[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.
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