regional 
programs will collect and analyze information on the number, incidence, 
and causes of birth defects within a region as well as provide 
education and training for health professionals aimed at the prevention 
of birth defects.
  At least one of the centers will focus on birth defects among ethnic 
minorities.
  Third, the Centers for Disease Control and Prevention [CDC] is 
directed to be the coordinating agency for birth defects prevention 
activities. The CDC will serve as a clearinghouse for the collection 
and storage of data generated from State and regional birth defects 
monitoring programs.
  Finally, grants will be available to State departments of health, 
universities, or other private, or nonprofit entities to develop and 
implement birth defect prevention strategies, such as programs using 
folic acid vitamin supplements to prevent spina bifida and alcohol 
avoidance strategies to prevent fetal alcohol syndrome.
  Again, when we talk about birth defects, it is important to note that 
many birth defects are preventable. For instance, we now know that a 
simple 400 mg dose of the B vitamin folic acid each day could prevent 
50 to 70 percent of all cases of spina bifida and anencephaly--saving 
about $245 million annually and more importantly, saving some families 
the heart ache that many of us have witnessed friends and families go 
through.
  We must broaden public and professional awareness of birth defects 
and prevention opportunities, and we must have a coordinated national 
strategy to achieve this goal.
  The economic and emotional burden of birth defects on families and 
society

[[Page S2131]]

as a whole presents a vivid, human picture of the need for a national 
research and prevention strategy.
  Although infant mortality in the United States has been falling 
steadily over the past few decades, 25 other countries have lower 
infant mortality rates than the United States.
  This bill is an important step in improving the health of our Nation. 
The tragedy of birth defects compels our Nation to become a stronger 
partner for charitable and medical groups in fulfilling our obligation 
to protect our Nation's most vulnerable population. Let us hope that 
more tragedies are not necessary to push Congress into action.
  This legislation has the support of many national organizations, 
including: the March of Dimes Foundation, the Spina Bifida Association 
of America, American Academy of Pediatrics, National Association of 
Children's Hospitals, the National Easter Seals Society, American 
Association of Mental Retardation, Association of Maternal and Child 
Health Programs, and the American Hospital Association.
  The bill also has broad bipartisan support.
  Let me conclude by taking special note of the help of the National 
and Missouri March of Dimes, as well as numerous health and child 
advocate organizations, for their assistance in developing and 
advocating this legislation. Specifically, I wish to thank Dr. Jennifer 
Howse, Jo Merrill, and Marina Weiss of the March of Dimes for their 
persistence and commitment to this endeavor.
  Mr. President, I send a copy of the bill to the desk and ask 
unanimous consent that it be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 419

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; FINDINGS.

       (a) Short Title.--This Act may be cited as the ``Birth 
     Defects Prevention Act of 1997''.
       (b) Findings.--The Congress makes the following findings:
       (1) Birth defects are the leading cause of infant 
     mortality, directly responsible for one out of every five 
     infant deaths.
       (2) Thousands of the 150,000 infants born with a serious 
     birth defect annually face a lifetime of chronic disability 
     and illness.
       (3) Birth defects threaten the lives of infants of all 
     racial and ethnic backgrounds. However, some conditions pose 
     excess risks for certain populations. For example, compared 
     to all infants born in the United States, Hispanic-American 
     infants are more likely to be born with anencephaly spina 
     bifida and other neural tube defects and African-American 
     infants are more likely to be born with sickle-cell anemia.
       (4) Birth defects can be caused by exposure to 
     environmental hazards, adverse health conditions during 
     pregnancy, or genetic mutations. Prevention efforts are 
     slowed by lack of information about the number and causes of 
     birth defects. Outbreaks of birth defects may go undetected 
     because surveillance and research efforts are underdeveloped 
     and poorly coordinated.

     SEC. 2. BIRTH DEFECTS PREVENTION AND RESEARCH PROGRAM.

       Part B of title III of the Public Health Service Act (42 
     U.S.C. 243 et seq.) is amended by inserting after section 
     317F the following:


            ``birth defects prevention and research programs

       ``Sec. 317G. (a) National Birth Defects Surveillance 
     Program.--The Secretary, acting through the Director of the 
     Centers for Disease Control, may award grants to, enter into 
     cooperative agreements with, or provide direct technical 
     assistance in lieu of cash to States, State health 
     authorities, or health agencies of political subdivisions of 
     a State for collection, analysis, and reporting of birth 
     defects statistics from birth certificates, infant death 
     certificates, hospital records, or other sources and to 
     collect and disaggregate such statistics by gender and racial 
     and ethnic group.
       ``(b) Centers of Birth Defects Prevention Research.--
       ``(1) In general.--The Secretary shall establish at least 
     five regional birth defects monitoring and research programs 
     for the purpose of collecting and analyzing information on 
     the number, incidence, correlates, and causes of birth 
     defects, to include information regarding gender and 
     different racial and ethnic groups, including Hispanics, non-
     Hispanic whites, African Americans, Native Americans, and 
     Asian Americans.
       ``(2) Authority for awards.--For purposes of paragraph (1), 
     the Secretary, acting through the Director of the Centers for 
     Disease Control, may award grants or enter into cooperative 
     agreements with State departments of health, universities, or 
     other private, nonprofit entities engaged in research to 
     enable such entities to serve as Centers of Birth Defects 
     Prevention Research.
       ``(3) Application.--To be eligible for grants or 
     cooperative agreements under paragraph (2), the entity shall 
     prepare and submit to the Secretary an application at such 
     time, in such manner and containing such information as the 
     Secretary may prescribe, including assurances that--
       ``(A) the program will collect, analyze, and report birth 
     defects data according to guidelines prescribed by the 
     Director of the Centers for Disease Control;
       ``(B) the program will coordinate States birth defects 
     surveillance and prevention efforts within a region;
       ``(C) education, training, and clinical skills improvement 
     for health professionals aimed at the prevention and control 
     of birth defects will be included in the program activities;
       ``(D) development and evaluation of birth defects 
     prevention strategies will be included in the program 
     activities, as appropriate; and
       ``(E) the program funds will not be used to supplant or 
     duplicate State efforts.
       ``(4) Centers to focus on racial and ethnic disparities in 
     birth defects.--One of the Centers of Birth Defects 
     Prevention Research shall focus on birth defects among ethnic 
     minorities, and shall be located in a standard metropolitan 
     statistical area that has over a 60 percent ethnic minority 
     population, is federally designated as a health professional 
     shortage area, and has an incidence of one or more birth 
     defects more than four times the national average.
       ``(c) Clearinghouse.--The Centers for Disease Control shall 
     serve as the coordinating agency for birth defects prevention 
     activities through establishment of a clearinghouse for the 
     collection and storage of data and generated from birth 
     defects monitoring programs developed under subsections (a) 
     and (b). Functions of such clearinghouse shall include 
     facilitating the coordination of research and policy 
     development to prevent birth defects. The clearinghouse shall 
     disaggregate data by gender and by racial and ethnic groups, 
     the major Hispanic subgroups, non-Hispanic whites, African 
     Americans, Native Americans, and Asian Americans.
       ``(d) Prevention Strategies.--
       ``(1) In general.--The Secretary, acting through the 
     Director of the Centers for Disease Control, shall award 
     grants to or enter into cooperative agreements with State 
     departments of health, universities, or other private, or 
     nonprofit entities to enable such entities to develop, 
     evaluate and implement prevention strategies designed to 
     reduce the incidence and effects or birth defects including--
       ``(A) demonstration projects for the prevention of birth 
     defects, including--
       ``(i) at least one project aimed at enhancing prevention 
     services in a `high-risk area' that has a proportion of birth 
     to minority women above the national average, is federally 
     designated as a health professional shortage area, and has a 
     high incidence of one or more birth defects; and
       ``(ii) at least one outcome research project to study the 
     effectiveness of infant interventions aimed at amelioration 
     of birth defects; and
       ``(B) public information and education programs for the 
     prevention of birth defects, including but not limited to 
     programs aimed at educating women on the need to consume the 
     daily amount of folic acid (pteroylmon oglutomic acid) as 
     recommended by the Public Health Service and preventing 
     alcohol and illicit drug use during pregnancy in a manner 
     which is sensitive to the cultural and linguistic context of 
     a given community.
       ``(2) Consultation.--In carrying out programs under this 
     subsection, the Secretary, acting through the Centers for 
     Disease Control and Prevention, shall consult with State and 
     local governmental agencies, managed care organizations, 
     nonprofit organizations, physicians, and other health 
     professionals and organizations.
       ``(e) Advisory Committee.--
       ``(1) Establishment of committee.--The Secretary shall 
     establish an Advisory Committee for Birth Defects Prevention 
     (in this subsection referred to as the `Committee'). The 
     Committee shall provide advice and recommendations on 
     prevention and amelioration of birth defects to the Secretary 
     and the Director of the Centers for Disease Control.
       ``(2) Functions.--With respect to birth defects prevention, 
     the Committee shall--
       ``(A) make recommendations regarding prevention research 
     and intervention priorities;
       ``(B) study and recommend ways to prevent birth defects, 
     with emphasis on emerging technologies;
       ``(C) identify annually the important areas of government 
     and nongovernment cooperation needed to implement prevention 
     strategies;
       ``(D) identify research and prevention strategies which 
     would be successful in addressing birth defects disparities 
     among the major Hispanic subgroups, non-Hispanic whites, 
     African Americans, Native Americans, and Asian Americans; and
       ``(E) review and recommend policies and guidance related to 
     birth defects research and prevention.
       ``(3) Composition.--The Committee shall be composed of 15 
     members appointed by the Secretary, including--
       ``(A) four health professionals, who are not employees of 
     the United States, who have expertise in issues related to 
     prevention of or care for children with birth defects;

[[Page S2132]]

       ``(B) two representatives from health professional 
     associations;
       ``(C) four representatives from voluntary health agencies 
     concerned with conditions leading to birth defects or 
     childhood disability;
       ``(D) five members of the general public, of whom at least 
     three shall be parents of children with birth defects or 
     persons having birth defects; and
       ``(E) representatives of the Public Health Service agencies 
     involved in birth defects research and prevention programs 
     and representatives of other appropriate Federal agencies, 
     including but not limited to the Department of Education and 
     the Environmental Protection Agency, shall be appointed as ex 
     officio, liaison members for purposes of informing the 
     Committee regarding Federal agency policies and practices;
       ``(4) Structure.--
       ``(A) Term of office.--Appointed members of the Committee 
     shall be appointed for a term of office of 3 years, except 
     that of the members first appointed, 5 shall be appointed for 
     a term of 1 year, 5 shall be appointed for a term of 2 years, 
     and 5 shall be appointed for a term of 3 years, as determined 
     by the Secretary.
       ``(B) Meetings.--The Committee shall meet not less than 
     three times per year and at the call of the chair.
       ``(C) Compensation.--Members of the Committee who are 
     employees of the Federal Government shall serve without 
     compensation. Members of the Committee who are not employees 
     of the Federal Government shall be compensated at a rate not 
     to exceed the daily equivalent of the rate in effect for 
     grade GS-18.
       ``(f) Report.--The Secretary shall prepare and submit to 
     the Committee on Commerce of the House of Representatives and 
     the Committee on Labor and Human Resources of the Senate a 
     biennial report regarding the incidence of birth defects, the 
     contribution of birth defects to infant mortality, the 
     outcome of implementation of prevention strategies, and 
     identified needs for research and policy development to 
     include information regarding the various racial and ethnic 
     groups, including Hispanic, non-Hispanic whites, African 
     Americans, Native Americans, and Asian Americans.
       ``(g) Applicability of Privacy Laws.--The provisions of 
     this section shall be subject to the requirements of section 
     552a of title 5, United States Code. All Federal laws 
     relating to the privacy of information shall apply to the 
     data and information that is collected under this section.
       ``(h) Authorization of Appropriations.--
       ``(1) For the purpose of carrying out subsections (a), (b), 
     and (c), there are authorized to be appropriated $15,000,000 
     for fiscal year 1998, $20,000,000 for fiscal year 1999, and 
     such sums as may be necessary for each of the fiscal years 
     2000 and 2001.
       ``(2) For the purpose of carrying out subsection (d), there 
     are authorized to be appropriated $15,000,000 for fiscal year 
     1998, $20,000,000 for fiscal year 1999, and such sums as may 
     be necessary for each of the fiscal years 2000 and 2001.
       ``(3) For the purpose of carrying out subsections (e) and 
     (f), there are authorized to be appropriated $2,000,000 for 
     each of the fiscal years 1998 through 2001.''.
                                 ______
                                 
      By Mr. DORGAN (for himself and Mr. Bumpers):
  S. 420. A bill to amend the Internal Revenue Code of 1986 to phase in 
by the year 2000 a 100 percent deduction for the health insurance costs 
of self-employed individuals; to the Committee on Finance.


            The Health Insurance Cost Tax Equity Act of 1997

 Mr. DORGAN. Mr. President, today I rise to introduce the 
Health Insurance Cost Tax Equity Act of 1997, which is legislation to 
finally put our Nation's sole proprietors on par with their larger 
corporate competitors with respect to the tax treatment of health 
insurance costs.
  Last summer in the Health Insurance Portability and Accountability 
Act, Congress took a great stride in addressing one of urgent tax 
matters facing our family farmers and ranchers. This act, which was 
passed by Congress and signed into law by the President, included a 
proposal to increase the amount that farmers, ranchers and other sole 
proprietors may deduct for their health insurance costs to 80 percent 
by the year 2006, a significant improvement from its current level of 
40 percent.
  But we cannot stop at this point. It is indefensible that our tax 
laws tell some of our biggest corporations that they still can deduct 
100 percent of their health insurance costs, while others, mostly 
smaller businesses, are told they can deduct only a smaller share of 
their health insurance costs.
  This provision is absolutely critical to the health care concerns of 
farmers, ranchers and small business owners who conduct their 
businesses as sole proprietors. That is why I'm reintroducing 
legislation this year to ensure complete fairness in the Tax Code for 
sole proprietors who acquire health insurance coverage for themselves 
and their families. My bill will increase the deduction for the health 
insurance costs of the self-employed to 60 percent and 80 percent in 
1998 and 1999, respectively. After that, Americans who work for 
themselves could deduct 100 percent of their insurance costs, just as 
large corporations do.
  The health of a farm family or small business owner is no less 
important than the health of the president of a large corporation, and 
the Internal Revenue Code should reflect this simple fact.
  I urge my colleagues to cosponsor this legislation. It promotes tax 
justice and the well-being of our independent producers and the entire 
country.
                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 421. A bill to amend title 35, United States Code, to establish 
the Patent and Trademark Office as a Government corporation, and for 
other purposes; to the Committee on the Judiciary.


               THE PATENT AND TRADEMARK OFFICE REFORM ACT

 Mr. LAUTENBERG. Mr. President, today I reintroduce the Patent 
and Trademark Office Reform Act, a bill to establish the Patent and 
Trademark Office as a Government corporation and to provide needed 
reforms to its operations. The handful of changes I have made from the 
legislation I sponsored in the last Congress are designed to provide 
assurance to the Office's users that their fees will only be applied 
toward Patent and Trademark Office purposes and additional protections 
to the Office's employees.
  Our country's Patent and Trademark Office is one of the finest in the 
world. It has been and continues to be integral to America's 
competitiveness and economic growth. It is no exaggeration to state 
that tens of millions of jobs have been created as a result of the 
PTO's actions. I have seen first-hand the benefits of this Office in my 
home State of New Jersey, which although it is the ninth most populated 
State in the Union, receives the third largest number of patents per 
capita. Despite the comparative quality of work of the current PTO, 
laws and regulations outside of the control of the PTO's management 
have prevented it from being as efficient as it should be, and as its 
users deserve. And unless remedied by legislation, certain 
circumstances that I will detail below will cause PTO's performance to 
decrease dramatically.
  The Patent and Trademark Office is currently subject to the same 
procurement and personnel requirements, including personnel ceilings, 
as other Federal agencies. While these requirements make sense and, 
indeed, are essential for other Government entities, they hinder the 
effectiveness of the PTO and are not appropriate for a completely user 
fee-funded agency. By converting the PTO into a Government corporation, 
we would free the Office from most of these laws and regulations, but 
would keep its inherently governmental function within the Federal 
Government and its work would be continued by federal employees.
  Mr. President, the new PTO will be a wholly owned Government 
corporation run by a commissioner and two assistants. They will report 
to the Secretary of Commerce on patent and trademark policy matters 
only. Like my bill from the last Congress, I have inserted a firewall 
to prevent the Commerce Department from interfering with internal 
management decisions of the Office, as opposed to policy decisions. My 
legislation establishes an Office of the Under Secretary for 
Intellectual Property within the Commerce Department. The Under 
Secretary will ensure both attention to intellectual property issues 
at the Cabinet level and a coordinated Government approach to these 
matters.

  The new PTO will be able to procure equipment, supplies, even office 
space without the constraints of the Brooks Act, the Public Buildings 
Act, and the Federal Property and Administrative Services Act. These 
changes are in response to criticism of undue procurement delays that 
have resulted in lower quality products at higher costs to the Office. 
My legislation would also permit PTO to lease, buy, or build office 
space that is more practical for PTO's needs. Currently, PTO is spread 
throughout over a dozen buildings, which is not only inconvenient for 
its employees, it's inefficient.

[[Page S2133]]

  Much of the work performed at the PTO requires specialized skills. 
Those skills are the main reason that the PTO's employees are so highly 
sought by the private sector. Limited by the general schedule and an 
overly structured employee classification system, the Office has been 
hindered in its ability to retain a large number of its workers. My 
legislation will enable the new PTO to provide its employees with 
competitive pay so that it might keep and hire top talent. The Office 
will no longer be subject to personnel ceilings, including those 
established in the Federal WorkForce Restructuring Act of 1994. There 
will also be a one-year carry-over of all PTO employees during the 
transition from the current PTO to the PTO as a Government corporation.
  One of the more significant differences between the bill I am 
introducing today and the one I sponsored last Congress involves 
personnel issues. Although both bills give the new PTO the flexibility 
to competitively compensate its employees, S. 421 permits collective 
bargaining over pay and other important terms and conditions of 
employment. This increased employee participation will provide an 
essential balance to needed managerial flexibility. I have also 
established a floor on basic pay for current PTO employees so that they 
will be assured of receiving no less then they do now after PTO becomes 
a Government corporation.
  Mr. President, this bill would give the users, who have fully funded 
the Office's operations since 1991, an advisory role over such matters 
as PTO's performance, fees, and budget. This advisory board will review 
and recommend changes to promote the Office's patent and trademark 
operations. This board will be comprised of 12 persons selected by the 
President and Congress who will serve for 4-year terms and who will 
meet at least quarterly. The Commissioner is required to consult with 
the board prior to changing or proposing to change fees or regulations. 
The board will submit an annual report containing its review of the 
Office to the President, the Commissioner, and Congress.
  In addition to the oversight of the Office's operations provided by 
the advisory board, I have included safeguards to ensure the new PTO 
remains accountable to Congress and its users. The new Office will have 
its own inspector general, who will be appointed by the President, to 
investigate waste, fraud, and abuse. The Office's annual financial 
statements will be audited by either an independent CPA or the 
Comptroller General, and the results of such audits shall be provided 
to Congress. Furthermore, the new PTO is required to submit annual 
management reports to Congress and business-like budgets to the 
President. These reports and budgets must include statements on cash 
flows, operations, financial position, and internal accounting and 
administrative control systems.
  Congress will continue to set the user fees for the new Office, and 
thus, control, to a large extent, the PTO's revenue stream. This should 
provide comfort to my colleagues and the PTO's users concerned that, 
with its new-found freedom, the Office will move into plush offices or 
pay its employees unwarranted sums. I realize the decision to keep the 
fee-setting authority with Congress is counter to most government 
corporations. Hopefully we can revisit this issue in a few years after 
we see how well the new PTO is performing.
  Mr. President, there is one last difference between S. 421 and the 
bill I introduced 2 years ago that I would like to discuss today and 
that involves the patent surcharge fee. When Congress created the 
patent surcharge fee in the Omnibus Budget Reconciliation Act of 1990, 
it was done to make the Office completely user fee funded, and 
therefore, to reduce the budget deficit. Although the surcharge, which 
amounted to an almost 70 percent increase in fees, was intended to be 
applied only to Patent and Trademark Office uses, Congress has diverted 
approximately $140 million over the past 6 fiscal years for unrelated 
purposes. Until this year, the administration has not advocated, nor 
even supported, such action. In the President's proposed budget for 
fiscal year 1998, however, over $90 million of the patent surcharge 
account will be applied for deficit reduction. In following fiscal 
years, the administration has proposed diverting all of the patent 
surcharge fees through 2002.
  As the ranking Democrat on the Budget Committee, I understand the 
strain on the administration and on this body to balance the budget. 
This is a goal supported by colleagues on both sides of the aisle. 
While I share the administration's budget priorities and commend the 
President for putting forth a budget that balances in 2002, I 
regretfully disagree with this component of his budget. Should this 
proposed diversion be enacted, the PTO would be prevented from hiring 
over 500 patent examiners this year, and patent pendency rates would 
double from the current 21 months to an estimated 42 months by 2003. 
The PTO projects that this delay will reduce PTO's revenues by 
over $400 million in lost issue and maintenance fees on top of the lost 
$570 million in surcharge fees. Not only will PTO suffer from this 
diversion, our economy will as well. Doubling the pendency times will 
slow the development of new technologies, hurt our productivity, and 
put us at a competitive disadvantage in the world marketplace.

  Mr. President, the legislation I introduced in the last Congress 
would have ended the patent surcharge fee in October 1, 1998. However, 
I am now convinced that the PTO needs the fees it should receive from 
the surcharge to make necessary hires and improvements to the Office's 
operations. Therefore, S. 421 continues the surcharge but reclassifies 
it as an ``offsetting collection'' like all other PTO user fees rather 
than an ``offsetting receipt.'' This modification to the 1990 OBRA 
would ensure that these fees are only applied toward PTO uses.
  Mr. President, although I might disagree with the administration on 
the surcharge diversion issue, the President and the Vice-President, in 
particular, deserve commendation for their support of reinventing the 
Patent and Trademark Office. The Vice President has been a tireless 
advocate on reforming Government and making it more responsive to the 
public. It is my understanding that the administration will soon send 
its own PTO reform legislation to Capitol Hill. The legislation I am 
introducing today is merely the starting point for discussion and I 
look forward to working with the administration to advance the concepts 
I have described above.
  I would also like to acknowledge the efforts of my colleagues and 
former colleagues in both Houses for their contributions on this issue. 
Unbeknownst to many Members, we came very close to enacting PTO 
government corporation legislation in the last Congress, largely due to 
the work of Senator Hatch and former Representatives Moorhead and 
Schroeder. I am pleased to note that Representative Moorhead's 
successor, Representative Coble, has continued the momentum and his 
Judiciary subcommittee favorably reported out a patent bill last week 
that contained a PTO government corporation section as well as 
protection against patent surcharge fee diversion.
  Mr. President, I hope my colleagues will support this bill, which 
will provide the means to improve the Patent and Trademark Office's 
operations and which will make the Office more accountable to its 
users. I ask unanimous consent that a copy of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 421

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patent and Trademark Office 
     Reform Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

           TITLE I--UNITED STATES PATENT AND TRADEMARK OFFICE

Sec. 101. Establishment of Patent and Trademark Office as a Government 
              corporation.
Sec. 102. Powers and duties.
Sec. 103. Organization and management.
Sec. 104. Management Advisory Board.
Sec. 105. Conforming amendments.
Sec. 106. Trademark Trial and Appeal Board.
Sec. 107. Board of Patent Appeals and Interferences.
Sec. 108. Suits by and against the Office.

[[Page S2134]]

Sec. 109. Annual report of Commissioner.
Sec. 110. Suspension or exclusion from practice.
Sec. 111. Funding.
Sec. 112. Audits.
Sec. 113. Transfers.
Sec. 114. Nonapplicability of Federal workforce reductions.

             TITLE II--EFFECTIVE DATE; TECHNICAL AMENDMENTS

Sec. 201. Effective date.
Sec. 202. Technical and conforming amendments.

                  TITLE III--MISCELLANEOUS PROVISIONS

Sec. 301. References.
Sec. 302. Exercise of authorities.
Sec. 303. Savings provisions.
Sec. 304. Transfer of assets.
Sec. 305. Delegation and assignment.
Sec. 306. Authority of Director of the Office of Management and Budget 
              with respect to functions transferred.
Sec. 307. Certain vesting of functions considered transfers.
Sec. 308. Availability of existing funds.
Sec. 309. Definitions.

          TITLE IV--UNDER SECRETARY FOR INTELLECTUAL PROPERTY

Sec. 401. Under Secretary for Intellectual Property.
           TITLE I--UNITED STATES PATENT AND TRADEMARK OFFICE

     SEC. 101. ESTABLISHMENT OF PATENT AND TRADEMARK OFFICE AS A 
                   GOVERNMENT CORPORATION.

       Section 1 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 1. Establishment

       ``(a) Establishment.--The United States Patent and 
     Trademark Office is established as a wholly owned Government 
     corporation subject to chapter 91 of title 31, separate from 
     any department of the United States, and shall be an agency 
     of the United States under the policy direction of the 
     Secretary of Commerce. For purposes of internal management, 
     the United States Patent and Trademark Office shall be a 
     corporate body not subject to direction or supervision by any 
     department of the United States, except as otherwise provided 
     in this title.
       ``(b) Offices.--The United States Patent and Trademark 
     Office shall maintain its principal office in the 
     metropolitan Washington, D.C. area, for the service of 
     process and papers and for the purpose of carrying out its 
     functions. The United States Patent and Trademark Office 
     shall be deemed, for purposes of venue in civil actions, to 
     be a resident of the district in which its principal office 
     is located, except where jurisdiction is otherwise provided 
     by law. The United States Patent and Trademark Office may 
     establish satellite offices in such other places as it 
     considers necessary and appropriate in the conduct of its 
     business.
       ``(c) Reference.--For purposes of this title, the United 
     States Patent and Trademark Office shall also be referred to 
     as the `Office' and the `Patent and Trademark Office'.''.

     SEC. 102. POWERS AND DUTIES.

       Section 2 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 2. Powers and duties

       ``(a) In General.--The United States Patent and Trademark 
     Office shall be responsible for--
       ``(1) the granting and issuing of patents and the 
     registration of trademarks;
       ``(2) conducting studies, programs, or exchanges of items 
     or services regarding domestic and international law of 
     patents, trademarks, and related matters, the administration 
     of the Office, or any other function vested in the Office by 
     law, including programs to recognize, identify, assess, and 
     forecast the technology of patented inventions and their 
     utility to industry;
       ``(3) authorizing or conducting studies and programs 
     cooperatively with foreign patent and trademark offices and 
     international organizations, in connection with the granting 
     and issuing of patents and the registration of trademarks; 
     and
       ``(4) disseminating to the public information with respect 
     to patents and trademarks.
       ``(b) Specific Powers.--The Office--
       ``(1) shall have perpetual succession;
       ``(2) shall adopt and use a corporate seal, which shall be 
     judicially noticed and with which letters patent, 
     certificates of trademark registrations, and papers issued by 
     the Office shall be authenticated;
       ``(3) may sue and be sued in its corporate name and be 
     represented by its own attorneys in all judicial and 
     administrative proceedings, subject to the provisions of 
     section 7;
       ``(4) may indemnify the Commissioner, and other officers, 
     attorneys, agents, and employees (including members of the 
     Management Advisory Board established in section 5) of the 
     Office for liabilities and expenses incurred within the scope 
     of their employment;
       ``(5) may adopt, amend, and repeal bylaws, rules, 
     regulations, and determinations, which--
       ``(A) shall govern the manner in which its business will be 
     conducted and the powers granted to it by law will be 
     exercised;
       ``(B) shall be made after notice and opportunity for full 
     participation by interested public and private parties;
       ``(C) shall facilitate and expedite the processing of 
     patent applications, particularly those which can be filed, 
     stored, processed, searched, and retrieved electronically, 
     subject to the provisions of section 122 relating to the 
     confidential status of applications; and
       ``(D) may govern the recognition and conduct of agents, 
     attorneys, or other persons representing applicants or other 
     parties before the Office, and may require them, before being 
     recognized as representatives of applicants or other persons, 
     to show that they are of good moral character and reputation 
     and are possessed of the necessary qualifications to render 
     to applicants or other persons valuable service, advice, and 
     assistance in the presentation or prosecution of their 
     applications or other business before the Office;
       ``(6) may acquire, construct, purchase, lease, hold, 
     manage, operate, improve, alter, and renovate any real, 
     personal, or mixed property, or any interest therein, as it 
     considers necessary to carry out its functions;
       ``(7)(A) may make such purchases, contracts for the 
     construction, maintenance, or management and operation of 
     facilities, and contracts for supplies or services, without 
     regard to the provisions of the Federal Property and 
     Administrative Services Act of 1949 (40 U.S.C. 471 and 
     following), the Public Buildings Act (40 U.S.C. 601 and 
     following), and the Stewart B. McKinney Homeless Assistance 
     Act (42 U.S.C. 11301 and following); and
       ``(B) may enter into and perform such purchases and 
     contracts for printing services, including the process of 
     composition, platemaking, presswork, silk screen processes, 
     binding, microform, and the products of such processes, as it 
     considers necessary to carry out the functions of the Office, 
     without regard to sections 501 through 517 and 1101 through 
     1123 of title 44;
       ``(8) may use, with their consent, services, equipment, 
     personnel, and facilities of other departments, agencies, and 
     instrumentalities of the Federal Government, on a 
     reimbursable basis, and cooperate with such other 
     departments, agencies, and instrumentalities in the 
     establishment and use of services, equipment, and facilities 
     of the Office;
       ``(9) may obtain from the Administrator of General Services 
     such services as the Administrator is authorized to provide 
     to other agencies of the United States, on the same basis as 
     those services are provided to other agencies of the United 
     States;
       ``(10) when the Commissioner determines that it is 
     practicable, efficient, and cost-effective to do so, may use, 
     with the consent of the United States and the agency, 
     government, or international organization concerned, the 
     services, records, facilities, or personnel of any State or 
     local government agency or instrumentality or foreign 
     government or international organization to perform functions 
     on its behalf;
       ``(11) may determine the character of and the necessity for 
     its obligations and expenditures and the manner in which they 
     shall be incurred, allowed, and paid, subject to the 
     provisions of this title and the Act of July 5, 1946 
     (commonly referred to as the `Trademark Act of 1946');
       ``(12) may retain and use all of its revenues and receipts, 
     including revenues from the sale, lease, or disposal of any 
     real, personal, or mixed property, or any interest therein, 
     of the Office, including for research and development and 
     capital investment;
       ``(13) shall have the priority of the United States with 
     respect to the payment of debts from bankrupt, insolvent, and 
     decedents' estates;
       ``(14) may accept monetary gifts or donations of services, 
     or of real, personal, or mixed property, in order to carry 
     out the functions of the Office;
       ``(15) may execute, in accordance with its bylaws, rules, 
     and regulations, all instruments necessary and appropriate in 
     the exercise of any of its powers; and
       ``(16) may provide for liability insurance and insurance 
     against any loss in connection with its property, other 
     assets, or operations either by contract or by self-
     insurance.
       ``(c) Construction.--Nothing in this section shall be 
     construed to nullify, void, cancel, or interrupt any pending 
     request-for-proposal let or contract issued by the General 
     Services Administration for the specific purpose of 
     relocating or leasing space to the United States Patent and 
     Trademark Office.''.

     SEC. 103. ORGANIZATION AND MANAGEMENT.

       Section 3 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 3. Officers and employees

       ``(a) Commissioner.--
       ``(1) In general.--The management of the United States 
     Patent and Trademark Office shall be vested in a Commissioner 
     of the United States Patent and Trademark Office (in this 
     title referred to as the `Commissioner'), who shall be a 
     citizen of the United States and who shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate. The Commissioner shall be a person who, by reason of 
     professional background and experience in patent or trademark 
     law, is especially qualified to manage the Office.
       ``(2) Duties.--
       ``(A) In general.--The Commissioner shall be responsible 
     for the management and direction of the Office, including the 
     issuance of patents and the registration of trademarks, and 
     shall perform these duties in a fair, impartial, and 
     equitable manner.
       ``(B) Advising the president.--The Commissioner shall 
     advise the President, through the Secretary of Commerce, on 
     the operation of the Office.

[[Page S2135]]

       ``(C) Consulting with the management advisory board.--The 
     Commissioner shall consult with the Management Advisory Board 
     established in section 5 on a regular basis on matters 
     relating to the operation of the Office, and shall consult 
     with the Board before submitting budgetary proposals to the 
     Office of Management and Budget or changing or proposing to 
     change patent or trademark user fees or patent or trademark 
     regulations.
       ``(D) Security clearances.--The Commissioner, in 
     consultation with the Director of the Office of Personnel 
     Management, shall maintain a program for identifying national 
     security positions and providing for appropriate security 
     clearances.
       ``(3) Term.--The Commissioner shall serve a term of 5 
     years, and may continue to serve after the expiration of the 
     Commissioner's term until a successor is appointed and 
     assumes office. The Commissioner may be reappointed to 
     subsequent terms.
       ``(4) Oath.--The Commissioner shall, before taking office, 
     take an oath to discharge faithfully the duties of the 
     Office.
       ``(5) Compensation.--The Commissioner shall receive 
     compensation at the rate of pay in effect for level II of the 
     Executive Schedule under section 5313 of title 5 and, in 
     addition, may receive as a bonus awarded by the Secretary, an 
     amount up to the equivalent of the annual rate of basic pay 
     for such level II, based upon an evaluation by the Secretary 
     of Commerce of the Commissioner's performance as defined in 
     an annual performance agreement between the Commissioner and 
     the Secretary. The annual performance agreement shall 
     incorporate measurable goals as delineated in an annual 
     performance plan agreed to by the Commissioner and the 
     Secretary.
       ``(6) Removal.--The Commissioner may be removed from office 
     by the President. The President shall provide notification of 
     any such removal to both Houses of Congress.
       ``(7) Designee of commissioner.--The Commissioner shall 
     designate an officer of the Office who shall be vested with 
     the authority to act in the capacity of the Commissioner in 
     the event of the absence or incapacity of the Commissioner.
       ``(b) Officers and Employees of the Office.--
       ``(1) Assistant commissioners.--The Commissioner shall 
     appoint an Assistant Commissioner for Patents and an 
     Assistant Commissioner for Trademarks for terms that shall 
     expire on the date on which the Commissioner's term expires. 
     The Assistant Commissioner for Patents shall be a person with 
     demonstrated experience in patent law and the Assistant 
     Commissioner for Trademarks shall be a person with 
     demonstrated experience in trademark law. The Assistant 
     Commissioner for Patents and the Assistant Commissioner for 
     Trademarks shall be the principal policy and management 
     advisers to the Commissioner on all aspects of the activities 
     of the Office that affect the administration of patent and 
     trademark operations, respectively.
       ``(2) Other officers and employees.--
       ``(A) In general.--The Commissioner shall--
       ``(i) appoint such officers, employees (including 
     attorneys), and agents of the Office as the Commissioner 
     considers necessary to carry out the functions of the Office;
       ``(ii) fix the compensation of such officers and employees, 
     except as otherwise provided in this section; and
       ``(iii) define the authority and duties of such officers 
     and employees and delegate to them such of the powers vested 
     in the Office as the Commissioner may determine.
       ``(B) Limitations.--The Office shall not be subject to any 
     administratively or statutorily imposed limitation on 
     positions or personnel, and no positions or personnel of the 
     Office shall be taken into account for purposes of applying 
     any such limitation.
       ``(c) Limits on Compensation.--Except as otherwise provided 
     by law, the annual rate of basic pay of an officer or 
     employee of the Office may not be fixed at a rate that 
     exceeds, and total compensation payable to any such officer 
     or employee for any year may not exceed, the annual rate of 
     basic pay in effect for the Commissioner for that year 
     involved. The Commissioner shall prescribe such regulations 
     as may be necessary to carry out this subsection.
       ``(d) Inapplicability of Title 5 Generally.--Except as 
     otherwise provided in this section, officers and employees of 
     the Office shall not be subject to the provisions of title 5 
     relating to Federal employees.
       ``(e) Continued Applicability of Certain Provision of Title 
     5.--
       ``(1) In general.--The following provisions of title 5 
     shall apply to the Office and its officers and employees:
       ``(A) Section 2302 (relating to prohibited personnel 
     practices).
       ``(B) Section 3110 (relating to employment of relatives; 
     restrictions).
       ``(C) Subchapter II of chapter 55 (relating to withholding 
     pay).
       ``(D) Subchapters II and III of chapter 73 (relating to 
     employment limitations and political activities, 
     respectively).
       ``(E) Chapter 71 (relating to labor-management relations), 
     subject to paragraph (2) and subsection (g).
       ``(F) Section 3303 (relating to political recommendations).
       ``(G) Subchapter II of chapter 61 (relating to flexible and 
     compressed work schedules).
       ``(2) Compensation subject to collective bargaining.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, for purposes of applying chapter 71 of title 5 pursuant 
     to paragraph (1)(D), basic pay and other forms of 
     compensation shall be considered to be among the matters as 
     to which the duty to bargain in good faith extends under such 
     chapter.
       ``(B) Exceptions.--The duty to bargain in good faith shall 
     not, by reason of subparagraph (A), be considered to extend 
     to any benefit under title 5 which is afforded by paragraph 
     (1), (2), (3), or (4) of subsection (f).
       ``(C) Limitations apply.--Nothing in this subsection shall 
     be considered to allow any limitation under subsection (c) to 
     be exceeded.
       ``(f) Provisions of Title 5 That Continue to Apply, Subject 
     to Certain Requirements.--
       ``(1) Retirement.--(A) The provisions of subchapter III of 
     chapter 83 and chapter 84 of title 5 shall apply to the 
     Office and its officers and employees, subject to 
     subparagraph (B).
       ``(B)(i) The amount required of the Office under the second 
     sentence of section 8334(a)(1) of title 5 with respect to any 
     particular individual shall, instead of the amount which 
     would otherwise apply, be equal to the normal-cost percentage 
     (determined with respect to officers and employees of the 
     Office using dynamic assumptions, as defined by section 
     8401(9) of such title) of the individual's basic pay, minus 
     the amount required to be withheld from such pay under such 
     section 8334(a)(1).
       ``(ii) The amount required of the Office under section 
     8334(k)(1)(B) of title 5 with respect to any particular 
     individual shall be equal to an amount computed in a manner 
     similar to that specified in clause (i), as determined in 
     accordance with clause (iii).
       ``(iii) Any regulations necessary to carry out this 
     subparagraph shall be prescribed by the Office of Personnel 
     Management.
       ``(C) The United States Patent and Trademark Office may 
     supplement the benefits provided under the preceding 
     provisions of this paragraph.
       ``(2) Health benefits.--(A) The provisions of chapter 89 of 
     title 5 shall apply to the Office and its officers and 
     employees, subject to subparagraph (B).
       ``(B)(i) With respect to any individual who becomes an 
     officer or employee of the Office pursuant to subsection (h), 
     the eligibility of such individual to participate in such 
     program as an annuitant (or of any other person to 
     participate in such program as an annuitant based on the 
     death of such individual) shall be determined disregarding 
     the requirements of section 8905(b) of title 5. The preceding 
     sentence shall not apply if the individual ceases to be an 
     officer or employee of the Office for any period of time 
     after becoming an officer or employee of the Office pursuant 
     to subsection (h) and before separation.
       ``(ii) The Government contributions authorized by section 
     8906 of title 5 for health benefits for anyone participating 
     in the health benefits program pursuant to this subparagraph 
     shall be made by the Office in the same manner as provided 
     under section 8906(g)(2) of title 5 with respect to the 
     United States Postal Service for individuals associated 
     therewith.
       ``(iii) For purposes of this subparagraph, the term 
     `annuitant' has the meaning given such term by section 
     8901(3) of title 5.
       ``(C) The Office may supplement the benefits provided under 
     the preceding provisions of this paragraph.
       ``(3) Life insurance.--(A) The provisions of chapter 87 of 
     title 5 shall apply to the Office and its officers and 
     employees, subject to subparagraph (B).
       ``(B)(i) Eligibility for life insurance coverage after 
     retirement or while in receipt of compensation under 
     subchapter I of chapter 81 of title 5 shall be determined, in 
     the case of any individual who becomes an officer or employee 
     of the Office pursuant to subsection (h), without regard to 
     the requirements of section 8706(b) (1) or (2) of such title, 
     but subject to the condition specified in the last sentence 
     of paragraph (2)(B)(i) of this subsection.
       ``(ii) Government contributions under section 8708(d) of 
     such title on behalf of any such individual shall be made by 
     the Office in the same manner as provided under paragraph (3) 
     thereof with respect to the United States Postal Service for 
     individuals associated therewith.
       ``(C) The Office may supplement the benefits provided under 
     the preceding provisions of this paragraph.
       ``(4) Employees' compensation fund.--(A) Officers and 
     employees of the Office shall not become ineligible to 
     participate in the program under chapter 81 of title 5, 
     relating to compensation for work injuries, by reason of 
     subsection (d).
       ``(B) The Office shall remain responsible for reimbursing 
     the Employees' Compensation Fund, pursuant to section 8147 of 
     title 5, for compensation paid or payable after the effective 
     date of the Patent and Trademark Office Reform Act in 
     accordance with chapter 81 of title 5 with regard to any 
     injury, disability, or death due to events arising before 
     such date, whether or not a claim has been filed or is final 
     on such date.
       ``(g) Labor-Management Relations.--
       ``(1) Labor relations and employee relations programs.--The 
     Office shall develop labor relations and employee relations 
     programs with the objective of improving productivity, 
     efficiency, and the quality of working life of Office 
     employees, incorporating the following principles:

[[Page S2136]]

       ``(A) Such programs shall be consistent with the merit 
     principles in section 2301(b) of title 5.
       ``(B) Such programs shall provide veterans preference 
     protections equivalent to those established by sections 2108, 
     3308 through 3318, and 3320 of title 5.
       ``(C)(i) The right to work shall not be subject to undue 
     restraint or coercion. The right to work shall not be 
     infringed or restricted in any way based on membership in, 
     affiliation with, or financial support of a labor 
     organization.
       ``(ii) No person shall be required, as a condition of 
     employment or continuation of employment--
       ``(I) to resign or refrain from voluntary membership in, 
     voluntary affiliation with, or voluntary financial support of 
     a labor organization;
       ``(II) to become or remain a member of a labor 
     organization;
       ``(III) to pay any dues, fees, assessments, or other 
     charges of any kind or amount to a labor organization;
       ``(IV) to pay to any charity or other third party, in lieu 
     of such payments, any amount equivalent to or a pro rata 
     portion of dues, fees, assessments, or other charges 
     regularly required of members of a labor organization; or
       ``(V) to be recommended, approved, referred, or cleared by 
     or through a labor organization.
       ``(iii) This subparagraph shall not apply to a person 
     described in section 7103(a)(2)(v) of title 5 or a 
     `supervisor', `management official', or `confidential 
     employee' as those terms are defined in section 7103(a) (10), 
     (11), and (13) of such title.
       ``(iv) Any labor organization recognized by the Office as 
     the exclusive representative of a unit of employees of the 
     Office shall represent the interests of all employees in that 
     unit without discrimination and without regard to labor 
     organization membership.
       ``(2) Adoption of existing labor agreements.--The Office 
     shall adopt all labor agreements which are in effect, as of 
     the day before the effective date of the Patent and Trademark 
     Office Reform Act, with respect to such Office (as then in 
     effect).
       ``(h) Carryover of Personnel.--
       ``(1) From pto.--Effective as of the effective date of the 
     Patent and Trademark Office Reform Act, all officers and 
     employees of the Patent and Trademark Office on the day 
     before such effective date shall become officers and 
     employees of the Office established under this Act or may be 
     reassigned to the Office of the Under Secretary for 
     Intellectual Property, without a break in service.
       ``(2) Other personnel.--Any individual who, on the day 
     before the effective date of the Patent and Trademark Office 
     Reform Act, is an officer or employee of the Department of 
     Commerce (other than an officer or employee under paragraph 
     (1)) shall be transferred to the Office if--
       ``(A) such individual serves in a position for which a 
     major function is the performance of work reimbursed by the 
     Patent and Trademark Office, as determined by the Secretary 
     of Commerce;
       ``(B) such individual serves in a position that performed 
     work in support of the Patent and Trademark Office during at 
     least half of the incumbent's work time, as determined by the 
     Secretary of Commerce; or
       ``(C) such transfer would be in the interest of the Office, 
     as determined by the Secretary of Commerce in consultation 
     with the Commissioner.

     Any transfer under this paragraph shall be effective as of 
     the same effective date as referred to in paragraph (1), and 
     shall be made without a break in service.
       ``(3) Nonseparation.--No person who becomes an officer or 
     employee of the Office under this subsection shall, for a 
     period of 1 year after the effective date of the Patent and 
     Trademark Office Reform Act, be subject to separation as a 
     consequence of the establishment of the Office.
       ``(4) Accumulated leave.--The amount of sick and annual 
     leave and compensatory time accumulated under title 5 before 
     the effective date described in paragraph (1), by those 
     becoming officers or employees of the Office pursuant to this 
     subsection, are obligations of the Office.
       ``(5) Termination rights.--Any employee referred to in 
     paragraph (1) or (2) of this subsection whose employment with 
     the Office is terminated during the 2-year period beginning 
     on the effective date of the Patent and Trademark Office 
     Reform Act shall be entitled to rights and benefits, to be 
     afforded by the Office, similar to those such employee would 
     have had under Federal law if termination had occurred 
     immediately before such date. An employee who would have been 
     entitled to appeal any such termination to the Merit Systems 
     Protection Board, if such termination had occurred 
     immediately before such effective date, may appeal any such 
     termination occurring within this 2-year period to the board 
     under such procedures as it may prescribe.
       ``(6) Continuation in office of certain officers.--(A) The 
     individual serving as the Assistant Commissioner for Patents 
     on the day before the effective date of the Patent and 
     Trademark Office Reform Act may serve as the Assistant 
     Commissioner for Patents until the date on which an Assistant 
     Commissioner for Patents is appointed under subsection (b).
       ``(B) The individual serving as the Assistant Commissioner 
     for Trademarks on the day before the effective date of the 
     Patent and Trademark Office Reform Act may serve as the 
     Assistant Commissioner for Trademarks until the date on which 
     an Assistant Commissioner for Trademarks is appointed under 
     subsection (b).
       ``(i) Competitive Status.--For purposes of appointment to a 
     position in the competitive service for which an officer or 
     employee of the Office is qualified, such officer or employee 
     shall not forfeit any competitive status, acquired by such 
     officer or employee before the effective date of the Patent 
     and Trademark Office Reform Act, by reason of becoming an 
     officer or employee of the Office pursuant to subsection (h).
       ``(j) Savings Provisions.--
       ``(1) In general.--Compensation, benefits, and other terms 
     and conditions of employment in effect immediately before the 
     effective date of the Patent and Trademark Office Reform Act, 
     whether provided by statute or by rules and regulations of 
     the former Patent and Trademark Office or the executive 
     branch of the Government of the United States, shall continue 
     to apply to officers and employees of the Office, until 
     changed in accordance with this section (whether by action of 
     the Director or otherwise).
       ``(2) Provisions specific to basic pay.--(A) With respect 
     to any individual who becomes an officer or employee of the 
     Office pursuant to subsection (h), the rate of basic pay for 
     such officer or employee may not, on or after the effective 
     date of the Patent and Trademark Office Reform Act, be less 
     than the rate in effect immediately before such effective 
     date, except--
       ``(i) pursuant to a collective-bargaining agreement entered 
     into under this section; or
       ``(ii) for inefficiency, neglect of duty, or misconduct, on 
     the part of such individual.
       ``(B) For purposes of this paragraph, the term `basic pay' 
     includes any amount considered to be part of basic pay for 
     purposes of subchapter III of chapter 83 or chapter 84 of 
     title 5.
       ``(k) Removal of Quasi-Judicial Examiners.--The Office may 
     remove a patent examiner or examiner-in-chief, or a trademark 
     examiner or member of a Trademark Trial and Appeal Board, 
     only for such cause as will promote the efficiency of the 
     Office.''.

      SEC. 104. MANAGEMENT ADVISORY BOARD.

       Chapter 1 of part I of title 35, United States Code, is 
     amended by inserting after section 4 the following:

     ``Sec. 5. Patent and Trademark Office Management Advisory 
       Board

       ``(a) Establishment of Management Advisory Board.--
       ``(1) Appointment.--The United States Patent and Trademark 
     Office shall have a Management Advisory Board (hereafter in 
     this title referred to as the `Board') of 12 members, 4 of 
     whom shall be appointed by the President, 4 of whom shall be 
     appointed by the Speaker of the House of Representatives in 
     consultation with the minority leader of the House of 
     Representatives, and 4 of whom shall be appointed by the 
     majority leader of the Senate in consultation with the 
     minority leader of the Senate.
       ``(2) Terms.--Members of the Board shall be appointed for a 
     term of 4 years each, except that of the members first 
     appointed by each appointing authority, 1 shall be for a term 
     of 1 year, 1 shall be for a term of 2 years, and 1 shall be 
     for a term of 3 years. No member may serve more than 1 term.
       ``(3) Chair.--The President shall designate the chair of 
     the Board, whose term as chair shall be for 4 years.
       ``(4) Timing of appointments.--Initial appointments to the 
     Board shall be made within 3 months after the effective date 
     of the Patent and Trademark Office Reform Act, and vacancies 
     shall be filled within 3 months after they occur.
       ``(5) Vacancies.--Vacancies shall be filled in the manner 
     in which the original appointment was made under this 
     subsection. Members appointed to fill a vacancy occurring 
     before the expiration of the term for which the member's 
     predecessor was appointed shall be appointed only for the 
     remainder of that term. A member may serve after the 
     expiration of that member's term until a successor is 
     appointed.
       ``(6) Committees.--The Chair shall designate members of the 
     Board to serve on a committee on patent operations and on a 
     committee on trademark operations to perform the duties set 
     forth in subsection (e) as they relate specifically to the 
     Office's patent operations, and the Office's trademark 
     operations, respectively.
       ``(b) Basis for Appointments.--Members of the Board shall 
     be citizens of the United States who shall be chosen so as to 
     represent the interests of diverse users of the United States 
     Patent and Trademark Office, and shall include individuals 
     with substantial background and achievement in corporate 
     finance and management.
       ``(c) Applicability of Certain Ethics Laws.--Members of the 
     Board shall be special Government employees within the 
     meaning of section 202 of title 18.
       ``(d) Meetings.--The Board shall meet at least quarterly 
     and at any time at the call of the chair to consider an 
     agenda set by the chair.
       ``(e) Duties.--The Board shall--
       ``(1) review the policies, goals, performance, budget, and 
     user fees of the United States Patent and Trademark Office, 
     and advise the Commissioner on these matters; and
       ``(2) within 60 days after the end of each fiscal year, 
     prepare an annual report on the

[[Page S2137]]

     matters referred to in paragraph (1), transmit the report to 
     the President, the Commissioner, and the Committees on the 
     Judiciary of the Senate and the House of Representatives, and 
     publish the report in the Patent and Trademark Office 
     Official Gazette.
       ``(f) Compensation.--Members of the Board shall be 
     compensated for each day (including travel time) during which 
     they are attending meetings or conferences of the Board or 
     otherwise engaged in the business of the Board, at the rate 
     which is the daily equivalent of the annual rate of basic pay 
     in effect for level III of the Executive Schedule under 
     section 5314 of title 5, and while away from their homes or 
     regular places of business they may be allowed travel 
     expenses, including per diem in lieu of subsistence, as 
     authorized by section 5703 of title 5.
       ``(g) Access to Assistance and Information.--
       ``(1) Assistance.--The Office shall provide at the request 
     of the Board such assistance as is necessary for the Board to 
     perform its functions.
       ``(2) Information.--Members of the Board shall be provided 
     access to records and information in the United States Patent 
     and Trademark Office, except for personnel or other 
     privileged information and information concerning patent 
     applications required to be kept in confidence by section 
     122.''.

     SEC. 105. CONFORMING AMENDMENTS.

       (a) Duties.--Chapter 1 of title 35, United States Code, is 
     amended by striking section 6.
       (b) Regulations for Agents and Attorneys.--Section 31 of 
     title 35, United States Code, and the item relating to such 
     section in the table of sections for chapter 3 of title 35, 
     United States Code, are repealed.

     SEC. 106. TRADEMARK TRIAL AND APPEAL BOARD.

       Section 17 of the Act of July 5, 1946 (commonly referred to 
     as the ``Trademark Act of 1946'') (15 U.S.C. 1067) is amended 
     to read as follows:
       ``Sec. 17. (a) In every case of interference, opposition to 
     registration, application to register as a lawful concurrent 
     user, or application to cancel the registration of a mark, 
     the Commissioner shall give notice to all parties and shall 
     direct a Trademark Trial and Appeal Board to determine and 
     decide the respective rights of registration.
       ``(b) The Trademark Trial and Appeal Board shall include 
     the Commissioner, the Assistant Commissioner for Patents, the 
     Assistant Commissioner for Trademarks, and members competent 
     in trademark law who are appointed by the Commissioner.''.

     SEC. 107. BOARD OF PATENT APPEALS AND INTERFERENCES.

       Chapter 1 of title 35, United States Code, is amended by 
     striking section 7 and inserting after section 5 the 
     following:

     ``Sec. 6. Board of Patent Appeals and Interferences

       ``(a) Establishment and Composition.--There shall be in the 
     United States Patent and Trademark Office a Board of Patent 
     Appeals and Interferences. The Commissioner, the Assistant 
     Commissioner for Patents, the Assistant Commissioner for 
     Trademarks, and the examiners-in-chief shall constitute the 
     Board. The examiners-in-chief shall be persons of competent 
     legal knowledge and scientific ability.
       ``(b) Duties.--The Board of Patent Appeals and 
     Interferences shall, on written appeal of an applicant, 
     review adverse decisions of examiners upon applications for 
     patents and shall determine priority and patentability of 
     invention in interferences declared under section 135(a). 
     Each appeal and interference shall be heard by at least 3 
     members of the Board, who shall be designated by the 
     Commissioner. Only the Board of Patent Appeals and 
     Interferences may grant rehearings.''.

     SEC. 108. SUITS BY AND AGAINST THE OFFICE.

       Chapter 1 of part I of title 35, United States Code, is 
     amended by inserting after section 6 the following new 
     section:

     ``Sec. 7. Suits by and against the Office

       ``(a) Actions Under United States Law.--Any civil action or 
     proceeding to which the United States Patent and Trademark 
     Office is a party is deemed to arise under the laws of the 
     United States. The Federal courts shall have exclusive 
     jurisdiction over all civil actions by or against the Office.
       ``(b) Representation by the Department of Justice.--The 
     United States Patent and Trademark Office shall be deemed an 
     agency of the United States for purposes of section 516 of 
     title 28.
       ``(c) Prohibition on Attachment, Liens, Etc.--No 
     attachment, garnishment, lien, or similar process, 
     intermediate or final, in law or equity, may be issued 
     against property of the Office.''.

     SEC. 109. ANNUAL REPORT OF COMMISSIONER.

       Section 14 of title 35, United States Code, is amended to 
     read as follows:

     ``Sec. 14. Annual report to Congress

       ``Not later than 180 days after the end of each fiscal 
     year, the Commissioner shall report to Congress the moneys 
     received and expended by the Office, the purposes for which 
     the moneys were spent, the quality and quantity of the work 
     of the Office, and other information relating to the Office. 
     The report under this section shall also meet the 
     requirements of section 9106 of title 31, to the extent that 
     such requirements are not inconsistent with the preceding 
     sentence. The report required under this section shall be 
     deemed to be the report of the United States Patent and 
     Trademark Office under section 9106 of title 31, and the 
     Commissioner shall not file a separate report under such 
     section.''.

     SEC. 110. SUSPENSION OR EXCLUSION FROM PRACTICE.

       Section 32 of title 35, United States Code, is amended by 
     inserting before the last sentence the following: ``The 
     Commissioner shall have the discretion to designate any 
     attorney who is an officer or employee of the United States 
     Patent and Trademark Office to conduct the hearing required 
     by this section.''.

     SEC. 111. FUNDING.

       (a) In General.--Chapter 4 of title 35, United States Code, 
     is amended by striking section 42 and inserting the 
     following:

     ``Sec. 42. Patent and Trademark Office funding

       ``(a) Fees Payable to the Office.--All fees for services 
     performed by or materials furnished by the United States 
     Patent and Trademark Office shall be payable to the Office.
       ``(b) Use of Moneys.--Moneys from fees shall be available 
     to the United States Patent and Trademark Office to carry out 
     the functions of the Office. Moneys of the Office not 
     otherwise used to carry out the functions of the Office shall 
     be kept in cash on hand or on deposit, or invested in 
     obligations of the United States or guaranteed by the United 
     States, or in obligations or other instruments which are 
     lawful investments for fiduciary, trust, or public funds. 
     Fees available to the Office under this title shall be used 
     for the processing of patent applications and for other 
     services and materials relating to patents. Fees available to 
     the Office under section 31 of the Act of July 5, 1946 
     (commonly referred to as the `Trademark Act of 1946'; 15 
     U.S.C. 1113), shall be used only for the processing of 
     trademark registrations and for other services and materials 
     relating to trademarks.
       ``(c) Borrowing Authority.--The United States Patent and 
     Trademark Office is authorized to issue from time to time for 
     purchase by the Secretary of the Treasury its debentures, 
     bonds, notes, and other evidences of indebtedness (hereafter 
     in this subsection referred to as `obligations') to assist in 
     financing its activities. Borrowing under this subsection 
     shall be subject to prior approval in appropriations Acts. 
     Such borrowing shall not exceed amounts approved in 
     appropriation Acts. Any borrowing under this subsection shall 
     be repaid only from fees paid to the Office. Such obligations 
     shall be redeemable at the option of the Office before 
     maturity in the manner stipulated in such obligations and 
     shall have such maturity as is determined by the Office with 
     the approval of the Secretary of the Treasury. Each such 
     obligation issued to the Treasury shall bear interest at a 
     rate not less than the current yield on outstanding 
     marketable obligations of the United States of comparable 
     maturity during the month preceding the issuance of the 
     obligation as determined by the Secretary of the Treasury. 
     The Secretary of the Treasury shall purchase any obligations 
     of the Office issued under this subsection and for such 
     purpose the Secretary of the Treasury is authorized to use as 
     a public-debt transaction the proceeds of any securities 
     issued under chapter 31 of title 31, and the purposes for 
     which securities may be issued under that chapter are 
     extended to include such purpose. Payment under this 
     subsection of the purchase price of such obligations of the 
     United States Patent and Trademark Office shall be treated as 
     public debt transactions of the United States.
       ``(d) Refund.--The Commissioner may refund any fee paid by 
     mistake or any amount paid in excess of that required.''.
       (b) Extension of Surcharges on Patent Fees.--
       (1) In general.--Section 10101 of the Omnibus Budget 
     Reconciliation Act of 1990 (35 U.S.C. 41 note) is amended by 
     striking subsections (a) through (c) and inserting the 
     following:
       ``(a) Surcharges.--There shall be a surcharge on all fees 
     authorized by subsections (a) and (b) of section 41 of title 
     35, United States Code, in order to ensure that the amounts 
     specified in subsection (c) are collected.
       ``(b) Use of Surcharges.--Notwithstanding section 3302 of 
     title 31, United States Code, all surcharges collected by the 
     United States Patent and Trademark Office--
       ``(1) shall be credited to a separate account established 
     in the Treasury and ascribed to the United States Patent and 
     Trademark Office activities in the Department of Commerce as 
     offsetting collections;
       ``(2) shall be collected by and made available to the 
     United States Patent and Trademark Office for all authorized 
     activities and operations of the Office, including all direct 
     and indirect costs of services provided by the Office; and
       ``(3) shall remain available until expended.
       ``(c) Establishment of Surcharges.--The Commissioner of the 
     United States Patent and Trademark Office shall establish 
     surcharges under subsection (a), subject to the provisions of 
     section 553 of title 5, United States Code, in order to 
     ensure that $119,000,000, but not more than $119,000,000, are 
     collected in fiscal year 1999 and each fiscal year 
     thereafter.
       ``(d) Appropriations Act Required.--Notwithstanding 
     subsections (a) through (c), no fee established by subsection 
     (a) shall be collected nor shall be available for spending 
     without prior authorization in appropriations Acts.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on October 1, 1998.

[[Page S2138]]

     SEC. 112. AUDITS.

       Chapter 4 of title 35, United States Code, is amended by 
     adding at the end the following new section:

     ``Sec. 43. Audits

       ``(a) In General.--Financial statements of the United 
     States Patent and Trademark Office shall be prepared on an 
     annual basis in accordance with generally accepted accounting 
     principles. Such statements shall be audited by an 
     independent certified public accountant chosen by the 
     Commissioner. The audit shall be conducted in accordance with 
     standards that are consistent with generally accepted 
     Government auditing standards and other standards established 
     by the Comptroller General, and with the generally accepted 
     auditing standards of the private sector, to the extent 
     feasible. The Commissioner shall transmit to the Committees 
     on the Judiciary of the House of Representatives and the 
     Senate the results of each audit under this subsection.
       ``(b) Review by Comptroller General.--The Comptroller 
     General may review any audit of the financial statement of 
     the United States Patent and Trademark Office that is 
     conducted under subsection (a). The Comptroller General shall 
     report to Congress and the Office the results of any such 
     review and shall include in such report appropriate 
     recommendations.
       ``(c) Audit by Comptroller General.--The Comptroller 
     General may audit the financial statements of the Office and 
     such audit shall be in lieu of the audit required by 
     subsection (a). The Office shall reimburse the Comptroller 
     General for the cost of any audit conducted under this 
     subsection.
       ``(d) Access to Office Records.--All books, financial 
     records, report files, memoranda, and other property that the 
     Comptroller General deems necessary for the performance of 
     any audit shall be made available to the Comptroller General.
       ``(e) Applicability in Lieu of Title 31 Provisions.--This 
     section applies to the Office in lieu of the provisions of 
     section 9105 of title 31.''.

     SEC. 113. TRANSFERS.

       (a) Transfer of Functions.--Except to the extent that such 
     functions, powers, and duties relate to the direction of 
     patent or trademark policy, there are transferred to, and 
     vested in, the United States Patent and Trademark Office all 
     functions, powers, and duties vested by law in the Secretary 
     of Commerce or the Department of Commerce or in the officers 
     or components in the Department of Commerce with respect to 
     the authority to grant patents and register trademarks, and 
     in the Patent and Trademark Office, as in effect on the day 
     before the effective date of this Act, and in the officers 
     and components of such Office.
       (b) Transfer of Funds and Property.--The Secretary of 
     Commerce shall transfer to the United States Patent and 
     Trademark Office, on the effective date of this Act, so much 
     of the assets, liabilities, contracts, property, records, and 
     unexpended and unobligated balances of appropriations, 
     authorizations, allocations, and other funds employed, held, 
     used, arising from, available to, or to be made available to 
     the Department of Commerce, including funds set aside for 
     accounts receivable, which are related to functions, powers, 
     and duties which are vested in the United States Patent and 
     Trademark Office by this Act.

     SEC. 114. NONAPPLICABILITY OF FEDERAL WORKFORCE REDUCTIONS.

       No full-time equivalent position in the United States 
     Patent and Trademark Office shall be eliminated to meet the 
     requirements of section 5 of the Federal Workforce 
     Restructuring Act of 1994 (5 U.S.C. 3101 note).
             TITLE II--EFFECTIVE DATE; TECHNICAL AMENDMENTS

     SEC. 201. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect 4 months after the date of the enactment of this Act.

     SEC. 202. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Amendments to Title 35.--
       (1) The item relating to part I in the table of parts for 
     chapter 35, United States Code, is amended to read as 
     follows:

  ``I. United States Patent and Trademark Office...................1''.

       (2) The heading for part I of title 35, United States Code, 
     is amended to read as follows:

         ``PART I--UNITED STATES PATENT AND TRADEMARK OFFICE''.

       (3) The table of chapters for part I of title 35, United 
     States Code, is amended by amending the item relating to 
     chapter 1 to read as follows:

``1. Establishment, Officers and Employees, Functions..........1''.....

       (4) The table of sections for chapter 1 of title 35, United 
     States Code, is amended to read as follows:

     ``CHAPTER 1--ESTABLISHMENT, OFFICERS AND EMPLOYEES, FUNCTIONS

``Sec.
``1.  Establishment.
``2.  Powers and duties.
``3.  Officers and employees.
``4.  Restrictions on officers and employees as to interest in patents.
``5.  Patent and Trademark Office Management Advisory Board.
``6.  Board of Patent Appeals and Interferences.
``7.  Suits by and against the Office.
``8.  Library.
``9.  Classification of patents.
``10. Certified copies of records.
``11. Publications.
``12. Exchange of copies of patents with foreign countries.
``13. Copies of patents for public libraries.
``14. Annual report to Congress.''.

       (5) The table of sections for chapter 4 of title 35, United 
     States Code, is amended by adding after the item relating to 
     section 42 the following:

``43. Audits.''.

       (6) Section 41(a)(8)(A) of title 35, United States Code, is 
     amended by striking ``On'' and inserting ``on''.
       (b) Other Provisions of Law.--
       (1) Section 9101(3) of title 31, United States Code, is 
     amended by adding at the end the following:
       ``(R) the United States Patent and Trademark Office.''.
       (2) Section 500(e) of title 5, United States Code, is 
     amended by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office''.
       (3) Section 5102(c)(23) of title 5, United States Code, is 
     amended by striking ``Patent and Trademark Office, Department 
     of Commerce'' and inserting ``United States Patent and 
     Trademark Office''.
       (4) Section 5314 of title 5, United States Code, is amended 
     by adding at the end the following:
       ``Under Secretary for Intellectual Property, Department of 
     Commerce.''.
       (5) Section 5315 of title 5, United States Code, is amended 
     by adding at the end the following:
       ``Inspector General, United States Patent and Trademark 
     Office.''.
       (6) Section 5316 of title 5, United States Code (5 U.S.C. 
     5316) is amended by striking ``Commissioner of Patents, 
     Department of Commerce.'', ``Deputy Commissioner of Patents 
     and Trademarks.'', ``Assistant Commissioner for Patents.'', 
     and ``Assistant Commissioner for Trademarks.''.
       (7) Section 9(p)(1)(B) of the Small Business Act (15 U.S.C. 
     638(p)(1)(B)) is amended to read as follows:
       ``(B) the Commissioner of the United States Patent and 
     Trademark Office; and''.
       (8) Section 12 of the Act of February 14, 1903 (15 U.S.C. 
     1511) is amended by striking ``(d) Patent and Trademark 
     Office;'' and redesignating subsections (a) through (g) as 
     paragraphs (1) through (6), respectively.
       (9) Section 1127 of title 15, United States Code, is 
     amended by striking ``Commissioner of Patents and 
     Trademarks'' and inserting ``Commissioner of the United 
     States Patent and Trademark Office''.
       (10) Section 19 of the Tennessee Valley Authority Act of 
     1933 (16 U.S.C. 831r) is amended--
       (A) by striking ``Patent and Trademark Office of the United 
     States'' and inserting ``United States Patent and Trademark 
     Office''; and
       (B) by striking ``Commissioner of Patents'' and inserting 
     ``Commissioner of the United States Patent and Trademark 
     Office''.
       (11) Section 182(b)(2)(A) of the Trade Act of 1974 (19 
     U.S.C. 2242(b)(2)(A)) is amended by striking ``Commissioner 
     of Patents and Trademarks'' and inserting ``Under Secretary 
     for Intellectual Property''.
       (12) Section 302(b)(2)(D) of the Trade Act of 1974 (19 
     U.S.C. 2412(b)(2)(D)) is amended by striking ``Commissioner 
     of Patents and Trademarks'' and inserting ``Under Secretary 
     for Intellectual Property''.
       (13) The Act of April 12, 1892 (27 Stat. 395; 20 U.S.C. 91) 
     is amended by striking ``Patent Office'' and inserting 
     ``United States Patent and Trademark Office''.
       (14) Sections 505(m) and 512(o) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 355(m) and 360b(o)) are each 
     amended by striking ``Patent and Trademark Office of the 
     Department of Commerce'' and inserting ``United States Patent 
     and Trademark Office''.
       (15) Section 702(d) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 372(d)) is amended by striking ``Commissioner 
     of Patents'' and inserting ``Commissioner of the United 
     States Patent and Trademark Office''.
       (16) Section 2151t-1(b)(1) of title 22, United States Code, 
     is amended by striking ``Patent and Trademark Office'' and 
     inserting ``Under Secretary for Intellectual Property''.
       (17) Section 105(e) of the Federal Alcohol Administration 
     Act (27 U.S.C. 205(e)) is amended by striking ``United States 
     Patent Office'' and inserting ``United States Patent and 
     Trademark Office''.
       (18) Section 1744 of title 28, United States Code is 
     amended--
       (A) by striking ``Patent Office'' each place it appears in 
     the text and section heading and inserting ``United States 
     Patent and Trademark Office''; and
       (B) by striking ``Commissioner of Patents'' and inserting 
     ``Commissioner of the United States Patent and Trademark 
     Office''.
       (19) Section 1295(a)(4) of title 28, United States Code, is 
     amended--
       (A) in subparagraph (A) by inserting ``United States'' 
     before ``Patent and Trademark''; and
       (B) in subparagraph (B) by striking ``Commissioner of 
     Patents and Trademarks'' and inserting ``Commissioner of the 
     United States Patent and Trademark Office''.
       (20) Section 1745 of title 28, United States Code, is 
     amended by striking ``United States Patent Office'' and 
     inserting ``United States Patent and Trademark Office''.

[[Page S2139]]

       (21) Section 1928 of title 28, United States Code, is 
     amended by striking ``Patent Office'' and inserting ``United 
     States Patent and Trademark Office''.
       (22) Section 151 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2181) is amended in subsections c. and d. by striking 
     ``Commissioner of Patents and Trademarks'' and inserting 
     ``Commissioner of the United States Patent and Trademark 
     Office''.
       (23) Section 152 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2182) is amended by striking ``Commissioner of Patents 
     and Trademarks'' each place it appears and inserting 
     ``Commissioner of the United States Patent and Trademark 
     Office''.
       (24) Section 160 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2190) is amended--
       (A) by striking ``United States Patent Office'' and 
     inserting ``United States Patent and Trademark Office''; and
       (B) by striking ``Commissioner of Patents'' and inserting 
     ``Commissioner of the United States Patent and Trademark 
     Office''.
       (25) Section 305(c) of the National Aeronautics and Space 
     Act of 1958 (42 U.S.C. 2457(c)) is amended by striking 
     ``Commissioner of Patents'' and inserting ``Commissioner of 
     the United States Patent and Trademark Office''.
       (26) Section 12(a) of the Solar Heating and Cooling 
     Demonstration Act of 1974 (42 U.S.C. 5510(a)) is amended by 
     striking ``Commissioner of the Patent Office'' and inserting 
     ``Commissioner of the United States Patent and Trademark 
     Office''.
       (27) Section 1111 of title 44, United States Code, is 
     amended by striking ``the Commissioner of Patents,''.
       (28) Section 1114 of title 44, United States Code, is 
     amended by striking ``the Commissioner of Patents,''.
       (29) Section 1123 of title 44, United States Code, is 
     amended by striking ``the Patent Office,''.
       (30) Sections 1337 and 1338 of title 44, United States 
     Code, and the items relating to those sections in the table 
     of contents for chapter 13 of such title, are repealed.
       (31) Section 10(i) of the Trading With the Enemy Act (50 
     U.S.C. App. 10(i)) is amended by striking ``Commissioner of 
     Patents'' and inserting ``Commissioner of the United States 
     Patent and Trademark Office''.
       (32) Section 11 of the Inspector General Act of 1978 (5 
     U.S.C. App.) is amended--
       (A) in paragraph (1)--
       (i) by striking ``and'' before ``the chief executive 
     officer of the Resolution Trust Corporation;'';
       (ii) by striking ``and'' before ``the Chairperson of the 
     Federal Deposit Insurance Corporation;'';
       (iii) by striking ``or'' before ``the Commissioner of 
     Social Security,''; and
       (iv) by inserting ``or the Commissioner of the United 
     States Patent and Trademark Office;'' after ``Social Security 
     Administration;''; and
       (B) in paragraph (2)--
       (i) by striking ``or'' before ``the Veterans' 
     Administration,''; and
       (ii) by striking ``or the Social Security Administration'' 
     and inserting ``the Social Security Administration, or the 
     United States Patent and Trademark Office''.
                  TITLE III--MISCELLANEOUS PROVISIONS

     SEC. 301. REFERENCES.

       Any reference in any other Federal law, Executive order, 
     rule, regulation, or delegation of authority, or any document 
     of or pertaining to a department or office from which a 
     function is transferred by this Act--
       (1) to the head of such department or office is deemed to 
     refer to the head of the department or office to which such 
     function is transferred; or
       (2) to such department or office is deemed to refer to the 
     department or office to which such function is transferred.

     SEC. 302. EXERCISE OF AUTHORITIES.

       Except as otherwise provided by law, a Federal official to 
     whom a function is transferred by this Act may, for purposes 
     of performing the function, exercise all authorities under 
     any other provision of law that were available with respect 
     to the performance of that function to the official 
     responsible for the performance of the function immediately 
     before the effective date of the transfer of the function 
     under this Act.

     SEC. 303. SAVINGS PROVISIONS.

       (a) Legal Documents.--All orders, determinations, rules, 
     regulations, permits, grants, loans, contracts, agreements, 
     certificates, licenses, and privileges--
       (1) that have been issued, made, granted, or allowed to 
     become effective by the President, the Secretary of Commerce, 
     any officer or employee of any office transferred by this 
     Act, or any other Government official, or by a court of 
     competent jurisdiction, in the performance of any function 
     that is transferred by this Act, and
       (2) that are in effect on the effective date of such 
     transfer (or become effective after such date pursuant to 
     their terms as in effect on such effective date),

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, any other authorized 
     official, a court of competent jurisdiction, or operation of 
     law.
       (b) Proceedings.--This Act shall not affect any proceedings 
     or any application for any benefits, service, license, 
     permit, certificate, or financial assistance pending on the 
     effective date of this Act before an office transferred by 
     this Act, but such proceedings and applications shall be 
     continued. Orders shall be issued in such proceedings, 
     appeals shall be taken therefrom, and payments shall be made 
     pursuant to such orders, as if this Act had not been enacted, 
     and orders issued in any such proceeding shall continue in 
     effect until modified, terminated, superseded, or revoked by 
     a duly authorized official, by a court of competent 
     jurisdiction, or by operation of law. Nothing in this 
     subsection shall be considered to prohibit the discontinuance 
     or modification of any such proceeding under the same terms 
     and conditions and to the same extent that such proceeding 
     could have been discontinued or modified if this Act had not 
     been enacted.
       (c) Suits.--This Act shall not affect suits commenced 
     before the effective date of this Act, and in all such suits, 
     proceedings shall be had, appeals taken, and judgments 
     rendered in the same manner and with the same effect as if 
     this Act had not been enacted.
       (d) Nonabatement of Actions.--No suit, action, or other 
     proceeding commenced by or against the Department of Commerce 
     or the Secretary of Commerce, or by or against any individual 
     in the official capacity of such individual as an officer or 
     employee of an office transferred by this Act, shall abate by 
     reason of the enactment of this Act.
       (e) Continuance of Suits.--If any Government officer in the 
     official capacity of such officer is party to a suit with 
     respect to a function of the officer, and under this Act such 
     function is transferred to any other officer or office, then 
     such suit shall be continued with the other officer or the 
     head of such other office, as applicable, substituted or 
     added as a party.
       (f) Administrative Procedure and Judicial Review.--Except 
     as otherwise provided by this Act, any statutory requirements 
     relating to notice, hearings, action upon the record, or 
     administrative or judicial review that apply to any function 
     transferred by this Act shall apply to the exercise of such 
     function by the head of the Federal agency, and other 
     officers of the agency, to which such function is transferred 
     by this Act.

     SEC. 304. TRANSFER OF ASSETS.

       Except as otherwise provided in this Act, so much of the 
     personnel, property, records, and unexpended balances of 
     appropriations, allocations, and other funds employed, used, 
     held, available, or to be made available in connection with a 
     function transferred to an official or agency by this Act 
     shall be available to the official or the head of that 
     agency, respectively, at such time or times as the Director 
     of the Office of Management and Budget directs for use in 
     connection with the functions transferred.

     SEC. 305. DELEGATION AND ASSIGNMENT.

       Except as otherwise expressly prohibited by law or 
     otherwise provided in this Act, an official to whom functions 
     are transferred under this Act (including the head of any 
     office to which functions are transferred under this Act) may 
     delegate any of the functions so transferred to such officers 
     and employees of the office of the official as the official 
     may designate, and may authorize successive redelegations of 
     such functions as may be necessary or appropriate. No 
     delegation of functions under this section or under any other 
     provision of this Act shall relieve the official to whom a 
     function is transferred under this Act of responsibility for 
     the administration of the function.

     SEC. 306. AUTHORITY OF DIRECTOR OF THE OFFICE OF MANAGEMENT 
                   AND BUDGET WITH RESPECT TO FUNCTIONS 
                   TRANSFERRED.

       (a) Determinations.--If necessary, the Director of the 
     Office of Management and Budget shall make any determination 
     of the functions that are transferred under this Act.
       (b) Incidental Transfers.--The Director of the Office of 
     Management and Budget, at such time or times as the Director 
     shall provide, may make such determinations as may be 
     necessary with regard to the functions transferred by this 
     Act, and to make such additional incidental dispositions of 
     personnel, assets, liabilities, grants, contracts, property, 
     records, and unexpended balances of appropriations, 
     authorizations, allocations, and other funds held, used, 
     arising from, available to, or to be made available in 
     connection with such functions, as may be necessary to carry 
     out the provisions of this Act. The Director shall provide 
     for the termination of the affairs of all entities terminated 
     by this Act and for such further measures and dispositions as 
     may be necessary to effectuate the purposes of this Act.

     SEC. 307. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.

       For purposes of this Act, the vesting of a function in a 
     department or office pursuant to reestablishment of an office 
     shall be considered to be the transfer of the function.

     SEC. 308. AVAILABILITY OF EXISTING FUNDS.

       Existing appropriations and funds available for the 
     performance of functions, programs, and activities terminated 
     pursuant to this Act shall remain available, for the duration 
     of their period of availability, for necessary expenses in 
     connection with the termination and resolution of such 
     functions, programs, and activities.

     SEC. 309. DEFINITIONS.

       For purposes of this Act--
       (1) the term ``function'' includes any duty, obligation, 
     power, authority, responsibility, right, privilege, activity, 
     or program; and
       (2) the term ``office'' includes any office, 
     administration, agency, bureau, institute, council, unit, 
     organizational entity, or component thereof.

[[Page S2140]]

          TITLE IV--UNDER SECRETARY FOR INTELLECTUAL PROPERTY

     SEC. 401. UNDER SECRETARY FOR INTELLECTUAL PROPERTY.

       (a) Appointment.--There is established in the Department of 
     Commerce, an Under Secretary for Intellectual Property, who 
     shall be appointed by the President by and with the advice 
     and consent of the Senate. Pending appointment of the Under 
     Secretary by and with the advice and consent of the Senate, 
     the individual serving as Commissioner of Patents and 
     Trademarks prior to the enactment of the Act shall perform 
     the functions of the Under Secretary.
       (b) Functions.--The Under Secretary for Intellectual 
     Property, under the direction of the Secretary of Commerce, 
     shall--
       (1) advise the President, through the Secretary of 
     Commerce, on national and international intellectual property 
     policy issues;
       (2) advise the Secretary of Commerce on international trade 
     issues concerning intellectual property;
       (3) promote in international trade the United States 
     industries that rely on intellectual property;
       (4) advise Federal agencies on ways to improve intellectual 
     property protection in other countries through economic 
     assistance and international trade;
       (5) review and coordinate all proposals by agencies to 
     assist foreign governments and international 
     intergovernmental agencies in improving intellectual property 
     protection;
       (6) carry on studies related to the effectiveness of 
     intellectual property protection throughout the world; and
       (7) in coordination with the Department of State, carry on 
     studies cooperatively with foreign intellectual property 
     offices and international organizations.
       (c) Consultation.--In connection with the performance of 
     this section, the Under Secretary for Intellectual Property 
     shall, in advance of major policy initiatives, consult with 
     the Commissioner of the United States Patent and Trademark 
     Office and the Register of Copyrights.
                                 ______
                                 
      By Mr. DOMENICI (for himself, Mr. Jeffords, and Mr. Dodd):
  S. 422. A bill to define the circumstances under which DNA samples 
may be collected, stored, and analyzed, and genetic information may be 
collected, stored, analyzed, and disclosed, to define the rights of 
individuals and persons with respect to genetic information, to define 
the responsibilities of persons with respect to genetic information, to 
protect individuals and families from genetic discrimination, to 
establish uniform rules that protect individual genetic privacy, and to 
establish effective mechanisms to enforce the rights and 
responsibilities established under this act; to the Committee on Labor 
and Human Resources.


     THE GENETIC CONFIDENTIALITY AND NONDISCRIMINATION ACT OF 1997

  Mr. DOMENICI. Mr. President, fellow Senators, I rise today to 
introduce a measure, the title of which will be the Genetic 
Confidentiality and Nondiscrimination Act of 1997.
  Let me just suggest, during the last 2 weeks at every turn we have 
seen and heard reports of the latest achievements in the advancement of 
genetic technologies. Man has been controlling the genetics of domestic 
animals and plants for many thousands of years, but the latest 
announcements about the cloning of sheep and monkeys have been 
particularly dramatic. Most of the drama arises from the media 
speculation that follows about the possibility of cloning human beings.
  Such an event is widely viewed as next to impossible because the 
scientific community and officers of Federal funding and oversight 
vigorously reject the concept of creating genetic copies of human 
beings. But what these new events do bring home to us, and what is of 
significance to us, is that genetics is important in our daily lives 
now.
  Let me suggest that the time has come to protect information about 
human genetics that has been obtained by researchers or otherwise from 
individual human beings, individual citizens of this country.
  I have a rather detailed bill, in which Senator Dodd is joining me, 
as is Senator Jeffords, the chairman of the Labor, Health and Human 
Resources Committee. This will actually say that what we are going to 
have to get is the consent of the person whose genetic information we 
intend to use in almost any way. We know that genetic information is 
just as significant as fingerprints of the past in terms of identifying 
people.
  Much can be determined about a person's life, about a person's 
future, from genetic information. Now is the time to have a serious 
debate in the U.S. Congress about how that information should be 
protected. The bill which I introduce will begin that dialogue in the 
appropriate committee.
  I send to the desk the bill. For those who have been giving us 
constructive information about it, this is the very last draft after 
many people in industry, in the biotechnology community, and in the 
community of genetics have given us information. I have a side by side 
on this bill and a detailed statement explaining it. I send them all to 
the desk and ask that the bill be referred to the appropriate 
committee.
  Now I yield to my good friend, Senator Dodd, from Connecticut.
  Mr. DODD. Mr. President, I thank my colleague for yielding. Let me 
begin my brief remarks by commending our colleague from New Mexico for, 
once again, taking leadership on a significant health issue. I have had 
the privilege, Mr. President, of working with my colleague from New 
Mexico, Senator Domenici, on numerous issues, most recently things like 
frivolous lawsuits and mental health. I am delighted to join him as a 
principal cosponsor of this proposal of the Genetic Confidentiality and 
Nondiscrimination Act of 1997.
  Mr. President, this legislation is critically important. It deals 
with basic concerns that people have today. It is of critical 
importance to our country, important to individuals and to researchers. 
We are not claiming here this is perfect, but the kind of work that 
Senator Domenici has done already, in communication with those who 
would be most directly interested in the legislation, I think has taken 
us a long way.
  We are fortunate, Mr. President, to live in an extraordinary--an 
extraordinary--crossroads in the history of our Nation and, indeed, of 
our species. I can only compare it, Mr. President, to the dawn of the 
nuclear age. Then, by the elemental act of splitting an atom, we became 
able to generate seemingly unlimited energy but, also, as we all know, 
the ability to destroy all forms of human life.
  Today, Mr. President, we stand at the dawn of the genetic age and 
once again confront heretofore unknown power over our destiny on this 
small planet. The recent reports of the cloning of mammals places this 
power in sharp relief. Within a few short years, Mr. President, the 
human genome project will decipher the entire human genetic code. The 
entire genetic human code will be deciphered in our lifetime, providing 
a blueprint of a human being's most personal and potent information.
  This blueprint, Mr. President, will hopefully allow us to understand 
and remedy illnesses in all its forms. We are already reaping some of 
the benefits of this newfound knowledge of our genetic makeup. Genetic 
testing, as many are already aware, is available for several serious 
diseases and illnesses, including breast cancer and colon cancer. Armed 
with this genetic information, individuals can take additional steps to 
safeguard their health. For instance, more frequent screenings and 
checkups.

  However, Mr. President, it will allow the exploitation of the human 
frailty to which one might be genetically predisposed, and concerns 
have been raised about the privacy of this information. Many Americans 
are concerned that dissemination of this information could lead to job 
discrimination and difficulty in getting or maintaining health 
insurance or life insurance. These are important issues.
  Clearly, in this area of increasing medical technology, we must be 
able to ensure a balance between scientific advancement and the privacy 
rights of individuals. This bill that my colleague from New Mexico has 
offered begins that critical process. It requires strict informed 
consent procedures while allowing genetic scientific research to 
continue. Specifically, this legislation provides protections against 
unwarranted disclosure of genetic information to employers and 
insurance companies.
  Mr. President, I am cosponsoring this legislation because I believe 
it is important that we address these issues today rather than wait. I 
know some have voiced concerns about this legislation. We hear them. We 
recognize this is a complex area of law with many important interests 
at stake. In fact, Mr. President, we will be having a hearing in the 
Labor Committee this week on the issue of cloning, to which

[[Page S2141]]

our colleague from New Mexico will be testifying--not specifically 
about this bill, but I suspect this bill may be the subject of some 
dialog in that hearing.
  So we are already beginning to look to try and raise the questions 
that people, I think, would want us to address, protecting people's 
privacy rights, so that that information that we are able to glean will 
not be misused. I think this is an important step in that effort. I 
commend my colleague from New Mexico. I am delighted to cosponsor his 
bill.
  The PRESIDING OFFICER. The time has expired.
  Mr. DOMENICI. I ask unanimous consent for an additional minute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, I did not, in my statement, mean to tie 
cloning into this bill. It is just that all of that is part of this 
explosion of the science of genetics and its application for various 
aspects of both human and animal life in America and in the world.
  Let me suggest that if we are going to continue research, we have 
this major American project called the Genome Project wherein all of 
the chromosomes of the human being are going to be mapped, all 23 pairs 
of them. We will know where most of the diseases are located within the 
chromosome system of the human being. Our scientists can then take this 
information and begin the long journey toward curing most of 
humankind's serious diseases over time.
  While all that is going on, the one thing we do not need, we do not 
need an abuse of the information by either researchers, scientists, 
insurance companies or the like, such that it would excite the American 
people to turn against such research. One thing we ought to do in that 
regard is pass some kind of protection for genetic information. That is 
what this bill attempts to do.
  Obviously, there is a whole field of ethics that must be really put 
together and nourished across the land regarding this, or we will cause 
breakouts to occur in terms of abuse of genetic information, all of 
which could be very harmful to the greatest wellness effort in 
humankind, in human history. That is, finding out the basic genetic 
structure of the human being.
  Mr. President, during the past 2 weeks, at every turn, we have been 
seen and heard reports of the latest achievement in the advance of 
genetic technologies. Man has been controlling the genetics of domestic 
animals and plants for many thousands of years, but the latest 
announcements about cloning sheep and monkeys have been particularly 
dramatic. And most of the drama arises from the media speculation that 
follows about the possibility of cloning humans. Such an event is 
widely viewed as next to impossible because the scientific community 
and offices of Federal funding and oversight vigorously reject the 
concept of creating genetic copies of human beings. But what these new 
events do bring home to us is the grave significance of genetics in our 
daily lives.
  I rise today to revisit a timely and momentous issue in the discovery 
and elucidation of human genetic information--the issue of genetic 
confidentiality and nondiscrimination.
  The human genome project is rapidly proceeding toward its goal of 
deciphering the human genetic code. Current projections tell us that 
the goal of reading the entire genetic script of 3 billion nucleotides 
and some 100,000 genes of the human genome will be reached by the year 
2005, which will be several years earlier than was initially projected 
when the project was undertaken in 1990.
  When the project is complete, we will have knowledge of man's 
complete genetic blueprint--a blueprint that is the most personal and 
most private information that any human being can have.
  We will have a wealth of knowledge of how our countless individual 
traits are determined. And perhaps more important, we will have 
fundamental knowledge about the 3,000 or more genes that can cause 
sickness and sometimes even death. And we will have realized one of 
mankind's greatest scientific achievements.
  At the time the human genome project was first brought to my 
attention 11 years ago, I realized that deciphering our genetic code 
would have immense implications for our medical welfare. But equally 
important, if not more so, were the implications of genetic information 
with respect to ethics and the law. This is why I insisted that the 
budget for the human genome project include funds specifically 
allocated for addressing the ethical, legal, and social implications of 
our new genetic technologies.
  Now that we have the know-how to generate genetic information on 
individuals and their families, we find ourselves asking some very 
basic questions about who has a right to control access to personal 
genetic information. Should our personal physicians know this 
information? Our families and friends? Our insurers and employers? As 
we begin to consider these questions, we find that they are deeply 
troublesome issues that reach into the lives of many Americans.

  Today I place before you a bill that addresses the broad issues of 
genetic confidentiality and nondiscrimination. This legislation will 
affirm the right of the individual to have some control over his or her 
most personal information. To be sure, much of our genetic information 
is similar--even identical--among all human beings. This is what makes 
us all members of the family of man. But much of our genetic 
information is also unique--it is the information that makes each human 
distinct from all others. And it is information that can be deciphered 
from cells in a drop of blood or cells that are stored in a laboratory 
after we have medical tests.
  Our personal and unique genetic information is the essence of our 
individuality. And today we seek to protect this information from 
public scrutiny or disclosure without the express consent of the 
individual who is the source of the information.
  So, today, I, and my colleagues, Senator Jeffords and Senator Dodd 
introduce the Genetic Confidentiality and Nondiscrimination Act of 
1997. This legislation is designed to reinforce the statutes that some 
19 state legislatures have enacted. This legislation echoes the 
concerns of many of my colleagues in this Chamber as we all seek to 
come to grips with this pressing and ubiquitous issue. I hope that this 
bill will invite exhaustive debate and legislative review, so that we 
will achieve a firm national standard for individual privacy with 
respect to genetic information.
  The bill that I introduce today focuses on two areas of serious 
concern.
  The first issue is the relationship between the interests of genetics 
research and the individuals who selflessly participate as subjects in 
hundreds of genetics research projects. The past year, 1996, witnessed 
the 50th anniversary of the birth of the Nuremberg Code and the public 
acknowledgement of the doctrine of informed consent for participation 
in research. Over this half century, we have repeatedly affirmed the 
right of the individual to be fully informed about any research project 
that he or she is asked to participate in and to give voluntary consent 
to participation.
  In this present bill we will extend the concept of informed consent 
to give each individual the right to control the deciphering of his or 
her most personal information and the disclosure of that information to 
other persons. And we will create a partnership between researchers and 
the people--the subjects--who are the foundation of research in 
genetics.

  We might consider a recent example of genetic testing that was 
carried out on a collection of samples that had been retained for some 
years in a genetics laboratory. These samples had been gathered for the 
purpose of detecting carriers of a recessive gene for Tay Sachs 
disease, a disease that invariably causes the death of infants who get 
a double dose of the gene, one from each parent. The more recent 
question concerned the frequency of one of the breast cancer genes in 
that population. So samples that were originally collected for one 
purpose were later used for another purpose, without the permission of 
the people who had donated the samples and without the possibility of 
getting any new information back to the people who had donated the 
samples.
  Both protection and partnership are critical as we continue to define 
our genetic legacies, particularly because

[[Page S2142]]

genetics has implications in many facets of our everyday lives, 
including medicine, employment, insurance, education, forensics, 
finance, and even our own self-perceptions.
  The second issue addressed in this legislation is the relationship 
between individuals, on the one hand, and employers and health 
insurers, on the other. This legislation will very simply preclude 
employers or health insurers from requesting or requiring genotype 
information as a condition of employment or health insurance.
  Many people in our society have already been discriminated against 
because other people had access to information about their genes. We 
want to avoid any more situations in which healthy people are denied 
employment or insurance when they disclose information about their 
genes. Consider, for example, the man who acknowledged that he had 
genes for hemochromatosis. This is a disease that can be devastating if 
untreated, but it can be successfully treated. This man was 
successfully treated and was completely healthy, but he was denied 
insurance simply because of his genes, and this should not happen.
  We do, however, carve out one exception to the general rule, for 
protecting employees and coworkers from hazardous conditions or 
situations in the workplace. For example, an employer may have a valid 
reason to know whether an employee has a genetic susceptibility to a 
certain chemical that is a part of the work environment. So the 
exception allows a request for genetic information if it is a matter of 
immediate business necessity.
  I would like to be very clear that this legislation does not make it 
illegal to collect, or store, or analyze, or even disclose, an 
individual's genetic information. It simply gives the individual 
control over this process through a rigorous procedure for written, 
informed consent. The only exceptions for individual control are 
questions of compulsory process, such as criminal investigations, or 
court-ordered analyses.

  Specifically, the purposes of this legislation are:
  First, to define the circumstances under which DNA samples and 
genetic information may be collected, stored, analyzed, and disclosed; 
second, to define the rights of individuals with respect to genetic 
information; third, to define the responsibilities of third parties 
with respect to genetic information; fourth, to protect individuals and 
families from genetic discrimination; and fifth, to establish uniform 
rules that protect individual genetic privacy.
  The need for this legislation is clear and pressing. I look forward 
to working with my colleagues in the Senate and in the House to bring 
this issue to a satisfactory resolution for the American people. The 
Human Genome Project holds the greatest promise of benefits for 
mankind, but these benefits will elude us if people are afraid of the 
consequences of deciphering their own genetic formulas.
  I forward a summary of this bill to the desk and ask unanimous 
consent that it be printed in the Record at the conclusion of my 
remarks.
                                 ______
                                 
      By Mr. ROBB (for himself and Mr. Warner):
  S. 423. A bill to extend the legislative authority for the Board of 
Regents of Gunston Hall to establish a memorial to honor George Mason; 
to the Committee on Energy and Natural Resources.


          THE GEORGE MASON MEMORIAL ESTABLISHMENT ACT OF 1997

 Mr. ROBB. Mr. President, I introduce a bill to extend the 
legislative authority for the Board of Regents of Gunston Hall to 
establish a memorial to honor a distinguished Virginian, George Mason.
  In 1776, George Mason wrote the Virginia Declaration of Rights, the 
first document in America calling for freedom of the press, freedom of 
religion, proscription of unreasonable searches, and the right to a 
speedy trial. The Virginia Declaration of Rights not only served as a 
model for our national Bill of Rights; but historians believe that 
Mason's refusal to sign the Constitution for its failure, initially, to 
include a declaration of rights was a major impetus for eventual 
adoption of the first 10 amendments to the Constitution.
  George Mason sacrificed friendships by insisting that a strong 
national government could not be purchased at the cost of individual 
rights, and Mason inevitably chose his family over politics. He retired 
from public office following the Constitutional Convention and died 
just a few years later in 1792. His contemporaries, Thomas Jefferson 
and James Madison, lived decades longer and were elected Presidents of 
the United States, and thus Mason's contributions were soon 
overshadowed.
  Efforts were combined during the 101st Congress to at last honor 
America's ``Forgotten Founder.'' Legislation authorizing a private, 
nonprofit organization to establish a memorial to George Mason on 
Federal land in the District of Columbia passed and was signed by then-
President George Bush. In the 102d Congress, a resolution concurred 
that George Mason was an individual ``of preeminent historical 
significance to the nation,'' and authorized the placement of the 
memorial within select area I lands, in sight of the memorials of two 
of Mason's closest friends: George Washington and Thomas Jefferson. The 
legislation was signed into law on April 28, 1992, and approved by the 
National Capital Memorial Committee in December 1993.
  To pay homage to a man whose ideas played a prominent role in the 
founding of the American Republic, a fitting memorial has been designed 
for this supreme site, located between Ohio Drive and the 14th Street 
Bridge, overlooking the Tidal Basin. The memorial designs have been 
completed and submitted for review to all necessary advisory and review 
boards and by agreement, the United States Park Service is to maintain 
the memorial once completed. In accordance with the Commemorative Works 
Act of 1986, $1 million must be raised in non-Federal funds to 
construct this gift to Washington and all Americans and ground-breaking 
is ordered to occur no later than August 1997. The Board of Regents of 
Gunston Hall Plantation, a historical organization that oversees 
Mason's family home in Fairfax County, is dedicated to raising the 
necessary funds for the monument and seeing this important project 
through to its completion, however, the August 1997 deadline is rapidly 
approaching. At this time, it seems that the fundraising effort will 
not be completed and that's why today I introduce the necessary 
legislation granting an extension until August 2000.
  The Commemorative Works Act, passed into law to prevent overcrowding 
on the Mall, requires two separate acts of Congress before a memorial 
may be placed in area I lands, and both of these hurdles have been 
cleared. The final battle is a fundraising one and the Board of Regents 
of Gunston Hall has a plan of attack. Last year, they launched Liberty 
2000, a campaign to share George Mason's legacy of liberty. The Board 
of Regents hope to build an endowment fund to ensure a secure future 
for Gunston Hall and attain the necessary non-Federal funds to break 
ground and complete their efforts to bring George Mason's legacy to the 
Mall. I ask that you join me in swiftly supporting this 3-year 
extension so we may properly commemorate this great statesman and 
Virginian, George Mason.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself and Mr. Stevens):
  S. 424. A bill to adjust the Federal medical assistance percentage 
determined for Alaska under the Medicaid Program to reflect Alaska's 
cost of living; to the Committee on Finance.


                 the alaska medicaid equity act of 1997

 Mr. MURKOWSKI. Mr. President, I, along with my distinguished 
colleague, Senator Stevens, introduce legislation that will more 
accurately reflect the appropriate Federal/State funding formula for 
Alaska's Medicaid Program.
  One-sixth of Alaska's population is eligible to receive Medicaid, and 
the population is growing. These Medicaid recipients are the needy 
children, pregnant women, disabled, and elderly poor of Alaska.
  Ever since the Medicaid Program was established in 1965, the Federal/
State funding formula has failed to recognize the extraordinarily high 
cost of living that all Alaskans face. Under current law, the funding 
formula that is used to determine the Federal matching payment is based 
on a comparison between average per capita income in the United States 
and each individual State's per capita income.
  Under the current formula, the minimum Federal Medicaid match is 50 
percent. The highest Federal match is 77.2

[[Page S2143]]

percent and is provided to the State with the lowest per capita 
income--Mississippi. By contrast, Alaska has a 50/50 Federal/State 
match based on the fact that it has the seventh highest per capita 
income in the United States, $17,961 based on 1993 data.
  However, many Federal programs recognize that per capita income, by 
itself, is not a fair measure of wealth. For example, a special Federal 
Government cost-of-living adjustment is provided to Federal employees 
in Alaska to reflect our cost differential. Other Federal formulas, 
such as the formula for the Federal School Lunch Program, Food Stamp 
Program, and certain housing programs each recognize and take into 
consideration Alaska's high cost of living.
  Mr. President, I recognize that Alaska's $17,961 per capita income 
suggests it is one of the wealthier States. However, when the 25 
percent higher cost of living is factored in, the State looks far less 
wealthy. In fact, when Alaska's high cost of living is factored into 
the equation, it would appear that an Alaskan with an income of $17,961 
lives at the same economic level as a person in Iowa with a per capita 
income of $14,399. Yet Iowa enjoys a 62/38 Federal/State Medicaid 
match.

  Why is Alaska's cost of living higher than the lower 48 States? The 
answer is primarily because of the high cost of shipping goods to 
Alaska. Almost everything of substantial size or volume comes to Alaska 
by water, and despite healthy competition among carriers, prices remain 
high due to the distance traveled and the fact that Alaska remains an 
importer of goods, not an exporter. That means most vessels are unable 
to carry a backhaul cargo that would lower the overall cost of the 
round trip. Moreover, because of an undeveloped road structure, most 
food transported to remote villages in Alaska rely exclusively on air 
freight.
  What this high shipping cost means is that it costs a family of four 
in Bethel, Alaska's largest rural community, nearly $30 more each week 
to feed their family, compared to the average family in the United 
States. And, it is these rural Alaska areas that have the highest 
number of Medicaid recipients.
  The present Medicaid formula is fundamentally unfair because it 
doesn't reflect these facts. What it means is that more people in 
Alaska are eligible for Medicaid, but the Federal match isn't adjusted 
accordingly. Basically, the current Federal formula gives us more 
Medicaid users and provides less money to pay for their services. to 
exacerbate this inequity--health care costs in Alaska are estimated to 
be 71 percent higher than the national average.
  The legislation we are introducing today, The Alaska Medicaid Equity 
Act, finally resolves this inequity. It adjusts the Medicaid formula 
for Alaska to factor in the State's high cost of living. Passage of 
this legislation would result in an estimated savings of $40 to $50 
million for the State of Alaska Legislature.
  This adjustment was included in legislation that was reported from 
the Senate Finance Committee as part of the reconciliation bill that 
was adopted in 1995. However, that omnibus bill was ultimately vetoed 
for unrelated reasons.
  Mr. President, we in Alaska have endured this historic inequity for 
nearly a third of a century. I hope my colleagues will agree, the time 
to right this wrong is this year.
                                 ______
                                 
      By Mr. ROTH (for himself and Mr. Moynihan):
  S. 425. A bill to provide for an accurate determination of the cost 
of living; to the Committee on Finance.


                    COST-OF-LIVING BOARD ACT OF 1997

  Mr. ROTH. Mr. President, today my good friend, Senator Moynihan, and 
I are introducing a landmark piece of legislation to create a cost-of-
living board that will improve our Government's ability to index 
Federal programs with a more accurate measurement of inflation. 
Clearly, there are a number of ways to address the accurate measure of 
inflation with regard to our indexed Federal tax and benefit programs. 
In my view, this bill represents one possible way to achieve greater 
accuracy. It is not the only way, but I believe it is our best effort 
to create a mechanism to fairly compensate taxpayers and benefit 
recipients alike.
  One of the most significant issues that faces Congress this year is 
the accuracy of the Consumer Price Index, and I believe that Congress 
and the President need to seriously address the economic ramifications 
of an inaccurate measure of the cost of living. The five-member board 
created in our bill will meet throughout the year to, first, review the 
statistical evidence about inflation produced by the Bureau of Labor 
Statistics and others, and after careful review of all the evidence 
regarding inflation, the board will then produce a cost-of-living 
adjustment by a majority vote of the members of the commission not 
later than November 1 of each year.
  This inflation adjustment number will serve as a number for which all 
Federal benefit programs and tax items will be indexed for the coming 
year without further action by the Congress or the President. If, 
however, the cost-of-living board fails by a majority vote to produce a 
cost-of-living adjustment, then current law applies. That is to say, 
that the BLS-produced CPI will be used to index tax and benefit 
programs.
  Let me be clear. This cost-of-living board will not--and I emphasize 
not--study the accuracy of the Consumer Price Index. We have already 
had the Boskin commission which did just that. The report was widely 
praised within the Economic Community, including many highly respected 
economists, such as Dr. Alan Greenspan and Dr. Martin Feldstein.
  One of the roles in Government is to protect American families from 
inflation. In doing so, it is important that we are able to measure 
inflation as precisely as possible, and I view this board as our best 
hope of accurately measuring inflation.
  I cannot emphasize too greatly the importance of an accurate 
measurement of inflation. If the index is too high, it overcompensates 
retirees and others and undertaxes many taxpayers. If it is too low, it 
undercompensates retirees and overtaxes the taxpayer. What we want is 
fairness to all with as accurate an index as possible.
  I want to stress that any action we take on this issue must be 
broadly and deeply bipartisan. We must have the full cooperation and 
leadership by President Clinton. I hope the President will not miss an 
opportunity to consider this board as one possible option that will 
``take the politics out of it'' and fulfill his goals set out in his 
State of the Union Address to ``do the right thing for the country.'' 
Clearly, this reform will not be successful without the President's 
leadership.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 425

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Cost-of-Living Board Act of 
     1997''.

     SEC. 2. COST-OF-LIVING ADJUSTMENTS.

       Title XI of the Social Security Act (42 U.S.C. 1301 et 
     seq.) is amended by adding at the end the following:

                  ``Part D--Cost-of-Living Adjustments


                ``Determination of Inflation Adjustment

       ``Sec. 1180. (a) In General.--The Cost-of-Living Board 
     established under section 1181 shall each calendar year after 
     1996 attempt to determine a single percentage increase or 
     decrease in the cost-of-living which shall apply to any cost-
     of-living adjustment taking effect during the next calendar 
     year.
       ``(b) Adoption or Rejection of Percentage.--
       ``(1) Adoption.--
       ``(A) In general.--If the Cost-of-Living Board adopts by 
     majority vote a single percentage increase or decrease under 
     subsection (a), then, notwithstanding any other provision of 
     law, any cost-of-living adjustment to take effect during the 
     following calendar year shall be made by using such 
     percentage and not by using the change in the Consumer Price 
     Index (or any component thereof).
       ``(B) Appropriate modifications.--The Cost-of-Living Board 
     shall make appropriate modifications to the single percentage 
     applied to any cost-of-living adjustment if--
       ``(i) the period during which the change in the cost-of-
     living is measured for such adjustment is different than the 
     period used by the Cost-of-Living Board; or
       ``(ii) the adjustment is based on a component of an index 
     rather than the entire index.
       ``(2) Rejection.--If the Cost-of-Living Board fails by 
     majority vote to adopt a single percentage increase or 
     decrease under subsection (a) for any calendar year, then any 
     cost-of-living adjustment to take effect


[[Page S2144]]

     during the following calendar year shall be determined 
     without regard to this part.
       ``(c) Report.--Not later than November 1 of each year, the 
     Cost-of-Living Board shall submit a report to the President 
     and Congress containing a detailed statement with respect 
     to--
       ``(1) the percentage (if any) agreed to by the Board under 
     subsection (a); and
       ``(2) the decision of the Board on whether or not to adopt 
     such a percentage.
       ``(d) Judicial Review.--Any determination by the Cost-of 
     Living Board under subsection (a) or (b)(1)(B) shall not be 
     subject to judicial review.
       ``(e) Definition of Cost-of-Living Adjustment.--In this 
     part, the term `cost-of-living adjustment' means any 
     adjustment under any of the following which is determined by 
     reference to any Consumer Price Index (or any component 
     thereof):
       ``(1) The Internal Revenue Code of 1986.
       ``(2) Titles II, XVI, XVIII, and XIX of this Act.
       ``(3) Any other Federal program.


                         ``COST-OF-LIVING BOARD

       ``Sec. 1181. (a) Establishment of Board.--
       ``(1) Establishment.--There is established a board to be 
     known as the Cost-of-Living Board (in this section referred 
     to as the `Board').
       ``(2) Membership.--
       ``(A) Composition.--The Board shall be composed of 5 
     members of whom--
       ``(i) 1 shall be the Chairman of the Board of Governors of 
     the Federal Reserve System;
       ``(ii) 1 shall be the Chairman of the President's Council 
     of Economic Advisers; and
       ``(iii) 3 shall be appointed by the President, by and with 
     the advice and consent of the Senate.

     The President shall consult with the leadership of the House 
     of Representatives and the Senate in the appointment of the 
     Board members under clause (iii).
       ``(B) Expertise.--The members of the Board appointed under 
     subparagraph (A)(iii) shall be experts in the field of 
     economics and should be familiar with the issues related to 
     the calculation of changes in the cost of living. In 
     appointing members under subparagraph (A)(iii), the President 
     shall consider appointing--
       ``(i) former members of the President's Council of Economic 
     Advisers;
       ``(ii) former Treasury department officials;
       ``(iii) former members of the Board of Governors of the 
     Federal Reserve System;
       ``(iv) other individuals with relevant prior government 
     experience in positions requiring appointment by the 
     President and Senate confirmation; and
       ``(v) academic experts in the field of price statistics.
       ``(C) Date.--
       ``(i) Nominations.--Not later than 30 days after the date 
     of enactment of the Cost of Living Board Act of 1997, the 
     President shall submit the nominations of the members of the 
     Board described in subparagraph (A)(iii) to the Senate.
       ``(ii) Senate action.--Not later than 60 days after the 
     Senate receives the nominations under clause (i), the Senate 
     shall vote on confirmation of the nominations.
       ``(3) Terms and vacancies.--
       ``(A) Terms.--A member of the Board appointed under 
     paragraph (2)(A)(iii) shall be appointed for a term of 5 
     years, except that of the members first appointed under that 
     paragraph--
       ``(i) 1 member shall be appointed for a term of 1 year;
       ``(ii) 1 member shall be appointed for a term of 3 years; 
     and
       ``(iii) 1 member shall be appointed for a term of 5 years.
       ``(B) Vacancies.--
       ``(i) In general.--A vacancy on the Board shall be filled 
     in the manner in which the original appointment was made and 
     shall be subject to any conditions which applied with respect 
     to the original appointment.
       ``(ii) Filling unexpired term.--An individual chosen to 
     fill a vacancy shall be appointed for the unexpired term of 
     the member replaced.
       ``(C) Expiration of terms.--The term of any member 
     appointed under paragraph (2)(A)(iii) shall not expire before 
     the date on which the member's successor takes office.
       ``(4) Initial meeting.--Not later than 30 days after the 
     date on which all members of the Board have been appointed, 
     the Board shall hold its first meeting. Subsequent meetings 
     shall be determined by the Board by majority vote.
       ``(5) Open meetings.--Notwithstanding section 552b of title 
     5, United States Code, or section 10 of the Federal Advisory 
     Committee Act (5 U.S.C. App.), the Board may, by majority 
     vote, close any meeting of the Board to the public otherwise 
     required to be open under that section. The Board shall make 
     the records of any such closed meeting available to the 
     public not later than 30 days of that meeting.
       ``(6) Quorum.--A majority of the members of the Board shall 
     constitute a quorum, but a lesser number of members may hold 
     hearings.
       ``(7) Chairperson and vice chairperson.--The Board shall 
     select a Chairperson and Vice Chairperson from among the 
     members appointed under paragraph (2)(A)(iii).
       ``(b) Powers of the Board.--
       ``(1) Hearings.--The Board may hold such hearings, sit and 
     act at such times and places, take such testimony, and 
     receive such evidence as the Board considers advisable to 
     carry out the purposes of this part.
       ``(2) Information from federal agencies.--The Board may 
     secure directly from any Federal department or agency such 
     information as the Board considers necessary to carry out the 
     provisions of this part, including the published and 
     unpublished data and analytical products of the Bureau of 
     Labor Statistics. Upon request of the Chairperson of the 
     Board, the head of such department or agency shall furnish 
     such information to the Board.
       ``(3) Postal services.--The Board may use the United States 
     mails in the same manner and under the same conditions as 
     other departments and agencies of the Federal Government.
       ``(4) Gifts.--The Board may accept, use, and dispose of 
     gifts or donations of services or property.
       ``(c) Board Personnel Matters.--
       ``(1) Compensation of members.--Each member of the Board 
     who is not otherwise an officer or employee of the Federal 
     Government shall be compensated at a rate equal to the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level III of the Executive Schedule under section 5315 of 
     title 5, United States Code, for each day (including travel 
     time) during which such member is engaged in the performance 
     of the duties of the Board. All members of the Board who 
     otherwise are officers or employees of the United States 
     shall serve without compensation in addition to that received 
     for their services as officers or employees of the United 
     States.
       ``(2) Travel expenses.--The members of the Board shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Board.
       ``(3) Staff.--
       ``(A) In general.--The Chairperson of the Board may, 
     without regard to the civil service laws and regulations, 
     appoint and terminate an executive director and such other 
     additional personnel as may be necessary to enable the Board 
     to perform its duties. The employment of an executive 
     director shall be subject to confirmation by the Board.
       ``(B) Compensation.--The Chairperson of the Board may fix 
     the compensation of the executive director and other 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to classification of positions and General Schedule 
     pay rates, except that the rate of pay for the executive 
     director and other personnel may not exceed the rate payable 
     for level IV of the Executive Schedule under section 5316 of 
     such title.
       ``(4) Detail of government employees.--Any Federal 
     Government employee may be detailed to the Board without 
     additional reimbursement (other than the employee's regular 
     compensation), and such detail shall be without interruption 
     or loss of civil service status or privilege.
       ``(5) Procurement of temporary and intermittent services.--
     The Chairperson of the Board may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.
       ``(d) Termination.--Section 14 of the Federal Advisory 
     Committee Act (5 U.S.C. App.) shall not apply to the Board.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Board such sums as are 
     necessary to carry out the purposes of this part.''.

  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I am honored to be a cosponsor of this 
measure which our revered chairman has brought to the floor. I would 
like to endorse each and every thing he has said.
  This legislation would create an independent Cost of Living Board to 
determine annually what cost of living adjustments should be made for 
the following calendar year. In the event a majority of the Board 
cannot agree on a decision, then by default the automatic adjustments 
would be based on the change in the Consumer Price Index as calculated 
by the Bureau of Labor Statistics.
  The Board would have five members and would be comprised as follows: 
the Chairman of the Board of Governors of the Federal Reserve System; 
the Chairman of the President's Council of Economic Advisers; and three 
others appointed by the President with the advice and consent of the 
Senate. The bill specifies that members of the board shall be 
professional economists familiar with issues related to the calculation 
of changes in the cost of living, such as index number theory.
  There is a growing consensus that the CPI overstates the cost of 
living. In December 1996, the Advisory Commission to Study the Consumer 
Price Index appointed by the Finance Committee--the Boskin Commission--
concluded that the Consumer Price Index

[[Page S2145]]

overstates the inflation by 1.1 percentage points. The distinguished 
Chairman of the Board of Governors of the Federal Reserve, Alan 
Greenspan, agrees. And in testimony before the Finance Committee, 
Chairman Greenspan provided the definitive response to those who have 
argued that this issue should not be ``politicized.'' He said:

       There has been considerable objection that such a . . . 
     procedure would be a political fix. To the contrary assuming 
     zero for the . . . bias is the political fix. On this issue, 
     we should let evidence, not politics, drive policy.

  I referred earlier to index number theory. I might add that in the 
last decade or two, there has been very considerable advancement in the 
subfield of index number theory--the point where mathematics meets 
economics. We know a lot more than we did. We can do it better than we 
do. There are persons who have specialized in this.
  The first particular study goes back to 1961, when the National 
Bureau of Economic Research, at the request of the then Bureau of the 
Budget, gave us a report by a committee chaired by George J. Stigler, 
soon to be a Nobel laureate, on the price indexes of the Federal 
Government. It concluded the indexes overstated changes in the cost of 
living.
  They did not have any estimates of the bias at the time, but they 
knew there was a bias. And in the manner of academic work, people 
addressed it. For what it is worth, perhaps one of the most 
distinguished practitioners now teaches at the University of British 
Columbia. In any event, we are able to do so much more than we have 
done, and the need to get it right is paramount, it is our obligation, 
as persons responsible for the public fisc.
  This bill represents the next step in a logical progression. We are 
beyond a fact-finding commission. The overwhelming evidence is that the 
CPI overstates the change in the cost of living by between 0.5 and 1.5 
percentage points.
  It is now time to consider how to go about getting the number right--
and getting it right every year henceforth. As the chairman indicated, 
it is our intention in introducing this bill to suggest one possible 
mechanism. Certainly there are other options, and I would not rule out 
any alternative at this point. Our purpose today is to keep attention 
focused and keep the dialogue moving on this issue, for delay is 
costly. If we get our numbers right--and that is all we propose to do--
then we save $1 trillion over 12 years. If we delay for 2 years, then 
the savings are reduced to $750 billion.
  I believe this Board, with the Chairman of the Federal Reserve Board, 
the Chairman of the Council of Economic Advisers, and the three 
economists nominated by the President and confirmed by the Senate, is a 
superb approach. We hope it will be given the attention it deserves now 
that it has been made clear by the White House that they see the 
necessity for doing this.

  Our distinguished majority leader, over there in the corner even as I 
speak, has spoken to this matter. And now we have a proposal for 
legislative action. With great and renewed thanks for our chairman, I 
yield the floor.
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Let me start out by thanking the distinguished Senator from 
New York for his leadership in this critically important matter. I can 
say, fairly, that nothing would have happened if it had not been for 
his willingness to step out early on and take measures that I think are 
in the best interests of this Nation and the people of this great 
country.

                          ____________________