[Congressional Record Volume 143, Number 37 (Thursday, March 20, 1997)]
[Senate]
[Pages S2654-S2706]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE FIREFIGHER PAY FAIRNESS ACT
Mr. SARBANES. Mr. President, today I am introducing legislation to
improve the pay system used for Federal firefighters. This bill has
three broad purposes: First, to improve pay equality with municipal and
other public section firefighters; second, to enhance recruitment and
retention of firefighters in order to maintain the highest quality
Federal fire service; and third, to encourage Federal firefighters to
pursue career advancement and training opportunities.
Fire protection is clearly a major concern at Federal facilities and
on Federal lands throughout the Nation. From fighting wildland fires in
our national parks and forests to protecting military families from
fires in their base housing, Federal firefighters play a vital role in
preserving lives and property. One only needs to recall the terrible
tragedies in Colorado two summers ago to understand the vital
importance of our Federal firefighters.
The Department of Agriculture, the Coast Guard, the Department of
Commerce, the Department of Defense, the General Services
Administration, the Department of the Interior, and the Department of
Veterans Affairs are among the Federal agencies which rely on Federal
fire fighters to protect their vast holdings of land and structures.
Just like their municipal counterparts, these firefighters are the
first line of defense against threats to life and property.
Mr. President, the current system used to pay our Federal
firefighters is at best confusing and at worst unfair. These men and
women work longer hours than any other public sector firefighters--yet
are paid substantially less. The current pay system, which consists of
three tiers, is overly complex and, more importantly, is hurting
Federal efforts to attract and retain top-quality employees.
Currently, most Federal firefighters work an average 72-hour week
under exceptionally demanding conditions. The typical workweek consists
of a one-day-off schedule which results in three 24-hours shifts during
the remainder of each week. Despite this unusual schedule, firefighters
are paid under a modified version of the same General Schedule pay
system used for full-time, 40-hour-per-week Federal workers.
The result of the pay modification is that Federal firefighters make
less per hour than any other Federal employee at their same grade
level. For example: a firefighter who is a GS-5, Step 5 makes $7.21 per
hour while other employees at the same grade and step earn $10.34 per
hour. Some have tried to justify this by noting that part of a
firefighter's day is downtime. However, I must note that all
firefighters have substantial duties beyond those at the site of a
fire. Adding to this discrepancy is the fact that the average municipal
firefighter makes $12.87 per hour.
Mr. President, this has caused the Federal fire service to become a
training ground for young men and women who then leave for higher pay
elsewhere in the public sector. Continually training new employees is,
as my colleagues know, very expensive for any employer.
The Office of Personnel Management is well aware of these problems.
In fact, section 102 of the Federal Employees Pay Comparability Act of
1990 [FEPCA], title V of Public Law 101-509, authorizes the
establishment of special pay systems for certain Federal occupations.
The origin of this provision was a recognition that the current pay
classification system did not account for the unique and distinctive
employment conditions of Federal protective occupations including the
Federal fire service.
In May 1991, I wrote to OPM urging the establishment of a separate
pay scale for firefighters under the authority provided for in FEPCA.
Subsequently, OPM established an Advisory Committee on Law Enforcement
and Protective Occupations consisting of agency personnel and
representatives from Federal fire and law enforcement organizations.
Beginning in August of 1991, representatives from the Federal fire
community began working with OPM and other administration officials to
identify and address the problems of paying Federal firefighters under
the General Schedule. The committee completed its work in June of 1992
and in December of that year issued a staff report setting forth
recommendations to correct the most serious problems with the current
pay system.
Mr. President, I regret that since the release of the OPM
recommendations, there has been no effort to implement any of the
proposals of the advisory task force. In fact, OPM has communicated
quite clearly that it has no plans to pursue any solution to the
serious pay deficiencies that have been so widely identified and
acknowledged.
[[Page S2655]]
It would not be necessary to introduce this legislation today had OPM
taken the corrective action that, in my view, is so clearly warranted.
However, I have determined that legislation appears to be the only
vehicle to achieve the necessary changes in the pay system for Federal
firefighters.
Mr. President, the Firefighter Pay Fairness Act would improve Federal
firefighter pay in several important and straightforward ways. Perhaps
most importantly, the bill draws from existing provisions in title V to
calculate a true hourly rate for firefighters. This would alleviate the
current problem of firefighters being paid considerably less than other
General Schedule employees at the same GS level. It would also account
for the varying length in the tour of duty for Federal firefighters
stationed at different locations.
In addition, the bill would use this hourly rate to ensure that
firefighters receive true time and one-half overtime for hours worked
over 106 in a bi-weekly pay period. This is designed to correct the
problem, under the current system, where the overtime rate is
calculated based on an hourly rate considerably less than base pay.
The Firefighter Pay Fairness Act would also extend these pay
provisions to so-called wildland firefighters when they are engaged in
firefighting duties. Currently, wildland firefighters are often not
compensated for all the time spent responding to a fire event. This
legislation would ensure that these protectors of our parks and forests
would be paid fairly for ensuring the safety of these invaluable
national resources.
It also ensures that firefighters promoted to supervisory positions
would be paid at a rate of pay at least equal to what they received
before the promotion. This would address a situation, under the current
pay system, which discourages employees from accepting promotions
because of the significant loss of pay which often accompanies a move
to a supervisory position.
Similarly, the bill would encourage employees to get the necessary
training in hazardous materials, emergency medicine, and other critical
areas by ensuring they do not receive a pay cut while engaged in these
training activities.
Mr. President, this legislation is based upon a bill I authorized in
the 103d Congress. A bipartisan group of more than 150 Members
cosponsored the measure in the Senate and the House last year. The
legislation I am introducing today reflects several modifications that
were suggested to the bill following substantial discussions with
various Members. However, it is identical to the so-called compromise
measure that has been discussed with the authorizing as well as the
appropriations committees in previous years and received widespread
support.
To reduce initial costs and allow oversight of the effectiveness of
the legislation, the bill I am introducing today would implement the
new pay system and other provisions beginning October 1, 1997. However,
the new rate of pay would be phased in over a 4-year period ending
October 1, 2002.
Mr. President, I consulted many of the affected groups in developing
my legislation. I am very pleased that this bill has been endorsed by
the American Federation of Government Employees, the International
Association of Fire Chiefs, the International Association of Fire
Fighters, the National Association of Government Employees, and the
National Federation of Federal Employees.
As I have said before, Mr. President, fairness is the key word. There
is no reason why Federal firefighters should be paid dramatically less
that their municipal counterparts. As a cochairman of the Congressional
Fire Services Caucus, I want to urge all members of the caucus and,
indeed, all Members of the Senate to join in cosponsoring this
important piece of legislation.
______
By Mr. KYL (for himself and Mr. Gorton):
S. 493. A bill to amend section 1029 of title 18, United States Code,
with respect to cellular telephone cloning paraphernalia; to the
Committee on the Judiciary.
the cellular telephone protection act
Mr. KYL. Mr. President, I rise to introduce the Cellular Telephone
Protection Act, which would improve the ability of law enforcement to
investigate and prosecute individuals engaged in the activity of
cloning cellular phones. Law enforcement officials and wireless
carriers support the bill as an important tool to stem this kind of
telecommunications fraud.
Cell phones are manufactured with an embedded electronic serial
number [ESN], which is transmitted to gain access to the
telecommunications network. Those involved in cloning cell phones sit
in parked cars outside of airports or along busy roadways to harvest
ESN's from legitimate cell phone users and, in a process known as
cloning, use software and equipment to insert the stolen numbers into
other cell phones, the clones. A single ESN can be implanted into
several cloned phones. The cloned phones charge to the account of the
lawful, unsuspecting user. Cellular phone carriers must absorb these
losses, which, according to the Cellular Telecommunication Industry
Association, amounted to about $650 million in 1995, up from $480
million in 1994. The cellular industry is expanding by about 40 percent
a year; efforts to combat fraud are imperative to ensure the integrity
of our communications network.
Cloning is more than an inconvenience to the 36 million Americans who
currently use cellular phone services, and an expense to wireless
communication companies who pay for the fraudulent calls. According to
the Secret Service, which is the primary Federal agency responsible for
investigating telecommunications fraud, cloning abets organized
criminal enterprises that use cellular telephones as their preferred
method of communication. Cloned phones are extremely popular among drug
traffickers and gang members, who oftentimes employ several cloned
phones to evade detection by law enforcement. When not selling cloned
phones to drug dealers and ruthless street gangs, cloners set up
corner-side calling shops where individuals pay a nominal fee to call
anywhere in the world on a replicated phone, or simply purchase the
illegal phone for a flat amount.
The cellular telephone protection bill clarifies that there is no
lawful purpose to posses, produce or sell hardware, known as copycat
boxes, or software used for cloning a cellular phone or its ESN. Such
equipment and software are easy to obtainn--advertisements hawking
cloning equipment appear in computer magazines and on the Internet.
There is no legitimate purpose for cloning software and equipment, save
for law enforcement and telecommunication service providers using it to
improve fraud detection. The bill strikes at the heart of the cloning
paraphernalia market by eliminating the requirement for prosecutors to
prove that the person selling copycat boxes or cloning software
programs intended to defraud. The bill retains an exception for law
enforcement to possess otherwise unlawful cloning software, and adds a
similar exception for telecommunications service providers.
Moreover, the Cellular Phone Protection Act expands the definition of
``scanning receivers,'' equipment which, unlike cloning software and
devices, does have legitimate uses if not used to scan frequencies
assigned to wireless communications. The bill clarifies that the
definition of scanning receivers encompasses devices that can be used
to intercept ESN's even if they are not capable of receiving the voice
channel. As mentioned above, criminals harvest ESN's by employing
scanners near busy thoroughfares. The revised definition of scanning
receiver will ensure that these devices are unlawful when used with an
intent to defraud just like scanners that intercept voice.
Finally, the bill increases penalties for those engaged in cloning. A
new paradigm is needed for penalizing cloning offenses. Currently,
penalties for cloning crimes are based on the monetary loss a carrier
suffers, not the potential loss. First-time offenders oftentimes do not
face any jail time, which makes these cases unattractive for
prosecution. Carriers and law enforcement are forced to choose between
keeping the cloner on the telecommunications network to rack up high
losses to ensure jail time, or stemming the losses sooner only to have
the cloner back on the streets in days. The penalty scheme should be
revised to
[[Page S2656]]
track another indicator of cloning fraud--the number of electronic
serial numbers stolen.
Cloning offenses are serious crimes, and the penalties should reflect
this. We know that cloned phones are used to facilitate other crimes--
particularly drug trafficking. Additionally, cloning offenses are
serious economic crimes in themselves that threaten the integrity of
the public communications network. In August, two individuals in New
York were arrested for allegedly possessing 80,000 electronic serial
numbers. Each of the 80,000 ESN's could be implanted into several
cloned phones. I look forward to working with the U.S. Sentencing
Commission to achieve a more appropriate sentencing structure for
cloning fraud.
The cellular phone protection initiative will help to reduce
telecommunications fraud. In the process, other criminal activity will
be made more difficult to conduct--cloned phones, now a staple of
criminal syndicates, would not be so readily available. I urge my
colleagues to support this legislation.
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. 493
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 ``Cellular Telephone
Protection Act''.
SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH
COUNTERFEIT ACCESS DEVICES.
(a) Unlawful Acts.--Section 1029(a) of title 18, United
States Code, is amended--
(1) in paragraph (7), by striking ``use of'' and inserting
``access to'';
(2) by redesignating paragraph (9) as paragraph (10); and
(3) by striking paragraph (8) and inserting the following:
``(8) knowingly and with intent to defraud uses, produces,
traffics in, has control or custody of, or possesses a
scanning receiver;
``(9) knowingly uses, produces, traffics in, has control or
custody of, or possesses hardware or software that may be
used for--
``(A) modifying or copying an electronic serial number; or
``(B) altering or modifying a telecommunications instrument
so that the instrument may be used to obtain unauthorized
access to telecommunications services; or''.
(b) Penalties.--Section 1029(c) of title 18, United States
Code, is amended to read as follows:
``(c) Penalties.--The punishment for an offense under
subsection (a) or (b)(1) is--
``(1) in the case of an offense that does not occur after a
conviction for another offense under subsection (a) or
(b)(1), or an attempt to commit an offense punishable under
subsection (a) or (b)(1), a fine under this title or twice
the value obtained by the offense, whichever is greater,
imprisonment for not more than 15 years, or both; and
``(2) in the case of an offense that occurs after a
conviction for another offense under subsection (a) or
(b)(1), or an attempt to commit an offense punishable under
subsection (a) or (b)(1), a fine under this title or twice
the value obtained by the offense, whichever is greater,
imprisonment for not more than 20 years, or both.''.
(c) Definition of Scanning Receiver.--Section 1029(e)(8) of
title 18, United States Code, is amended by inserting before
the period at the end the following: ``or any electronic
serial number, mobile identification number, personal
identification number, or other identifier of any
telecommunications service, equipment, or instrument''.
(d) Exception for Certain Telecommunications Services
Providers.--Section 1029 of title 18, United States Code, is
amended by adding at the end the following:
``(g) Exception for Certain Telecommunications Services
Providers.--
``(1) Definitions.--In this subsection, the term
`telecommunications carrier' has the same meaning as in
section 3 of the Communications Act of 1934 (47 U.S.C. 153).
``(2) Permissible activities.--This section does not
prohibit any telecommunications carrier, or an officer,
agent, or employee of, or a person under contract with a
telecommunications carrier, engaged in protecting any
property or legal right of the telecommunications carrier,
from sending through the mail, sending or carrying in
interstate or foreign commerce, having control or custody of,
or possessing, manufacturing, assembling, or producing any
otherwise unlawful--
``(A) device-making equipment, scanning receiver, or access
device; or
``(B) hardware or software used for--
``(i) modifying or altering an electronic serial number; or
``(ii) altering or modifying a telecommunications
instrument so that the instrument may be used to obtain
unauthorized access to telecommunications services.''.
______
By Mr. KYL (for himself, Mr. Abraham, and Mr. Reid):
S. 494. A bill to combat the overutilization of prison health care
services and control rising prisoner health care costs; to the
Committee on the Judiciary.
The Federal Prison Health Care Copayment Act
Mr. KYL. Mr. President. I introduce the Federal Prisoner Health Care
Copayment Act, which would require Federal prisoners to pay a nominal
fee when they initiate a visit for medical attention. The fee would be
deposited in the Federal Crime Victims' Fund. Each time a prisoner pays
to heal himself, he will be paying to heal a victim.
Most working, law-abiding Americans are required to pay a copayment
fee when they seek medical care. It is time to impose this requirement
on Federal prisoners.
To date, at least 20 States--including my home State of Arizona--have
implemented statewide prisoner health care copayment programs. In
addition to Arizona, the following States have enacted this reform:
California, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky,
Louisiana, Oklahoma, Maryland, Minnesota, Mississippi, Nevada, Hew
Hampshire, New Jersey, Utah, Virginia, Tennessee, and Wisconsin.
Several other States are expected to soon institute a copayment system,
including, Alaska, Connecticut, Maine, Montana, Michigan, North
Carolina, Oregon, South Carolina, Washington, and Wyoming.
Moreover, according to the National Sheriffs' Association, at least
25 States--some of which have not adopted medical copayment reform on a
statewide basis--have jail systems that impose a copayment.
In June, the National Commission on Correctional Health Care held a
conference that examined the statewide fee-for-service programs. At the
conference, Dr. Ron Waldron of the Federal Bureau of Prisons provided a
survey of some of the States that have adopted inmate medical copayment
programs and concluded that ``Inmate user fees programs appear to
reduce utilization, and do generate modest revenues.''
Dr. Waldron reported that prison copayment laws resulted in the
reduction of medical utilization of: between 16 and 29 percent in
Florida; between 30 and 50 percent in Kansas; 40 percent in Maryland;
50 percent in Nevada; and between 10 and 18 percent in Oklahoma. Terry
Stewart, director of the Arizona Department of Corrections, notes that,
``Over the life of the [Arizona copayment] program, there has been an
overall reduction of about 31 percent in the number of requests for
health care services. This strongly suggests that inmates are being
more discreet about, and giving more considered thought to, their need
for medical attention.'' I will have his letter placed in the
Congressional Record.
Reducing frivolous medical visits saves taxpayers money. A December
28, 1996, New York Post editorial, ``Toward Healthier Prison Budgets,''
which I will also include in the Record, reported that the copayment
law in New Jersey allowed the State to cut its prison health care
budget by $17 million.
As to generating revenue, Dr. Waldron reported that California
collects about $60,000 per month in prisoner-copayment fees. In my home
State of Arizona, the State has collected about $400,000 since the
inception of the program in October 1994.
Not only are inmate copayment plans working well on the statewide
level, they are achieving success in jail systems across the United
States. In the January-February edition of Sheriff, the National
Sheriffs' Association President reported that copayment plans--which,
as mentioned above, are operational in jail systems in at least 25
States--have: First, discouraged overuse of service; and second, freed
health care staff to provide better care to inmates who truly need
medical attention. Yavapai County sheriff, G.C. ``Buck'' Buchanan, in a
letter that I will include in the Record, writes: ``Prior to the
institution of [copayment reform], many inmates in custody were taking
advantage of the health care which, or course, must be provided to
them. This could be construed as frivolous requests if you will, and
took up the valuable time of our health care providers * * *. Since
this policy has been in effect, we have realized a reduction in inmate
requests for medical services between 45 to 50 percent.''
[[Page S2657]]
The success of the prison and jail fee-for-service initiatives should
come as no surprise. Common sense says that inmates will be less likely
to seek unnecessary medical attention if they are required to pick up
part of the tab.
I believe that Congress should follow the lead of the States and
provide the Federal Bureau of Prisons with the authority to charge
Federal inmates a nominal fee for elective health care visits. The
Federal system is particularly ripe for reform. According to the 1996
Corrections Yearbook, the system spends more per inmate on health care
than any State except Vermont. Federal inmate health care totaled $327
million in fiscal year 1996, up from $138 million in fiscal year 1990.
Average cost per inmate has increased over 60 percent during this
period, from $2,204 to $3,549.
The Prisoner Health Care Copayment Act provides that the Director of
the Bureau of Prisons shall assess and collect a fee of not less than
$3 and not more than $5 for each qualified health care visit. The term
``qualified health care visit'' does not include any health care visit
that is: Conducted during the intake process; an annual examination;
initiated by the health care staff of the Bureau of Prisons; the direct
result of a referral made by a prison official; or an emergency visit.
Prisoners who are pregnant or determined to be seriously mentally ill
are exempted from the copayment requirement altogether. No prisoner
shall be denied treatment on the basis of insolvency.
The act also gives the Director of the Bureau of Prisons the
authority to set by regulation a reasonable fee, not to exceed $5, for
prescriptions, emergency visits, and juvenile visits. And the
legislation permits the Director to charge an inmate's account for
medical treatment for injuries an inmate inflicts on himself or others.
As I mentioned above, all fees will be deposited in the Federal Crime
Victims' Fund.
Before I conclude, I would like to thank the Arizona Department of
Corrections for its assistance in helping me draft this reform.
Additionally, I appreciate the assistance that Sheriff Buchanan and his
office provided me.
I look forward to working with the Department of Justice, the Bureau
of Prisons, and my colleagues on both sides of the aisle, to implement
a fee-for-medical-services program--a sensible and overdue reform--for
Federal prisoners.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 494
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 ``Federal Prisoner Health Care
Copayment Act''.
SEC. 2. PRISONER COPAYMENTS FOR HEALTH CARE SERVICES.
(a) In General.--Chapter 303 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 4048. Prisoner copayments for health care services
``(a) Definitions.--In this section--
``(1) the term `account' means the trust fund account (or
institutional equivalent) of a prisoner;
``(2) the term `Director' means the Director of the Bureau
of Prisons;
``(3) the term `health care provider' means any person and
who is licensed or certified under State law to provide
health care services who is operating within the scope of
such license;
``(4) the term `health care visit' means any visit by a
prisoner to an institutional or noninstitutional health care
provider, if the visit is made at the request of the
prisoner;
``(5) the term `prisoner' means any person subject to
incarceration, detention, or admission to any facility who is
accused of, convicted of, sentenced for, or adjudicated
delinquent for, violations of criminal law or the terms and
conditions of parole, probation, pretrial release, or
diversionary program; and
``(6) the term `qualified health care visit' means any
health care visit except a health care visit
``(A) that--
``(i) is conducted during the incarceration intake process;
``(ii) is an annual examination;
``(iii) is determined by the health care provider to be an
emergency visit;
``(iv) is an immunization;
``(v) is initiated by the health care staff of the Bureau
of Prisons; or
``(vi) is the direct result of a referral made by a prison
official; or
``(B) by a prisoner who is--
``(i) less than 18 years of age;
``(ii) pregnant; or
``(iii) determined by the appropriate official of the
Bureau of Prisons to be seriously mentally ill, or
permanently disabled.
``(b) Copayments For Health Care Services.--The Director
shall assess and collect a fee in accordance with this
section--
``(1) in an amount equal to not less than $3 and not more
than $5, for each qualified health care visit;
``(2) in an amount not to exceed $5, which shall be
established by the Director by regulation, for--
``(A) each prescription medication provided to the prisoner
by a health care provider; and
``(B) each health care visit described in subparagraph
(A)(iii) or (B)(i) of subsection (a)(6); and
``(3) in an amount established by the Director by
regulation, for each health care visit occurring as a result
of an injury inflicted on a prisoner by another prisoner.
``(c) Responsibility for Payment.--Each fee assessed under
subsection (b) shall be collected by the Director from the
account of--
``(1) the prisoner making the health care visit or
receiving the prescription medication; or
``(2) in the case of a health care visit described in
subsection (b)(3), the prisoner who is determined by the
Director to have inflicted the injury.
``(d) Timing.--Each fee assessed under this section shall
be collected from the appropriate account under subsection
(c)--
``(1) on the date on which the qualified health care visit
occurs; or
``(2) in the case of a prisoner whose account balance is
determined by the Director to be insufficient for collection
of the fee in accordance with paragraph (1), in accordance
with an installment payment plan, which shall be established
by the Director by regulation.
``(e) No Refusal of Treatment for Financial Reasons.--
Nothing in this section shall be construed to permit any
refusal of treatment to a prisoner on the basis that--
``(1) account of the prisoner is insolvent; or
``(2) the prisoner is otherwise unable to pay a fee
assessed under this section in accordance with subsection
(d)(1).
``(f) Use of Amounts.--Any amounts collected by the
Director under this section shall be deposited in the Crime
Victims' Fund established under section 1402 of the Victims
of Crime Act of 1984 (42 U.S.C. 10601).
``(g) Reports to Congress.--Not later than 1 year after the
date of enactment of the Federal Prisoner Health Care
Copayment Act and annually thereafter, the Director shall
submit to Congress a report, which shall include--
``(1) a description of the amounts collected under this
section during the preceding 12-month period; and
``(2) an analysis of the effects of the implementation of
this section, if any, on the nature and extent of health care
visits by prisoners.''.
(b) Clerical Amendment.--The chapter analysis for chapter
303 of title 18, United States Code, is amended by adding at
the end the following:
``4048. Prisoner copayments for health care services.''.
____
Arizona Department of Corrections,
Phoenix, AZ, March 7, 1997.
Hon. Jon Kyl,
U.S. Senate, Senate Hart Office Building, Washington, DC.
Re: Inmate Health Care--Fee for Service
Dear Senator Kyl: On October 15, 1994, the Arizona
Department of Corrections began its fee for service program
for inmate health care. The program was intended to reduce
inmate abuse of the health care delivery system, to place on
the inmate some responsibility for his/her own health care,
and to offset the increasing costs of inmate health care.
This program has proven itself effective in accomplishing the
purposes intended.
There has been a noticeable decrease in the number of
requests for health care services. For example, upon
implementation of the program, and depending upon the
facility, we experienced an initial reduction of between 40%
and 60% in the number health care requests. Over the life of
the program, there has been an overall reduction of about 31%
in the number of requests for health care services. This
strongly suggests that inmates are being more discreet about,
and giving more considered thought to, their need for medical
attention.
The program has also proven a great benefit to Arizona's
taxpayers. From October 15, 1994 through December 31, 1996,
the Arizona Department of Corrections has collected
$392,843.59 for health care services provided to its inmates.
This money is returned to Arizona's general fund, where it
can be utilized to fund other State programs. This means that
fewer taxpayer dollars are required to fund State programs.
In light of the results achieved by this program in
Arizona, I highly recommend that similar programs be adopted
by prison and jail systems nationwide, and I support and
greatly appreciate your efforts to this end.
Sincerely,
Terry L. Stewart,
Director.
[[Page S2658]]
____
Yavapai County Sheriff's Office,
Prescott, AZ, March 4, 1997.
Senator Jon Kyl,
2240 Rayburn House Office Building, Washington, DC.
Dear Senator Kyl: As you have requested, a copy of the
current Yavapai County Sheriff's Office Detention Services
Procedure Manual with respect to Inmate Health Care Co-
Payment policy, has been attached. This policy is sanctioned
under Arizona Revised Statute 31-151 and has been in
existence since November 1995.
Prior to the institution of this policy, many inmates in
custody were taking advantage of the health care which, of
course, must be provided to them. This could be construed as
frivolous requests if you will, and took up the valuable time
of our health care providers. Time was not being utilized to
full potential including any request for psychological
analysis and treatment.
Since this policy has been in effect, we have realized a
reduction in inmate requests for medical services between 45%
to 50%. Consequently, when an inmate is given the choice of
how to best spend his money, the preference is not for
unnecessary medical care. Those in custody have nothing
better to do than take advantage of the system for just a
change in the daily routine. This has ceased. There is no
denial of medical services, it just becomes a matter of
priority for the inmate.
Over the past eleven months, in the special account in
which the co-payment fee is retained, approximately $3500.00
has been placed into deposit. Although this is not a large
amount of revenue, the savings which have been noticed are
that of a reduction in staff time and an increase in the
quality of care the physician provides for this service
delivery. One could only imagine the magnitude of budget
savings if a program such as this were initiated on the
federal inmate population.
In Yavapai County this policy has proven to be a success
and it is through this success that you have my full support
in this proposed legislation.
In matters of mutual concern I remain,
G.C. ``Buck'' Buchanan,
Yavapai County Sheriff.
____
[From the New York Post, Dec. 28, 1996]
Toward Healthier Prison Budgets
Since April, New Jersey has experienced a 60 percent drop
in the number of prison inmates seeking medical attention.
Have prisoners suddenly begun pursuing a healthier lifestyle?
Perhaps--but we prefer to think it has something to do with
the fact that inmates must now ante up $5 every time they
demand to see a doctor.
New Jersey prison officials are extremely pleased with the
new system. The fee deters prisoners with vague or minor
complaints or whose primary motivation appears to be simply,
to get out of their cells for a few hours.
Result: The state has been able to cut its prison health-
care budget by $17 million. Fewer inmates being escorted to
and from the infirmary also enhances security within prison
walls.
Predictably, the American Civil Liberties Union (ACLU)
isn't pleased. It claims the $5 fee--equal to about two days'
prison wages--is preventing some chronically ill inmates from
seeking proper care. Naturally, a lawsuit has been filed. In
May, a judge ruled in favor of the prison system (the
decision is being appealed).
Charging prisoners a fee for medical services, however, is
nothing new, nor is it unique to New Jersey. Prisons and
jails in at least 18 states now charge for health care, up
from just nine in 1995. New Jersey has allowed such fees
since 1995. In fact, the Bergen County jail charges inmates
$10 per doctor visit.
State prison officials dismiss the ACLU's concerns as
``highly speculative.'' Inmates diagnosed with chronic
illnesses, the officials point out, are not charged for all
visits. One diabetic inmate, interviewed by The New York
Times, complained that the fee was a ``burden'' because it
meant he could no longer buy ``toothpaste and stuff.'' He
admitted, however, that he'd had to pay only ``three or four
times'' since April 1.
This isn't exactly Black Hole of Calcutta stuff. New Jersey
appears to be making good use of a sound prison-management
technique.
______
By Mr. KYL (for himself, Mr. Lott, Mr. Nickles, Mr. Mack, Mr.
Coverdell, Mr. Helms, Mr. Shelby, and Mrs. Hutchison):
S. 495. A bill to provide criminal and civil penalties for the
unlawful acquisition, transfer, or use of any chemical weapon or
biological weapon, and to reduce the threat of acts of terrorism or
armed aggression involving the use of any such weapon against the
United States, its citizens, or Armed Forces, or those of any allied
country, and for other purposes.
the chemical and biological weapons threat reduction act of 1997
Mr. KYL. 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. 495
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Chemical
and Biological Weapons Threat Reduction Act of 1997''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Policy.
Sec. 4. Definitions.
TITLE I--PENALTIES FOR UNLAWFUL ACTIVITIES WITHIN THE UNITED STATES OR
BY UNITED STATES NATIONALS ABROAD
Subtitle A--Criminal Penalties
Sec. 101. Criminal provisions.
Subtitle B--Civil Penalties
Sec. 111. Designation of lead agency.
Sec. 112. Prohibitions on chemical and biological weapons-related
activities.
Sec. 113. Civil penalties.
Sec. 114. Regulatory authority; application of other laws.
Subtitle C--Other Penalties
Sec. 121. Revocations of export privileges.
Sec. 122. Suspension of patent rights.
TITLE II--FOREIGN RELATIONS AND DEFENSE-RELATED PROVISIONS
Sec. 201. Sanctions for use of chemical or biological weapons.
Sec. 202. Continuation and enhancement of multilateral control regimes.
Sec. 203. Criteria for United States assistance to Russia.
Sec. 204. Report on the state of chemical and biological weapons
proliferation.
Sec. 205. International conference to strengthen the 1925 Geneva
Protocol.
Sec. 206. Restriction on use of funds for the Organization for the
Prohibition of Chemical Weapons.
Sec. 207. Enhancements to robust chemical and biological defenses.
Sec. 208. Negative security assurances.
Sec. 209. Riot control agents.
SEC. 2. FINDINGS.
The Congress finds that--
(1) the United States eliminated its stockpile of
biological weapons pursuant to the 1972 Biological Weapons
Convention and has pledged to destroy its entire inventory of
chemical weapons by 2004, independent of the Chemical Weapons
Convention entering into force;
(2) the use of chemical or biological weapons in
contravention of international law is abhorrent and should
trigger immediate and effective sanctions;
(3) United Nations Security Council Resolution 620, adopted
on August 26, 1988, states the intention of the Security
Council to consider immediately ``appropriate and effective''
sanctions against any nation using chemical and biological
weapons in violation of international law;
(4) the General Agreement on Tariffs and Trade recognizes
that national security concerns may serve as legitimate
grounds for limiting trade; title XXI of the General
Agreement on Tariffs and Trade states that ``nothing in this
Agreement shall be construed . . . to prevent any contracting
party from taking any action which it considers necessary for
the protection of its essential security interests. . .'';
(5) on September 30, 1993, the President declared by
Executive Order No. 12868 a national emergency to deal with
``the unusual and extraordinary threat to the national
security, foreign policy, and economy of the United States''
posed by the proliferation of nuclear, biological and
chemical weapons, and of the means for delivering such
weapons;
(6) Russia has not implemented the 1990 United States-
Russian Bilateral Agreement on Destruction and Non-Production
of Chemical Weapons and on Measures to Facilitate the
Multilateral Convention on Banning Chemical Weapons, known as
the ``BDA'', nor has the United States and Russia resolved,
to the satisfaction of the United States, the outstanding
compliance issues under the Memorandum of Understanding
Between the United States of America and the Government of
the Union of Soviet Socialist Republics Regarding a Bilateral
Verification Experiment and Data Exchange Related To
Prohibition on Chemical Weapons, known as the ``1989 Wyoming
MOU'';
(7) the Intelligence Community has stated that a number of
countries, among them China, Egypt, Iran, Iraq, Libya, North
Korea, Syria, and Russia, possess chemical and biological
weapons and the means to deliver them;
(8) four countries in the Middle East--Iran, Iraq, Libya,
and Syria--have, as a national policy, supported
international terrorism;
(9) chemical and biological weapons have been used by
states in the past for intimidation and military aggression,
most recently during the Iran-Iraq war and by Iraq against
its Kurdish minority;
(10) the grave new threat of chemical and biological
terrorism has been demonstrated by the 1995 nerve gas attack
on the Tokyo subway by the Japanese cult Aum Shinrikyo;
(11) the urgent need to improve domestic preparedness to
protect against chemical and
[[Page S2659]]
biological threats was underscored by enactment of the 1997
Defense Against Weapons of Mass Destruction Act;
(12) the Department of Defense, in light of growing
chemical and biological threats in regions of key concern,
including Northeast Asia, and the Middle East, has stated
that United States forces must be properly trained and
equipped for all missions, including those in which opponents
might threaten use of chemical or biological weapons; and
(13) Australia Group controls on the exports of chemical
and biological agents, and related equipment, and the Missile
Technology Control Regime, together provide an indispensable
foundation for international and national efforts to curb the
spread of chemical and biological weapons, and their delivery
means.
SEC. 3. POLICY.
It should be the policy of the United States to take all
appropriate measures to--
(1) prevent and deter the threat or use of chemical and
biological weapons against the citizens, Armed Forces, and
territory of the United States and its allies, and to protect
against, and manage the consequences of, such use should it
occur;
(2) discourage the proliferation of chemical and biological
weapons, their means of delivery, and related equipment,
material, and technology;
(3) prohibit within the United States the development,
production, acquisition, stockpiling, and transfer to third
parties of chemical or biological weapons, their precursors
and related technology; and
(4) impose unilateral sanctions, and seek immediately
international sanctions, against any nation using chemical
and biological weapons in violation of international law.
SEC. 4. DEFINITIONS.
In this Act:
(1) Australia group.--The term ``Australia Group'' refers
to the informal forum of countries, formed in 1984 and
chaired by Australia, whose goal is to discourage and impede
chemical and biological weapons proliferation by harmonizing
national export controls on precursor chemicals for chemical
weapons, biological weapons pathogens, and dual-use
equipment, sharing information on target countries, and
seeking other ways to curb the use of chemical weapons and
biological weapons.
(2) Biological weapon.--The term ``biological weapon''
means the following, together or separately:
(A) Any micro-organism (including bacteria, viruses, fungi,
rickettsiae or protozoa), pathogen, or infectious substance,
or any naturally occurring, bio-engineered or synthesized
component of any such micro-organism, pathogen, or infectious
substance, whatever its origin or method of production,
capable of causing--
(i) death, disease, or other biological malfunction in a
human, an animal, a plant, or another living organism;
(ii) deterioration of food, water, equipment, supplies, or
materials of any kind; or
(iii) deleterious alteration of the environment.
(B) Any munition or device specifically designed to cause
death or other harm through the toxic properties of those
biological weapons specified in subparagraph (A), which would
be released as a result of the employment of such munition or
device.
(C) Any equipment specifically designed for use directly in
connection with the employment of munitions or devices
specified in this section.
(D) Any living organism specifically designed to carry a
biological weapon specified in subparagraph (A) to a host.
(3) Chemical weapon.--The term ``chemical weapon'' means
the following, together or separately:
(A) Any of the following chemical agents: tabun, Sarin,
Soman, GF, VX, sulfur mustard, nitrogen mustard, phosgene
oxime, lewisite, phenyldichloroarsine, ethyldi- chloroarsine,
methyldichloroarsine, phosgene, diphosgene, hydrogen cyanide,
cyanogen chloride, and arsine.
(B) Any of the 54 chemicals other than a riot control agent
that is controlled by the Australia Group as of the date of
the enactment of this Act.
(C) Any munition or device specifically designed to cause
death or other harm through the toxic properties of a
chemical weapon specified in subparagraph (A) or (B), which
would be released as a result of the employment of such
munition or device.
(D) Any equipment specifically designed for use directly in
connection with the employment of munitions or devices
specified in this section.
(4) Knowingly.--The term ``knowingly'' is used within the
meaning of ``knows'' as that term is defined in section 104
of the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-
2) and includes situations in which a person has reason to
know.
(5) National of the united states.--The term ``national of
the United States'' has the same meaning given such term in
section 101(a)(22) of the Immigration and Nationality Act (8
U.S.C. 1101(a)(22)).
(6) Person.--The term ``person'' means any individual,
corporation, partnership, firm, association, or other legal
entity.
(7) Purpose not prohibited under this act.--The term
``purpose not prohibited under this Act'' means--
(A) any industrial, agricultural, research, medical,
pharmaceutical, or other peaceful purpose;
(B) any protective purpose, namely any purpose directly
related to protection against a chemical or biological
weapon;
(C) any military purpose that is not connected with the use
of a chemical or biological weapon or that is not dependent
on the use of the toxic properties of the chemical or
biological weapon to cause death or other harm; or
(D) any law enforcement purpose, including any domestic
riot control purpose.
(8) Riot control agent.--The term ``riot control agent''
means any substance, including diphenylchloroarsine,
diphenyl- cyanoarsine, adamsite, chloroacetophenone,
chloropicrin, bromobenzyl cyanide, 0-chlorobenzylidene
malononitrile, or 3-Quinuclidinyl benzilate, that is designed
or used to produce rapidly in humans any nonlethal sensory
irritation or disabling physical effect that disappears
within a short time following termination of exposure.
(9) United states.--The term ``United States'' means the
several States of the United States, the District of
Columbia, and the commonwealths, territories, and possessions
of the United States and includes all places under the
jurisdiction or control of the United States, including--
(A) any of the places within the provisions of section
101(41) of the Federal Aviation Act of 1958, as amended (49
U.S.C. App. sec. 1301(41));
(B) any public aircraft or civil aircraft of the United
States, as such terms are defined in sections 101 (36) and
(18) of the Federal Aviation Act of 1958, as amended (49
U.S.C. App. secs. 1301(36) and 1301(18)); and
(C) any vessel of the United States, as such term is
defined in section 3(b) of the Maritime Drug Enforcement Act,
as amended (46 U.S.C., App. sec. 1903(b)).
TITLE I--PENALTIES FOR UNLAWFUL ACTIVITIES WITHIN THE UNITED STATES OR
BY UNITED STATES NATIONALS ABROAD
Subtitle A--Criminal Penalties
SEC. 101. CRIMINAL PROVISIONS.
(a) In General.--Part I of title 18, United States Code, is
amended by inserting after chapter 11A the following new
chapter:
``CHAPTER 11B--CHEMICAL AND BIOLOGICAL WEAPONS
``Sec.
``229. Penalties and prohibitions with respect to chemical and
biological weapons.
``229A. Seizure, forfeiture, and destruction.
``229B. Other prohibitions.
``229C. Injunctions.
``229D. Requests for military assistance to enforce prohibition in
certain emergencies.
``229E. Definitions.
``Sec. 229. Penalties and prohibitions with respect to
chemical and biological weapons
``(a) In General.--Except as provided in subsection (c),
whoever knowingly develops, produces, otherwise acquires,
receives from any person located outside the territory of the
United States, stockpiles, retains, directly or indirectly
transfers, uses, owns, or possesses any chemical weapon or
any biological weapon, or knowingly assists, encourages or
induces, in any way, any person to do so, or attempt or
conspire to do so, shall be fined under this title or
imprisoned for life or any term of years or both, unless--
``(1) the chemical weapon or biological weapon is intended
for a purpose not prohibited under this Act;
``(2) the types and quantities of chemical weapons or
biological weapons are strictly limited to those that can be
justified for such purposes; and
``(3) the amount of such chemical weapons or biological
weapons per person at any given time does not exceed a
quantity that under the circumstances is inconsistent with
the purposes not prohibited under this Act.
``(b) Death Penalty.--Any person who knowingly uses
chemical or biological weapons in violation of subsection (a)
and by whose action the death of another person is the result
shall be punished by death or imprisoned for life.
``(c) Exclusion.--
``(1) In general.--Subsection (a) does not apply to the
retention, ownership, or possession of a chemical weapon or a
biological weapon by an agency of the United States or a
person described in paragraph (2) pending destruction of the
weapon.
``(2) Covered persons.--A person referred to in paragraph
(1) is a member of the Armed Forces of the United States or
any other person if the person is authorized by the head of
an agency of the United States to retain, own, or possess the
chemical or biological weapon.
``(d) Jurisdiction.--Conduct prohibited by subsection (a)
is within the jurisdiction of the United States if the
prohibited conduct--
``(1) takes place in the United States; or
``(2) takes place outside of the United States and is
committed by a national of the United States.
``(e) Reimbursement of Costs.--The court shall order any
person convicted of an offense under this section to
reimburse the United States for any expenses incurred by the
United States incident to the seizure, storage, handling,
transportation, and destruction or other disposition of any
property that was seized in connection with an investigation
of the commission of the offense by that person. A person
ordered to reimburse the United States for expenses
[[Page S2660]]
under this subsection shall be jointly and severally liable
for such expenses with each other person, if any, who is
ordered under this subsection to reimburse the United States
for the same expenses.
``Sec. 229A. Seizure, forfeiture, and destruction
``(a) Seizure.--
``(1) Seizures on warrants.--The Attorney General may
request the issuance, in the same manner as provided for a
search warrant, of a warrant authorizing the seizure of any
chemical weapon or any biological weapon that is of a type or
quantity that, under the circumstances, is inconsistent with
the purposes not prohibited under this Act.
``(2) Warrantless seizures.--In exigent circumstances,
seizure and destruction of any such chemical weapon or
biological weapon described in paragraph (1) may be made by
the Attorney General upon probable cause without the
necessity for a warrant.
``(b) Procedure for Forfeiture and Destruction.--
``(1) In general.--Except as provided in subsection (a)(2),
property seized pursuant to subsection (a) shall be forfeited
to the United States after notice to potential claimants and
an opportunity for a hearing.
``(2) Burden of persuasion.--At such a hearing, the United
States shall bear the burden of persuasion by a preponderance
of the evidence.
``(3) Procedures.--The provisions of chapter 46 of this
title relating to civil forfeitures shall apply to a seizure
or forfeiture under this section except to the extent (if
any) that such provisions are inconsistent with this section.
``(4) Destruction or other disposition.--The Attorney
General shall provide for the destruction or other
appropriate disposition of any chemical or biological weapon
seized and forfeited pursuant to this section.
``(c) Other Seizure, Forfeiture, and Destruction.--
``(1) Seizures on warrant.--The Attorney General may
request the issuance, in the same manner as provided for a
search warrant, of a warrant authorizing the seizure of any
chemical weapon or biological weapon that exists by reason of
conduct prohibited under section 229 of this title.
``(2) Warrantless seizures.--In exigent circumstances,
seizure and destruction of any such chemical weapon or
biological weapon described in paragraph (1) may be made by
the Attorney General upon probable cause without the
necessity for a warrant.
``(3) Forfeiture and destruction.--Property seized pursuant
to this subsection shall be summarily forfeited (within the
meaning of section 609(b) of the Tariff Act of 1930) to the
United States and destroyed.
``(d) Assistance.--The Attorney General may request the
head of any agency of the United States to assist in the
handling, storage, transportation, or destruction of property
seized under this section.
``(e) Owner or Possessor Liability.--The owner or possessor
of any property seized under this section shall be jointly
and severally liable to the United States in an action for
money damages for any expenses incurred by the United States
incident to the seizure, including any expenses relating to
the handling, storage, transportation, destruction or other
disposition of the seized property.
``Sec. 229B. Other prohibitions
``(a) In General.--Whoever knowingly uses riot control
agents as an act of terrorism, or knowingly assists any
person to do so, shall be fined under this title or
imprisoned for a term of not more than 10 years, or both.
``(b) Jurisdiction.--Conduct prohibited by this section is
within the jurisdiction of the United States if the
prohibited conduct--
``(1) takes place in the United States; or
``(2) takes place outside of the United States and is
committed by a national of the United States.
``Sec. 229C. Injunctions
``The United States may obtain in a civil action an
injunction against--
``(1) the conduct prohibited under section 229 of this
title; or
``(2) the preparation or solicitation to engage in conduct
prohibited under section 229 of this title.
``Sec. 229D. Requests for military assistance to enforce
prohibition in certain emergencies
``The Attorney General may request the Secretary of Defense
to provide assistance under section 382 of title 10 in
support of Department of Justice activities relating to the
enforcement of section 229 of this title in an emergency
situation involving a biological weapon or chemical weapon.
The authority to make such a request may be exercised by
another official of the Department of Justice in accordance
with section 382(f)(2) of title 10.
``Sec. 229E. Definitions
``In this chapter:
``(1) Australia group.--The term `Australia Group' refers
to the informal forum of countries, formed in 1984 and
chaired by Australia, whose goal is to discourage and impede
chemical and biological weapons proliferation by harmonizing
national export controls on precursor chemicals for chemical
weapons, biological weapons pathogens, and dual-use
equipment, sharing information on target countries, and
seeking other ways to curb the use of chemical and biological
weapons.
``(2) Biological weapon.--The term `biological weapon'
means the following, together or separately:
``(A) Any micro-organism (including bacteria, viruses,
fungi, rickettsiae or protozoa), pathogen, or infectious
substance, or any naturally occurring, bio-engineered or
synthesized component of any such micro-organism, pathogen,
or infectious substance, whatever its origin or method of
production, capable of causing--
``(i) death, disease, or other biological malfunction in a
human, an animal, a plant, or another living organism;
``(ii) deterioration of food, water, equipment, supplies,
or materials of any kind; or
``(iii) deleterious alteration of the environment.
``(B) Any munition or device specifically designed to cause
death or other harm through the toxic properties of those
biological weapons specified in subparagraph (A), which would
be released as a result of the employment of such munition or
device.
``(C) Any equipment specifically designed for use directly
in connection with the employment of munitions or devices
specified in this section.
``(D) Any living organism specifically designed to carry a
biological weapon specified in subparagraph (A) to a host.
``(3) Chemical weapon.--The term `chemical weapon' means
the following, together or separately:
``(A) Any of the following chemical agents: tabun, Sarin,
Soman, GF, VX, sulfur mustard, nitrogen mustard, phosgene
oxime, lewisite, phenyldichloroarsine, ethyldichloroarsine,
methyldichloroarsine, phosgene, diphosgene, hydrogen cyanide,
cyanogen chloride, and arsine.
``(B) Any of the 54 chemicals, other than a riot control
agent, controlled by the Australia Group as of the date of
the enactment of this Act.
``(C) Any munition or device specifically designed to cause
death or other harm through the toxic properties of a
chemical weapon specified in subparagraph (A) or (B), which
would be released as a result of the employment of such
munition or device.
``(D) Any equipment specifically designed for use directly
in connection with the employment of munitions or devices
specified in this section.
``(4) Knowingly.--The term `knowingly' is used within the
meaning of `knows' as that term is defined in section 104 of
the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-2)
and includes situations in which a person has reason to know.
``(5) National of the united states.--The term `national of
the United States' has the same meaning given such term in
section 101(a)(22) of the Immigration and Nationality Act (8
U.S.C. 1101(a)(22)).
``(6) Person.--The term `person' means any individual,
corporation, partnership, firm, association, or other legal
entity.
``(7) Purpose not prohibited under the act.--The term
`purpose not prohibited under this Act' means--
``(A) any industrial, agricultural, research, medical,
pharmaceutical, or other peaceful purpose;
``(B) any protective purpose, namely any purpose directly
related to protection against a chemical or biological
weapon;
``(C) any military purpose that is not connected with the
use of a chemical or biological weapon or that is not
dependent on the use of the toxic properties of the chemical
or biological weapon to cause death or other harm; or
``(D) any law enforcement purpose, including any domestic
riot control purpose.
``(8) Riot control agent.--The term `riot control agent'
means any substance, including diphenylchloroarsine,
diphenylcyanoarsine, adamsite, chloroacetophenone,
chloropicrin, bromobenzyl cyanide, 0-chlorobenzylidene
malononitrile, or 3-Quinuclidinyl benzilate that is designed
or used to produce rapidly in humans any nonlethal sensory
irritation or disabling physical effect that disappears
within a short time following termination of exposure.
``(9) Terrorism.--The term `terrorism' means activities
that--
``(A) involve violent acts or acts dangerous to human life
that are a violation of the criminal laws of the United
States or of any State, or that would be a criminal violation
if committed within the jurisdiction of the United States or
of any State; and
``(B) appear to be intended--
``(i) to intimidate or coerce a civilian population;
``(ii) to influence the policy of a government by
intimidation or coercion; or
``(iii) to affect the conduct of a government by
assassination or kidnapping.
``(10) United states.--The term `United States' means the
several States of the United States, the District of
Columbia, and the commonwealths, territories, and possessions
of the United States and includes all places under the
jurisdiction or control of the United States, including--
``(A) any of the places within the provisions of section
40102(41) of title 49, United States Code;
``(B) any civil aircraft or public aircraft of the United
States, as such terms are defined in paragraphs (16) and
(37), respectively, of section 40102 of title 49, United
States Code; and
``(C) any vessel of the United States, as such term is
defined in section 3(b) of the Maritime Drug Law Enforcement
Act (46 U.S.C. App. 1903(b)).''.
(b) Conforming Amendment.--The table of chapters for part I
of title 18, United States Code, is amended--
[[Page S2661]]
(1) by striking the item relating to chapter 10; and
(2) by inserting after the item for chapter 11A the
following new item:
``11B. Chemical and Biological Weapons.......................229''.....
(c) Repeals.--The following provisions of law are repealed:
(1) Chapter 10 of title 18, United States Code, relating to
biological weapons.
(2) Section 2332c of title 18, United States Code, relating
to chemical weapons.
(3) In the table of sections for chapter 113B of title 18,
United States Code, the item relating to section 2332c.
Subtitle B--Civil Penalties
SEC. 111. DESIGNATION OF LEAD AGENCY.
The President shall designate the Federal Bureau of
Investigation as the agency primarily responsible for
implementing the provisions of this subtitle (in this
subtitle referred to as the ``Lead Agency'').
SEC. 112. PROHIBITIONS ON CHEMICAL AND BIOLOGICAL WEAPONS-
RELATED ACTIVITIES.
(a) Chemical and Biological Weapons Activities.--Except as
provided in subsection (b), it shall be unlawful for any
person located in the United States, or any national of the
United States located outside the United States, to develop,
produce, otherwise acquire, receive from any person located
outside the territory of the United States, stockpile,
retain, directly or indirectly transfer, use, own, or possess
any chemical weapon or any biological weapon, or to assist,
encourage or induce, in any way, any person to do so, or
attempt or conspire to do so, unless--
(1) the chemical weapon or biological weapon is intended
for a purpose not prohibited under this Act;
(2) the types and quantities of the chemical weapon or
biological weapon are strictly limited to those that can be
justified for such purpose; and
(3) the amount of the chemical weapon or biological weapon
per person at any given time does not exceed a quantity that
under the circumstances is inconsistent with the purposes not
prohibited under this Act.
(b) Exclusion.--
(1) In general.--Subsection (a) does not apply to the
retention, ownership, or possession of a chemical weapon or a
biological weapon by an agency of the United States or a
person described in paragraph (2) pending destruction of the
weapon.
(2) Covered persons.--A person referred to in paragraph (1)
is a member of the Armed Forces of the United States or any
other person if the person is authorized by the head of an
agency of the United States to retain, own, or possess the
chemical weapon.
(c) Jurisdiction.--Conduct prohibited by subsection (a) is
within the jurisdiction of the United States if the
prohibited conduct--
(1) takes place in the United States; or
(2) takes place outside of the United States and is
committed by a national of the United States.
SEC. 113. CIVIL PENALTIES.
(a) Penalty Amount.--Any person that is determined, in
accordance with subsection (b), to have violated section
112(a) of this Act shall be required by order to pay a civil
penalty in an amount not to exceed $100,000 for each such
violation.
(b) Hearing.--
(1) In general.--Before imposing an order described in
subsection (a) against a person under this subsection for a
violation of section 112(a), the head of the Lead Agency
shall provide the person or entity with notice and, upon
request made within 15 days of the date of the notice, a
hearing respecting the violation.
(2) Conduct of hearing.--Any hearing so requested shall be
conducted before an administrative law judge. The hearing
shall be conducted in accordance with the requirements of
section 554 of title 5, United States Code. If no hearing is
so requested, the Attorney General's imposition of the order
shall constitute a final and unappealable order.
(3) Issuance of orders.--If the administrative law judge
determines, upon the preponderance of the evidence received,
that a person named in the complaint has violated section
102, the administrative law judge shall state his findings of
fact and issue and cause to be served on such person an order
described in subsection (a).
(4) Factors for determination of penalty amounts.--In
determining the amount of any civil penalty, the
administrative law judge shall take into account the nature,
circumstances, extent, and gravity of the violation or
violations and, with respect to the violator, the ability to
pay, effect on ability to continue to do business, any
history of prior such violations, the degree of culpability,
the existence of an internal compliance program, and such
other matters as justice may require.
(c) Administrative Appellate Review.--The decision and
order of an administrative law judge shall become the final
agency decision and order of the head of the Lead Agency
unless, within 30 days, the head of the Lead Agency modifies
or vacates the decision and order, with or without
conditions, in which case the decision and order of the head
of the Lead Agency shall become a final order under this
subsection. The head of the Lead Agency may not delegate his
authority under this paragraph.
(d) Offsets.--The amount of the civil penalty under a final
order of the Lead Agency may be deducted from any sums owed
by the United States to the person.
(e) Judicial Review.--A person adversely affected by a
final order respecting an assessment may, within 30 days
after the date the final order is issued, file a petition in
the Court of Appeals for the appropriate circuit for review
of the order.
(f) Enforcement of Orders.--If a person fails to comply
with a final order issued under this subsection against the
person and if the person does not file a petition for
judicial review under subsection (e), the Attorney General
shall file a suit to seek compliance with the order in any
appropriate district court of the United States, plus
interest at currently prevailing rates calculated from the
date of expiration of the 30-day period referred to in
subsection (e) or the date of such final judgment, as the
case may be. In any such suit, the validity and
appropriateness of the final order shall not be subject to
review.
SEC. 114. REGULATORY AUTHORITY; APPLICATION OF OTHER LAWS.
(a) Regulations.--The Lead Agency may issue such
regulations as are necessary to implement and enforce this
subtitle and to amend or revise such regulations as necessary
if such Executive orders, directives, or regulations do not
require any person to submit information or data on any plant
site, plant, chemical weapon, or biological weapon that such
person produces, processes, or consumes for purposes not
prohibited by this Act.
(b) Enforcement.--The Lead Agency may designate its
officers or employees to conduct investigations pursuant to
this Act. In conducting such investigations, those officers
or employees may, to the extent necessary or appropriate for
the enforcement of this subtitle, or for the imposition of
any penalty or liability arising under this subtitle,
exercise such authorities as are conferred upon them by other
laws of the United States.
Subtitle C--Other Penalties
SEC. 121. REVOCATIONS OF EXPORT PRIVILEGES.
(a) In General.--If the President determines, after notice
and an opportunity for a hearing in accordance with section
554 of title 5, United States Code, that any person within
the United States, or any national of the United States
located outside the United States, has committed any
violation of section 112, the President may issue an order
for the suspension or revocation of the authority of the
person to export from the United States any goods or
technology (as such terms are defined in section 16 of the
Export Administration Act of 1979 (50 U.S.C. app. 2415)).
(b) Repeal.--Section 11C of the Export Administration Act
of 1979 (50 U.S.C. app. 2410c), relating to chemical and
biological weapons proliferation sanctions, is repealed.
SEC. 122. SUSPENSION OF PATENT RIGHTS.
(a) Suspension.--The term of any patent granted pursuant to
title 35, United States Code, held by any person, including
any subsidiary of such person, who knowingly violates any
provision of section 112 of this Act shall be suspended for a
period of three years.
(b) Effect on Patent Rights.--
(1) Prohibition.--No rights under title 35, United States
Code, shall be derived from any patent described in
subsection (a) during the period of any such suspension.
(2) No extension of patent term.--Any suspension of patent
rights imposed pursuant to the provisions of this section
shall not extend the term of any such patent.
(c) Procedures.--
(1) Determination by the commissioner.--Within 30 days
after the date of enactment of this Act, the Commissioner of
Patents, after a determination has been made regarding which
person or persons have violated section 112 of this Act,
shall recommend the suspension of the appropriate patents.
(2) Notices of violations.--The Commissioner shall notify
the holder of such patent within 30 days after the date of
such determination and shall publish in the Federal Register
a notice of such determination, together with the factual and
legal basis for such determination.
(3) Hearings.--Any interested person may request, within
the 60-day period beginning on the date of publication of a
determination, that the Commissioner making the determination
hold a hearing on such determination. Such a hearing shall be
an informal hearing which is not subject to section 554, 556,
or 557 of title 5, United States Code. If such a request is
made within such period, the Commissioner shall hold such
hearing not later than 30 days after the date of the request,
or at the request of the person making the request, not later
than 60 days after such date. The Commissioner who is holding
the hearing shall provide notice of the hearing to the person
involved and to any interested person and provide the owner
of record of the patent and any interested person an
opportunity to participate in the hearing.
(4) Final determinations.--Within 30 days after the
completion of the hearing, the Commissioner shall affirm or
revise the determination that was the subject of the hearing
and shall publish such affirmation or revision in the Federal
Register.
(d) Fees.--The Commissioner may establish such fees as are
appropriate to cover the costs of carrying out his duties and
functions under this section.
(e) Certificate of Suspension.--The Commissioner shall make
the determination that a patent is suspended and that the
requirements of subsection (c) have been complied
[[Page S2662]]
with. If the Commissioner determines that the patent is
suspended, the Commissioner shall issue to the owner of
record of the patent a certificate of suspension, under seal,
stating the length of the suspension, and identifying the
product and the statute under which regulatory review
occurred. Such certificate shall be recorded in the official
file of the patent and shall be considered as part of the
original patent. The Commissioner shall publish in the
Official Gazette of the Patent and Trademark Office a notice
of such suspension.
TITLE II--FOREIGN RELATIONS AND DEFENSE-RELATED PROVISIONS
SEC. 201. SANCTIONS FOR USE OF CHEMICAL OR BIOLOGICAL
WEAPONS.
(a) In General.--The Arms Export Control Act (22 U.S.C.
2751 et seq.) is amended by striking chapter 8 and inserting
the following:
``CHAPTER 8--SANCTIONS AGAINST USE OF CHEMICAL OR BIOLOGICAL WEAPONS
``SEC. 81. PURPOSE.
``The purpose of this chapter is--
``(1) to provide for the imposition of sanctions against
any foreign government--
``(A) that uses chemical or biological weapons in violation
of international law; or
``(B) that has used chemical or biological weapons against
its own nationals; and
``(2) to ensure that the victims of the use of chemical or
biological weapons shall be compensated and awarded punitive
damages, as may be determined by courts in the United States.
``SEC. 82. PRESIDENTIAL DETERMINATION.
``(a) Bilateral Sanctions.--Except as provided in
subsections (c) and (d), the President shall, after the
consultation with Congress, impose the sanctions described in
subsections (a) and (b) of section 83 if the President
determines that any foreign government--
``(1) has used a chemical weapon or biological weapon in
violation of international law; or
``(2) has used a chemical weapon or biological weapon
against its own nationals.
``(b) Multilateral Sanctions.--The sanctions imposed
pursuant to subsection (a) are in addition to any
multilateral sanction or measure that may be otherwise
agreed.
``(c) Presidential Waiver.--The President may waive the
application of any of the sanctions imposed pursuant to
subsection (a) if the President determines and certifies in
writing to the Speaker of the House of Representatives and
the Committee on Foreign Relations of the Senate that
implementing such measures would have a substantial negative
impact upon the supreme national interests of the United
States.
``(d) Sanctions Not Applied to Certain Existing
Contracts.--A sanction described in section 83 shall not
apply to any activity pursuant to a contract or international
agreement entered into before the date of the Presidential
determination under subsection (a) if the President
determines that performance of the activity would reduce the
potential for the use of a chemical weapon or biological
weapon by the sanctioned country.
``SEC. 83. MANDATORY SANCTIONS.
``(a) Minimum Number of Sanctions.--After consultation with
Congress and making a determination under section 82 with
respect to the actions of a foreign government, the President
shall impose not less than 5 of the following sanctions
against that government for a period of three years:
``(1) Foreign assistance.--The United States Government
shall terminate assistance under the Foreign Assistance Act
of 1961, except for urgent humanitarian assistance and food
or other agricultural commodities or products.
``(2) Arms sales.--The United States Government shall not
sell any item on the United States Munitions List and shall
terminate sales to that country under this Act of any defense
articles, defense services, or design and construction
services. Licenses shall not be issued for the export to the
sanctioned country of any item on the United States Munitions
List, or for commercial satellites.
``(3) Arms sale financing.--The United States Government
shall terminate all foreign military financing under this
Act.
``(4) Denial of united states government credit or other
financial assistance.--The United States Government shall
deny any credit, credit guarantees, or other financial
assistance by any department, agency, or instrumentality of
the United States Government, including the Export-Import
Bank of the United States.
``(5) Export controls.--The authorities of section 6 of the
Export Administration Act of 1979 shall be used to prohibit
the export of any goods or technology on that part of the
control list established under section 5(c)(1) of that Act,
and all other goods and technology under this Act (excluding
food and other agricultural commodities and products) as the
President may determine to be appropriate.
``(6) Import restrictions.--The President shall issue an
order imposing restrictions on the importation into the
United States of any service, good, or commodity that is the
growth, product, or manufacture of that country.
``(7) Multilateral bank assistance.--The United States
shall oppose, in accordance with section 701 of the
International Financial Institutions Act, the extension of
any loan or financial or technical assistance by
international financial institutions.
``(8) Bank loans.--The United States Government shall
prohibit any United States bank from making any loan or
providing any credit, including to any agency or
instrumentality of the government, except for loans or
credits for the purpose of purchasing food or other
agricultural commodities or products.
``(9) Aviation rights.--
``(A) In general.--
``(i) Notification.--The President is authorized to notify
the government of a country with respect to which the
President has made a determination pursuant to section 82(a)
of his intention to suspend the authority of foreign air
carriers owned or controlled by the government of that
country to engage in foreign air transportation to or from
the United States.
``(ii) Suspension of aviation rights.--Within 10 days after
the date of notification of a government under subclause (I),
the Secretary of Transportation shall take all steps
necessary to suspend at the earliest possible date the
authority of any foreign air carrier owned or controlled,
directly or indirectly, by that government to engage in
foreign air transportation to or from the United States,
notwithstanding any agreement relating to air services.
``(B) Termination of air service agreements.--
``(i) In general.--The President may direct the Secretary
of State to terminate any air service agreement between the
United States and a country with respect to which the
President has made a determination pursuant to section 82(a),
in accordance with the provisions of that agreement.
``(ii) Termination of aviation rights.--Upon termination of
an agreement under this clause, the Secretary of
Transportation shall take such steps as may be necessary to
revoke at the earliest possible date the right of any foreign
air carrier owned, or controlled, directly or indirectly, by
the government of that country to engage in foreign air
transportation to or from the United States.
``(C) Exception.--The Secretary of Transportation may
provide for such exceptions from the sanction contained in
subparagraph (A) as the Secretary considers necessary to
provide for emergencies in which the safety of an aircraft or
its crew or passengers is threatened.
``(D) Definitions.--For purposes of this paragraph, the
terms `aircraft', `air transportation', and `foreign air
carrier' have the meanings given those terms in section 40102
of title 49, United States Code.
``(10) Diplomatic relations.--The President shall use his
constitutional authorities to downgrade or suspend diplomatic
privileges between the United States and that country.
``(b) Blocking of Assets.--Upon making a determination
under section 82, the President shall take all steps
necessary to block any transactions in any property subject
to the jurisdiction of the United States in which the foreign
country or any national thereof has any interest whatsoever,
for the purpose of compensating the victims of the chemical
or biological weapons use and for punitive damages as may be
assessed.
``(c) Statutory Construction.--Nothing in this section
limits the authority of the President to impose a sanction
that is not specified in this section.
``SEC. 84. REMOVAL OF SANCTIONS.
``(a) Certification Requirement.--The President shall
remove the sanctions imposed with respect to a foreign
government pursuant to this section if the President
determines and so certifies to the Congress, after the end of
the three-year period beginning on the date on which
sanctions were initially imposed on that country pursuant to
section 82, that--
``(1) the government of that country has provided reliable
assurances that it will not use any chemical weapon or
biological weapon in violation of international law and will
not use any chemical weapon or biological weapon against its
own nationals;
``(2) the government of the country is willing to accept
onsite inspections or other reliable measures to verify that
the government is not making preparations to use any chemical
weapon or biological weapon in violation of international law
or to use any chemical weapon or biological weapon against
its own nationals; and
``(3) the government of the country is making restitution
to those affected by any use of any chemical weapon or
biological weapon in violation of international law or
against its own nationals.
``(b) Reasons for Determination.--The certification made
under this subsection shall set forth the reasons supporting
such determination in each particular case.
``(c) Effective Date.--The certification made under this
subsection shall take effect on the date on which the
certification is received by the Congress.
``SEC. 85. NOTIFICATIONS AND REPORTS OF CHEMICAL OR
BIOLOGICAL WEAPONS USE AND APPLICATION OF
SANCTIONS.
``(a) Notification.--Not later than 30 days after
persuasive information becomes available to the executive
branch of Government indicating the substantial possibility
of the use of chemical or biological weapons by any person or
government, the President shall so notify in writing
Congress.
``(b) Report.--Not later than 60 days after making a
notification under subsection (a), the President shall submit
a report to Congress that contains--
``(1) an assessment by the President in both classified and
unclassified form of the
[[Page S2663]]
circumstances of the suspected use of chemical or biological
weapons, including any determination by the President made
under section 82 with respect to a foreign government; and
``(2) a description of the actions the President intends to
take pursuant to the assessment, including the imposition of
any sanctions or other measures pursuant to section 82.
``(c) Progress Report.--Not later than 60 days after
submission of a report under subsection (b), the President
shall submit a progress report to Congress describing actions
undertaken by the President under this chapter, including the
imposition of unilateral and multilateral sanctions and other
punitive measures, in response to the use of any chemical
weapon or biological weapon described in the report.
``(d) Recipients of Notifications and Reports.--Any
notification or report required by this section shall be
submitted to the following:
``(1) The Majority Leader of the Senate and the Speaker of
the House of Representatives.
``(2) The Committee on Foreign Relations and the Select
Committee on Intelligence of the Senate.
``(3) The Committee on International Relations and the
Permanent Select Committee on Intelligence of the House of
Representatives.
``SEC. 86. DEFINITIONS.
``In this chapter:
``(1) Biological weapon.--The term `biological weapon'
means the following, together or separately:
``(A) Any micro-organism (including bacteria, viruses,
fungi, rickettsiae or protozoa), pathogen, or infectious
substance, or any naturally occurring, bio-engineered or
synthesized component of any such micro-organism, pathogen,
or infectious substance, whatever its origin or method of
production, capable of causing--
``(i) death, disease, or other biological malfunction in a
human, an animal, a plant, or another living organism;
``(ii) deterioration of food, water, equipment, supplies,
or materials of any kind; or
``(iii) deleterious alteration of the environment.
``(B) Any munition or device specifically designed to cause
death or other harm through the toxic properties of those
biological weapons specified in subparagraph (A), which would
be released as a result of the employment of such munition or
device.
``(C) Any equipment specifically designed for use directly
in connection with the employment of munitions or devices
specified in this section.
``(D) Any living organism specifically designed to carry a
biological weapon specified in subparagraph (A) to a host.
``(2) Chemical weapon.--The term `chemical weapon' means
the following, together or separately:
``(A) Any of the following chemical agents: tabun, Sarin,
Soman, GF, VX, sulfur mustard, nitrogen mustard, phosgene
oxime, lewisite, phenyldichloroarsine, ethyldichloroarsine,
methyldichloroarsine, phosgene, diphosgene, hydrogen cyanide,
cyanogen chloride, and arsine.
``(B) Any of the 54 chemicals, other than a riot control
agent, controlled by the Australia Group as of the date of
the enactment of this Act.
``(C) Any munition or device specifically designed to cause
death or other harm through the toxic properties of a
chemical weapon specified in subparagraph (A) or (B), which
would be released as a result of the employment of such
munition or device.
``(D) Any equipment specifically designed for use directly
in connection with the employment of munitions or devices
specified in this section.
``(3) Person.--The term `person' means any individual,
corporation, partnership, firm, association, or other legal
entity.''.
(b) Repeal.--Sections 306 through 308 of the Act of
December 4, 1991 (Public Law 102-182) are repealed.
SEC. 202. CONTINUATION AND ENHANCEMENT OF MULTILATERAL
CONTROL REGIMES.
(a) Sense of Congress.--It is the sense of Congress that
any collapse of the informal forum of states known as the
``Australia Group'', either through changes in membership or
lack of compliance with common export controls, or any
substantial weakening of common Australia Group export
controls and nonproliferation measures in force as of the
date of enactment of this Act, would seriously undermine
international and national efforts to curb the spread of
chemical and biological weapons and related equipment.
(b) Policy.--It shall be the policy of the United States--
(1) to continue close cooperation with other countries in
the Australia Group in support of its current efforts and in
devising additional means to monitor and control the supply
of chemicals and biological agents applicable to weapons
production;
(2) to maintain an equivalent or more comprehensive level
of control over the export of toxic chemicals and their
precursors, dual-use processing equipment, human, animal and
plant pathogens and toxins with potential biological weapons
application, and dual-use biological equipment, as that
afforded by the Australia Group as of the date of enactment
of this Act;
(3) to block any effort by any Australia Group member to
achieve Australia Group consensus on any action that would
substantially weaken existing common Australia Group export
controls and nonproliferation measures or otherwise undermine
the effectiveness of the Australia Group; and
(4) to work closely with other countries also capable of
supplying equipment, materials, and technology with
particular applicability to the production of chemical or
biological weapons in order to devise and harmonize the most
effective national controls possible on the transfer of such
materials, equipment, and technology.
(c) Certification.--Not later than 180 days after the date
of the enactment of this Act, and annually thereafter, the
President shall determine and certify to Congress whether--
(1) the Australia Group continues to maintain an equivalent
or more comprehensive level of control over the export of
toxic chemicals and their precursors, dual-use processing
equipment, human, animal, and plant pathogens and toxins with
potential biological weapons application, and dual-use
biological equipment, as that afforded by the Australia Group
as of the date of the last certification under this
subsection, or, in the case of the first certification, the
level of control maintained as of the date of enactment of
this Act; and
(2) the Australia Group remains a viable mechanism for
curtailing the spread of chemical and biological weapons-
related materials and technology, and whether the
effectiveness of the Australia Group has been undermined by
changes in membership, lack of compliance with common export
controls, or any weakening of common controls and measures
that are in effect as of the date of enactment of this Act.
(d) Consultations.--
(1) In general.--The President shall consult periodically,
but not less frequently than twice a year, with the Committee
on Foreign Relations of the Senate and the Committee on
International Relations of the House of Representatives, on
Australia Group export controls and nonproliferation
measures.
(2) Resulting from presidential certification.--If the
President certifies that either of the conditions in
subsection (c) are not met, the President shall consult
within 60 days of such certification with the Committee on
Foreign Relations of the Senate and the Committee on
International Relations of the House of Representatives on
steps the United States should take to maintain effective
international controls on chemical and biological weapons-
related materials and technology.
SEC. 203. CRITERIA FOR UNITED STATES ASSISTANCE TO RUSSIA.
(a) In General.--Notwithstanding any other provision of
law, United States assistance described in subsection (b) may
not be provided to Russia unless the President determines and
certifies to Congress not later than 180 days after the date
of the enactment of this Act, and on an annual basis
thereafter, that--
(1) Russia is making reasonable progress in the
implementation of the Bilateral Destruction Agreement;
(2) the United States and Russia have resolved, to the
satisfaction of the United States, outstanding compliance
issues under the Wyoming Memorandum of Understanding and the
Bilateral Destruction Agreement;
(3) Russia has fully and accurately declared all
information regarding its unitary and binary chemical
weapons, chemical weapons production facilities, other
facilities associated with the development of chemical
weapons, and riot control agents; and
(4) Russia is in compliance with its obligations under the
Biological Weapons Convention.
(b) United States Assistance Covered.--United States
assistance described in this subsection is United States
assistance provided only for the purposes of--
(1) facilitating the transport, storage, safeguarding, and
elimination of any chemical weapon or biological weapon or
its delivery vehicle;
(2) preventing the proliferation of any chemical weapon or
biological weapon, any component or technology of such a
weapon, or any technology or expertise related to such a
weapon;
(3) planning, designing, or construction of any destruction
facility for a chemical weapon or biological weapon; or
(4) supporting any international science and technology
center.
(c) Definitions.--
(1) Bilateral destruction agreement.--The term ``Bilateral
Destruction Agreement'' means Agreement Between the United
States of America and the Union of Soviet Socialist Republics
on Destruction and Nonproduction of Chemical Weapons and on
Measures to Facilitate the Multilateral Convention on Banning
Chemical Weapons, signed on June 1, 1990.
(2) Biological weapons convention.--The term ``Biological
Weapons Convention'' means the Convention on the Prohibition
of the Development, Production and Stockpiling of
Bacteriological (Biological) and Toxin Weapons and on Their
Destruction, done at Washington, London, and Moscow on April
10, 1972.
(3) Wyoming memorandum of understanding.--The term
``Wyoming Memorandum of Understanding'' means the Memorandum
of Understanding Between the Government of the United States
of America and the Government of the Union of Soviet
Socialist Republics Regarding a Bilateral Verification
Experiment and Data Exchange Related to
[[Page S2664]]
Prohibition on Chemical Weapons, signed at Jackson Hole,
Wyoming, on September 23, 1989.
(4) United states assistance.--The term ``United States
assistance'' has the meaning given the term in section
481(e)(4) of the Foreign Assistance Act of 1961 (22 U.S.C.
2291(e)(4)).
SEC. 204. REPORT ON THE STATE OF CHEMICAL AND BIOLOGICAL
WEAPONS PROLIFERATION.
Not later than 180 days after the date of enactment of this
Act, and every year thereafter, the President shall submit to
the Speaker of the House of Representatives and the Committee
on Foreign Relations and the Select Committee on Intelligence
of the Senate a report containing the following:
(1) Proliferation by foreign countries.--A description of
any efforts by China, Egypt, India, Iran, Iraq, Libya, North
Korea, Pakistan, Russia, and Syria, and any country that has,
during the five years prior to submission of the report, used
any chemical weapon or biological weapon or attempted to
acquire the material and technology to produce and deliver
chemical or biological agents, together with an assessment of
the present and future capability of the country to produce
and deliver such agents.
(2) Foreign persons assisting in proliferation.--An
identification of--
(A) those persons that in the past have assisted the
government of any country described in paragraph (1) in that
effort; and
(B) those persons that continue to assist the government of
the country described in paragraph (1) in that effort as of
the date of the report.
(3) Third country assistance in proliferation.--An
assessment of whether and to what degree other countries have
assisted any government or country described in paragraph (1)
in its effort to acquire the material and technology
described in that paragraph.
(4) Intelligence information on third country assistance.--
A description of any confirmed or credible intelligence or
other information that any country has assisted the
government of any country described in paragraph (1) in that
effort, either directly or by facilitating the activities of
the persons identified in subparagraph (A) or (B) of
paragraph (3) or had knowledge of the activities of the
persons identified in subparagraph (A) or (B) of paragraph
(3), but took no action to halt or discourage such
activities.
(5) Intelligence information on subnational groups.--A
description of any confirmed or credible intelligence or
other information of the development, production,
stockpiling, or use, of any chemical weapon or biological
weapon by subnational groups, including any terrorist or
paramilitary organization.
(6) Funding priorities for detection and monitoring
capabilities.--An identification of the priorities of the
executive branch of Government for the development of new
resources relating to detection and monitoring capabilities
with respect to chemical weapons and biological weapons.
SEC. 205. INTERNATIONAL CONFERENCE TO STRENGTHEN THE 1925
GENEVA PROTOCOL.
(a) Definition.--In this section, the term ``1925 Geneva
Protocol'' means the Protocol for the Prohibition of the Use
in War of Asphyxiating, Poisonous or Other Gases, and of
Bacteriological Methods of Warfare, done at Geneva June 17,
1925 (26 UST 71; TIAS 8061).
(b) Policy.--It shall be the policy of the United States--
(1) to work to obtain multilateral agreement to effective,
international enforcement mechanisms to existing
international agreements that prohibit the use of chemical
and biological weapons, to which the United States is a state
party; and
(2) pursuant to paragraph (1), to work to obtain
multilateral agreement regarding the collective imposition of
sanctions and other measures described in chapter 8 of the
Arms Export Control Act, as amended by this Act.
(c) Responsibility.--The Secretary of State shall, as a
priority matter, take steps necessary to achieve United
States objectives, as set forth in this section.
(d) Sense of the Senate.--The Senate urges and directs the
Secretary of State to work to convene an international
negotiating forum for the purpose of concluding an
international agreement on enforcement of the 1925 Geneva
Protocol.
(e) Allocation of Funds.--Of the amount authorized to be
appropriated to the Department of State for fiscal year 1998
under the appropriations account entitled ``International
Conferences and Contingencies'', $5,000,000 shall be
available only for payment of salaries and expenses in
connection with efforts of the Secretary of State to conclude
an international agreement described in subsection (d).
SEC. 206. RESTRICTION ON USE OF FUNDS FOR THE ORGANIZATION
FOR THE PROHIBITION OF CHEMICAL WEAPONS.
None of the funds appropriated pursuant to any provision of
law, including previously appropriated funds, may be
available to make any voluntary or assessed contribution to
the Organization for the Prohibition of Chemical Weapons, or
to reimburse any account for the transfer of in-kind items to
the Organization, unless or until the Convention on the
Prohibition of Development, Production, Stockpiling and Use
of Chemical Weapons and on Their Destruction, opened for
signature at Paris January 13, 1993, enters into force for
the United States.
SEC. 207. ENHANCEMENTS TO ROBUST CHEMICAL AND BIOLOGICAL
DEFENSES.
(a) Sense of Congress.--It is the sense of Congress that--
(1) the threats posed by chemical and biological weapons to
United States Armed Forces deployed in regions of concern
will continue to grow and will undermine United States
strategies for the projection of United States military power
and the forward deployment of United States Armed Forces;
(2) the use of chemical or biological weapons will be a
likely condition of future conflicts in regions of concern;
(3) it is essential for the United States and key regional
allies of the United States to preserve and further develop
robust chemical and biological defenses;
(4) the United States Armed Forces, both active and
nonactive duty, are inadequately equipped, organized,
trained, and exercised for operations in chemically and
biologically contaminated environments;
(5) the lack of readiness stems from a deemphasis by the
executive branch of Government and the United States Armed
Forces on chemical and biological defense;
(6) the armed forces of key regional allies and likely
coalition partners, as well as civilians necessary to support
United States military operations, are inadequately prepared
and equipped to carry out essential missions in chemically
and biologically contaminated environments;
(7) congressional direction contained in the 1997 Defense
Against Weapons of Mass Destruction Act is intended to lead
to enhanced domestic preparedness to protect against the use
of chemical and biological weapons; and
(8) the United States Armed Forces should place increased
emphasis on potential threats to deployed United States Armed
Forces and, in particular, should make countering the use of
chemical and biological weapons an organizing principle for
United States defense strategy and for the development of
force structure, doctrine, planning, training, and exercising
policies of the United States Armed Forces.
(b) Defense Readiness Training.--The Secretary of Defense
shall take those actions that are necessary to ensure that
the United States Armed Forces are capable of carrying out
required military missions in United States regional
contingency plans despite the threat or use of chemical or
biological weapons. In particular, the Secretary of Defense
shall ensure that the United States Armed Forces are
effectively equipped, organized, trained, and exercised
(including at the large unit and theater level) to conduct
operations in chemically and biologically contaminated
environments that are critical to the success of United
States military plans in regional conflicts, including--
(1) deployment, logistics, and reinforcement operations at
key ports and airfields;
(2) sustained combat aircraft sortie generation at critical
regional airbases; and
(3) ground force maneuvers of large units and divisions.
(c) Discussions With Allied Countries on Readiness.--
(1) High-priority joint responsibility of secretaries of
defense and state.--The Secretary of Defense and the
Secretary of State shall give a high priority to discussions
with key regional allies and likely regional coalition
partners, including those countries where the United States
currently deploys forces, where United States forces would
likely operate during regional conflicts, or which would
provide civilians necessary to support United States military
operations, to determine what steps are necessary to ensure
that allied and coalition forces and other critical civilians
are adequately equipped and prepared to operate in chemically
and biologically contaminated environments.
(2) Report.--Not later than one year after the date of the
enactment of this Act, the Secretary of Defense and the
Secretary of State shall jointly submit to the Committee on
Foreign Relations and the Committee on Armed Services of the
Senate and to the Speaker of the House of Representatives a
report describing--
(A) the results of the discussions held under paragraph (1)
and plans for future discussions;
(B) the measures agreed to improve the preparedness of
foreign armed forces and civilians; and
(C) any proposals for increased military assistance,
including assistance provided through--
(i) the sale of defense articles and defense services under
the Arms Export Control Act;
(ii) the Foreign Military Financing program under section
23 of that Act; and
(iii) chapter 5 of part II of the Foreign Assistance Act of
1961 (relating to international military education and
training).
(d) United States Army Chemical School.--
(1) Command of school.--The Secretary of Defense shall take
those actions that are necessary to ensure that the United
States Army Chemical School remains under the oversight of a
general officer of the United States Army.
(2) Sense of congress.--It is the sense of Congress that--
(A) the transfer, consolidation, and reorganization of the
United States Army Chemical School should not disrupt or
diminish the training and readiness of the United States
Armed Forces to fight in a chemical-biological warfare
environment; and
(B) the Army should continue to operate the Chemical
Defense Training Facility at
[[Page S2665]]
Fort McClellan until such time as the replacement facility at
Fort Leonard Wood is functional.
(e) Report.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, and on January 1 every year
thereafter, the President shall submit a report to the
Committee on Foreign Relations, the Committee on Armed
Services, and the Committee on Appropriations of the Senate
and the Committee on International Relations, the Committee
on National Security, and the Committee on Appropriations of
the House of Representatives, and the Speaker of the House of
Representatives on previous, current, and planned chemical
and biological weapons defense activities of the United
States Armed Forces.
(2) Content of report.--Each report required by paragraph
(1) shall include the following information for the previous
fiscal year and for the next three fiscal years:
(A) Enhancement of defense and readiness.--Proposed
solutions to each of the deficiencies in chemical and
biological warfare defenses identified in the March 1996
General Accounting Office Report, titled ``Chemical and
Biological Defense: Emphasis Remains Insufficient to Resolve
Continuing Problems'', and steps being taken pursuant to
subsection (b) to ensure that the United States Armed Forces
are capable of conducting required military operations to
ensure the success of United States regional contingency
plans despite the threat or use of chemical or biological
weapons.
(B) Priorities.--An identification of priorities of the
executive branch of Government in the development of both
active and passive defenses against the use of chemical and
biological weapons.
(C) RDT&E and procurement of defenses.--A detailed summary
of all budget activities associated with the research,
development, testing, and evaluation, and procurement of
chemical and biological defenses, set forth by fiscal year,
program, department, and agency.
(D) Vaccine production and stocks.--A detailed assessment
of current and projected vaccine production capabilities and
vaccine stocks, including progress in researching and
developing a multivalent vaccine.
(E) Decontamination of infrastructure and installations.--A
detailed assessment of procedures and capabilities necessary
to protect and decontaminate infrastructure and installations
that support the ability of the United States to project
power through the use of its Armed Forces, including progress
in developing a nonaqueous chemical decontamination
capability.
(F) Protective gear.--A description of the progress made in
procuring lightweight personal protective gear and steps
being taken to ensure that programmed procurement quantities
are sufficient to replace expiring battledress overgarments
and chemical protective overgarments to maintain required
wartime inventory levels.
(G) Detection and identification capabilities.--A
description of the progress made in developing long-range
standoff detection and identification capabilities and other
battlefield surveillance capabilities for biological and
chemical weapons, including progress on developing a
multichemical agent detector, unmanned aerial vehicles, and
unmanned ground sensors.
(H) Theater missile defenses.--A description of the
progress made in developing and deploying layered theater
missile defenses for deployed United States Armed Forces
which will provide greater geographic coverage against
current and expected ballistic missile threats and will
assist the mitigation of chemical and biological
contamination through higher altitude intercepts and boost-
phase intercepts.
(I) Training and readiness.--An assessment of the training
and readiness of the United States Armed Forces to operate in
chemically and biologically contaminated environments and
actions taken to sustain training and readiness, including at
national combat training centers.
(J) Military exercises.--A description of the progress made
in incorporating consideration about the threat or use of
chemical and biological weapons into service and joint
exercises as well as simulations, models, and wargames,
together with the conclusions drawn from these efforts about
the United States capability to carry out required missions,
including with coalition partners, in military contingencies.
(K) Military doctrine.--A description of the progress made
in developing and implementing service and joint doctrine for
combat and noncombat operations involving adversaries armed
with chemical or biological weapons, including efforts to
update the range of service and joint doctrine to better
address the wide range of military activities, including
deployment, reinforcement, and logistics operations in
support of combat operations, and for the conduct of such
operations in concert with coalition forces.
(L) Defense of civilian population.--A description of the
progress made in resolving issues relating to the protection
of United States population centers from chemical and
biological attack and from the consequences of such an
attack, including plans for inoculation of populations,
consequence management, and progress made in developing and
deploying effective cruise missile defenses and a national
ballistic missile defense.
SEC. 208. NEGATIVE SECURITY ASSURANCES.
(a) Sense of Congress.--It is the sense of Congress that in
order to achieve an effective deterrence against attacks of
the United States and United States Armed Forces by chemical
weapons, the President should reevaluate the extension of
negative security assurances by the United States to
nonnuclear-weapon states in the context of the Treaty on the
Non-Proliferation of Nuclear Weapons.
(b) Report.--Not later than 180 days after the date of the
enactment of this Act, the President shall submit to the
Committee on Armed Services and the Committee on Foreign
Relations of the Senate and to the Speaker of the House of
Representatives a report, both in classified and unclassified
forms, setting forth--
(1) the findings of a detailed review of United States
policy on negative security assurances as a deterrence
strategy; and
(2) a determination by the President of the appropriate
range of nuclear and conventional responses to the use of
chemical or biological weapons against the United States
Armed Forces, United States citizens, allies, and third
parties.
(c) Definitions.--In this section:
(1) Negative security assurances.--The term ``negative
security assurances'' means the assurances provided by the
United States to nonnuclear-weapon states in the context of
the Treaty on the Non-Proliferation of Nuclear Weapons (21
UST 483) that the United States will forswear the use of
certain weapons unless the United States is attacked by that
nonnuclear-weapon state in alliance with a nuclear-weapon
state.
(2) Nonnuclear-weapon states.--The term ``nonnuclear-weapon
states'' means states that are not nuclear-weapon states (as
defined in Article IX(3) of the Treaty on the Non-
Proliferation of Nuclear Weapons, done at Washington, London,
and Moscow July 1, 1968 (21 UST 483).
SEC. 209. RIOT CONTROL AGENTS.
(a) Prohibition.--The President shall not issue any order
or directive that diminishes, abridges, or alters the right
of the United States to use riot control agents--
(1) in any circumstance not involving international armed
conflict; or
(2) in a defensive military mode to save lives in an
international armed conflict, as provided for in Executive
Order No. 11850 of April 9, 1975.
(b) Circumstances Not Involving International Armed
Conflict.--The use of riot control agents under subsection
(a)(1) includes the use of such agents in--
(1) peacekeeping or peace support operations;
(2) humanitarian or disaster relief operations;
(3) noncombatant evacuation operations;
(4) counterterrorist operations and the rescue of hostages;
and
(5) law enforcement operations and other internal
conflicts.
(c) Defensive Military Mode.--The use of riot control
agents under subsection (a)(2) may include the use of such
agents--
(1) in areas under direct and distinct United States
military control, including the use of such agents for the
purposes of controlling rioting or escaping enemy prisoners
of war;
(2) to protect personnel or material from civil
disturbances, terrorists, and paramilitary organizations;
(3) to minimize casualties during rescue missions of downed
air crews and passengers, prisoners of war, or hostages;
(4) in situations where combatants and noncombatants are
intermingled; and
(5) in support of base defense, rear area operations,
noncombatant evacuation operations, and operations to protect
or recover nuclear weapons.
(d) Sense of Congress.--It is the sense of Congress that
international law permits the United States to use
herbicides, under regulations applicable to their domestic
use, for control of vegetation within United States bases and
installations or around their immediate defensive perimeters.
(e) Authority of the President.--The President shall take
all necessary measures, and prescribe such rules and
regulations as may be necessary, to ensure that the policy
contained in this section is observed by the Armed Forces of
the United States.
______
By Mr. CHAFEE (for himself, Mr. Graham, and Mr. Jeffords):
S. 496. A bill to amend the Internal Revenue Code of 1986 to provide
a credit against income tax to individuals who rehabilitate historic
homes or who are the first purchasers of rehabilitated historic homes
for use as a principal residence; to the Committee on Finance.
the historic homeownership assistance act
Mr. CHAFEE. Mr. President, all across America, in the small towns and
great cities of this country, our heritage as a nation--the physical
evidence of our past--is at risk. In virtually every corner of this
land, homes in which grandparents and parents grew up, communities and
neighborhoods that nurtured vibrant families, schools that were good
places to learn and churches and synagogues that were filled on days of
prayer, have suffered the ravages of abandonment and decay.
In the decade from 1980 to 1990, Chicago lost 41,000 housing units
through abandonment, Philadelphia 10,000, and
[[Page S2666]]
St. Louis 7,000. The story in our older small communities has been the
same, and the trend continues. It is important to understand that it is
not just buildings that we are losing. It is the sense of our past, the
vitality of our communities, and the shared values of those precious
places.
We need not stand hopelessly by as passive witnesses to the loss of
these irreplaceable historic resources. We can act, and to that end I
am introducing today the Historic Homeownership Assistance Act along
with my distinguished colleagues, Senator Graham of Florida and Senator
Jeffords.
This legislation is patterned after the existing historic
rehabilitation investment tax credit. That legislation has been
enormously successful in stimulating private investment in the
rehabilitation of buildings of historic importance all across the
country. Through its use we have been able to save and reuse a rich and
diverse array of historic buildings: landmarks such as Union Station
right here in Washington, DC, the Fox River Mills, a mixed use project
that was once a derelict paper mill in Appleton, WI, and the Rosa True
School, an eight-unit low- and moderate-income rental project in a
historic school building in Portland, ME.
In my own State of Rhode Island, Federal tax incentives stimulated
the rehabilitation and commercial reuse of more than 300 historic
properties. The properties saved include the Hotel Manisses on Block
Island, the former Valley Falls Mills complex in Central Falls, and the
Honan Block in Woonsocket.
The legislation that I am introducing builds on the familiar
structure of the existing tax credit, but with a different focus and
a more modest scope and cost. It is designed to empower the one major
constituency that has been barred from using the existing credit--
homeowners. Only those persons who rehabilitate or purchase a newly
rehabilitated home and occupy it as their principal residence would be
entitled to this new credit. There would be no passive losses, no tax
shelters and no syndications under this bill.
Like the existing investment credit, the bill would provide a credit
to homeowners equal to 20 percent of the qualified rehabilitation
expenditures made on an eligible building which is used as a principal
residence by the owner. Eligible buildings are those individually
listed on the National Register of Historic Places or on a nationally
certified State or local historic register, or are contributing
buildings in national, State or local historic districts. As is the
case with the existing credit, the rehabilitation work would have to be
performed in compliance with the Secretary of the Interior's Standards
for Rehabilitation, although the bill clarifies that such Standards
should be interpreted in a manner that takes into consideration
economic and technical feasibility.
The bill allows lower-income homebuyers, who may not have sufficient
Federal income tax liability to use a tax credit, to convert the credit
to mortgage assistance. The legislation would permit such persons to
receive an Historic Rehabilitation Mortgage Credit Certificate which
they can use with their bank to obtain a lower interest rate on their
mortgage or to lower the amount of their downpayment.
The credit would be available to condominiums and co-ops, as well as
single-family buildings. If a building is rehabilitated by a developer
for resale, the credit would pass through to the homeowner.
One goal of the bill is to provide incentives for middle- and upper-
income families to return to older towns and cities. Therefore, the
bill does not limit the tax benefits on the basis of income. However,
it does impose a cap of $50,000 on the amount of credit which may be
taken for a principal residence.
The Historic Homeownership Assistance Act will make ownership of a
rehabilitated older home more affordable for homebuyers of modest
incomes. It will encourage more affluent families to claim a stake in
older towns and neighborhoods. It affords fiscally stressed cities and
towns a way to put abandoned buildings back on the tax rolls, while
strengthening their income and sales tax bases. It offers developers,
realtors and homebuilders a new realm of economic opportunity in
revitalizing decaying buildings.
In addition to preserving our heritage, extending this credit will
provide an important supplemental benefit--it will boost the economy.
Every dollar of Federal investment in historic rehabilitation leverages
many more from the private sector. Rhode Island, for example, has used
the credit to leverage 252 million dollars in private investment. This
investment has created more than 10,000 jobs and 187 million dollars in
wages.
The American dream of owning one's own home is a powerful force. This
bill can help it come true for those who are prepared to make a
personnel commitment to join in the rescue of our priceless heritage.
By their actions they can help to revitalize decaying resources of
historic importance, create jobs and stimulate economic development,
and restore to our older towns and cities a lost sense of purpose and
community.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 496
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 ``Historic Homeownership
Assistance Act''.
SEC. 2. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 23 the following new section:
``SEC. 24. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.
``(a) General Rule.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to 20 percent of
the qualified rehabilitation expenditures made by the
taxpayer with respect to a qualified historic home.
``(b) Dollar Limitation.--
``(1) In general.--The credit allowed by subsection (a)
with respect to any residence of a taxpayer shall not exceed
$50,000 ($25,000 in the case of a married individual filing a
separate return).
``(2) Carryforward of credit unused by reason of limitation
based on tax liability.--If the credit allowable under
subsection (a) for any taxable year exceeds the limitation
imposed by section 26(a) for such taxable year reduced by the
sum of the credits allowable under this subpart (other than
this section), such excess shall be carried to the succeeding
taxable year and added to the credit allowable under
subsection (a) for such succeeding taxable year.
``(c) Qualified Rehabilitation Expenditure.--For purposes
of this section:
``(1) In general.--The term `qualified rehabilitation
expenditure' means any amount properly chargeable to capital
account--
``(A) in connection with the certified rehabilitation of a
qualified historic home, and
``(B) for property for which depreciation would be
allowable under section 168 if the qualified historic home
were used in a trade or business.
``(2) Certain expenditures not included.--
``(A) Exterior.--Such term shall not include any
expenditure in connection with the rehabilitation of a
building unless at least 5 percent of the total expenditures
made in the rehabilitation process are allocable to the
rehabilitation of the exterior of such building.
``(B) Other rules to apply.--Rules similar to the rules of
clauses (ii) and (iii) of section 47(c)(2)(B) shall apply.
``(3) Mixed use or multifamily building.--If only a portion
of a building is used as the principal residence of the
taxpayer, only qualified rehabilitation expenditures which
are properly allocable to such portion shall be taken into
account under this section.
``(d) Certified Rehabilitation.--For purposes of this
section:
``(1) In general.--Except as otherwise provided in this
subsection, the term `certified rehabilitation' has the
meaning given such term by section 47(c)(2)(C).
``(2) Factors to be considered in the case of targeted area
residences, etc.--
``(A) In general.--For purposes of applying section
47(c)(2)(C) under this section with respect to the
rehabilitation of a building to which this paragraph applies,
consideration shall be given to--
``(i) the feasibility of preserving existing architectural
and design elements of the interior of such building,
``(ii) the risk of further deterioration or demolition of
such building in the event that certification is denied
because of the failure to preserve such interior elements,
and
``(iii) the effects of such deterioration or demolition on
neighboring historic properties.
``(B) Buildings to which this paragraph applies.--This
paragraph shall apply with respect to any building--
[[Page S2667]]
``(i) any part of which is a targeted area residence within
the meaning of section 143(j)(1), or
``(ii) which is located within an enterprise or empowerment
zone,
but shall not apply with respect to any building which is
listed in the National Register.
``(3) Approved state program.--The term `certified
rehabilitation' includes a certification made by--
``(A) a State Historic Preservation Officer who administers
a State Historic Preservation Program approved by the
Secretary of the Interior pursuant to section 101(b)(1) of
the National Historic Preservation Act, or
``(B) a local government, certified pursuant to section
101(c)(1) of the National Historic Preservation Act and
authorized by a State Historic Preservation Officer, or the
Secretary of the Interior where there is no approved State
program),
subject to such terms and conditions as may be specified by
the Secretary of the Interior for the rehabilitation of
buildings within the jurisdiction of such officer (or local
government) for purposes of this section.
``(e) Definitions and Special Rules.--For purposes of this
section:
``(1) Qualified historic home.--The term `qualified
historic home' means a certified historic structure--
``(A) which has been substantially rehabilitated, and
``(B) which (or any portion of which)--
``(i) is owned by the taxpayer, and
``(ii) is used (or will, within a reasonable period, be
used) by such taxpayer as his principal residence.
``(2) Substantially rehabilitated.--The term `substantially
rehabilitated' has the meaning given such term by section
47(c)(1)(C); except that, in the case of any building
described in subsection (d)(2), clause (i)(I) thereof shall
not apply.
``(3) Principal residence.--The term `principal residence'
has the same meaning as when used in section 1034.
``(4) Certified historic structure.--
``(A) In general.--The term `certified historic structure'
has the meaning given such term by section 47(c)(3).
``(B) Certain structures included.--Such term includes any
building (and its structural components) which is designated
as being of historic significance under a statute of a State
or local government, if such statute is certified by the
Secretary of the Interior to the Secretary as containing
criteria which will substantially achieve the purpose of
preserving and rehabilitating buildings of historic
significance.
``(5) Enterprise or empowerment zone.--The term `enterprise
or empowerment zone' means any area designated under section
1391 as an enterprise community or an empowerment zone.
``(6) Rehabilitation not complete before certification.--A
rehabilitation shall not be treated as complete before the
date of the certification referred to in subsection (d).
``(7) Lessees.--A taxpayer who leases his principal
residence shall, for purposes of this section, be treated as
the owner thereof if the remaining term of the lease (as of
the date determined under regulations prescribed by the
Secretary) is not less than such minimum period as the
regulations require.
``(8) Tenant-stockholder in cooperative housing
corporation.--If the taxpayer holds stock as a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
stockholder shall be treated as owning the house or apartment
which the taxpayer is entitled to occupy as such stockholder.
``(f) When Expenditures Taken Into Account.--In the case of
a building other than a building to which subsection (g)
applies, qualified rehabilitation expenditures shall be
treated for purposes of this section as made--
``(1) on the date the rehabilitation is completed, or
``(2) to the extent provided by the Secretary by
regulation, when such expenditures are properly chargeable to
capital account.
Regulations under paragraph (2) shall include a rule similar
to the rule under section 50(a)(2) (relating to recapture if
property ceases to qualify for progress expenditures).
``(g) Allowance of Credit for Purchase of Rehabilitated
Historic Home.--
``(1) In general.--In the case of a qualified purchased
historic home, the taxpayer shall be treated as having made
(on the date of purchase) the qualified rehabilitation
expenditures made by the seller of such home.
``(2) Qualified purchased historic home.--For purposes of
this subsection, the term `qualified purchased historic home'
means any substantially rehabilitated certified historic
structure purchased by the taxpayer if--
``(A) the taxpayer is the first purchaser of such structure
after the date rehabilitation is completed, and the purchase
occurs within 5 years after such date,
``(B) the structure (or a portion thereof) will, within a
reasonable period, be the principal residence of the
taxpayer,
``(C) no credit was allowed to the seller under this
section or section 47 with respect to such rehabilitation,
and
``(D) the taxpayer is furnished with such information as
the Secretary determines is necessary to determine the credit
under this subsection.
``(h) Historic Rehabilitation Mortgage Credit
Certificate.--
``(1) In general.--The taxpayer may elect, in lieu of the
credit otherwise allowable under this section, to receive a
historic rehabilitation mortgage credit certificate. An
election under this paragraph shall be made--
``(A) in the case of a building to which subsection (g)
applies, at the time of purchase, or
``(B) in any other case, at the time rehabilitation is
completed.
``(2) Historic rehabilitation mortgage credit
certificate.--For purposes of this subsection, the term
`historic rehabilitation mortgage credit certificate' means a
certificate--
``(A) issued to the taxpayer, in accordance with procedures
prescribed by the Secretary, with respect to a certified
rehabilitation,
``(B) the face amount of which shall be equal to the credit
which would (but for this subsection) be allowable under
subsection (a) to the taxpayer with respect to such
rehabilitation,
``(C) which may only be transferred by the taxpayer to a
lending institution in connection with a loan--
``(i) that is secured by the building with respect to which
the credit relates, and
``(ii) the proceeds of which may not be used for any
purpose other than the acquisition or rehabilitation of such
building, and
``(D) in exchange for which such lending institution
provides the taxpayer--
``(i) a reduction in the rate of interest on the loan which
results in interest payment reductions which are
substantially equivalent on a present value basis to the face
amount of such certificate, or
``(ii) if the taxpayer so elects with respect to a
specified amount of the face amount of such a certificate
relating to a building--
``(I) which is a targeted area residence within the meaning
of section 143(j)(1), or
``(II) which is located in an enterprise or empowerment
zone,
a payment which is substantially equivalent to such specified
amount to be used to reduce the taxpayer's cost of purchasing
the building (and only the remainder of such face amount
shall be taken into account under clause (i)).
``(3) Use of certificate by lender.--The amount of the
credit specified in the certificate shall be allowed to the
lender only to offset the regular tax (as defined in section
55(c)) of such lender. The lender may carry forward all
unused amounts under this subsection until exhausted.
``(i) Recapture.--
``(1) In general.--If, before the end of the 5-year period
beginning on the date on which the rehabilitation of the
building is completed (or, if subsection (g) applies, the
date of purchase of such building by the taxpayer)--
``(A) the taxpayer disposes of such taxpayer's interest in
such building, or
``(B) such building ceases to be used as the principal
residence of the taxpayer,
the taxpayer's tax imposed by this chapter for the taxable
year in which such disposition or cessation occurs shall be
increased by the recapture percentage of the credit allowed
under this section for all prior taxable years with respect
to such rehabilitation.
``(2) Recapture percentage.--For purposes of paragraph (1),
the recapture percentage shall be determined in accordance
with the table under section 50(a)(1)(B), deeming such table
to be amended--
``(A) by striking `If the property ceases to be investment
credit property within--' and inserting `If the disposition
or cessation occurs within--', and
``(B) in clause (i) by striking `One full year after placed
in service' and inserting `One full year after the taxpayer
becomes entitled to the credit'.
``(j) Basis Adjustments.--For purposes of this subtitle, if
a credit is allowed under this section for any expenditure
with respect to any property (including any purchase under
subsection (g) and any transfer under subsection (h)), the
increase in the basis of such property which would (but for
this subsection) result from such expenditure shall be
reduced by the amount of the credit so allowed.
``(k) Processing Fees.--Any State may impose a fee for the
processing of applications for the certification of any
rehabilitation under this section provided that the amount of
such fee is used only to defray expenses associated with the
processing of such applications.
``(l) Denial of Double Benefit.--No credit shall be allowed
under this section for any amount for which credit is allowed
under section 47.
``(m) Regulations.--The Secretary shall prescribe such
regulations as may be appropriate to carry out the purposes
of this section, including regulations where less than all of
a building is used as a principal residence and where more
than 1 taxpayer use the same dwelling unit as their principal
residence.''
(b) Conforming Amendment.--Subsection (a) of section 1016
of such Code is amended by striking ``and'' at the end of
paragraph (25), by striking the period at the end of
paragraph (26) and inserting ``, and'', and by adding at the
end the following new item:
``(27) to the extent provided in section 24(j).''
(c) Clerical Amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of such Code is
[[Page S2668]]
amended by inserting after the item relating to section 23
the following new item:
``Sec. 24. Historic homeownership rehabilitation credit.''
(d) Effective Date.--The amendments made by this section
shall apply with respect to rehabilitations the physical work
on which begins after the date of enactment of this Act.
____
Summary of the Historic Homeownership Assistance Act
Purpose. To provide homeownership incentives and
opportunities through the rehabilitation of older buildings
in historic districts. To stimulate the revival of decaying
neighborhoods and communities, and the preservation of
historic buildings and districts through homeownership.
Rate of Credit: Eligible Buildings. The existing Historic
Rehabilitation Tax Credit, which provides a credit of 20
percent of qualified rehabilitation expenditures to investors
in commercial and rental buildings, is extended to homeowners
who rehabilitate or purchase a newly-rehabilitated eligible
home and occupy it as a principal residence. In the case of
buildings rehabilitated by developers and sold to homeowners,
the credit is passed through to the home purchaser. Eligible
buildings are those listed individually on the National
Register of Historic Places or on a nationally certified
state or local register, and contributing buildings in
national, state or local historic districts.
Both single-family and multifamily residences, through
condominiums and cooperatives, qualify for the credit. In the
case of buildings where one section of the structure is
slated for residential use and another for commercial use,
such as in two- or three-story buildings in downtown areas,
purchasers could utilize the historic homeowner tax credit
against the rehabilitation expenditures of the residential
portion, and the existing commercial rehabilitation tax
credit for the remaining portion.
Maximum Credit: Minimum Expenditures. The amount of the
homeownership credit is limited to $50,000 for each principal
residence. The amount of qualified rehabilitation
expenditures must exceed the greater of $5,000 or the
adjusted tax basis of the building (excluding the land)
within a 24-month period. For buildings in census tracts
targeted as distressed for Mortgage Revenue Bond purposes and
those in Enterprise and Empowerment Zones, the minimum
expenditure is $5,000. At least five percent of the qualified
rehabilitation expenditures must be spent on the exterior of
the building.
Pass-Through of Credit: Carry-Forward: Recapture. In the
event that the rehabilitation is performed by a developer,
the credit accrues to the homeowner. The credit cannot be
used to offset the developer's tax liability, but instead
must be passed through to the home purchaser. The entire
amount of the credit is available to reduce federal income
tax liability, subject to Alternative Minimum Tax
limitations. The credit is available in the year in which the
expenditures are made by the taxpayer or a rehabilitated
property is purchased by the homeowner. Any unused credit
would be carried forward until fully exhausted. In the event
the taxpayer fails to maintain the home as a principal
residence for five years, the credit is subject to recapture.
No ``Passive Loss''; No Income Limit. The credit is not
subject to the ``passive loss'' limitations. Further, since
the legislation is intended to promote economic diversity
among residents and increase local property, income and sales
tax revenues, taxpayers are eligible for the credit without
regard to income.
Standards for Historic Rehabilitation. To qualify for the
credit, the rehabilitation must be performed in accordance
with the Secretary of the Interior's Standards for
Rehabilitation, which guide eligibility of expenditures under
the existing commercial rehabilitation tax credit. The intent
of the Standards is to assist the long-term preservation of a
property's significance through the preservation of historic
materials and features. The Standards are to be applied to
specific rehabilitation projects in a reasonable manner,
taking into consideration economic and technical feasibility.
The proposed legislation clarifies this directive.
State-Level Certifications. As under the existing
commercial rehabilitation tax credit program, State Historic
Preservation Officers and Certified Local Governments are
given the authority to certify the rehabilitation of
buildings within their respective jurisdictions. States are
given the authority to levy fees for processing applications
for certification of the rehabilitation expenditures,
provided that the proceeds of such fees are used solely to
defray expenses associated with processing the application.
Historic Rehabilitation Mortgage Credit Certificates. Lower
income taxpayers may not have sufficient income tax liability
to take full use of the credit. The legislation permits
anyone eligible for the income tax credit to convert it into
a mortgage credit certificate which could be used either to
reduce the interest rate on a home mortgage loan or to lower
the down payment required to purchase the property.
Under this option, the taxpayer transfers the certificate
to the mortgage lender in exchange for a reduced interest
rate on a home mortgage loan. The mortgage lender then uses
the credit to reduce its federal income tax liability,
subject to Alternative Minimum Tax limitations. The credit
claimed by the mortgage lender is not subject to recapture.
In many distressed neighborhoods, the cost of
rehabilitating a home and bringing it to market significantly
exceeds the value at which the property is appraised by the
mortgage lender. This gap imposes a significant burden on a
potential homeowner because the required downpayment exceeds
his or her means. The legislation permits the mortgage credit
certificate to be used to reduce the buyer's downpayment,
rather than to reduce the interest rate, in order to close
this gap. This provision is limited to historic districts
which qualify as targeted under the existing Mortgage Revenue
Bond program or are located in enterprise or empowerment
zones.
Although the right to receive an Historic Rehabilitation
Mortgage Credit Certificate is available to all persons
entitled to the tax credit, the certificate may not be used
by a person who would be precluded from using the income tax
credit because of the Alternative Minimum Tax limitation.
Mr. GRAHAM. Mr. President, today I join my colleague Senator Chafee
in support of the Historic Homeownership Assistance Act. This bill
would spur growth and preservation of historic neighborhoods across the
country by providing a limited tax credit for qualified rehabilitation
expenditures to historic homes.
An understanding of the history of the United States serves as one of
the cornerstones supporting this great nation. We find American history
reflected not only in books, films, and stories, but also in physical
structures, including schools, churches, county courthouses, mills,
factories, and personal residences.
The bill that Senator Chafee and I are cosponsoring focuses on the
preservation of historic residences. The bill will assist Americans who
want to safeguard, maintain, and reside in these homes which chronicle
America's past.
The Historic Homeownership Assistance Act will stimulate
rehabilitation of historic homes while contributing to the
revitalization of urban communities. The Federal tax credit provided in
the legislation is modeled after the existing Federal commercial
historic rehabilitation tax credit. Since 1981, this commercial tax
credit has facilitated the preservation of many historic structures
across this great land. For example in the last two decades, in my home
State of Florida, $238 million in private capital was invested in over
325 historic rehabilitation projects. These investments helped preserve
Ybor City in Tampa and the Springfield Historic District in
Jacksonville.
The tax credit, however, has never applied to personal residences. It
is time to provide an incentive to individuals to restore and preserve
homes in America's historic communities.
The Historic Homeownership Assistance Act targets Americans at all
economic levels. The bill provides lower income Americans with the
option to elect a Mortgage Credit Certificate in lieu of the tax
credit. This certificate allows Americans who cannot take advantage of
the tax credit to reduce the interest rate on their mortgage that
secures the purchase and rehabilitation of a historic home.
For example, if a lower-income family were to purchase a $35,000 home
which included $25,000 worth of qualified rehabilitation expenditures,
it would be entitled to a $5,000 Historic Rehabilitation Mortgage
Credit Certificate which could be used to reduce interest payments on
the mortgage. This provision would enable families to obtain a home and
preserve historic neighborhoods when they would be unable to do so
otherwise.
Mr. President, the time has come for Congress to get serious about
urban renewal. For too long, we have sat on the sidelines watching idly
as our citizens slowly abandoned entire homes and neighborhoods in
urban settings, leaving cities like Miami in Florida and others around
the nation in financial jeopardy. For example, according to U.S. Census
data, in the decade from 1980 to 1990, Chicago lost 41,000 housing
units, Philadelphia 10,000, and St. Louis 7,000. The erosion of a sense
of community and culture once shared by our urban neighborhoods and
towns further magnifies the loss.
By addressing years of neglect and a general decline in investment in
our older neighborhoods, this bill will empower families and
individuals with the financial incentives needed to revitalize historic
housing in our urban communities.
Recognizing that the States can best administer laws affecting unique
communities, the act gives power to the
[[Page S2669]]
Secretary of the Interior to work with states to implement a number of
the provisions.
The Historic Homeownership Assistance Act does not, however, reflect
an untried proposal. In addition to the existing commercial historic
rehabilitation credit, the proposed bill incorporates features from
several state tax incentives for the preservation of historic homes.
Colorado, Maryland, New Mexico, Rhode Island, Wisconsin, and Utah have
pioneered their own successful versions of a historic preservation tax
incentive for homeownership.
At the Federal level, this legislation would promote historic home
preservation nationwide, allowing future generations of Americans to
visit and reside in homes that tell the unique history of our
communities. The Historic Homeownership Assistance Act will offer
enormous potential for saving historic homes and bringing entire
neighborhoods back to life.
I urge my colleagues to support this bill for the preservation of
history.
______
By Mr. COVERDELL (for himself and Mr. Faircloth):
S. 497. A bill to amend the National Labor Relations Act and the
Railway Labor Act to repeal the provisions of the Acts that require
employees to pay union dues or fees as a condition of employment; to
the Committee on Labor and Human Resources.
the national right to work act of 1997
Mr. COVERDELL. Mr. President, I am pleased to introduce the
Coverdell-Faircloth National Right to Work Act of 1997. As many of you
know, my esteemed colleague from North Carolina, Senator Lauch
Faircloth, introduced this language last Congress and I commend Senator
Faircloth for his outstanding leadership on this issue.
This bill does not add a single word to Federal law. Rather, it would
repeal those sections of the National Labor Relations Act and Railway
Labor Act that authorize the imposition of forced-dues contracts on
working Americans. I believe that every worker must have the right to
join or support a labor union. This bill protects that right. But no
worker should ever be forced to join a union.
I am happy to say that my own state, Georgia, is among one of the 21
states that is a ``Right to Work'' state and has been since 1947.
According to U.S. News and World Report, 7 of the strongest 10 State
economies in the nation have Right to Work laws. Workers who have the
freedom to choose whether or not to join a union have a higher standard
of living than their counterparts in non-Right to Work States.
According to Dr. James Bennett, an economist with the highly respected
economics department at George Mason University, on average, urban
families in Right to Work States have approximately $2,852 more annual
purchasing power than urban families in non-Right to Work States when
the lower taxes, housing and food costs of Right to Work States are
taken into consideration.
According to a poll by the respected Marketing Research Institute, 77
percent of Americans support Right to Work, and over 50 percent of
union households believe workers should have the right to choose
whether or not to join or pay dues to a labor union. That should be no
surprise. Because what this is all about is freedom. And right to work
expands every working American's personal freedom.
Mr. President, I urge my colleagues to support this legislation that
expands the freedom of hard working Americans and gives them the
freedom to choose whether to accept or reject union representation and
union dues without facing coercion, violence, and work-place harassment
by union officials.
Mr. FAIRCLOTH. Mr. President, today I join with my good friend,
Senator Coverdell to introduce the National Right to Work Act of 1997.
This is the same legislation that I introduced during the 104th
Congress, and I am delighted to have Senator Coverdell as a partner in
this effort during the 105th Congress.
As I have said before, and continue to believe strongly, compulsory
unionism violates the fundamental principle of individual liberty--the
very principle upon which this Nation was founded. Compulsory unionism
basically says that workers cannot and should not decide for themselves
what is in their best interest. I can think of nothing more offensive
to the core American principles of liberty and freedom.
The National Right to Work Act will address this most fundamental
problem of federal labor policy: does America believe that working men
and women should be forced, as a condition of employment, to pay dues
or fees to a labor union? I believe, as does my colleague, Senator
Coverdell and many others, that no one should be forced to pay union
dues just to get or keep a job.
The National Right to Work Act would not change a single word of
Federal law. Rather, the measure would repeal those sections of the
National Labor Relations Act and Railway Labor Act that authorize the
imposition of forced-dues contracts on working Americans. I believe
that every worker must have the right to join or support a labor union.
This bill protects that right. However, no worker should be forced to
join a union.
In 1965, Senator Everett Dirksen said of compulsory unionism, ``Is
there a more fundamental right than to make a living for one's family
without being compelled to join a labor organization?'' I could not
agree more.
Mr. President, again let me say that I am pleased to introduce today
with Senator Coverdell the National Right to Work Act of 1977.
______
By Mr. CHAFEE (for himself and Mr. Moynihan):
S. 498. A bill to amend the Internal Revenue Code of 1986 to allow an
employee to elect to receive taxable cash compensation on lieu of
nontaxable parking benefits, and for other purposes; to the Committee
on Finance.
the commuter choice act of 1997
Mr. CHAFEE. Mr. President, one of the greatest challenges facing
metropolitan areas in our Nation is finding a way to reduce traffic
congestion. Commuters in cities across the country spend countless
hours on the road traveling to and from work. This traffic places
tremendous pressure on our highway infrastructure and causes monumental
environmental problems. More than 100 cities fail to meet today's clean
air standards. The best way to clean up our air is to reduce the number
of automobiles which are driven on a daily basis.
Unfortunately, our current tax laws actually encourage commuters to
travel to work in single occupant automobiles. Today, employers can
provide parking to their employees as a tax-free fringe benefit. As
part of the Energy Policy Act of 1992, the value of parking that
qualifies for this benefit is limited to $170 per month. By comparison,
tax-free transit or van-pool benefits are limited to only $65 per
month.
There is another aspect of this benefit that makes the tax-free
parking an even greater incentive for employees to drive to work. The
fringe benefit must be offered by employers on a take-it-or-leave-it
basis. In other words, the employee has the option of accepting the
employer-paid parking or nothing at all. The tax-exempt status of the
employer-provided parking is lost if employees are offered a choice
between the parking fringe benefit and taxable salary.
Let me illustrate the problem this creates. Suppose an employer has
two employees, Sally and Jim. Under current law, the employer can pay
for a parking space at a garage next door. This fringe benefit will not
be taxable to Sally and Jim so long as the cost does not exceed $170
per month. But, let's assume that Sally would prefer to receive cash
instead of a parking space, because she can commute to work with her
husband or take public transportation. The way the law is currently
written, Sally's employer cannot offer her cash instead of the parking
fringe benefit, because it would cause Jim's parking fringe benefit to
become taxable.
The Commuter Choice Act of 1997, which I am introducing today along
with my colleague Senator Moynihan, corrects this bias in the Tax Code
by allowing employers to offer their employees the choice of tax-free
parking or taxable cash compensation. This proposal is completely
voluntary. Employers are not required to offer cash in lieu of parking.
Furthermore, it has absolutely no affect on employees wishing to
continue receiving tax-free parking. That fringe benefit would remain
exempt from income and payroll taxes. However, my proposal would
[[Page S2670]]
allow employees not interested in the parking fringe benefit to opt
instead for taxable cash compensation.
Intuitively, I believe Voluntary Cash Out will have positive revenue
consequences for the Federal Government. Some individuals who currently
receive tax-free parking will instead opt for taxable cash
compensation. For example, trading in a parking space in many cities
could be worth almost $2,000 in pretax salary annually, a powerful
incentive to consider alternative ways of getting to work. An
overwhelming majority of employees receive tax-free parking from their
employers--95 percent who drive to work, according to the National
Personal Transportation Survey. So, even if only a small portion of
this population chooses the taxable cash it should lead to a
substantial revenue windfall.
In 1992, the State of California enacted legislation that required
employers with 50 or more employees to offer cash in lieu of parking if
the employer subsidized commuter parking. A recent study of eight
employers who complied with this law provides some evidence of how
businesses and their employees might react to Commuter Choice. For the
nearly 1,700 employees of the eight firms, the solo driver share fell
from 76 to 63 percent; to carpool share increased from 14 to 23
percent. More importantly, because many employees voluntarily chose
taxable cash over tax-exempt parking, State and Federal income tax
revenues increased by $56 per employee per year.
Finally, employer interest in programs like Commuter Choice will
increase as pressure builds to reduce traffic congestion and air
pollution in our Nation's cities. Many urban areas that are in
nonattainment for national air quality standards have incorporated
employee commute option programs as part of their State implementation
plans. These programs are hampered, however, by the current tax rules,
which prohibit employees from trading in tax-free parking for cash and
utilizing alternative commute options. The Commuter Choice Act removes
that prohibition.
I encourage my colleagues to cosponsor this legislation, which offers
greater flexibility to employers and employees, and which will have a
substantial positive effect on our air quality.
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. 498
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 ``Commuter Choice Act of
1997''.
SEC. 2. ELECTION TO RECEIVE TAXABLE CASH COMPENSATION IN LIEU
OF NONTAXABLE PARKING BENEFITS.
(a) In General.--Section 132(f)(4) of the Internal Revenue
Code of 1986 (relating to benefits not in lieu of
compensation) is amended by adding at the end the following
new sentence: ``This paragraph shall not apply to any
qualified parking provided in lieu of compensation which
otherwise would have been includible in gross income of the
employee.''
(b) Effective Date.--The amendment made by this section
shall apply to qualified parking provided after December 31,
1997.
______
By Mr. CHAFEE (for himself, Mr. Baucus, and Mr. Gregg):
S. 499. A bill to amend the Internal Revenue Code of 1986 to provide
an election to exclude from the gross estate of a decedent the value of
certain land subject to a qualified conservation easement, and to make
technical changes to alternative valuation rules; to the Committee on
Finance.
the american farm and ranch protection act of 1997
Mr. CHAFEE. Mr. President, a serious environmental problem facing the
country today is the loss of open space to development. All across the
country, farms, ranches, forests, and wetlands are forced to give way
to the pressures for new office buildings, shopping malls, and housing
developments.
America is losing over 4 square miles of land to development every
day. In Rhode Island, over 11 thousand acres of farmland have been lost
to development since 1974. In many instances, this is simply the
natural outgrowth of urbanization of our society. Other times it is the
direct result of improper planning at the State and local levels.
But frequently, the pressure comes from the need to raise funds to
pay estate taxes. For those families where undeveloped land represents
a significant portion of the estate's total value, the need to pay the
tax creates powerful pressure to develop or sell off part or all of the
land or to liquidate the timber resources of the land. Because land is
appraised by the Internal Revenue Service according to its highest and
best use, and such use is often its development value, the effect of
the tax is to make retention of undeveloped land impossible.
In addition, our current estate tax policy results in complicated
valuation disputes between the donor's estate and the Internal Revenue
Service. In many cases, the additional costs incurred as a result of
these disagreements cause a potential donor of a conservation easement
to decide not to make the contribution.
These open spaces improve the quality of life for Americans
throughout this great Nation and provide important habitat for fish and
wildlife. The question is how do we conserve our most valuable resource
during this time of significant budget constraints.
Mr. President, I think we need to restructure the Nation's estate tax
laws to remove the disincentive for private property owners to conserve
environmentally significant land. The American Farm and Ranch
Protection Act, which I am introducing today along with Senators Baucus
and Gregg, will help to achieve this goal by providing an exemption
from the estate tax for the value of land that is subject to a
qualified, permanent conservation easement.
This bill is similar to legislation that we introduced during the
104th Congress and was included in the Balanced Budget Act of 1995. It
excludes land subject to a conservation easement from the estate and
gift taxes. Development rights retained by the family--most frequently
the ability to use the property for a commercial purpose--remain
subject to the estate tax.
In order to target the incentives under this bill to those areas that
are truly at risk for development, the bill is limited to land that
falls within a 50-mile radius of a metropolitan area, a national park
or a national wilderness area, or an urban national forest.
Conservation easements, which are entirely voluntary, are agreements
negotiated by landowners in which a restriction upon the future use of
land is imposed in order to conserve those aspects of the land that are
publicly significant. To qualify for the estate tax exemption under
this bill, such easements must be perpetual and must be made to
preserve open space, to protect the natural habitat of fish, wildlife,
or plants, to meet a governmental conservation policy, or to preserve a
historically important land area.
I urge my colleagues to join me in this effort to save
environmentally sensitive open spaces.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 499
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 ``American Farm and Ranch
Protection Act of 1997''.
SEC. 2. TREATMENT OF LAND SUBJECT TO A QUALIFIED CONSERVATION
EASEMENT.
(a) Estate Tax With Respect to Land Subject to a Qualified
Conservation Easement.--Section 2031 of the Internal Revenue
Code of 1986 (relating to the definition of gross estate) is
amended by redesignating subsection (c) as subsection (d) and
by inserting after subsection (b) the following new
subsection:
``(c) Estate Tax With Respect to Land Subject to a
Qualified Conservation Easement.--
``(1) In general.--If the executor makes the election
described in paragraph (4), then, except as otherwise
provided in this subsection, there shall be excluded from the
gross estate the value of land subject to a qualified
conservation easement.
``(2) Treatment of certain indebtedness.--
``(A) In general.--The exclusion provided in paragraph (1)
shall not apply to the extent that the land is debt-financed
property.
``(B) Definitions.--For purposes of this paragraph--
``(i) Debt-financed property.--The term `debt-financed
property' means any property
[[Page S2671]]
with respect to which there is an acquisition indebtedness
(as defined in clause (ii)) on the date of the decedent's
death.
``(ii) Acquisition indebtedness.--The term `acquisition
indebtedness' means, with respect to debt-financed property,
the unpaid amount of--
``(I) the indebtedness incurred by the donor in acquiring
such property,
``(II) the indebtedness incurred before the acquisition of
such property if such indebtedness would not have been
incurred but for such acquisition.
``(III) the indebtedness incurred after the acquisition of
such property if such indebtedness would not have been
incurred but for such acquisition and the incurrence of such
indebtedness was reasonably foreseeable at the time of such
acquisition, except that indebtedness incurred after the
acquisition of such property is not acquisition indebtedness
if incurred to carry on activities directly related to
farming, ranching, forestry, horticulture, or viticulture,
and
``(IV) the extension, renewal, or refinancing of an
acquisition indebtedness.
``(3) Treatment of retained development right.--
``(A) In general.--Paragraph (1) shall not apply to the
value of any development right retained by the donor in the
conveyance of a qualified conservation easement.
``(B) Termination of retained development right.--If every
person in being who has an interest (whether or not in
possession) in such land shall execute an agreement to
extinguish permanently some or all of any development rights
(as defined in subparagraph (D)) retained by the donor on or
before the date for filing the return of the tax imposed by
section 2001, then any tax imposed by section 2001 shall be
reduced accordingly. Such agreement shall be filed with the
return of the tax imposed by section 2001. The agreement
shall be in such form as the Secretary shall prescribe.
``(C) Additional tax.--Failure to implement the agreement
described in subparagraph (B) within 2 years of the
decedent's death shall result in the imposition of an
additional tax in the amount of tax which would have been due
on the retained development rights subject to such agreement.
Such additional tax shall be due and payable on the last day
of the 6th month following the end of the 2-year period.
``(D) Development right defined.--For purposes of this
paragraph, the term `development right' means the right to
establish or use any structure and the land immediately
surrounding it for sale (other than the sale of the structure
as part of a sale of the entire tract of land subject to the
qualified conservation easement), or other commercial purpose
which is not subordinate to and directly supportive of the
activity of farming, forestry, ranching, horticulture, or
viticulture conducted on land subject to the qualified
conservation easement in which such right is retained.
``(4) Election.--The election under this subsection shall
be made on the return of the tax imposed by section 2001.
Such an election, once made, shall be irrevocable.
``(5) Calculation of estate tax due.--An executor making
the election described in paragraph (4) shall, for purposes
of calculating the amount of tax imposed by section 2001,
include the value of any development right (as defined in
paragraph (3)) retained by the donor in the conveyance of
such qualified conservation easement. The computation of tax
on any retained development right prescribed in this
paragraph shall be done in such manner and on such forms as
the Secretary shall prescribe.
``(6) Definitions.--For purposes of this subsection--
``(A) Land subject to a qualified conservation easement.--
The term `land subject to a qualified conservation easement'
means land--
``(i) which is located in or within 50 miles of an area
which, on the date of the decedent's death--
``(I) is a metropolitan area (as defined by the Office of
Management and Budget),
``(II) is a National Park or wilderness area designated as
part of the National Wilderness Preservation System (unless
it is determined by the Secretary that land in or within 50
miles of such a park or wilderness area is not under
significant development pressure), or
``(III) is an Urban National Forest (as designated by the
Forest Service),
``(ii) which was owned by the decedent or a member of the
decedent's family at all times during the 3-year period
ending on the date of the decedent's death, and
``(iii) with respect to which a qualified conservation
easement is or has been made by the decedent or a member of
the decedent's family.
``(B) Qualified conservation easement.--The term `qualified
conservation easement' means a qualified conservation
contribution (as defined in section 170(h)(1)) of a qualified
real property interest (as defined in section 170(h)(2)(C)),
except that for this purpose the term `qualified real
property interest' shall not include any structure or
building constituting `a certified historic structure' as
defined in section 170(h)(4)(B), and the restriction on the
use of such interest described in section 170(h)(2)(C) shall
include a prohibition on commercial recreational activity,
except that the leasing of fishing and hunting rights shall
not be considered commercial recreational activity when such
leasing is subordinate to the activities of farming,
ranching, forestry, horticulture or viticulture.
``(C) Member of family.--The term `member of the decedent's
family' means any member of the family (as defined in section
2032A(e)(2)) of the decedent.''
``(7) Application of this section to interests in
partnerships, corporations, and trusts.--The Secretary shall
prescribe regulations applying this section to an interest in
a partnership, corporation, or trust which, with respect to
the decedent, is an interest in a closely held business
(within the meaning of paragraph (1) of section 6166(b)).''
(b) Carryover Basis.--Section 1014(a) of such Code
(relating to basis of property acquired from a decedent) is
amended by striking the period at the end of paragraph (3)
and inserting ``, or'' and by adding after paragraph (3) the
following new paragraph:
``(4) to the extent of the applicability of the exclusion
described in section 2031(c), the basis in the hands of the
decedent.''
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying after December 31,
1996.
SEC. 3. GIFT TAX ON LAND SUBJECT TO A QUALIFIED CONSERVATION
EASEMENT.
(a) Gift Tax With Respect to Land Subject to a Qualified
Conservation Easement.--Section 2503 of the Internal Revenue
Code of 1986 (relating to taxable gifts) is amended by adding
at the end the following new subsection:
``(h) Gift Tax With Respect to Land Subject to a Qualified
Conservation Easement.--The transfer by gift of land subject
to a qualified conservation easement shall not be treated as
a transfer of property by gift for purposes of this chapter.
For purposes of this subsection, the term `land subject to a
qualified conservation easement' has the meaning given to
such term by section 2031(c); except that references to the
decedent shall be treated as references to the donor and
references to the date of the decedent's death shall be
treated as references to the date of the transfer by the
donor.''
(b) Effective Date.--The amendment made by this section
shall apply to gifts made after December 31, 1996.
SEC. 4. QUALIFIED CONSERVATION CONTRIBUTION IS NOT A
DISPOSITION.
(a) Qualified Conservation Contribution Is Not a
Disposition.--Subsection (c) of section 2032A of the Internal
Revenue Code of 1986 (relating to alternative valuation
method) is amended by adding at the end the following new
paragraphs:
``(8) Qualified conservation contribution is not a
disposition.--A qualified conservation contribution (as
defined in section 170(h)) by gift or otherwise shall not be
deemed a disposition under subsection (c)(1)(A).
``(9) Exception for real property is land subject to a
qualified conservation easement.--If qualified real property
is land subject to a qualified conservation easement (as
defined in section 2031(c)), the preceding paragraphs of this
subsection shall not apply.''
(b) Land Subject to a Qualified Conservation Easement Is
Not Disqualified.--Subsection (b) of section 2032A of such
Code (relating to alternative valuation method) is amended by
adding at the end the following paragraph:
``(E) If property is otherwise qualified real property, the
fact that it is land subject to a qualified conservation
easement (as defined in section 2031(c)) shall not disqualify
it under this section.''
(c) Effective Date.--The amendments made by this section
shall apply with respect to contributions made, and easements
granted, after December 31, 1996.
SEC. 5. QUALIFIED CONSERVATION CONTRIBUTION WHERE SURFACE AND
MINERAL RIGHTS ARE SEPARATED.
(a) In General.--Section 170(h)(5)(B)(ii) of the Internal
Revenue Code of 1986 (relating to special rule) is amended to
read as follows:
``(ii) Special rule.--With respect to any contribution of
property in which the ownership of the surface estate and
mineral interests has been and remains separated,
subparagraph (A) shall be treated as met if the probability
of surface mining occurring on such property is so remote as
to be negligible.''
(b) Effective Date.--The amendment made by this section
shall apply with respect to contributions made after December
31, 1992, in taxable years ending after such date.
____
Summary of the American Farm and Ranch Protection Act of 1997
The American Farm and Ranch Protection Act protects family
lands and encourages the voluntary conservation of farmland,
ranches, forest land, wetlands, wildlife habitat, open space
and other environmentally sensitive property. It enables
farmers and ranchers to continue to own and work their land
by eliminating the estate and gift tax burden that threatens
the current generation of owners. The bill does this in the
following ways:
By excluding from estate and gift taxes the value of land
on which a qualified conservation easement has been granted
if the land is located in or within a 50-mile radius of a
metropolitan area, a National Park, or a wilderness area that
is part of the National Wilderness Area System, or an Urban
National Forest; and,
By clarifying that land subject to a qualified conservation
easement can also qualify for special use valuation under
Code section 2032A.
[[Page S2672]]
The bill also contains a number of safeguards to ensure
that the benefits of the exclusion are not abused. These
safeguards include the following:
The easement must be perpetual and meet the requirements of
Code Section 170(h), governing deductions for charitable
contributions of easements;
Easements retaining the right to develop the property for
commercial recreational use would not be eligible, while
other retained development rights would be taxed;
Land excluded from the estate tax would receive a
carryover, rather than stepped-up, basis for purposes of
calculating gain on a subsequent sale;
The land must have been owned by the decedent or a member
of the decedent's family for at least three years immediately
prior to the decedent's death; and,
The easement must have been donated by the decedent or a
member of the decedent's family.
Under Section 170(h) easements will qualify only if they
are made to a federal, state or local governmental unit or
certain non-profit groups. In addition, they must be made: To
preserve land areas for outdoor recreation by the general
public; to protect the natural habitat of fish, wildlife, or
plants; or, to preserve open space (including farmland and
forest land).
The bill is effective for decedents dying, or gifts made,
after December 31, 1996.
Mr. BAUCUS. Mr. President, I am very pleased to join my colleague
Senator Chafee in introducing the American Farm and Ranch Protection
Act today. This bill represents a bipartisan effort to help protect the
open lands of our great country.
Montana is know as Big Sky country for a reason, our expansive open
areas dedicated to farming, ranching, and forestry rather than building
and development. Our open lands represent a way of life in Montana,
they are part of our environmental and cultural heritage. And they are
rapidly disappearing as ranches and farms make way for houses and
building complexes.
America is losing over 4 square miles of land to development every
day. In Montana alone, since 1987 over 560,000 acres of farmland have
been taken out of farm use. Since 1974 the number of acres of land
taken our of farm use exceeds 2.5 million.
Frequently, the pressure to abandon the farm use of land comes from
the need to raise funds to pay estate taxes. For those families where
undeveloped land represents a significant portion of the estate's total
value, often the heirs must develop or sell off part or all of the land
merely in order to pay the tax. Because land is typically appraised by
the Internal Revenue Service according to its highest and best use,
which usually assumes development on the property, retention of
undeveloped land is very difficult.
I have attempted to resolve this problem through changes in the
estate tax itself by my sponsorship of the bipartisan Estate Tax Relief
for the American Family Act of 1997. That bill will make it easier for
all family-owned businesses, including farms and ranches, to be passed
on to succeeding generations. At the same time, however, I believe it
is important to provide an incentive for the permanent preservation of
environmentally significant land, so that our legacy to our children
will include Montana's open lands. The American Farm and Ranch
Protection Act, which Senator Chafee and I are introducing today, will
help to achieve this goal by providing an exemption from the estate tax
for the value of land that is subject to a qualified, permanent
conservation easement.
Conservation easements, which are entirely voluntary, are agreements
negotiated by landowners in which a restriction upon the future use of
land is imposed in order to conserve those aspects of the land that are
publicly significant. To qualify for the estate tax exemption under
this bill, the easements must be perpetual and must be made to preserve
open space, to protect the natural habitat of fish, wildlife or plants,
to meet a government conservation policy, or to preserve a important
historical heritage area.
Title 5 of this bill represents an effort to clarify an area of the
law that is of particular importance in Montana. Under current law,
when mineral rights have been severed from the surface rights in a
piece of property, and a qualified conservation easement is created by
the owner of the surface rights for the benefit of a nonprofit entity,
that owner is unable to take a charitable deduction unless two
conditions are met: the probability of surface mining occurring on the
property must be so remote as to be negligible, and the severance of
the mineral rights must have occurred before June 13, 1976. In Montana,
severance of mineral rights for many properties occurred many
generations earlier, and they have often been disbursed to farflung
relatives in very small portions. So the probability that mining will
occur is, indeed, very remote. The Internal Revenue Service, however,
has asserted that some uncertainty exists about the congressional
intent behind the term ``ownership of the surface estate and mineral
interest first separated after June 12, 1976.''
I was the original authority of the language in question, and I have
communicated with the IRS regarding my intention when the language was
drafted. However, IRS has been unwilling to issue a favorable letter
ruling which would clarify this issue, and as a consequence, it is
impossible for many Western landowners to make voluntary charitable
contributions of conservation easements in order to protect important
Western land. In light of the confusion that this date has caused, and
because it has no policy justification, our legislation would eliminate
the 1976 date from the statute.
I believe this bill can be an important tool for America's farm and
ranch families to utilize in preserving their homesteads. At the same
time, it makes a significant contribution to the larger public good of
conserving America's increasingly threatened rural lands. I urge my
colleagues to join on the bill as cosponsors, and encourage the
administration to support the legislation.
______
By Mrs. BOXER (for herself and Mrs. Feinstein):
S. 500. A bill to authorize emergency appropriations for cleanup and
repair of damages to facilities of Yosemite National Park and other
California national parks caused by heavy rains and flooding in
December 1996 and January 1997, and for other purposes; to the
Committee on Energy and Natural Resources.
THE YOSEMITE EMERGENCY RESTORATION AND CONSTRUCTION ACT
Mrs. BOXER. Mr. President, I am today introducing a bill that will
authorize emergency appropriations for cleanup and repair of damages to
facilities of Yosemite National Park and other National Park Service
areas in California caused by heavy rains and flooding in December 1996
and January 1997.
I expect most of the issues regarding emergency cleanup and repair
due to floods in California to be addressed through the appropriations
process. I do not therefore expect this bill to be taken up by the
appropriate Senate committee and passed by the Senate. The primary
purpose of introducing this bill is to set a benchmark for recovery and
cleanup efforts at Yosemite National Park.
My bill takes several steps beyond the bill that was introduced last
month by Congressman Doolittle and Radanovich:
First, it authorizes emergency funding. Second, it authorizes a
specific amount--$200 million in emergency funds in fiscal year 1997.
Third, it specifies that funds shall only be spent in a manner that is
consistent with the Yosemite general management plan, the concession
services plan, and when adopted, the Yosemite Valley housing plan, and
the valley implementation plan. Fourth, it specifies that funds spent
on repair and rebuilding of concessions facilities shall be recovered
by the Secretary of the Interior to the greatest extent practicable
according to the Department of the Interior's contract with the
concessioner. Fifth, it authorizes emergency grants to satellite
communities around Yosemite to provide mass transit visitor
transportation into the park during repair and restoration activities
on access roads. Sixth, it authorizes emergency appropriations for
other California parks that suffered flood damage including Redwood
National Park, Sequoia-Kings Canyon National Park, and others. Seventh,
it authorizes $7 million to be appropriated in fiscal year 1998 and
such sums as may be necessary for each fiscal year thereafter for a
mass transit system for Yosemite.
Mr. President, the primary goal of the emergency restoration and
construction activities authorized in this bill is to reopen Yosemite
National
[[Page S2673]]
Park and restore services to Park visitors as quickly and safely as
possible.
The importance of emergency funding for Yosemite cannot be
overstated. It is a unique national treasure, recognized all over the
world for its spectacular natural beauty. Over 1.4 million people visit
the park every year including tens of thousands of international
visitors who travel to California for the sole purpose of staying in
the park to experience nature. John Muir--one of our nation's founding
leaders of environmental conservation--first encountered the majestic
Yosemite Valley in 1864 and immediately realized the importance of
preserving its natural wonders. Muir's foresight and passion resulted
in the establishment of Yosemite National Park in October 1890. At its
onset, the park included 60,000 acres miles of scenic wild lands.
Today, some 106 years later, the park embraces over 761,236 acres of
granite peaks, broad meadows, glacially carved domes, giant sequoias,
secluded tarns, and breathtaking waterfalls.
This winter, tropical storms with heavy rain caused serious flooding
in the park. Yosemite's major rivers and tributaries flooded many park
areas and caused severe damage to infrastructure. Over 350 damage
assessments have been completed by engineers, architects, resource
specialists, and other technical experts. Their first damage assessment
report shows serious damage to the four main routes leading into the
park, major electrical and sewer systems, 224 units of employee
housing, over 500 guest lodging units, over 350 campsites, 17
restoration projects, and over 10 archeological sites.
According to the National Park Service, full recovery will take
years. We now begin the recovery period during which, interim solutions
will be put in place such as temporary housing and lodging while
permanent construction is being completed.
The Yosemite Emergency Restoration and Reconstruction Act would
authorize $200 million in emergency funds to be appropriated to the
Secretary of Interior for cleanup and repair of flood damages to the
facilities of Yosemite National Park caused by heavy rains and flooding
in December 1996 and January 1997, and other national parks in the
State of California. The funds are authorized to remain available until
expended.
The authorization requires that any emergency funds spent at Yosemite
be consistent with the Yosemite General Management Plan, the Concession
Services Plan, and when adopted, the Yosemite Valley Housing Plan, and
the Valley Implementation Plan.
Funds are authorized to be spent on repair, restoration, and
relocation, where appropriate, of infrastructure vital to Yosemite
National Park operations, including but not limited to roads, trails,
utilities, buildings, grounds--including campgrounds--natural
resources, cultural resources, and lost and damaged property, both
within the park boundaries and at the El Portal administrative site
servicing the park.
Also, funds are authorized to repair and relocation of park employee
housing and the Resource Management Office; repair, maintenance, and
opening of Tioga Pass Road within the boundaries of the park; and
repair and expeditious opening of highways 120, 140, and 41 within the
boundaries of the park.
The bill requires that funds spent on repair and relocation of
concession-operated rental cabins, motel rooms, rental structures, and
concession employee housing and facilities be recovered by the
Department of the Interior to the greatest extent practicable, within
the provisions of the concession contract between the Department of the
Interior and the Yosemite Concession Services.
Mr. President, a key aspect to the bill is the authorization of $2.5
million in emergency grants to satellite communities around Yosemite
National Park for the purpose of providing mass transit visitor
transportation into the park during repair and restoration activities
on access roads to the park.
Other California parks suffered flood damage. My bill would authorize
emergency funds for Redwood National Park, Sequoia-Kings Canyon
National Park, Lassen Volcanic National Park, Whiskeytown National
Recreation Area, Devils Postpile National Monument, and Lava Beds
National Monument.
Last, Mr. President, my bill authorizes $7 million to be appropriated
in fiscal year 1998 and such sums as may be necessary for each fiscal
year thereafter to the Secretary of Interior for the purpose of helping
establish a mass transit system for Yosemite National Park--
specifically for the purchase of electric buses and alternative-fueled
buses.
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. 500
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 ``Yosemite Emergency
Restoration and Construction Act of 1997''.
SEC. 2. AUTHORIZATION OF EMERGENCY APPROPRIATIONS FOR CLEANUP
AND REPAIR OF YOSEMITE NATIONAL PARK.
(a) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $200,000,000 for
fiscal year 1997, to remain available until expended.
(b) Use of Funds.--
(1) In general.--The Secretary of the Interior (referred to
in this Act as the ``Secretary'') shall use amounts made
available under subsection (a) for cleanup and repair of
flood damage to the facilities of Yosemite National Park and
other national parks in the State of California caused by
heavy rains and flooding in December 1996 and January 1997.
(2) Included activities.--Activities by the Secretary under
paragraph (1) shall include--
(A) repair, restoration, and, if appropriate, relocation of
infrastructure vital to operations at Yosemite National Park,
including roads, trails, utilities, buildings, grounds
(including campgrounds), natural resources, cultural
resources, and lost and damaged property in the park and at
the El Portal administrative site servicing the park;
(B) repair and, if appropriate, relocation of Yosemite
National Park employee housing and the Resource Management
Office;
(C) repair and, if appropriate, relocation of concession-
operated rental cabins, motel rooms, rental structures, and
concession employee housing and facilities;
(D) repair, maintenance, and opening of Tioga Pass Road in
Yosemite National Park;
(E) repair and expeditious opening of Highways 120, 140,
and 41 in Yosemite National Park;
(F) any other repair and restoration that is necessary for
the expeditious and complete opening of Yosemite National
Park;
(G) making emergency grants to satellite communities around
Yosemite National Park to provide mass transit visitor
transportation into the park during repair and restoration
activities on access roads to the park; and
(H) repair and restoration of damage caused by heavy rains
and flooding in December 1996 and January 1997 at Redwood
National Park, Sequoia-Kings Canyon National Park, Lassen
Volcanic National Park, Whiskeytown National Recreation Area,
Devils Postpile National Monument, and Lava Beds National
Monument.
SEC. 3. EMERGENCY FUNDING FOR YOSEMITE SATELLITE COMMUNITIES.
Of any amounts made available under section 2(a), the
Secretary shall make available not less than $2,500,000 to
make grants described in section 2(b)(2)(G).
SEC. 4. CAPITAL RECOVERY FROM CONCESSIONAIRES.
To the extent practicable under the concession contract
between the Secretary and Yosemite Concession Services, the
Secretary shall recover from Yosemite Concession Services any
amount used under section 2(b)(2)(C).
SEC. 5. AUTHORIZATION OF APPROPRIATIONS FOR MASS TRANSIT
SYSTEM FOR YOSEMITE NATIONAL PARK.
(a) Authorization.--There are authorized to be appropriated
to carry out this section $7,000,000 for fiscal year 1998 and
such sums as are necessary for each fiscal year thereafter.
(b) Use of Funds.--
(1) In general.--The Secretary shall use amounts made
available under subsection (a) to establish a mass transit
system at Yosemite National Park.
(2) Included activities.--Activities by the Secretary under
paragraph (1) shall include--
(A) using not more than $1,500,000 for the purchase of
electric buses; and
(B) using not more than $5,500,000 for the purchase of
alternative-fueled buses.
SEC. 6. CONSISTENCY WITH PLANS.
Activities at Yosemite National Park by the Secretary under
this Act shall be consistent with the Yosemite General
Management Plan, the Concession Services Plan, the Yosemite
Valley Housing Plan, and the Valley Implementation Plan.
______
By Mr. MACK (for himself, Mr. Shelby, Mr. Cochran, Mr. D'Amato,
and Mr. Hagel):
[[Page S2674]]
S. 501. A bill to amend the Internal Revenue Code of 1986 to provide
all taxpayers with a 50-percent deduction for capital gains, to
increase the exclusion for gain on qualified small business stock, to
index the basis of certain capital assets, to allow the capital loss
deduction for losses on the sale or exchange of an individual's
principal residence, and for other purposes; to the Committee on
Finance.
the return capital to the american people act
Mr. MACK. Mr. President, today I am introducing legislation, along
with Senator Shelby, which provides real cuts in the capital gains rate
and indexes capital gains to account for inflation. As we work to
achieve a balanced budget, it is our belief that a real reduction in
the capital gains rate is essential to ensure greater growth,
innovation, and prosperity. Accordingly, the legislation we have
proposed offers the best elements of existing capital gains proposals.
Perhaps most importantly, this proposal ensures that homeowners,
family farms, and small businesses are not penalized for inflationary--
phantom--gains by providing for the indexation of capital gains. The
importance of indexation is made clear in the accompanying report
recently prepared by the Joint Economic Committee.
Additionally, our bill will offer a 50-percent rate reduction for
individuals and corporations, and allow the deduction for a loss on the
sale of a principal residence.
Finally, this legislation encourages investment in small businesses
by increasing the exclusion from gains for small business stock from 50
to 75 percent; reducing the requirement for holding stock from 5 to 3
years; increasing the eligibility size to $100 million, and providing a
60-day grace period for the rollover of stock between small businesses.
Again, I want to restate the importance of a reduced capital gains
rate, which benefits all Americans by stimulating economic growth and
prosperity and leading to innovation in biomedical research and other
life-enhancing technologies. I look forward to my colleagues joining me
in this effort to ensure that a real capital gains rate reduction is
included in any balanced budget package the Congress puts together in
the coming months.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Indexing Capital Gains
(Prepared by Robert Stein)
The case for cutting the capital gains tax is simple and
straightforward: It is a win-win situation for all involved--
for taxpayers, workers and government revenue.
Everyone who invests would get more bang for their buck.
This includes people who start small businesses, workers who
have pension money in stocks and those who save for life's
goals, like a downpayment on a home, a college education or
retirement. More than 40% percent of families own stocks,
either directly or indirectly, including more than 25% of the
families making between $10,000 and $25,000 per year.\1\ And
contrary to conventional wisdom, cutting the capital gains
tax will increase government revenue, making it easier to
balance the budget.
---------------------------------------------------------------------------
\1\ Footnotes at end of article.
---------------------------------------------------------------------------
One way to cut the capital gains tax is to limit the tax to
real increases in the prices of assets, over and above
inflation. This is called indexing. Without indexing,
effective tax rates can be much higher than the government's
official rate. Consider a couple that buys $10,000 worth of
stocks in 1966, to help pay for their retirement. In 1996,
they would have about $79,000 worth of stocks.\2\ Cashing-in
these stocks could require a tax of about $19,000.\3\ But
much of their gain--the difference between their initial
investment and the $79,000 they end up with--was due to
inflation, not real increases in purchasing power. In fact,
the couple only had about $30,000 in real gains, over and
above inflation.\4\ And a tax of $19,000 or $30,000 in gains
is an effective tax rate of 63%.
Chart 1 shows a history of the difference between the top
official tax rate on capital gains and the top effective tax
rate, taking inflation into account.\5\ As Chart 1 shows, the
effective tax rate on capital gains can greatly exceed the
official rate, even going well above 100%. In fact, if an
investor sells an asset that increased in price, but which
didn't keep pace with inflation, she would have to pay taxes
without enjoying any real gain at all! It doesn't take much
of an imagination to see how the fear of such taxes could
deter investment.
(Chart not reproductible in Record.)
Would cutting taxes on capital gains reduce government
revenue, making it tougher to balance the budget? Certainly
not. In fact, cutting the effective tax rate on capital gains
should boost revenue. As the following table shows,
government revenue from the capital gains tax has grown much
more quickly when the effective tax rate has been low or
falling than when it's been high or rising.
FIVE PHASES OF THE CAPITAL GAINS TAX
------------------------------------------------------------------------
Capital
gains
Years Effective tax rates (in revenue \6\
percent) (percent
per year)
------------------------------------------------------------------------
1954-1967................. Low (30 to 40)................. +10
1968-1980................. Rising/Very High (37 to 126)... +2
1981-1986................. Falling (97 to 39)............. \7\+10
1987-1991................. Rising (39 to 61).............. \8\-5
1992-1994................. Falling (61 to 50)............. +10
------------------------------------------------------------------------
Put simply, reducing the effective tax rate on capital
gains would kill two birds with one stone: It would both ease
the tax burden and make it easier to balance the budget. Case
in point: The last time the government cut the official tax
rate on capital gains, revenue from the capital gains tax
rose from $22 billion to $36 billion in only five years.\9\
Questions and Answers
Q: Wouldn't indexation complicate the tax code, as
taxpayers would have to keep track of not only the cost of
their assets but also the inflation adjustment for each?
A: No. People would have the option of indexing, but could
still use the non-indexed cost of their assets when figuring
out the amount of their gains. This would mostly happen when
inflation was low and the asset wasn't held very long.
Q: If we index capital gains for inflation, don't we have
to index debts too? And since it's too difficult to index
debts for tax purposes, shouldn't we leave the system the way
it is?
A: No. This argument confuses key differences between
equity and debt. Theoretically, the tax code could let
lenders index their interest income, so they only have to pay
taxes on the interest they earn over and above inflation. But
for every $1 that lenders reduce their taxable income,
borrowers would have to reduce the amount of interest they
deduct. Overall, debt transactions would still feel the same
tax bite. Only the distribution of the taxes would change:
Lenders would pay less; borrowers would pay more. But lenders
and borrowers already apportion the tax burden between
themselves. It's factored into the interest rate. This
interest rate also reflects the inflation the two parties
expect, as well as the risk that inflation will differ in
either party's favor.
By contrast, bargaining over tax costs doesn't happen with
equity. Unlike with debts, nobody deducts capital gains as a
cost. Indexing gains would not simply shift the tax burden
from one party to another. It would reduce the total tax
burden placed on investments in equity, to reflect the
erosion of capital gains by inflation.
endnotes
\1\ Family Finances in the U.S.: Recent Evidence from the
Survey of Consumer Finances, Federal Reserve Bulletin,
January 1997. Indirect stock ownership includes owned through
mutual funds or retirement accounts.
\2\ Between 1966 and 1996 the Standard and Poor's 500 stock
index rose from 85.26 to 670.81.
\3\ Twenty-eight percent of the capital gain.
\4\ The consumer price index for urban worker rose from 32.5
in 1966 to 157 in 1996. This makes the real basis about
$48,000 in 1996.
\5\ To calculate the effective capital gains tax rate I
assumed people hold their assets for five years and use the
consumer price index for urban workers as my price index. To
avoid a result where people get taxed on zero or negative
real gains (which implies a tax rate of infinity!) I assume
people earned a 5% real return per year. This method has the
added benefit of giving us a view of the expected capital
gain tax rate, as almost all people invest with the
expectation that they will get a positive return. The
expected tax rate should drive investment decisions more than
any other tax rate.
\6\ Changes in real revenue, with nominal revenue figures
adjusted by the consumer price index for urban workers.
\7\ This annual rate of changes does not include the huge
increase in government revenue in 1986, as people cashed in
their gains to avoid an oncoming tax hike in 1987. In other
words, as favorable as the data in the table looks for
keeping capital gains taxes low, it could have made the table
even more favorable, if 1986 were used as the end point.
Instead, the increase in gains during this era of lower taxes
is cut off in 1985, at a much lower point than the 1986
point.
\8\ This calculation does not use the 1986 peak as the
starting point. It uses 1985. Had it used 1986 as the
starting point the data would have been even more favorable
for keeping capital gains tax low.
\9\ From 1980, the year before the tax cut, to 1985, the year
before the huge surge in revenue that anticipated the hike in
rates in 1986. Money figures are in constant 1994 dollars.
______
By Mr. GRASSLEY:
S. 502. A bill to amend title XIX of the Social Security Act to
provide post-eligibility treatment of certain payments received under a
Department of Veterans Affairs pension or compensation program; to the
Committee on Finance.
state veterans' home legislation
Mr. GRASSLEY. Mr. President, today I am introducing legislation
which, when enacted, will modify the treatment of certain veterans
benefits received by veterans who reside in State veterans homes and
whose care
[[Page S2675]]
and treatment is paid for by the Medicaid program. I am joined in
introducing this bill by Senator Graham.
Veterans residing in State veterans homes, who are eligible for aid
and attendance [AA] and unusual medical expense [UME] benefits,
veterans benefits provided under title 38 of the United States Code,
who are also eligible for Medicaid, are the only veterans in nursing
homes who receive, and who are able to keep, the entire AA and UME
benefit amounts. This can be as much as $1,000 per month.
Other veterans, who reside in other types of nursing homes are
receiving Medicaid, and who are also eligible for AA/UME can receive
only 90 per month from the VA.
Yet, other veterans who reside in State veterans homes but who are
not eligible for the AA/UME benefits must contribute all but $90 of
their income to the cost of their care.
So, even though veterans residing in State veterans homes who are
eligible for AA and UME benefits and who qualify for Medicaid have all
of their treatment and living expense paid by the State Medicaid
program, they nevertheless may keep as much as $1,000 per month of the
AA and UME benefits.
It might be useful for me to review how this state of affairs came to
be.
In 1990, legislation was enacted, Public Law 101-508, November 5,
1990, which modified title 38, the veterans benefits title of the
United States Code, to stipulate that veterans with no dependents, on
title XIX, residing in nursing homes, and eligible for AA and UME,
could receive only a $90 per month personal expense allowance from the
VA, rather than the full UME and AA amounts.
State veterans homes were subsequently exempted from the definition
of nursing homes which had been contained in those earlier provisions
of Public Law 101-508 by legislation enacted in 1991, Public Law 102-
40, May 7, 1991.
The result was that veterans on title XIX and residing in State
nursing homes continued to receive UME and AA. Until recently, the
State veterans homes followed a policy of requiring that all but $90
per month of these allowances be used to defray the cost of care in the
Home.
Then, a series of Federal court decisions held that neither UME nor
AA could be considered income. The court decisions appeared to focus on
the definition of income used in pre- and post-eligibility income
determinations for Medicaid. The court decisions essentially held that
UME and AA payments to veterans did not constitute income for the
purpose of post-eligibility income determination. The reasoning was
that, since these monies typically were used by veterans to defray the
cost of certain series they were receiving, the payments constituted a
``wash'' for purposes of income gain by the veterans.
However, the frame of reference for the courts' decisions was not a
nursing home environment in which a veteran receiving Medicaid benefits
might find himself or herself. In other words, the UME and AA payment
received by a veteran on Medicaid are provided to a veteran for
services for which the State is already paying through the Medicaid
program. The veteran is not paying for these services with their own
income. So, as a consequence of the court decisions, these payments to
the veteran in State veterans homes represent a net gain in income to
the veteran; they are not paid out by the veteran to defray the cost of
services the veteran is receiving.
VA does not pay AA or UME to veterans who are also on title XIX and
residing in non-State veterans home nursing homes. Those veterans get
only a $90 per month personal allowance.
And non-Medicaid eligible veterans who reside in State veterans homes
must pay for services with their own funds. If they get UME and AA
payments, the State veterans homes will take all but $90 of those sums
to help defray the cost of the nursing home care.
Although the written record does not document this, I believe that
the purpose of exempting the State veterans homes was to allow the
Homes to continue to collect all but $90 of the UME and AA paid to the
eligible veteran so as to enable State veterans homes to provide
service to more veterans than they otherwise would be able to provide.
In any case, it seems highly unlikely that the purpose of exempting
State veterans homes would have been to allow these veterans, and only
these among similarly situated veterans, to retain the entire UME and
A&A amounts.
The legislation I am introducing today modifies section 1902(r)(1) of
the Social Security Act to stipulate that, for purposes of the post-
eligibility treatment of income of individuals who are
institutionalized, and on title 19, the payments received under a
Department of Veterans Affairs pension or compensation program,
including aid and attendance and unusual medical expense payments, may
be taken into account.
______
By Mr. NICKLES:
S. 503. A bill to prevent the transmission of the human
immunodeficiency virus (commonly known as HIV), and for other purposes;
to the Committee on Labor and Human Resources.
the hiv prevention act of 1997
Mr. NICKLES. Mr. President, I rise today to introduce the HIV
Prevention Act of 1997. This legislation appropriately refocuses public
health efforts on HIV prevention by using proven public health
techniques designed for communicable diseases. The public health
initiatives in this bill, which result in early detection of HIV
infection, are now more important than ever in light of the tremendous
advances that medical science has made.
This bill will balance the needs of HIV-infected patients with the
prevention needs of those who are uninfected. The HIV Prevention Act of
1997 establishes a confidential, national HIV reporting effort as
already exists for end stage HIV and AIDS; requires partner
notification; mandates testing for indicted sexual offenders; protects
health care patients and professionals from inadvertent exposure to
HIV; provides access to insurance-required HIV test results; and allows
adoptive parents to learn the HIV status of a child. In addition, this
legislation includes Sense of the Senate language which expresses that
the States should criminalize the intentional transmission of HIV; and
also expresses the Sense of the Senate that strict confidentiality must
be observed at all times in carrying out all of the provisions of the
act.
The Senate is on record supporting the provisions of this bill in a
1990 amendment which was adopted by voice vote. The primary sponsors of
the amendment were Senators Kennedy and Mikulski. During debate on the
amendment, Senator Kennedy argued, ``In a case in which there is a
clear and present danger, there is a duty to warn.'' That is the
purpose of the HIV Prevention Act of 1997. The best ways to warn for
the prevention of further spread of HIV and AIDS are reporting and
partner notification, methods which are currently in use and proven to
be effective.
This bill has received overwhelming support from groups including the
Independent Women's Forum, Americans for a Sound AIDS/HIV Policy, the
Family Research Council, Women Against Violence, the Christian
Coalition, and the American Medical Association. I quote from a letter
written by the AMA in support of this legislation:
``These public health initiatives which result in early detection of
HIV infection are now more important because of the tremendous advances
that medical science has made. Early intervention combined with
effective treatments will enable those with HIV and AIDS to live
longer, healthier lives.''
The HIV Prevention Act adds HIV to 52 other notifiable contagious
diseases such as gonorrhea, hepatitis A, B, and C, syphilis,
tuberculosis, and AIDS that must be reported to the Centers for Disease
Control. In terms of partner notification, 26 states, including, I
might add, Oklahoma, already require notification. It is time that
these policies that are already in practice in some states are applied
around the country in order to track and prevent further spread of HIV.
Mr. President, this legislation will greatly increase public health
HIV prevention efforts that until now have focused only on AIDS. The
HIV Prevention Act of 1997 is a sensible, common sense approach toward
containing the spread of AIDS. By using proven, public health
techniques and sound medical practices, this bill will curtail the
[[Page S2676]]
spread of HIV. I thank the chair and encourage my colleagues to support
this commonsense legislation.
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. 503
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 ``HIV Prevention Act of
1997''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The States should recognize that the terms ``acquired
immune deficiency syndrome'' and ``AIDS'' are obsolete. In
the case of individuals who are infected with the human
immunodeficiency virus (commonly known as HIV), the more
important medical fact for the individuals and for the
protection of the public health is the fact of infection, and
not just the later development of AIDS (the stage at which
the infection causes symptoms). The term ``HIV disease'',
meaning infection with HIV regardless of whether the
infection has progressed to AIDS, more correctly defines the
medical condition.
(2) The medical, public health, political, and community
leadership must focus on the full course of HIV disease
rather than concentrating on later stages of the disease.
Continual focus on AIDS rather than the entire spectrum of
HIV disease has left our Nation unable to deal adequately
with the epidemic. Federal and State data collection efforts
should focus on obtaining data as early as possible after
infection occurs, while continuing to collect data on the
symptomatic stage of the disease.
(3) Recent medical breakthroughs may enable doctors to
treat HIV disease as a chronic disease rather than as a
terminal disease. Early intervention in the progression of
the infection is imperative to prolonging and improving the
lives of individuals with the disease.
(4) The Centers for Disease Control and Prevention has
recommended partner notification as a primary prevention
service. The health needs of the general public, and the care
and protection of those who do not have the disease, should
be balanced with the needs of individuals with the disease in
a manner that allows for the infected individuals to receive
optimal medical care and for public health services to
protect the uninfected.
(5) Individuals with HIV disease have an obligation to
protect others from being exposed to HIV by avoiding
behaviors that place others at risk of becoming infected. The
States should have in effect laws providing that
intentionally infecting others with HIV is a felony.
SEC. 3. PREVENTION OF TRANSMISSION OF HIV.
(a) Requirements for States.--A State shall demonstrate to
the satisfaction of the Secretary that the law or regulations
of the State are in accordance with the following:
(1) Reporting of cases.--The State requires that, in the
case of a health professional or other entity that provides
for the performance of a test for HIV on an individual, the
entity confidentially report positive test results to the
State public health officer, together with any additional
necessary information, in order to carry out the following
purposes:
(A) The performance of statistical and epidemiological
analyses of the incidence in the State of cases of such
disease.
(B) The performance of statistical and epidemiological
analyses of the demographic characteristics of the population
of individuals in the State who have the disease.
(C) The assessment of the adequacy of preventive services
in the State with respect to the disease.
(D) The performance of the functions required in paragraph
(2).
(2) Functions.--The functions described in this paragraph
are the following:
(A) Partner notification.--
(i) In general.--The State requires that the public health
officer of the State carry out a program of partner
notification to inform individuals that the individuals may
have been exposed to HIV.
(ii) Definition.--For purposes of this paragraph, the term
``partner'' includes--
(I) the sexual partners of individuals with HIV disease;
(II) the partners of such individuals in the sharing of
hypodermic needles for the intravenous injection of drugs;
and
(III) the partners of such individuals in the sharing of
any drug-related paraphernalia determined by the Secretary to
place such partners at risk of HIV infection.
(B) Collection of information.--The State requires that any
information collected for purposes of partner notification be
sufficient for the following purposes:
(i) To provide the partners of the individual with HIV
disease with an appropriate opportunity to learn that the
partners have been exposed to HIV.
(ii) To provide the partners with counseling and testing
for HIV disease.
(iii) To provide the individual who has the disease with
information regarding therapeutic measures for preventing and
treating the deterioration of the immune system and
conditions arising from the disease, and to provide the
individual with other preventive information.
(iv) With respect to an individual who undergoes testing
for HIV disease but does not seek the results of the testing,
and who has positive test results for the disease, to recall
and provide the individual with counseling, therapeutic
information, and other information regarding preventative
health services appropriate for the individual.
(C) Cooperation in national program.--The State cooperates
with the Director of the Centers for Disease Control and
Prevention in carrying out a national program of partner
notification, including the sharing of information between
the public health officers of the States.
(3) Testing of certain indicted individual.--With respect
to a defendant against whom an information or indictment is
presented for a crime in which by force or threat of force
the perpetrator compels the victim to engage in sexual
activity, the State requires the following:
(A) In general.--That the defendant be tested for HIV
disease if--
(i) the nature of the alleged crime is such that the sexual
activity would have placed the victim at risk of becoming
infected with HIV; or
(ii) the victim requests that the defendant be so tested.
(B) Timing.--That if the conditions specified in
subparagraph (A) are met, the defendant undergo the test not
later than 48 hours after the date on which the information
or indictment is presented, and that as soon thereafter as is
practicable the results of the test be made available to--
(i) the victim;
(ii) the defendant (or if the defendant is a minor, to the
legal guardian of the defendant);
(iii) the attorneys of the victim;
(iv) the attorneys of the defendant;
(v) the prosecuting attorneys;
(vi) the judge presiding at the trial, if any; and
(vii) the principal public health official for the local
governmental jurisdiction in which the crime is alleged to
have occurred.
(C) Follow-up testing.--That if the defendant has been
tested pursuant to subparagraph (B), the defendant, upon
request of the victim, undergo such follow-up tests for HIV
as may be medically appropriate, and that as soon as is
practicable after each such test the results of the test be
made available in accordance with subparagraph (B) (except
that this subparagraph applies only to the extent that the
individual involved continues to be a defendant in the
judicial proceedings involved, or is convicted in the
proceedings).
(D) Consideration of results.--That, if the results of a
test conducted pursuant to subparagraph (B) or (C) indicate
that the defendant has HIV disease, such fact may, as
relevant, be considered in the judicial proceedings conducted
with respect to the alleged crime.
(4) Testing of certain individuals.--
(A) Patients.--With respect to a patient who is to undergo
a medical procedure that would place the health professionals
involved at risk of becoming infected with HIV, the State--
(i) authorizes such health professionals in their
discretion to provide that the procedure will not be
performed unless the patient undergoes a test for HIV disease
and the health professionals are notified of the results of
the test; and
(ii) requires that, if such test is performed and the
patient has positive test results, the patient be informed of
the results.
(B) Funeral-related services.--The State authorizes
funeral-services practitioners in their discretion to provide
that funeral procedures will not be performed unless the body
involved undergoes a test for HIV disease and the
practitioners are notified of the results of the test.
(5) Informing of funeral-service practitioners.--The State
requires that, if a health care entity (including a hospital)
transfers a body to a funeral-services practitioner and such
entity knows that the body is infected with HIV, the entity
notify the funeral-services practitioner of such fact.
(6) Health insurance issuers.--
(A) In general.--The State requires that, if a health
insurance issuer requires an applicant for such insurance to
be tested for HIV disease as a condition of issuing such
insurance, the applicant be afforded an opportunity by the
health insurance issuer to be informed, upon request, of the
HIV status of the applicant.
(B) Definition.--For purposes of this paragraph, the term
``health insurance issuer'' means an insurance company,
insurance service, or insurance organization (including a
health maintenance organization) which is licensed to engage
in the business of insurance in the State and which is
subject to State law which regulates insurance.
(C) Rule of construction.--This paragraph may not be
construed as affecting the provisions of section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1154) with respect to group health plans.
(7) Adoption.--The State requires that, if an adoption
agency is giving significant consideration to approving an
individual as an adoptive parent of a child and the agency
knows whether the child has HIV disease,
[[Page S2677]]
such prospective adoptive parent be afforded an opportunity
by the agency to be informed, upon request, of the HIV status
of the child.
(b) Sense of Congress Regarding Health Professionals With
HIV Disease.--It is the sense of Congress that, with respect
to health professionals who have HIV disease--
(1) the health professionals should notify their patients
that the health professionals have the disease in medical
circumstances that place the patients at risk of being
infected with HIV by the health professionals; and
(2) the States should encourage the medical profession to
develop guidelines to assist the health professionals in so
notifying patients.
(c) Applicability of Requirements.--
(1) In general.--Except as provided in paragraph (2), this
section shall apply to States upon the expiration of the 120-
day period beginning on the date of the enactment of this
Act.
(2) Delayed applicability for certain states.--In the case
of the State involved, if the Secretary determines that a
requirement established by subsection (a) cannot be
implemented in the State without the enactment of State
legislation, then such requirement applies to the State on
and after the first day of the first calendar quarter that
begins after the close of the first regular session of the
State legislature that begins after the date of the enactment
of this Act. For purposes of the preceding sentence, in the
case of a State that has a 2-year legislative session, each
year of such session is deemed to be a separate regular
session of the State legislature.
(d) Definitions.--In this section:
(1) HIV.--The term ``HIV'' means the human immunodeficiency
virus.
(2) HIV disease.--The term ``HIV disease'' means infection
with HIV and includes any condition arising from such
infection.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(e) Rule of Construction.--Part D of title XXVI of the
Public Health Service Act (42 U.S.C. 300ff-71 et seq.) is
amended by inserting after section 2675 the following
section:
``SEC. 2675A. RULE OF CONSTRUCTION.
``With respect to an entity that is an applicant for or a
recipient of financial assistance under this title,
compliance by the entity with any State law or regulation
that is consistent with section 3 of the HIV Prevention Act
of 1997 may not be considered to constitute a violation of
any condition under this title for the receipt of such
assistance.''.
SEC. 4. SENSE OF CONGRESS REGARDING INTENTIONAL TRANSMISSION
OF HIV.
It is the sense of Congress that the States should have in
effect laws providing that, in the case of an individual who
knows that he or she has HIV disease, it is a felony for the
individual to infect another with HIV if the individual
engages in the behaviors involved with the intent of so
infecting the other individual.
SEC. 5. SENSE OF CONGRESS REGARDING CONFIDENTIALITY.
It is the sense of the Congress that strict confidentiality
should be maintained in carrying out the provisions of
section 3 of the this Act.
______
By Mrs. FEINSTEIN (for herself, Mrs. Boxer and Ms. Snowe):
S. 504. A bill to amend title 18, United States Code, to prohibit the
sale of personal information about children without their parent's
consent, and for other purposes; to the Committee on the Judiciary.
THE CHILDREN'S PRIVACY PROTECITON AND PARENTAL EMPOWERMENT ACT OF 1997
Mrs. FEINSTEIN. Mr. President, I rise to urge my colleagues to
support this simple but strong legislation to protect our children.
This bill, sponsored by myself, Senator Boxer, and Senator Snowe,
would provide three simple protections:
First, the bill would prohibit list brokers from selling personal
information about children under 16 to anyone, without first getting
the parent's consent.
All kinds of information about our children--more facts than most of
us might think or hope for--is rapidly becoming available through these
list brokers. It is only a matter of time before this information
begins to fall into the wrong hands.
Last year, a reporter in Los Angeles was easily able to purchase
parents' names, birth months and addresses for 5,500 children aged 1-12
in a particular neighborhood. The reporter used the name of a
fictitious company, gave a non-working telephone number, had no credit
card or check, and identified herself as Richard Allen Davis, the
notorious murderer of Polly Klaas. When ordering the list, the company
representative simply told her ``Oh, you have a famous name,'' and sent
her the information C.O.D. This is simply unacceptable.
Second, the bill would give parents the authority to demand
information from the list brokers who traffic in the personal data of
their children--brokers will be required to provide parents with a list
of all those to whom they sold information about the child, and must
also tell the parent precisely what kind of information was sold.
If this personal information is out there, and brokers are buying and
selling it back and forth, it is only reasonable that we allow parents
to find out what information has been sold and to whom that information
has been given.
Finally, this bill would prohibit list brokers from using prison
labor to input personal information. This seems like common sense to
most of us, but unfortunately the use of prison labor is not currently
prohibited.
Last year when I introduced this bill, I spoke of the plight of
Beverly Dennis, an Ohio grandmother who filled out a detailed marketing
questionnaire about her buying habits for a mail in survey. She filled
out the questionnaire when she was told that she might receive free
product samples and helpful information. Rather than receiving product
information, however, she soon began to receive sexually explicit,
fact-specific letters from a convicted rapist serving time.
The rapist, writing from his prison cell, had learned the very
private, intimate details about her life because he was keypunching her
personal questionnaire data into a computer for a subcontractor. Ms.
Dennis received letters with elaborate sexual fantasies, weaved around
personal facts provided by her in the questionnaire. This bill would
have prevented the situation from ever occurring.
Finally, Mr. President, this year I have included in the bill
exemptions for sales to law enforcement organizations, the Center for
Missing and Exploited Children, and to accredited colleges and
universities. We received a great deal of input since we introduced the
bill last June, and I believe we have addressed most of the concerns
about our bill with these exemptions.
Schools will be able to get information about prospective students,
law enforcement will be able to get the lists to help them find missing
kids, and the Center for Missing and Exploited Children will be able to
do likewise.
This bill is really very simple. Some marketing companies may be
unhappy that the government is trying to legislate how they do
business, but we have to weigh the safety and well-being of our
children against the small inconvenience of requiring parental consent
in these cases. Given the rapidly changing nature of the marketing
business and the ways in which child molesters and other criminals
operate, this bill is an important step in protecting our kids from
those who would do them harm.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 504
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 ``Children's Privacy
Protection and Parental Empowerment Act of 1997''.
SEC. 2. PROHIBITION OF CERTAIN ACTIVITIES RELATING TO
PERSONAL INFORMATION ABOUT CHILDREN.
(a) In General.--Chapter 89 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 1822. Sale of personal information about children
``(a) Prohibition.--Whoever, in or affecting interstate or
foreign commerce--
``(1) being a list broker, knowingly--
``(A) sells, purchases, or receives remuneration for
providing personal information about a child knowing that
such information pertains to a child without the consent of a
parent of that child;
``(B) conditions any sale or service to a child or to that
child's parent on the granting of such a consent; or
``(C) fails to comply with the request of a parent--
``(i) to disclose the source of personal information about
that parent's child;
``(ii) to disclose all information that has been sold or
otherwise disclosed by that list broker about that child; or
``(iii) to disclose the identity of all persons to whom the
list broker has sold or otherwise disclosed personal
information about that child;
``(2) being a person who, using any personal information
about a child in the course of commerce that was obtained for
commercial
[[Page S2678]]
purposes, has directly contacted that child or a parent of
that child to offer a commercial product or service to that
child, knowingly fails to comply with the request of a
parent--
``(A) to disclose to the parent the source of personal
information about that parent's child;
``(B) to disclose all information that has been sold or
otherwise disclosed by that person about that child; or
``(C) to disclose the identity of all persons to whom such
a person has sold or otherwise disclosed personal information
about that child;
``(3) knowingly uses prison inmate labor, or any worker who
is registered pursuant to title XVII of the Violent Crime
Control and Law Enforcement Act of 1994, for data processing
of personal information about children; or
``(4) knowingly distributes or receives any personal
information about a child, knowing or having reason to
believe that the information will be used to abuse the child
or physically to harm the child;
shall be fined under this title, imprisoned not more than 1
year, or both.
``(b) Civil Actions.--A child or the parent of that child
with respect to whom a violation of this section occurs may
in a civil action obtain appropriate relief, including
monetary damages of not less than $1,000. The court shall
award a prevailing plaintiff in a civil action under this
subsection a reasonable attorney's fee as a part of the
costs.
``(c) Limitation.--Nothing in this section shall be
construed to affect the sale of lists to--
``(1) any Federal, State, or local government agency or law
enforcement organization;
``(2) the National Center for Missing and Exploited
Children; or
``(3) any institution of higher education (as that term is
defined in section 1201(a) of the Higher Education Act of
1965 (20 U.S.C. 1141(a)).
``(d) Definitions.--In this section--
``(1) the term `child' means a person who has not attained
the age of 16 years;
``(2) the term `parent' includes a legal guardian;
``(3) the term `personal information' means information
(including name, address, telephone number, social security
number, and physical description) about an individual
identified as a child, that would suffice to physically
locate and contact that individual; and
``(4) the term `list broker' means a person who, in the
course of business, provides mailing lists, computerized or
telephone reference services, or the like containing personal
information of children.''.
(b) Clerical Amendment.--The analysis for chapter 89 of
title 18, United States Code, is amended by adding at the end
the following:
``1822. Sale of personal information about children.''.
______
By Mr. HATCH (for himself, Mr. Leahy, Mr. D'amato, Mr. Thompson,
Mr. Abraham, and Mrs. Feinstein):
S. 505. A bill to amend the provisions of title 17, United States
Code, with respect to the duration of copyright, and for other
purposes; to the Committee on the Judiciary.
THE COPYRIGHT TERM EXTENSION ACT OF 1997
______
By Mr. HATCH:
S. 506. A bill to clarify certain copyright provisions, and for other
purposes; to the Committee on the Judiciary.
THE COPYRIGHT CLARIFICATIONS ACT OF 1997
______
By Mr. HATCH:
S. 507. A bill to establish the United States Patent and Trademark
Organization as a Government corporation, to amend the provisions of
title 35, United States Code, relating to procedures for patent
applications, commercial use of patents, reexamination reform, and for
other purposes; to the Committee on the Judiciary.
THE OMNIBUS PATENT ACT OF 1997
Mr. HATCH. Mr. President, intellectual property is vitally important
to sustaining the high level of creativity that America enjoys, which
not only adds to the fund of human knowledge and the progress of
science and technology, but also results in the more tangible benefits
of a strong economy and a favorable balance of trade.
For example, in 1994, copyright-related industries contributed more
than $385 billion to the American economy, or more than 5 percent of
the total gross domestic product. This represents more than $50 billion
in foreign sales, which exceeds every other leading industry sector
except automotive and agriculture in contributions to a favorable trade
balance. From 1977 to 1994, these same industries grew at a rate that
was twice the rate of growth of the national economy, and the rate of
job growth in these industries since 1987 has outpaced that of the
overall economy by more than 100 percent.
Mr. President, this is impressive to say the least. And these figures
don't begin to take into account the contributions of other
intellectual property sectors, including trade in patented technologies
and the economic value of famous marks. Clearly intellectual property
has become one of our Nation's most valuable resources.
As you know, the Judiciary Committee, is charged with monitoring the
effectiveness of our intellectual property laws and with proposing to
the Senate changes that are called for to meet new challenges. Because
of the digital age and the global economy, we've had our hands full.
Let me just go through a few highlights.
In the 104th Congress, we passed the Digital Performance Right in
Sound Recordings Act, which, as its name signifies, adjusts the
existing performance right in the Copyright Act to the demands of the
new digital media. I also introduced, with Senator Leahy, the National
Information Infrastructure (NII) Copyright Protection Act of 1995 to
begin to lay down the rules of the road for the information highway.
The Committee held two hearings on this bill, but not enough time was
left in the 104th to complete our deliberations.
In response to the challenges of the global economy, I introduced the
Copyright Term Extension Act of 1995, along with Senator Thompson and
Senator Feinstein, to give U.S. copyright owners parity of term in the
European Union. The EU has issued a directive to increase the minimum
basic copyright term from life-plus-50 years to life-plus-70. If we do
not follow suit, U.S. works in potentially all EU countries will
receive 20 years less protection than the works of the nationals of the
host country.
The Copyright Term Extension Act was approved by the Judiciary
Committee. I am confident that the bill would have been approved by the
Senate as well with little or no opposition, but unfortunately this
important legislation was held hostage by advocates of music licensing
reform--a totally unrelated issue.
In patents, too, we were very active. The Biotechnology Process
Patents Act was passed. Also, I introduced the Omnibus Patent Act of
1996, which remade the Patent and Trademark Office into a government
corporation. The corporate form would allow the Patent and Trademark
Office to escape the micromanagement that it currently endures from the
Commerce Department, although my bill preserved a policy link with the
Department. The bill also made several very important substantive
changes to the Patent Act.
After some tough negotiations, the Clinton administration ended up
supporting the final version of the bill. The Judiciary Committee had a
hearing on the bill, but Committee action was held hostage to yet
another, totally unrelated issue--judicial nominations.
In addition to improving the efficiency of the patent and trademark
systems, I have worked tirelessly for a number of years to rectify the
injustice of making American inventors bear a heavier burden in deficit
reduction than the ordinary citizen through the withholding of patent
surcharge funds. Again last year I led an ultimately unsuccessful
effort to ease this tax on American ingenuity.
Now no one has demonstrated more zeal for a balanced budget than I
have. As you know, Mr. President, I was on the Senate floor for 3 weeks
trying to get this body to discipline itself through the Balanced
Budget Amendment. But I do not believe that inventors ought to pay a
surcharge on their patent applications only to see that surcharge used
for the general revenue rather than to improve the service they receive
from the PTO. The PTO, after all, is a self-sustaining agency, not
receiving a penny from taxpayer dollars. What they charge, they ought
to keep. I am currently looking at a legislative solution to this
problem.
I have also been looking into the special patent restoration rules
that apply to pharmaceutical products. In 1984, Congress enacted the
Drug Price Competition and Patent Term Restoration Act. Essentially,
this law--commonly known as, I am proud to say, the Hatch-Waxman Act--
allowed generic drug manufacturers to rely on the costly safety and
efficacy data of pioneer
[[Page S2679]]
drug manufacturers and provided for partial patent restoration for
pioneer products to offset a portion of the patent term lost due to FDA
regulatory review.
I know that many are interested in revisiting particular provisions
of the Hatch-Waxman Act now that we have had a decade-plus experience
under the new system. In my view, to be successful, any Hatch-Waxman
reform must be balanced in a manner that the American public, generic
drug firms, and the R&D manufacturers are all able to realize benefits.
Toward this end, my staff and I have been meeting with representatives
of both segments of the pharmaceutical industry to identify areas of
concern.
It is my hope that these discussions will result in proposals to
create new incentives in our intellectual property protection system
and efficiency in our regulatory processes that will increase the long-
term strength of both segments of the industry. Our bottom line goal is
clear: We want a climate that produces both innovative new medicines
and lower-cost generic copies of off-patent products.
I do not guarantee success in this endeavor, I can only commit that I
will listen to all parties involved and see if we can work together to
forge a compromise on Hatch-Waxman reform. I would like to do it if we
can, but I will not support any approach that is not balanced.
Let me just add that my willingness to work with all parties should
not be construed as giving a veto to any particular party. Ultimately,
the test I use will be: Will the American public be better off if a
particular legislative proposal is adopted? If, and only if, this test
can be met, will I ask others in this body to join me in moving
legislation.
Mr. President, let me now turn to trademark legislation, an area in
which we have had a lot of success. Both the Federal Trademark Dilution
Act and the Anticounterfeiting Consumer Protection Act became law in
the 104th Congress. The Federal Trademark Dilution Act was significant
in that it established the first-ever Federal anti-dilution statute to
provide nationwide protection against the whittling away of famous
marks. The Anticounterfeiting Consumer Protection Act brought our
Nation's anticounterfeiting laws up to speed with the quickly evolving
counterfeiting trade by providing stiffer civil and criminal penalties
and increasing the tools available to law enforcement to give them the
upper hand in this fight.
As you can see though, Mr. President, we have a lot of unfinished
business, so today I'm introducing two bills from the last Congress,
the Omnibus Patent Act, and the Copyright Term Extension Act. In
addition, I'm introducing the Copyright Clarification Act, which is a
series of truly technical amendments to the Copyright Act. I am pleased
that Senator Leahy, the distinguished ranking member of the Judiciary
Committee, Senator D'Amato, the distinguished junior Senator from New
York, Senator Abraham, the distinguished junior Senator from Michigan,
and Senator Feinstein, the distinguished senior Senator from
California, are joining me as cosponsors of the Copyright Term
Extension Act of 1997.
Of course, Mr. President, these three bills do not comprise my entire
intellectual property agenda. For example, at my request, the Copyright
Office is taking a look at sui generis protection of databases and at
amendments to the Satellite Home Viewer Act. The Copyright Office may
very well have recommendations for legislation in this area, and I may
introduce such legislation before the end of this session. However,
because the three bills I am introducing today have widespread support
and have been thoroughly discussed in the last Congress, it is
appropriate that they be the first to be considered--old business
before new business.
The Omnibus Patent Act of 1997
Mr. President, the Omnibus Patent Act of 1997 is identical to the
latest version of a bill I introduced last Congress, S. 1961, except
for a few technical changes. Last Congress, S. 1961 gained bipartisan
support in the Senate, its counterpart, H.R. 3460 gained bipartisan
support in the House, and the Clinton administration also supported
this bill. Further, a large, broad coalition of representatives of the
patent industry were strongly supportive of the bill. Additionally, the
National Treasury Employees Union and the AFL-CIO both supported the
provisions that affect their membership. I am fully confident that this
far-reaching, bipartisan support will continue this Congress.
I have no doubt that had a vote been taken on S. 1961, it would have
passed the Senate by an overwhelming vote. Unfortunately, we did not
take up S. 1961 until later in the 104th Congress, and time ran out
before we were able to reach a vote on this important measure.
In order to be certain that such a problem is not repeated, I am
beginning this process early in the 105th Congress. The House is
already acting to move through this important and needed measure
without delay. The House counterpart to my bill, H.R. 400, was
introduced by Congressman Coble, the chairman of the House Judiciary
Subcommittee on Courts and Intellectual Property. Chairman Coble has
held a hearing on H.R. 400, and the bill was subsequently favorably
reported by the subcommittee and the full House Judiciary Committee. I
look forward to the consideration of H.R. 400 by the full House of
Representatives.
During the last Congress this bill was the subject of multiple
hearings in both Houses of Congress. But, this is a new Congress, so I
would like to review, once again, the purposes and goals of the Omnibus
Patent Act of 1997.
The purposes of this bill are: (1) to provide for more efficient
administration of the patent and trademark systems; (2) to discourage
``gaming'' the patent system while ensuring against loss of patent term
and theft of American inventiveness; (3) to protect the rights of prior
users of inventions which are later patented by another; (4) to
increase the reliability of patents by allowing third parties more
meaningful participation in the reexamination process; (5) to make
certain that American provisional applications are given the same
weight as other countries' provisional applications in other countries'
courts; (6) to close a loophole in the plant patent provisions of the
Patent Act; and (7) to allow for the filing of patent and trademark
documents by electronic medium.
The United States Patent and Trademark Office
The United States leads the world in innovation. That leadership is a
direct result of our long-standing commitment to strong patent
protection. The strong protection of patents and trademarks are of
vital importance not only to continued progress in science, but also to
the economy. A vast array of industries depend on patents. From the
chemical, electrical, biotechnological, and manufacturing industries to
computer software and hardware. And trademark is important to all
businesses, period.
I believe that we must not only keep our intellectual property laws
current and strong, but we must do everything we can to make sure that
the offices responsible for the administration of those laws are
properly equipped and able to do their job as efficiently as possible.
Thus, the first provision of this bill makes the Patent and Trademark
Office a government corporation, called the U.S. Patent and Trademark
Organization. Basically, the effect of this provision is to separate
the administration of the patent and trademark systems from
micromanagement by the Department of Commerce, while maintaining a
policy link to that Department. The current PTO has been hampered by
burdensome red tape regarding personnel matters, and the office has
also been held back from reaching its full potential by the repeated
siphoning off of its user fees for other, unrelated expenditures.
The government corporation proposal was the subject of much
discussion last Congress. The Administration, various union
representatives, representatives of the users of the Patent and
Trademark Office, and, of course, the officers of the PTO itself were
all involved in helping me to craft this consensus legislation. I am
confident that the product of these negotiations will enhance the
efficiency of the USPTO while protecting the interests of the Commerce
Department and the employees of the USPTO.
[[Page S2680]]
The structure of the USPTO under my bill vests primary responsibility
for patent and trademark policy in the head of the USPTO, the Director,
and primary responsibility for administration of the patent and
trademark systems in the respective Commissioners of Patents and
Trademarks. The corporate form of the USPTO inoculates the Patent and
Trademark Offices as much as possible from the bureaucratic sclerosis
that infects many federal agencies. Further, by subdividing the
organization into separate patent and trademark offices, the bill will
help raise the prominence of trademarks, an important part of
intellectual property but long seen as the poor step-child of the more
prominent patent field.
The parties interested in patents and trademarks support having close
access to the President by having the chief intellectual policy advisor
directly linked to a cabinet officer. The Secretary of Commerce is a
logical choice. As a result, while this bill would make the day-to-day
functioning of the USPTO independent of the Commerce Department, the
policy portion of the new organization will still be under the policy
direction of the Secretary of Commerce. Further, as a government
corporation, as opposed to a private corporation, the USPTO will remain
subject to congressional oversight.
Mr. President, although the creation of the USPTO may be the most
dramatic part of this bill, it also contains several important changes
to substantive patent law that will, taken as a whole, dramatically
improve our patent system.
With the adoption of the GATT provisions in 1994, the United States
changed the manner in which it calculated the duration of patent terms.
Under the old rule, patents lasted for seventeen years after the grant
of the patent. The new rule under the legislation implementing GATT is
that these patents last for twenty years from the time the patent
application is filed.
In addition to harmonizing American patent terms with those of our
major trading partners, this change solved the problem of ``submarine
patents''. A submarine patent is not a military secret. Rather, it is a
colloquial way to describe a legal but unscrupulous strategy to game
the system and unfairly extend a patent term.
Submarine patenting is when an applicant purposefully delays the
final granting of his patent by filing a series of amendments and
delaying motions. Since, under the old system, the term did not start
until the patent was granted, no patent term was lost. And since patent
applications are secret in the United States until a patent is actually
granted, no one knows that the patent application is pending. Thus,
competitors continued to spend precious research and development
dollars on technology that has already been developed.
When a competitor finally did develop the same technology, the
submarine applicant sprang his trap. He would cease delaying his
application and it would finally be approved. Then, he sued his
competitor for infringing on his patent. Thus, he maximized his own
patent term while tricking his competitors into wasting their money.
Mr. President, submarine patents are terribly inefficient. Because of
them, the availability of new technology is delayed and instead of
moving to new and better research, companies are fooled into throwing
away time and money on technology that already exists.
By adopting GATT, and changing the manner in which we calculate the
patent term to twenty years from filing, we eliminated the submarine
problem. Under the current rule, if an applicant delays his own
application, it simply shortens the time he will have after the actual
granting of the patent. Thus, we have eliminated this unscrupulous,
inefficient practice by removing its benefits.
Unfortunately, the change in term calculation potentially creates a
new problem. Under the current law, if the Patent Office takes a long
time to approve a patent, the delay comes out of the patent term, thus
punishing the patent holder for the PTO's delay. This is not right.
The question we face now, Mr. President, is how to fix this new
problem. Some have suggested combining the old seventeen years from
granting system with the new twenty years from filing and giving the
patent holder whichever is longer. But that approach leads to
uncertainty in the length of a patent term and even worse, resurrects
the submarine patent problem by giving benefits to an applicant who
purposefully delays his own application. I believe that Titles II and
III of the Omnibus Patent Act of 1997 solve the administrative delay
dilemma without recreating old problems.
Early Publication
Title II of the bill provides for the early publication of patent
applications. It would require the Patent Office to publish pending
applications eighteen months after the application was filed. An
exception to this rule is made for applications filed only in the
United States. Those applications will be published 18 months after
filing or 3 months after the office issues its first response on the
application, whichever is later. By publishing early, competitors are
put on notice that someone has already beaten them to the invention,
thus allowing them to stop spending money researching that same art.
The claims that early publication will allow foreign competitors to
steal American technology are simply not true. To start with, between
75 and 80 percent of patent applications filed in the United States are
also filed abroad where 18 month publication is already the rule.
Further, I have provided in my bill for delayed publication of
applications only submitted in the United States to protect them from
competitors. Additionally, once an application is published, Title II
grants the applicant ``provisional rights,'' that is, legal protection
for his invention. Thus, while it is true that someone could break the
law and steal the invention, that is true under current law and will
always be true, and it will subject them to liability for their illegal
actions.
Patent Term Restoration
Title III deals directly with the administrative delay problem by
restoring to the patent holder any part of the term that is lost due to
undue administrative delay. To prevent any possible confusion over what
undue delay means, the bill sets specific deadlines for the Patent
Office to act. The office has fourteen months to issue a first office
action and four months to respond to subsequent applicant filings. Any
delay beyond those deadlines is considered undue delay and will be
restored to the patent term. Thus, Title III solves the administrative
delay problem in a clear, predictable, and objective manner.
Prior Domestic Commercial Use
Title IV deals with people who independently invent new art, and use
it in commercial sale, but who never patent their invention.
Specifically, this title provides rights to a person who has
commercially sold an invention more than 1 year before another person
files an application for a patent on the same subject matter. Anyone in
this situation will be permitted to continue to sell his product
without being required to pay a royalty to the patent holder. This
basic fairness measure is aimed at protecting the innocent inventor who
chooses to use trade secret protection instead of pursuing a patent and
who has expended enough time and money to begin commercial sale of the
invention. It also serves as an incentive for those who wish to seek a
patent to seek it quickly, thus reducing the time during which others
may acquire prior user rights. The incentives of this title will
improve the efficiency of our patent system by protecting ongoing
business concerns and encouraging swift prosecution of patent
applications.
Patent Reexamination Reform
Title V provides for a greater role for third parties in patent re-
examination proceedings. Nothing is more basic to an effective system
of patent protection than a reliable examination process. Without the
high level of faith that the PTO has earned, respect for existing
patents would fall away and innovation would be discouraged for fear of
a lack of protection for new inventions.
In the information age, however, it is increasingly difficult for the
PTO to keep track of all the prior art that exists. The examiners do
the best job they can, but inevitably someone misses something and
grants a patent that should not be granted. This is the problem that
title V addresses.
Title V amends the existing reexamination process to allow third-
parties
[[Page S2681]]
to raise a challenge to an existing patent and to participate in the
reexamination process in a meaningful way. Thus, the expertise of the
patent examiner is supplemented by the knowledge and resources of
third-parties who may have information not known to the patent
examiner. Through this joint effort, we maximize the flow of
information, increase the reliability of patents, and thereby increase
the strength of the American patent system.
There are also safeguards to prevent this process from being abused
by those who merely seek to harass a patent-holder. First, if a third-
party requestor loses an appeal of his reexamination request, he may
not subsequently raise any issue he could have raised during the
examination proceeding in any forum. Second, a party that loses a civil
action where that party failed to show the invalidity of the patent,
the party may not subsequently seek a reexamination of such patent on
any grounds that could have been raised in the civil action. Third, the
burden of reexamination on the patent-holder is minimized by the fact
that a reexamination is not like a court review, and that the patent
holder need not submit any documentation in order to prevail.
Provisional Applications for Patents
Title VI is comprised of miscellaneous provisions. First, it fixes a
matter of a rather technical nature. Some foreign courts have
interpreted American provisional applications in a way that would not
preserve their filing priority. This title amends section 115 of Title
35 of the U.S. Code to clarify that if a provisional application is
converted into a non-provisional application within 12 months of
filing, that it stands as a full patent application, with the date of
filing of the provisional application as the date of priority. If no
request is made within 12 months, the provisional application is
considered abandoned. This clarification will make certain that
American provisional applications are given the same weight as other
countries' provisional applications in other countries' courts.
Plant Patents
Title VI also makes two corrections to the plant patent statute.
First, the ban on tuber propagated plants is removed. This depression-
era ban was included for fear of limiting the food supply. Obviously,
this is no longer a concern. Second, the plant patent statute is
amended to provide protection to parts of plants, as well as the whole
plant. This closes a loophole that foreign growers have used to import
the fruit or flowers of patented plants without paying a royalty
because the entire plant was not being sold.
Electronic Filing
Lastly, this title also allows for the filing of patent and trademark
documents by electronic medium. It is high time that the government
office that is, by definition, always on the cutting edge of
technology, be permitting to enter the age of computers.
Mr. President, this bill is an important, and necessary measure that
enjoys overwhelming support. I am confident that it will be enacted
into law this Congress.
The Copyright Term Extension Act of 1997
Mr. President, the purpose of the Copyright Term Extension Act of
1997 is to ensure adequate copyright protection for American works
abroad by extending the U.S. term of copyright protection for an
additional 20 years. It also includes a provision reversing the Ninth
Circuit decision in La Cienega Music Co. v. ZZ Top that calls into
question the copyrights of thousands of musical works first distributed
on sound recordings.
Except for the La Cienega provision, the substance of this bill is
identical to S. 483, the Copyright Term Extension Act, which was passed
by the Judiciary Committee on May 23, 1996, with overwhelming
bipartisan support. This legislation also has the strong support of the
Administration, as expressed by both the Commissioner of Patents and
Trademarks, Bruce Lehman, and the Register of Copyrights, Marybeth
Peters, in their testimony before the Judiciary Committee in the last
Congress.
Twenty years ago, Mr. President, Congress fundamentally altered the
way in which the U.S. calculates its term of copyright protection by
abandoning a fixed-year term of protection and adopting a basic term of
protection based on the life of the author. In adopting the life-plus-
50 term, Congress cited three primary justifications for the change. 1)
the need to conform the U.S. copyright term with the prevailing
worldwide standard; 2) the insufficiency of the U.S. copyright term to
provide a fair economic return for authors and their dependents; and,
3) the failure of the U.S. copyright term to keep pace with the
substantially increased commercial life of copyrighted works resulting
from the rapid growth in communications media.
Developments over the past 20 years have led to a widespread
reconsideration of the adequacy of the life-plus-50-year term based on
these same reasons. Among the main developments is the effect of
demographic trends, such as increasing longevity and the trend toward
rearing children later in life, on the effectiveness of the life-plus-
50 term to provide adequate protection for American creators and their
heirs. In addition, unprecedented growth in technology over the last 20
years, including the advent of digital media and the development of the
National Information Infrastructure and the Internet, have dramatically
enhanced the marketable lives of creative works. Most importantly,
though, is the growing international movement toward the adoption the
longer term of life-plus-70.
Thirty-five years ago, the Permanent Committee of the Berne Union
began to reexamine the sufficiency of the life-plus-50-year term. Since
then, a growing consensus of the inadequacy of the life-plus-50 term to
protect creators in an increasingly competitive global marketplace has
led to actions by several nations to increase the duration of
copyright. Of particular importance is the 1993 directive issued by the
European Union, which requires its member countries to implement a term
of protection equal to the life of the author plus 70 years by July 1,
1995.
According to the Copyright Office, Belgium, Denmark, Finland,
Germany, Greece, Ireland, Spain, and Sweden have all notified their
laws to the European Commission and the Commission has found them to be
in compliance with the EU Directive. Luxembourg, The Netherlands,
Portugal, the United Kingdom, and Austria have each notified their
implementing laws to the Commission and are awaiting certification.
Other countries are currently in the process of bringing their laws
into compliance. And, as the Register of Copyrights has stated, those
countries that are seeking to join the European Union, including
Poland, Hungary, Turkey, the Czech Republic, and Bulgaria, are likely
to amend their copyright laws to conform with the life-plus-70
standard.
The reason this is of such importance to the United States is that
the EU Directive also mandates the application of what is referred to
as the rule of the shorter term. This rule may also be applied by
adherents to the Berne Convention and the Universal Copyright
Convention. In short, this rule permits those countries with longer
copyright terms to limit protection of foreign works to the shorter
term of protection granted in the country of origin. Thus, in those
countries that adopt the longer term of life-plus-70, American works
will forfeit 20 years of available protection and be protected instead
for only the duration of the life-plus-50 term afforded under U.S. law.
Mr. President, I've already cited some statistics about the
importance of copyright to our national economy. The fact is that
America exports more copyrighted intellectual property than any country
in the world, a huge percentage of it to nations of the European Union.
In fact, intellectual property is our third largest export. And,
according to 1994 estimates, copyright industries account for some 5.7
percent of the total gross domestic product. Furthermore, copyright
industries are creating American jobs at twice the rate of other
industries, with the number of U.S. workers employed by core copyright
industries more than doubling between 1977 and 1994. Today, these
industries contribute more to the economy and employ more workers than
any single manufacturing sector, accounting for nearly 5 percent of the
total U.S. workforce. In fact, in 1994, the core copyright industries
employed more workers than the four leading noncopyright manufacturing
sectors combined.
Clearly, Mr. President, America stands to lose a significant part of
its
[[Page S2682]]
international trading advantage if our copyright laws do not keep pace
with emerging international standards. Given the mandated application
of the rule of the shorter term under the EU Directive, American works
will fall into the public domain 20 years before those of our European
trading partners, undercutting our international trading position and
depriving copyright owners of two decades of income they might
otherwise have. Similar consequences will follow in those nations
outside the EU that choose to exercise the rule of the shorter term
under the Berne Convention and the Universal Copyright Convention.
Mr. President, adoption of the Copyright Term Extension Act will
ensure fair compensation for the American creators whose efforts fuel
the intellectual property sector of our economy by allowing American
copyright owners to benefit to the fullest extent from foreign uses and
will, at the same time, ensure that our trading partners do not get a
free ride from their use of our intellectual property. And, as stated
very simply by the Register of Copyrights in her testimony before the
Judiciary Committee in the last Congress: ``[i]t does appear that at
some point in the future the standard will be life plus 70. The
question is at what point does the United States move to this term * *
*. As a leading creator and exporter of copyrighted works, the United
States should not wait until it is forced to increase the term, rather
it should set an example for other countries.''
Mr. President, this bill is of crucial importance to our Nation's
copyright owners and to our economy. It is also a balanced approach. It
contains a provision, allowing the actual creators of copyrighted works
in certain circumstances to bargain for the extra 20 years, except in
the case of works made for hire. The libraries and archives, too, will
be pleased to see that the bill provides them with additional latitude
to reproduce and distribute material during the extension term, and it
does not extend the copyright term for certain works that were
unpublished at the time of the effective date of the 1976 act. This
latter provision means that libraries and archives will be able to go
forward with their plans to publish those unpublished works in 2003,
the year after the current guaranteed term for unpublished works
expires.
La Cienega v. ZZ Top
Mr. President, the Copyright Term Extension Act of 1997 also includes
a provision to overturn the decision in La Cienega Music Co. v. ZZ Top,
53 F.3d 950 (9th Cir. 1995), cert denied, 116 S. Ct. 331 (1995). In
general, La Cienega held that distributing a sound recording to the
public--for example by sale--is a ``publication'' of the music recorded
on it under the 1909 Copyright Act. Under the 1909 act, publication
without copyright notice caused loss of copyright protection. Almost
all music that was first published on recordings did not contain
copyright notice, because publishers believed that it was not
technically a publication. The Copyright Office also considered these
musical compositions to be unpublished. The effect of La Cienega,
however, is that virtually all music before 1978 that was first
distributed to the public on recordings has no copyright protection--at
least in the 9th Circuit.
By contrast, the Second Circuit in Rosette v. Rainbo Record
Manufacturing Corp., 546 F.2d 461 (2d Cir. 1975), aff'd per curiam, 546
F.2d 461 (2d Cir. 1976) has held the opposite--that public distribution
of recordings was not a publication of the music contained on them. As
I have noted, Rosette comports with the nearly universal understanding
of the music and sound recording industries and of the Copyright
Office.
Since the Supreme Court has denied cert in La Cienega, whether one
has copyright in thousands of musical compositions depends on whether
the case is brought in the Second or Ninth Circuits. This situation is
intolerable. Overturning the La Cienega decision will restore national
uniformity on this important issue by confirming the wisdom of the
custom and usage of the affected industries and of the Copyright Office
for nearly 100 years. My bill, however, also contains a provision to
ensure that Congress' affirmation of this view will not retroactively
upset the disposition of previously adjudicated or pending cases.
The Copyright Clarification Act of 1997
Finally, Mr. President, I am introducing the Copyright Clarification
Act of 1997 to make a series of truly technical amendments to the
Copyright Act. The need for these technical corrections was brought to
my attention in the last Congress by the Register of Copyrights, Ms.
Marybeth Peters. This bill was passed by the House of Representatives
in similar form in the 104th Congress. Unfortunately time ran short on
our efforts to enact the same bill in the Senate. The version I am
introducing today is identical to H.R. 672, which passed the House
under suspension of the rules just yesterday. I hope the Senate will
follow suit and act expeditiously to make these important technical
amendments.
Conclusion
Mr. President, each of the three bills I am introducing today is
tremendously important. For the information of my colleagues I am
submitting a brief summary of the Omnibus Patent Act of 1997, a
section-by-section analysis of the Copyright Term Extension Act of
1997, and a summary of provisions of the Copyright Clarification Act of
1997. I ask unanimous consent that they be printed in the Record, along
with the text of the Copyright Term Extension Act of 1997 and the text
of the Copyright Clarification Act of 1997.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 505
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 ``Copyright Term Extension Act
of 1997''.
SEC. 2. DURATION OF COPYRIGHT PROVISIONS.
(a) Preemption With Respect to Other Laws.--Section 301(c)
of title 17, United States Code, is amended by striking
``February 15, 2047'' each place it appears and inserting
``February 15, 2067''.
(b) Duration of Copyright: Works Created on or After
January 1, 1978.--Section 302 of title 17, United States
Code, is amended--
(1) in subsection (a) by striking ``fifty'' and inserting
``70'';
(2) in subsection (b) by striking ``fifty'' and inserting
``70'';
(3) in subsection (c) in the first sentence--
(A) by striking ``seventy-five'' and inserting ``95''; and
(B) by striking ``one hundred'' and inserting ``120''; and
(4) in subsection (e) in the first sentence--
(A) by striking ``seventy-five'' and inserting ``95'';
(B) by striking ``one hundred'' and inserting ``120''; and
(C) by striking ``fifty'' each place it appears and
inserting ``70''.
(c) Duration of Copyright: Works Created but Not Published
or Copyrighted Before January 1, 1978.--Section 303 of title
17, United States Code, is amended in the second sentence by
striking ``December 31, 2027'' and inserting ``December 31,
2047''.
(d) Duration of Copyright: Subsisting Copyrights.--
(1) In general.--Section 304 of title 17, United States
Code, is amended--
(A) in subsection (a)--
(i) in paragraph (1)--
(I) in subparagraph (B) by striking ``47'' and inserting
``67''; and
(II) in subparagraph (C) by striking ``47'' and inserting
``67'';
(ii) in paragraph (2)--
(I) in subparagraph (A) by striking ``47'' and inserting
``67''; and
(II) in subparagraph (B) by striking ``47'' and inserting
``67''; and
(iii) in paragraph (3)--
(I) in subparagraph (A)(i) by striking ``47'' and inserting
``67''; and
(II) in subparagraph (B) by striking ``47'' and inserting
``67'';
(B) by amending subsection (b) to read as follows:
``(b) Copyrights in Their Renewal Term at the Time of the
Effective Date of the Copyright Term Extension Act of 1997.--
Any copyright still in its renewal term at the time that the
Copyright Term Extension Act of 1997 becomes effective shall
have a copyright term of 95 years from the date copyright was
originally secured.'';
(C) in subsection (c)(4)(A) in the first sentence by
inserting ``or, in the case of a termination under subsection
(d), within the five-year period specified by subsection
(d)(2),'' after ``specified by clause (3) of this
subsection,''; and
(D) by adding at the end the following new subsection:
``(d) Termination Rights Provided in Subsection (c) Which
Have Expired on or Before the Effective Date of the Copyright
Term Extension Act of 1997.--In the case of any copyright
other than a work made for hire, subsisting in its renewal
term on the effective date of the Copyright Term Extension
Act of 1997 for which the termination right provided in
subsection (c) has expired by such date, where the author or
owner of
[[Page S2683]]
the termination right has not previously exercised such
termination right, the exclusive or nonexclusive grant of a
transfer or license of the renewal copyright or any right
under it, executed before January 1, 1978, by any of the
persons designated in subsection (a)(1)(C) of this section,
other than by will, is subject to termination under the
following conditions:
``(1) The conditions specified in subsection (c) (1), (2),
(4), (5), and (6) of this section apply to terminations of
the last 20 years of copyright term as provided by the
amendments made by the Copyright Term Extension Act of 1997.
``(2) Termination of the grant may be effected at any time
during a period of 5 years beginning at the end of 75 years
from the date copyright was originally secured.''.
(2) Copyright renewal act of 1992.--Section 102 of the
Copyright Renewal Act of 1992 (Public Law 102-307; 106 Stat.
266; 17 U.S.C. 304 note) is amended--
(A) in subsection (c)--
(i) by striking ``47'' and inserting ``67'';
(ii) by striking ``(as amended by subsection (a) of this
section)''; and
(iii) by striking ``effective date of this section'' each
place it appears and inserting ``effective date of the
Copyright Term Extension Act of 1997''; and
(B) in subsection (g)(2) in the second sentence by
inserting before the period the following: ``, except each
reference to forty-seven years in such provisions shall be
deemed to be 67 years''.
SEC. 3. REPRODUCTION BY LIBRARIES AND ARCHIVES.
Section 108 of title 17, United States Code, is amended--
(1) by redesignating subsection (h) as subsection (i); and
(2) by inserting after subsection (g) the following:
``(h)(1) For purposes of this section, during the last 20
years of any term of copyright of a published work, a library
or archives, including a nonprofit educational institution
that functions as such, may reproduce, distribute, display,
or perform in facsimile or digital form a copy or phonorecord
of such work, or portions thereof, for purposes of
preservation, scholarship, or research, if such library or
archives has first determined, on the basis of a reasonable
investigation, that none of the conditions set forth in
subparagraphs (A), (B), and (C) of paragraph (2) apply.
``(2) No reproduction, distribution, display, or
performance is authorized under this subsection if--
``(A) the work is subject to normal commercial
exploitation;
``(B) a copy or phonorecord of the work can be obtained at
a reasonable price; or
``(C) the copyright owner or its agent provides notice
pursuant to regulations promulgated by the Register of
Copyrights that either of the conditions set forth in
subparagraphs (A) and (B) applies.
``(3) The exemption provided in this subsection does not
apply to any subsequent uses by users other than such library
or archives.''.
SEC. 4. DISTRIBUTION OF PHONORECORDS.
Section 303 of title 17, United States Code, is amended--
(1) in the first sentence by striking ``Copyright'' and
inserting ``(a) Copyright''; and
(2) by adding at the end the following:
``(b) The distribution before January 1, 1978, of
phonorecords shall not constitute publication of the musical
work embodied therein for purposes of the Copyright Act of
1909.''.
SEC. 5. EFFECTIVE DATES.
(a) In General.--Except as provided in subsection (b), this
Act and the amendments made by this Act shall take effect on
the date of the enactment of this Act.
(b) Distribution of Phonorecords.--The amendment made by
section 4 shall not be a basis to reopen an action nor to
commence a subsequent action for copyright infringement if an
action in which such claim was raised was dismissed by final
judgment before the date of enactment of this Act. The
amendment made by section 4 shall not apply to any action
pending on the date of enactment in any court in which a
party, prior to the date of enactment, sought dismissal of,
judgment on, or declaratory relief regarding a claim of
infringement by arguing that the adverse party had no valid
copyright in a musical work by virtue of the distribution of
phonorecords embodying it.
____
The Copyright Term Extension Act of 1997 (S. 505)--Section-by-Section
Analysis
section 1. short title
The proposed legislation is entitled the Copyright Term
Extension Act of 1997.
section 2. duration of copyright provisions
Section 2(a)--Preemption with Respect to Other Laws
This subsection amends Sec. 301(c) of the Copyright Act to
extend for an additional 20 years the application of common
law and state statutory protection for sound recordings fixed
before February 15, 1972. Under Sec. 301, the federal law
generally preempts all state and common law protection of
copyright with several exceptions, including one for sound
recordings fixed before February 15, 1972 (the effective date
of the statute extending federal copyright protection to
sound recordings). Because federal copyright protection
applies only to sound recordings fixed on or after that date,
federal preemption of state statutory and common law
protection of sound recordings fixed before February 15,
1972, would result in all of these works falling into the
public domain. The Sec. 301 exception was enacted to ensure a
75-year minimum term of copyright protection for these works.
By delaying the date of federal Copyright Act preemption of
state statutory and common law protection of pre-February 15,
1972, sound recordings until February 15, 2067, this
subsection extends the minimum term of protection for these
works by 20 years.
Section 2(b)--Duration of Copyright: Works Created on or After January
1, 1978
This subsection amends Sec. 302 of the Copyright Act to
extend the U.S. term of copyright protection by 20 years for
all works created on or after January 1, 1978. For works in
general, which currently enjoy protection for the life of the
author plus 50 additional years under Sec. 301(a), this
section creates a term equal to the life of the author plus
70 years. Likewise, for joint works under Sec. 302(b), this
section extends the current term of protection to the life of
the last surviving author plus 70 years. For anonymous works,
pseudonymous works, and works made for hire, which are
protected the shorter of 75 years from publication or 100
years from creation under Sec. 302(c), this subsection
extends the term to the shorter of 95 years from publication
or 120 years from the date the work is created.
This subsection also amends Sec. 302(e) of the Copyright
Act to extend by 20 years the various dates relating to the
presumptive death of the author as a complete defense against
copyright infringement. Whereas current copyright protection
is generally tied to the life of the author, it is sometimes
not possible to ascertain whether the author of a work is
still living, or even to identify the year of death if the
author is deceased. Sec. 302(e) provides a complete defense
against copyright infringement when the work is used more
than 75 years after publication or 100 years after creation,
whichever is less, provided the user obtains a certificate
from the Copyright Office indicating that it has no record to
indicate whether that person is living or died less than 50
years before. This subsection would extend protection of such
works for an additional 20 years--95 years from publication
and 120 years from creation--as well as base the presumptive
death of the author on certification by the Copyright Office
that is has no record to indicate whether the person is
living or died less than 70 years before, which is 20 years
longer than the 50 years currently provided for in
Sec. 302(e).
Section 2(c)--Duration of Copyright: Works Created But Not Published or
Copyrighted Before January 1, 1978
This subsection amends Sec. 303 of the Copyright Act to
extend the minimum term of copyright protection by 20 years
for works created but not copyrighted before January 1, 1978,
provided they are published prior to December 31, 2002. Prior
to 1978, unpublished works enjoyed perpetual copyright
protection. Beginning in 1978, however, copyright protection
for unpublished works was limited to the life of the author
plus 50 years, or 100 years from creation for anonymous
works, pseudonymous works, and works made for hire. Under
Sec. 303, however, works created but not published before
January 1, 1978, are guaranteed protection until at least
December 31, 2002. Works subsequently published before that
date are guaranteed further protection until December 31,
2027. This subsection provides an additional 20 years of
protection for these subsequently published works by ensuring
that copyright protection will not expire before December 31,
1047.
Section 2(d)(1)(A)--Duration of Copyright: Copyrights in Their First
Term on January 1, 1978
This subsection amends Sec. 304(a) of the Copyright Act to
extend the term of protection for works in their first term
on January 1, 1978, by extending the renewal term from 47
years to 67 years. The effect of this amendment is to provide
a composite term of protection of 95 years from the date of
publication.
Section 2(d)(1)(B)--Duration of Copyright: Copyright in Their Renewal
Term or Registered for Renewal Before January 1, 1978
This subsection amends Sec. 304(b) of the Copyright Act to
extend the copyright term of pre-1978 works currently in
their renewal term from 75 years to 95 years. As amended,
this section clarifies that the extension applies only to
works that are currently under copyright protection and is
not intended to restore copyright protection to works already
in the public domain.
Section 2(d)(1)(C) & (D)--Termination of Transfers and Licenses
These subsections amend Sec. 340(c) of the Copyright Act
and create a new subsection (d) to provide a revived power of
termination for individual authors whose right to terminate
prior transfers and licenses of copyright under Sec. 304(c)
has expired, provided the author has not previously exercised
that right. Under Sec. 304(c), an author may terminate a
prior transfer or license of copyright for any work, other
than a work made for hire, by serving advance written notice
upon the grantee or the grantee's successor at least 2, but
not more than 10, years prior to the effective date of the
termination. Such termination may be effected at any time
within 5 years beginning at the end of 56 years from the date
of publication. The purpose of this termination provision
was to afford the individual creator the opportunity to
bargain for the benefit of the 19-year extension provided
by the 1976 Copyright Act.
[[Page S2684]]
For most individual creators, the existing power of
termination under Sec. 304(c) will allow them to terminate
prior transfers and to bargain for the benefit of both the
extension under the 1976 Copyright Act and the extension
under the Copyright Term Extension Act of 1997. For a much
smaller group of individuals, the five-year window in which
to terminate prior transfers under Sec. 304(c) has already
expired. Thus, these creators are denied the opportunity to
reap the benefits of the extended term, while the current
copyright owners are given a 20-year windfall. This
subsection amends the existing termination provisions under
Sec. 304(c) of Copyright Act to create a revived window,
beginning at the end of the current 75-year copyright term,
in which individual creators or their heirs who did not
terminate previous transfers or grants prior to the
expiration of their right of termination under Sec. 304(c)
may bargain for the benefit of the extended term.
Section 2(d)(2)--Copyright Renewal Act revisions
This subsection makes corresponding amendments to Sec. 102
of the Copyright Renewal Act of 1992 (P.L. 102-307, 106 Stat.
266) to reflect the changes made by the Copyright Term
Extension Act.
Section 3--Clarification of Library Exemption of Exclusive Rights
This subsection amends Sec. 108 of the Copyright Act,
governing limited exemptions from copyright infringement for
libraries and archives, including nonprofit educational
institutions that function as such, by redesignating
subsection (h) as subsection (i) and inserting a new
subsection (h). The new subsection (h)(1) will allow
libraries, archives, and nonprofit educational institutions
to reproduce and distribute copies of works for preservation,
scholarship, or research during the last 20 years of
copyright, if the works are not being commercially exploited
and cannot be obtained at a reasonable price. The new
subsection (h)(2) provides that the limited exemption does
not apply where the copyright owner provides notice to the
Copyright Office that the conditions regarding commercial
exploitation and reasonable availability have not been met.
The new subsection (h)(3) provides that the exemption does
not apply to subsequent users other than the libraries or
archives.
section 4. distribution of phonorecords
Section 4 affirms the longstanding view that the public
distribution of phonorecords prior to 1978, did not
constitute publication of the musical composition embodied
therein under the 1909 Copyright Act. This section overturns
the decision in LaCienega Music Co. v. Z.Z. Top., 53 F.3d 950
(9th Cir. 1995), cert. denied, 116 S.Ct. 331 (1995), which
held that the sale of records constituted ``publication'' of
the musical composition under the 1909 Act, and implicitly
ruled that unless such a copy contained a copyright notice,
the composition entered the public domain immediately upon
the first sale. The result of such a view is that potentially
thousands of musical compositions will be stripped of their
presumed copyright protection as unpublished works under the
1909 Act. Section 13 adopts the view of the Second Circuit
that the pre-1978 sale or distribution of recordings to the
public did not constitute a publication for copyright
purposes. Rosette v. Rainbo Record Mfg. Corp., 354 F.Supp.
1183 (S.D.N.Y.), aff'd per curiam, 546 F.2d 461 (2d. Cir.
1976). This same view is adopted by the Copyright Office,
which for years has refused to accept registrations for such
phonorecords as published works.
section 5. effective date
Subsection (a) provides that this Act and the amendments
made thereby shall be effective on the date of enactment.
Subsection (b) provides, however, that the overturning of the
LaCienega decision will not retroactively upset the
disposition of previously adjudicated or pending cases.
Mr. LEAHY. Mr. President, I am glad to be working with Senator Hatch
as original cosponsors of this, the Copyright Term Extension Act of
1997. We worked together on this matter last Congress to craft a bill
that was reported by the Judiciary Committee to the Senate by a vote of
15 to 3.
I raised a number of questions and concerns during our Judiciary
Committee hearing on this issue back in September 1995. I spoke of a
letter I had received from Prof. Karen Burke Lefevre of Vermont and the
Rensselaer Polytechnic Institute. She expressed reservations, as a
researcher and author, that Congress not extend the term for
unpublished works beyond the term set by the 1976 Act. This category of
materials is set to have its copyrights expire in 2002. They include
anonymous works and unpublished works of interest to scholars. In
section 2(c) of the bill we introduce today, we accommodate these
interests and preserve the public availability of these materials in
2003, if they remain unpublished on December 31, 2002.
I want to thank Marybeth Peters, our Register of Copyrights, for
supporting this improvement in the bill, and Senator Hatch for working
with me on it.
I am concerned about libraries, educational institutions and
nonprofits being able to access materials and provide access in turn
for research, archival, preservation and other purposes. We have also
made progress in this area as reflected in section 3 of the bill.
Copyright industry and library representatives have narrowed their
differences. I ask for their continued help in crafting the best
balance possible to create public access for noncommercial purposes
during the extension period without undercutting the value of
copyrights.
At our hearing I also raised the notion of a new right of termination
for works where the period of termination in current law has already
passed and the 20-year extension inures to the benefit of a copyright
transferee. This bill creates such a right of termination in section
2(d) of the bill.
At our hearing, I was still considering whether there was sufficient
justification for extending the copyright term for an additional 20
years. At that time we were considering the European Union Directive to
its member countries to provide copyright protection for a term of life
plus 70 years by July 1, 1995. While many of our trading partners had
not extended their terms by July 1995, they have acted to do so in the
past 2 years.
I received a letter from Bruce A. Lehman, the Assistant Secretary of
Commerce and Commissioner of Patents and Trademarks, in which he
reported that Austria, Germany, Greece, France, Denmark, Belgium,
Ireland, Spain, Italy and the United Kingdom had complied with the EU
Directive on Copyright Term. Sweden, Portugal, Finland and the
Netherlands were reported to have legislation to do so pending, as
well. With so many of our trading partners moving to the longer term
but preparing to recognize American works for only the shorter term, I
believe it is time for us to act.
This bill also now includes a revised version of legislation that
passed the House last Congress but was stalled in the Senate to clarify
the Copyright Act of 1909 with regard to whether the distribution of
phonorecords may be held to be a divesting publication of the copyright
in the musical composition embodied therein. The revision is intended
to clarify the law while not affecting cases in which parties have
litigated or are litigating this issue.
Finally, I feel strongly that the extension of the copyright term
should include public benefit, such as the creation of new works or
benefit to public arts. Senator Dodd, Senator Kennedy, and I have been
concerned about finding an appropriate way to benefit the public from
this extension and continue to do so. Along these lines, the Copyright
Office is examining how the extension in this bill will benefit
copyright industries, authors and the public.
Given the changes made to meet the concerns that I raised with an
earlier bill and in light of the international developments that are
disadvantaging American copyrighted works, I cosponsored the Committee
substitute at our Judiciary Committee executive business session last
Congress and pressed for its consideration by the Senate.
Unfortunately, this bill was not considered by the Senate during the
104th Congress.
Accordingly, I join with Senator Hatch to reintroduce this copyright
term extension legislation this Congress and look forward to working
with him to see to its enactment, without further delay.
Mrs. FEINSTEIN. Mr. President, I want to express my support for the
Copyright Term Extension Act of 1997. I believe that extending the
basic term of copyright protection by 20 years is a step in the right
direction.
Perhaps the most compelling reason for this legislation is the need
for greater international reciprocity in honoring copyright terms. The
European Union has formally adopted a life plus 70 copyright term, and
countries currently awaiting admission to the Union will adopt this
standard in the future. Several countries outside of the European Union
also have turned to the life plus 70 term, and many expect it to become
the international standard.
By extending to life plus 70 years, Congress will help ensure that
American creators receive comparable protection in other countries. If
we do not act, other nations will not be required
[[Page S2685]]
to provide American authors and artists with any more protection than
we offer them at home.
And, before the United States is the world's leader in the production
of intellectual property, and because the State of California is home
to many of the leading copyright industries, this issue is of great
importance to me. We could be the net losers if we do not move toward
greater harmonization.
Intellectual property--the collective creative output of America's
makers of movies, music, art, and other works--is an enormous asset to
the Nation's economy and balance of trade.
The International Intellectual Property Alliance estimates that
copyright-related industries contributed more than $385 billion to the
U.S. economy in 1994, with more than $50 billion in foreign sales.
Many other countries have preferred to appropriate and re-sell
American films, music, and computer programs--some of the great exports
of my State of California--rather than license American works.
The United States suffers greatly from illegal duplication of our
work. Why, then, should we sit back and allow European companies to
legally profit from the use of our works, without paying us in return?
As Prof. Arthur Miller of Harvard Law School aptly, albeit bluntly,
put it: ``Unless Congress matches the copyright extension adopted by
the European Union, we will lost 20 years of valuable protection
against rip-off artists.'' Since America is the world's principal
exporter of popular culture, extension of the basic copyright term is
an important step in the right direction.
Reciprocity in copyright protection becomes even more necessary in
today's global information society, where computer networks span the
continents, and intellectual property is shuttled around the world in
seconds.
The world has changed dramatically since 1976, when Congress
established the present copyright terms. Many copyrighted works have a
much longer commercial life than they used to have.
Videocassettes, cable television, and new satellite delivery systems
have extended the commercial life of movies and television series. New
technologies not only have extended but also have expanded the market
for creative content. Cable television, which promises hundreds of
different channels, has vastly expanded this market. Networked
computers add to the demand for content. Interactive television
promises to do the same.
The Copyright Term Extension Act will go far to address the global
developments I have mentioned.
After introduction, I recommend that my colleagues and I further
develop the language of the act to ensure that all contributors to the
creative process receive benefits from the extended copyright term.
I urge my colleagues to support this bill.
S. 506
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 ``Copyright Clarifications Act
of 1997''.
SEC. 2. SATELLITE HOME VIEWER ACT OF 1994.
The Satellite Home Viewer Act of 1994 (Public Law 103-369)
is amended as follows:
(1) Section 2(3)(A) is amended to read as follows:
``(A) in clause (i) by striking `12 cents' and inserting
`17.5 cents per subscriber in the case of superstations that
as retransmitted by the satellite carrier include any program
which, if delivered by any cable system in the United States,
would be subject to the syndicated exclusivity rules of the
Federal Communications Commission, and 14 cents per
subscriber in the case of superstations that are syndex-proof
as defined in section 258.2 of title 37, Code of Federal
Regulations'; and''.
(2) Section 2(4) is amended to read as follows:
``(4) Subsection (c) is amended--
``(A) in paragraph (1)--
``(i) by striking `until December 31, 1992,';
``(ii) by striking `(2), (3) or (4)' and inserting `(2) or
(3)'; and
``(iii) by striking the second sentence;
``(B) in paragraph (2)--
``(i) in subparagraph (A) by striking `July 1, 1991' and
inserting `July 1, 1996'; and
``(ii) in subparagraph (D) by striking `December 31, 1994'
and inserting `December 31, 1999, or in accordance with the
terms of the agreement, whichever is later'; and
``(C) in paragraph (3)--
``(i) in subparagraph (A) by striking `December 31, 1991'
and inserting `January 1, 1997';
``(ii) by amending subparagraph (B) to read as follows:
`(B) Establishment of royalty fees.--In determining royalty
fees under this paragraph, the copyright arbitration royalty
panel appointed under chapter 8 shall establish fees for the
retransmission of network stations and superstations that
most clearly represent the fair market value of secondary
transmissions. In determining the fair market value, the
panel shall base its decision on economic, competitive, and
programming information presented by the parties, including--
`(i) the competitive environment in which such programming
is distributed, the cost of similar signals in similar
private and compulsory license marketplaces, and any special
features and conditions of the retransmission marketplace;
`(ii) the economic impact of such fees on copyright owners
and satellite carriers; and
`(iii) the impact on the continued availability of
secondary transmissions to the public.'; and
``(iii) in subparagraph (C), by inserting `or July 1, 1997,
whichever is later' after `section 802(g)'.''.
(3) Section 2(5)(A) is amended to read as follows:
``(A) in paragraph (5)(C) by striking `the date of the
enactment of the Satellite Home Viewer Act of 1988' and
inserting `November 16, 1988'; and''.
SEC. 3. COPYRIGHT IN RESTORED WORKS.
Section 104A of title 17, United States Code, is amended as
follows:
(1) Subsection (d)(3)(A) is amended to read as follows:
``(3) Existing derivative works.--(A) In the case of a
derivative work that is based upon a restored work and is
created--
``(i) before the date of the enactment of the Uruguay Round
Agreements Act, if the source country of the restored work is
an eligible country on such date, or
``(ii) before the date on which the source country of the
restored work becomes an eligible country, if that country is
not an eligible country on such date of enactment,
a reliance party may continue to exploit that derivative work
for the duration of the restored copyright if the reliance
party pays to the owner of the restored copyright reasonable
compensation for conduct which would be subject to a remedy
for infringement but for the provisions of this paragraph.''.
(2) Subsection (e)(1)(B)(ii) is amended by striking the
last sentence.
(3) Subsection (h)(2) is amended to read as follows:
``(2) The `date of restoration' of a restored copyright
is--
``(A) January 1, 1996, if the source country of the
restored work is a nation adhering to the Berne Convention or
a WTO member country on such date; or
``(B) the date of adherence or proclamation, in the case of
any other source country of the restored work.''.
(4) Subsection (h)(3) is amended to read as follows:
``(3) The term `eligible country' means a nation, other
than the United States, that--
``(A) becomes a WTO member country after the date of the
enactment of the Uruguay Round Agreements Act;
``(B) on such date of enactment is, or after such date of
enactment becomes, a member of the Berne Convention; or
``(C) after such date of enactment becomes subject to a
proclamation under subsection (g).
For purposes of this paragraph, a nation that is a member of
the Berne Convention on the date of the enactment of the
Uruguay Round Agreements Act shall be construed to become an
eligible country on such date of enactment.''.
SEC. 4. LICENSES FOR NONEXEMPT SUBSCRIPTION TRANSMISSIONS.
Section 114(f) of title 17, United States Code, is
amended--
(1) in paragraph (1), by inserting ``, or, if a copyright
arbitration royalty panel is convened, ending 30 days after
the Librarian issues and publishes in the Federal Register an
order adopting the determination of the copyright arbitration
royalty panel or an order setting the terms and rates (if the
Librarian rejects the panel's determination)'' after
``December 31, 2000''; and
(2) in paragraph (2), by striking ``and publish in the
Federal Register''.
SEC. 5. ROYALTY PAYABLE UNDER COMPULSORY LICENSE.
Section 115(c)(3)(D) of title 17, United States Code, is
amended by striking ``and publish in the Federal Register''.
SEC. 6. NEGOTIATED LICENSE FOR JUKEBOXES.
Section 116 of title 17, United States Code, is amended--
(1) by amending subsection (b)(2) to read as follows:
``(2) Arbitration.--Parties not subject to such a
negotiation may determine, by arbitration in accordance with
the provisions of chapter 8, the terms and rates and the
division of fees described in paragraph (1).''; and
(2) by adding at the end the following new subsection:
``(d) Definitions.--As used in this section, the following
terms mean the following:
``(1) A `coin-operated phonorecord player' is a machine or
device that--
``(A) is employed solely for the performance of nondramatic
musical works by means of phonorecords upon being activated
[[Page S2686]]
by the insertion of coins, currency, tokens, or other
monetary units or their equivalent;
``(B) is located in an establishment making no direct or
indirect charge for admission;
``(C) is accompanied by a list which is comprised of the
titles of all the musical works available for performance on
it, and is affixed to the phonorecord player or posted in the
establishment in a prominent position where it can be readily
examined by the public; and
``(D) affords a choice of works available for performance
and permits the choice to be made by the patrons of the
establishment in which it is located.
``(2) An `operator' is any person who, alone or jointly
with others--
``(A) owns a coin-operated phonorecord player;
``(B) has the power to make a coin-operated phonorecord
player available for placement in an establishment for
purposes of public performance; or
``(C) has the power to exercise primary control over the
selection of the musical works made available for public
performance on a coin-operated phonorecord player.''.
SEC. 7. REGISTRATION AND INFRINGEMENT ACTIONS.
Section 411(b)(1) of title 17, United States Code, is
amended to read as follows:
``(1) serves notice upon the infringer, not less than 48
hours before such fixation, identifying the work and the
specific time and source of its first transmission, and
declaring an intention to secure copyright in the work;
and''.
SEC. 8. COPYRIGHT OFFICE FEES.
(a) Fee Increases.--Section 708(b) of title 17, United
States Code, is amended to read as follows:
``(b) In calendar year 1997 and in any subsequent calendar
year, the Register of Copyrights, by regulation, may increase
the fees specified in subsection (a) in the following manner:
``(1) The Register shall conduct a study of the costs
incurred by the Copyright Office for the registration of
claims, the recordation of documents, and the provision of
services. The study shall also consider the timing of any
increase in fees and the authority to use such fees
consistent with the budget.
``(2) The Register may, on the basis of the study under
paragraph (1), and subject to paragraph (5), increase fees to
not more than that necessary to cover the reasonable costs
incurred by the Copyright Office for the services described
in paragraph (1), plus a reasonable inflation adjustment to
account for any estimated increase in costs.
``(3) Any newly established fee under paragraph (2) shall
be rounded off to the nearest dollar, or for a fee less than
$12, rounded off to the nearest 50 cents.
``(4) The fees established under this subsection shall be
fair and equitable and give due consideration to the
objectives of the copyright system.
``(5) If the Register determines under paragraph (2) that
fees should be increased, the Register shall prepare a
proposed fee schedule and submit the schedule with the
accompanying economic analysis to the Congress. The fees
proposed by the Register may be instituted after the end of
120 days after the schedule is submitted to the Congress
unless, within that 120-day period, a law is enacted stating
in substance that the Congress does not approve the
schedule.''.
(b) Deposit of Fees.--Section 708(d) of such title is
amended to read as follows:
``(d)(1) Except as provided in paragraph (2), all fees
received under this section shall be deposited by the
Register of Copyrights in the Treasury of the United States
and shall be credited to the appropriations for necessary
expenses of the Copyright Office. Such fees that are
collected shall remain available until expended. The Register
may, in accordance with regulations that he or she shall
prescribe, refund any sum paid by mistake or in excess of the
fee required by this section.
``(2) In the case of fees deposited against future
services, the Register of Copyrights shall request the
Secretary of the Treasury to invest in interest-bearing
securities in the United States Treasury any portion of the
fees that, as determined by the Register, is not required to
meet current deposit account demands. Funds from such portion
of fees shall be invested in securities that permit funds to
be available to the Copyright Office at all times if they are
determined to be necessary to meet current deposit account
demands. Such investments shall be in public debt securities
with maturities suitable to the needs of the Copyright
Office, as determined by the Register of Copyrights, and
bearing interest at rates determined by the Secretary of the
Treasury, taking into consideration current market yields on
outstanding marketable obligations of the United States of
comparable maturities.
``(3) The income on such investments shall be deposited in
the Treasury of the United States and shall be credited to
the appropriations for necessary expenses of the Copyright
Office.''.
SEC. 9. COPYRIGHT ARBITRATION ROYALTY PANELS.
(a) Establishment and Purpose.--Section 801 of title 17,
United States Code, is amended--
(1) in subsection (b)(1) by striking ``and 116'' in the
first sentence and inserting ``116, and 119'';
(2) in subsection (c) by inserting after ``panel'' at the
end of the sentence the following:
``, including--
``(1) authorizing the distribution of those royalty fees
collected under sections 111, 119, and 1005 that the
Librarian has found are not subject to controversy; and
``(2) accepting or rejecting royalty claims filed under
sections 111, 119, and 1007 on the basis of timeliness or the
failure to establish the basis for a claim''; and
(3) by amending subsection (d) to read as follows:
``(d) Support and Reimbursement of Arbitration Panels.--The
Librarian of Congress, upon the recommendation of the
Register of Copyrights, shall provide the copyright
arbitration royalty panels with the necessary administrative
services related to proceedings under this chapter, and shall
reimburse the arbitrators presiding in distribution
proceedings at such intervals and in such manner as the
Librarian shall provide by regulation. Each such arbitrator
is an independent contractor acting on behalf of the United
States, and shall be hired pursuant to a signed agreement
between the Library of Congress and the arbitrator. Payments
to the arbitrators shall be considered costs incurred by the
Library of Congress and the Copyright Office for purposes of
section 802(h)(1).''.
(b) Proceedings.--Section 802 of title 17, United States
Code, is amended--
(1) in subsection (c) by striking the last sentence; and
(2) in subsection (h) by amending paragraph (1) to read as
follows:
``(1) Deduction of costs of library of congress and
copyright office from royalty fees.--The Librarian of
Congress and the Register of Copyrights may, to the extent
not otherwise provided under this title, deduct from royalty
fees deposited or collected under this title the reasonable
costs incurred by the Library of Congress and the Copyright
Office under this chapter. Such deduction may be made before
the fees are distributed to any copyright claimants. In
addition, all funds made available by an appropriations Act
as offsetting collections and available for deductions under
this subsection shall remain available until expended. In
ratemaking proceedings, the Librarian of Congress and the
Copyright Office may assess their reasonable costs directly
to the parties to the most recent relevant arbitration
proceeding, 50 percent of the costs to the parties who would
receive royalties from the royalty rate adopted in the
proceeding and 50 percent of the costs to the parties who
would pay the royalty rate so adopted.''.
SEC. 10. DIGITAL AUDIO RECORDING DEVICES AND MEDIA.
Section 1007(b) of title 17, United States Code, is amended
by striking ``Within 30 days after'' in the first sentence
and inserting ``After''.
SEC. 11. CONFORMING AMENDMENT.
Section 4 of the Digital Performance Right in Sound
Recordings Act of 1995 (Public Law 104-39) is amended by
redesignating paragraph (5) as paragraph (4).
SEC. 12. MISCELLANEOUS TECHNICAL AMENDMENTS.
(a) Amendments to Title 17, United States Code.--Title 17,
United States Code, is amended as follows:
(1) The table of chapters at the beginning of title 17,
United States Code, is amended--
(A) in the item relating to chapter 6, by striking
``Requirement'' and inserting ``Requirements'';
(B) in the item relating to chapter 8, by striking
``Royalty Tribunal'' and inserting ``Arbitration Royalty
Panels'';
(C) in the item relating to chapter 9, by striking
``semiconductor chip products'' and inserting ``Semiconductor
Chip Products''; and
(D) by inserting after the item relating to chapter 9 the
following:
``10. Digital Audio Recording Devices and Media.............1001''.....
(2) The item relating to section 117 in the table of
sections at the beginning of chapter 1 is amended to read as
follows:
``117. Limitations on exclusive rights: Computer programs.''.
(3) Section 101 is amended in the definition of to perform
or display a work ``publicly'' by striking ``processs'' and
inserting ``process''.
(4) Section 108(e) is amended by striking ``pair'' and
inserting ``fair''.
(5) Section 109(a)(2)(B) is amended by striking
``Copyright'' and inserting ``Copyrights''.
(6) Section 110 is amended--
(A) in paragraph (8) by striking the period at the end and
inserting a semicolon;
(B) in paragraph (9) by striking the period at the end and
inserting ``; and''; and
(C) in paragraph (10) by striking ``4 above'' and inserting
``(4)''.
(7) Section 115(c)(3)(E) is amended--
(A) in clause (i) by striking ``section 106(1) and (3)''
each place it appears and inserting ``paragraphs (1) and (3)
of section 106''; and
(B) in clause (ii)(II) by striking ``sections 106(1) and
106(3)'' and inserting ``paragraphs (1) and (3) of section
106''.
(8) Section 119(c)(1) is amended by striking ``unless
until'' and inserting ``unless''.
(9) Section 304(c) is amended in the matter preceding
paragraph (1) by striking ``the subsection (a)(1)(C)'' and
inserting ``subsection (a)(1)(C)''.
(10) Section 405(b) is amended by striking ``condition or''
and inserting ``condition for''.
(11) Section 407(d)(2) is amended by striking ``cost of''
and inserting ``cost to''.
[[Page S2687]]
(12) The item relating to section 504 in the table of
sections at the beginning of chapter 5 is amended by striking
``Damage'' and inserting ``Damages''.
(13) Section 504(c)(2) is amended by striking ``court it''
and inserting ``court in''.
(14) Section 509(b) is amended by striking ``merchandise;
and baggage'' and inserting ``merchandise, and baggage''.
(15) Section 601(a) is amended by striking ``nondramtic''
and inserting ``nondramatic''.
(16) Section 601(b)(1) is amended by striking
``subsustantial'' and inserting ``substantial''.
(17) The item relating to section 710 in the table of
sections at the beginning of chapter 7 is amended by striking
``Reproductions'' and inserting ``Reproduction''.
(18) The item relating to section 801 in the table of
sections at the beginning of chapter 8 is amended by striking
``establishment'' and inserting ``Establishment''.
(19) Section 801(b) is amended--
(A) by striking ``shal be--'' and inserting ``shall be as
follows:'';
(B) in paragraph (1) by striking ``to make'' and inserting
``To make'';
(C) in paragraph (2)--
(i) by striking ``to make'' and inserting ``To make''; and
(ii) in subparagraph (D) by striking ``adjustment; and''
and inserting ``adjustment.''; and
(D) in paragraph (3) by striking ``to distribute'' and
inserting ``To distribute''.
(20) Section 803(b) is amended in the second sentence by
striking ``subsection subsection'' and inserting
``subsection''.
(21) The item relating to section 903 in the table of
sections at the beginning of chapter 9 is amended to read as
follows:
``903. Ownership, transfer, licensure, and recordation.''.
(22) Section 909(b)(1) is amended--
(A) by striking ``force'' and inserting ``work''; and
(B) by striking ``sumbol'' and inserting ``symbol''.
(23) Section 910(a) is amended in the second sentence by
striking ``as used'' and inserting ``As used''.
(24) Section 1006(b)(1) is amended by striking ``Federation
Television'' and inserting ``Federation of Television''.
(25) Section 1007 is amended--
(A) in subsection (a)(1) by striking ``The calendar year in
which this chapter takes effect'' and inserting ``calendar
year 1992''; and
(B) in subsection (b) by striking ``the year in which this
section takes effect'' and inserting ``1992''.
(b) Related Provisions.--
(1) Section 1(a)(1) of the Act entitled ``An Act to amend
chapter 9 of title 17, United States Code, regarding
protection extended to semiconductor chip products of foreign
entities'', approved November 9, 1987 (17 U.S.C. 914 note),
is amended by striking ``orginating'' and inserting
``originating''.
(2) Section 2319(b)(1) of title 18, United States Code, is
amended by striking ``last 10'' and inserting ``least 10''.
SEC. 13. EFFECTIVE DATES.
(a) In General.--Except as provided in subsections (b) and
(c), the amendments made by this title shall take effect on
the date of the enactment of this Act.
(b) Satellite Home Viewer Act of 1994.--The amendments made
by section 2 shall be effective as if enacted as part of the
Satellite Home Viewer Act of 1994 (Public Law 103-369).
(c) Technical Amendment.--The amendment made by section
12(b)(1) shall be effective as if enacted on November 9,
1987.
____
Summary of Provisions--Copyright Clarification Act of 1997 (S. 506)
The Copyright Clarification Act is intended to make several
technical, yet important, changes to Copyright law, as
suggested by the U.S. Copyright Office. The following is a
brief summary of its provisions.
Satellite Home Viewer Act Technical Amendments. Section 2
makes technical corrections to the Satellite Home Viewer Act
of 1994 (SHVA), as recommended by the Copyright Office.
First, the bill corrects the dollar figures specified in the
Act for royalties to be paid by satellite carriers--the 1994
SHVA amendments mistakenly reversed the rates set by
arbitration in 1992 for signals subject to FCC syndicated
exclusivity blackout rules vs. those that are not subject to
such rules. Second, the bill corrects errors in section
numbers and references resulting from the failure of the 1994
SHVA amendments to account for changes made to Title 17 by
the Copyright Royalty Tribunal Act of 1993. Third, the bill
replaces references to ``the effective date of the Satellite
Home Viewer Act of 1988'' with the actual calendar date so as
to avoid confusion caused by the two Acts bearing the same
name.
Copyright Restoration. Section 3 clarifies ambiguities and
corrects drafting errors in the Copyright Restoration Act,
which was enacted as part of the 1994 Uruguay Round
Agreements Act to restore copyright protection in the U.S.
for certain works from WTO member countries that had fallen
into the public domain. First, the bill corrects a drafting
error that precludes U.S. creators of derivative works from
continuing to exploit those works if copyright protection in
the underlying foreign work is restored under GATT. Second,
the bill eliminates a duplicative reporting requirement.
Third, the bill clarifies Congress' intent that the effective
date of restoration is January 1, 1996 (not 1995 as
interpreted by some commentators). Fourth, the bill clarifies
the definition of ``eligible country'' as it pertains to
limited rights of continued exploitation for those who rely
on public domain works that were restored under GATT. An
ambiguous reference in the original bill left open the
possible interpretation that a party would not qualify as a
``reliance party'' where reliance had not predated adherence
to the Berne Convention for the country of origin--a date
that goes as far back as 1886 for many countries.
Digital Performance Right in Sound Recordings. Section 4
ensures that the effective rates under the 1995 digital
performance rights bill will not lapse. That bill requires
new rates to be established during 2000, and the 1996 rates
are to expire at the end of 2000. In the case where the
copyright arbitration royalty panel (CARP) does not complete
its work by the end of the year, or where the Librarian of
Congress does not complete its review of the CARP's report by
the end of the year, this section provides that the 1996
rates will continue beyond the December 31, 2000, expiration
date until 30 days after the Librarian publishes a decision
to adopt or reject the CARP's rate adjustment. This section
(as well as provisions in Section 5) also eliminates
authorization for a CARP to publish its report in the Federal
Register since only federal agencies are permitted to do so.
Instead, CARP decisions will be published by the Librarian.
Section 11 corrects a numbering mistake in the 1995 Digital
Performance Right bill.
Negotiated Jukebox License. Section 6 restores the
definitions of a ``jukebox'' and a ``jukebox operator'' to
Sec. 116A of Title 17. These definitions were mistakenly
eliminated from the old Sec. 116 jukebox compulsory license
when that section was replaced by the current Sec. 116A
negotiated jukebox license in the 1988 Berne Convention
implementing legislation. This section also clarifies that
all jukebox negotiated licenses that require arbitration are
CARP proceedings.
Advance Notice of Intent to Copyright Live Performances.
Section 7 changes the current 10-days advanced notice
requirement for a copyright owner who intends to copyright
the fixation of a live performance to a 48-hours advanced
notice requirement. The current provision has proven
unworkable for sporting events, in particular, where the
teams and times of the event may not be known 10 days in
advance.
Copyright Office Fees. Section 8 responds to ambiguities in
the Copyright Fees and Technical Amendments Act of 1989. That
bill allows the Copyright Office to increase fees in 1995,
and every fifth year thereafter to reflect changes in the
Consumer Price Index (CPI). The Copyright Office did not
raise its fees in 1995, because it determined that the costs
associated with the increase would be greater than the
resulting revenue. Uncertainty has arisen as to whether the
failure to increase fees in 1995 precludes the Copyright
Office from increasing its fees again until 2000 and whether
the increase in the CPI to be used in calculating the fee
increase is the increase since the last fee settlement (1990)
or only that since 1995. The bill clarifies that the
Copyright Office may increase its fees in any given year,
provided it has not done so within the last five years, and
that the fees may be increased up to the amount required to
cover the reasonable costs incurred by the Copyright Office
plus a reasonable inflation adjustment to account for future
increases in costs. The bill also allows the Register of
Copyrights to invest funds from the prepaid fees in interest
bearing securities in the U.S. Treasury and to use the income
from those investments for Copyright Office expenses. It is
expected that the proceeds will be used for the development
of the Copyright Office's new electronic registration,
recordation, and deposit system.
Copyright Arbitration Royalty Panels (CARPs). Section 9
clarifies administrative issues regarding the operation of
the CARPs. First, it gives the Librarian of Congress express
authority to pay panel members directly in ratemaking and
distribution proceedings and clarifies that these arbitrators
are independent contractors acting on behalf of the U.S.
(thus subject to laws governing the conduct of government
employees). Second, it clarifies that copyright owners and
users are responsible for equal shares of the costs of
ratemaking proceedings. Third, it clarifies by way of example
the procedural and evidentiary rulings the Librarian of
Congress can issue with respect to CARP proceedings. Fourth,
it clarifies that the 1997 ratemaking proceeding for the
satellite carrier compulsory license is a CARP proceeding.
Digital Audio Recording Devices. Section 10 provides added
flexibility for the Librarian of Congress in setting the
negotiation period for the distribution of digital audio
recording technology (DART) royalties, with the intention of
promoting settlements and timely distribution of royalties.
The current March 30 annual deadline for determining whether
there exist controversies among claimants has proven
unworkable and is eliminated by this section.
Miscellaneous Technical Amendments. Section 12 makes
various technical corrections, such as spelling, grammatical,
capitalization, and other corrections, to title 17.
____
S. 507
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S2688]]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Omnibus Patent Act of
1997''.
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--UNITED STATES PATENT AND TRADEMARK ORGANIZATION
Sec. 101. Short title.
Subtitle A--Establishment of the United States Patent and Trademark
Organization
Sec. 111. Establishment of the United States Patent and Trademark
Organization as a Government corporation.
Sec. 112. Powers and duties.
Sec. 113. Organization and management.
Sec. 114. United States Patent Office.
Sec. 115. United States Trademark Office.
Sec. 116. Suits by and against the Organization.
Sec. 117. Funding.
Sec. 118. Transfers.
Subtitle B--Effective Date; Technical Amendments
Sec. 131. Effective date.
Sec. 132. Technical and conforming amendments.
Subtitle C--Miscellaneous Provisions
Sec. 141. References.
Sec. 142. Exercise of authorities.
Sec. 143. Savings provisions.
Sec. 144. Transfer of assets.
Sec. 145. Delegation and assignment.
Sec. 146. Authority of Director of the Office of Management and Budget
with respect to functions transferred.
Sec. 147. Certain vesting of functions considered transfers.
Sec. 148. Availability of existing funds.
Sec. 149. Definitions.
TITLE II--EARLY PUBLICATION OF PATENT APPLICATIONS
Sec. 201. Short title.
Sec. 202. Early publication.
Sec. 203. Time for claiming benefit of earlier filing date.
Sec. 204. Provisional rights.
Sec. 205. Prior art effect of published applications.
Sec. 206. Cost recovery for publication.
Sec. 207. Conforming changes.
Sec. 208. Last day of pendency of provisional application.
Sec. 209. Effective date.
TITLE III--PATENT TERM RESTORATION
Sec. 301. Patent term extension authority.
Sec. 302. Effective date.
TITLE IV--PRIOR DOMESTIC COMMERCIAL USE
Sec. 401. Short title.
Sec. 402. Defense to patent infringement based on prior domestic
commercial use.
Sec. 403. Effective date and applicability.
TITLE V--PATENT REEXAMINATION REFORM
Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Reexamination procedures.
Sec. 504. Conforming amendments.
Sec. 505. Effective date.
TITLE VI--MISCELLANEOUS PATENT PROVISIONS
Sec. 601. Provisional applications.
Sec. 602. International applications.
Sec. 603. Plant patents.
Sec. 604. Electronic filing.
TITLE I--UNITED STATES PATENT AND TRADEMARK ORGANIZATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``United States Patent and
Trademark Organization Act of 1997''.
Subtitle A--Establishment of the United States Patent and Trademark
Organization
SEC. 111. ESTABLISHMENT OF THE UNITED STATES PATENT AND
TRADEMARK ORGANIZATION AS A GOVERNMENT
CORPORATION.
(a) Establishment.--The United States Patent and Trademark
Organization is established as a wholly owned Government
corporation subject to chapter 91 of title 31, separate from
any department, and shall be an agency of the United States
under the policy direction of the Secretary of Commerce.
(b) Offices.--The United States Patent and Trademark
Organization shall maintain its principal office in the
District of Columbia, or the metropolitan area thereof, for
the service of process and papers and for the purpose of
carrying out its powers, duties, and obligations under this
title. The United States Patent and Trademark Organization
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 Organization may
establish satellite offices in such places as it considers
necessary and appropriate in the conduct of its business.
(c) Reference.--For purposes of this title, a reference to
the ``Organization'' shall be a reference to the United
States Patent and Trademark Organization, unless the context
provides otherwise.
SEC. 112. POWERS AND DUTIES.
(a) In General.--The United States Patent and Trademark
Organization, under the policy direction of the Secretary of
Commerce, 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 patent and
trademark law, the administration of the Organization, or any
other function vested in the Organization by law, including
programs to recognize, identify, assess, and forecast the
technology of patented inventions and their utility to
industry;
(3)(A) 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
(B) with the concurrence of the Secretary of State,
authorizing the transfer of not to exceed $100,000 in any
year to the Department of State for the purpose of making
special payments to international intergovernmental
organizations for studies and programs for advancing
international cooperation concerning patents, trademarks, and
related matters; and
(4) disseminating to the public information with respect to
patents and trademarks.
(b) Special Payments.--The special payments under
subsection (a)(3)(B) may be in addition to any other payments
or contributions to international organizations and shall not
be subject to any limitations imposed by law on the amounts
of such other payments or contributions by the United States
Government.
(c) Specific Powers.--The Organization--
(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 Organization 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 116;
(4) may indemnify the Director of the United States Patent
and Trademark Organization, the Commissioner of Patents, the
Commissioner of Trademarks, and other officers, attorneys,
agents, and employees (including members of the Management
Advisory Boards of the Patent Office and the Trademark
Office) of the Organization 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; and
(B) shall be made after notice and opportunity for full
participation by interested public and private parties;
(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 et seq.),
the Public Buildings Act (40 U.S.C. 601 et seq.), and the
Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301
et seq.); 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
Organization, without regard to sections 501 through 517 and
1101 through 1123 of title 44, United States Code;
(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 Organization;
(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) 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 title 35, United States Code 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 Organization, including for research and development
and capital investment, subject to the provisions of section
10101 of the Omnibus Budget Reconciliation Act of 1990 (35
U.S.C. 41 note);
(13) shall have the priority of the United States with
respect to the payment of debts
[[Page S2689]]
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 Organization;
(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.
(d) 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 Organization.
SEC. 113. ORGANIZATION AND MANAGEMENT.
(a) Offices.--The United States Patent and Trademark
Organization shall consist of--
(1) the Office of the Director;
(2) the United States Patent Office; and
(3) the United States Trademark Office.
(b) Director.--
(1) In general.--The management of the United States Patent
and Trademark Organization shall be vested in a Director of
the United States Patent and Trademark Organization
(hereafter in this title referred to as the ``Director'',
unless the context provides otherwise), 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 Director shall be a person who, by reason of
professional background and experience in patent or trademark
law, is especially qualified to manage the Organization.
(2) Duties.--(A) The Director shall--
(i) be responsible for the Management and direction of the
Organization and shall perform this duty in a fair,
impartial, and equitable manner; and
(ii) strive to meet the goals set forth in the performance
agreement described under paragraph (4).
(B) The Director shall advise the President, through and
under the policy direction of the Secretary of Commerce, of
all activities of the Organization undertaken in response to
obligations of the United States under treaties and executive
agreements, or which relate to cooperative programs with
those authorities of foreign governments that are responsible
for granting patents or registering trademarks. The Director
shall also recommend to the President, through and under the
policy direction of the Secretary of Commerce, changes in law
or policy which may improve the ability of United States
citizens to secure and enforce patent and trademark rights in
the United States or in foreign countries.
(C)(i) At the direction of the President, the Director may
represent the United States in international negotiations on
matters of patents or trademarks, or may designate an officer
or officers of the Organization to participate in such
negotiations.
(ii) Nothing in this subparagraph shall be construed to
alter any statutory responsibility of the Secretary of State
or the United States Trade Representative.
(D) The Director, 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.
(E) The Director may perform such personnel, procurement,
and other functions, with respect to the United States Patent
Office and the United States Trademark Office, where a
centralized administration of such functions would improve
the efficiency of the Offices, as determined by agreement of
the Director, the Commissioner of Patents, and the
Commissioner of Trademarks.
(F) Except as otherwise provided in this title, the
Director shall ensure that--
(i) the United States Patent Office and the United States
Trademark Office, respectively, shall--
(I) prepare all appropriation requests under section 1108
of title 31, United States Code, for each office for
submission by the Director;
(II) adjust fees to provide sufficient revenues to cover
the expenses of such office; and
(III) expend funds derived from such fees for only the
functions of such office; and
(ii) each such office is not involved in the management of
any other office.
(3) Oath.--The Director shall, before taking office, take
an oath to discharge faithfully the duties of the
Organization.
(4) Compensation.--The Director shall receive compensation
at the rate of pay in effect for level III of the Executive
Schedule under section 5314 of title 5, United States Code
and, in addition, may receive as a bonus, an amount which
would raise total compensation to the equivalent of the level
of the rate of pay in effect for level II of the Executive
Schedule under section 5313 of title 5, based upon an
evaluation by the Secretary of Commerce of the Director's
performance as defined in an annual performance agreement
between the Director and the Secretary. The annual
performance agreement shall incorporate measurable goals as
delineated in an annual performance plan agreed to by the
Director and the Secretary.
(5) Removal.--The Director shall serve at the pleasure of
the President.
(6) Designee of director.--The Director shall designate an
officer of the Organization who shall be vested with the
authority to act in the capacity of the Director in the event
of the absence or incapacity of the Director.
(c) Officers and Employees of the Organization.--
(1) Commissioners of patents and trademarks.--The Director
shall appoint a Commissioner of Patents and a Commissioner of
Trademarks under section 3 of title 35, United States Code
and section 53 of the Act of July 5, 1946 (commonly referred
to as the Trademark Act of 1946), respectively, as amended by
this Act.
(2) Other officers and employees.--The Director shall--
(A) appoint officers, employees (including attorneys), and
agents of the Organization as the Director considers
necessary to carry out its functions;
(B) fix the compensation of such officers and employees,
except as provided in subsection (e); and
(C) define the authority and duties of such officers and
employees and delegate to them such of the powers vested in
the Organization as the Director may determine.
(3) Personnel limitations.--The Organization shall not be
subject to any administratively or statutorily imposed
limitation on positions or personnel, and no positions or
personnel of the Organization shall be taken into account for
purposes of applying any such limitation.
(d) Limits on Compensation.--Except as otherwise provided
by law, the annual rate of basic pay of an officer or
employee of the Organization 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 level II of the Executive Schedule
under section 5313 of title 5, United States Code. The
Director shall prescribe such regulations as may be necessary
to carry out this subsection.
(e) Inapplicability of Title 5, United States Code,
Generally.--Except as otherwise provided in this section,
officers and employees of the Organization shall not be
subject to the provisions of title 5, United States Code,
relating to Federal employees.
(f) Continued Applicability of Certain Provision of Title
5, United States Code.--
(1) In general.--The following provisions of title 5,
United States Code, shall apply to the Organization and its
officers and employees:
(A) Section 3110 (relating to employment of relatives;
restrictions).
(B) Subchapter II of chapter 55 (relating to withholding
pay).
(C) Subchapters II and III of chapter 73 (relating to
employment limitations and political activities,
respectively).
(D) Chapter 71 (relating to labor-management relations),
subject to paragraph (2) and subsection (g).
(E) Section 3303 (relating to political recommendations).
(F) Subchapter II of chapter 61 (relating to flexible and
compressed work schedules).
(G) Section 21302(b)(8) (relating to whistleblower
protection) and whistleblower related provisions of chapter
12 (covering the role of the Office of Special Counsel).
(2) Compensation subject to collective bargaining.--
(A) In general.--Notwithstanding any other provision of
law, for purposes of applying chapter 71 of title 5, United
States Code, 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, United States Code, which is
afforded by paragraph (1), (2), (3), or (4) of subsection
(g).
(C) Limitations apply.--Nothing in this subsection shall be
considered to allow any limitation under subsection (d) to be
exceeded.
(g) Provisions of Title 5, United States Code, 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, United States Code,
shall apply to the Organization and its officers and
employees, subject to subparagraph (B).
(B)(i) The amount required of the Organization under the
second sentence of section 8334(a)(1) of title 5, United
States Code, 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 Organization 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 Organization under section
8334(k)(1)(B) of title 5, United States Code, 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 Organization may
supplement the benefits provided under the preceding
provisions of this paragraph.
[[Page S2690]]
(2) Health benefits.--(A) The provisions of chapter 89 of
title 5, United States Code, shall apply to the Organization
and its officers and employees, subject to subparagraph (B).
(B)(i) With respect to any individual who becomes an
officer or employee of the Organization pursuant to
subsection (i), 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,
United States Code. The preceding sentence shall not apply if
the individual ceases to be an officer or employee of the
Organization for any period of time after becoming an officer
or employee of the Organization pursuant to subsection (i)
and before separation.
(ii) The Government contributions authorized by section
8906 of title 5, United States Code, for health benefits for
anyone participating in the health benefits program pursuant
to this subparagraph shall be made by the Organization in the
same manner as provided under section 8906(g)(2) of such
title 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, United States Code.
(C) The Organization may supplement the benefits provided
under the preceding provisions of this paragraph.
(3) Life insurance.--(A) The provisions of chapter 87 of
title 5, United States Code, shall apply to the Organization
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, United States Code,
shall be determined, in the case of any individual who
becomes an officer or employee of the Organization pursuant
to subsection (i), 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
Organization in the same manner as provided under paragraph
(3) thereof with respect to the United States Postal Service
for individuals associated therewith.
(C) The Organization may supplement the benefits provided
under the preceding provisions of this paragraph.
(4) Employees' compensation fund.--(A) Officers and
employees of the Organization shall not become ineligible to
participate in the program under chapter 81 of title 5,
United States Code, relating to compensation for work
injuries, by reason of subsection (e).
(B) The Organization shall remain responsible for
reimbursing the Employees' Compensation Fund, pursuant to
section 8147 of title 5, United States Code, for compensation
paid or payable after the effective date of this title in
accordance with chapter 81 of title 5, United States Code,
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.
(h) Labor-Management Relations.--
(1) Labor relations and employee relations programs.--The
Organization shall develop hiring practices, labor relations
and employee relations programs with the objective of
improving productivity and efficiency, incorporating the
following principles:
(A) Such programs shall be consistent with the merit
principles in section 2301(b) of title 5, United States Code.
(B) Such programs shall provide veterans preference
protections equivalent to those established by sections 2108,
3308 through 3318, 3320, 3502, and 3504 of title 5, United
States Code.
(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, United States
Code, or a ``supervisor'', ``management official'', or
``confidential employee'' as those terms are defined in
7103(a) (10), (11), and (13) of such title.
(iv) Any labor organization recognized by the Organization
as the exclusive representative of a unit of employees of the
Organization 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
Organization shall adopt all labor agreements which are in
effect, as of the day before the effective date of this
title, with respect to such Organization (as then in effect).
(i) Carryover of Personnel.--
(1) From pto.--Effective as of the effective date of this
title, all officers and employees of the Patent and Trademark
Office on the day before such effective date shall become
officers and employees of the Organization, without a break
in service.
(2) Other personnel.--(A) Any individual who, on the day
before the effective date of this title, is an officer or
employee of the Department of Commerce (other than an officer
or employee under paragraph (1)) shall be transferred to the
Organization if--
(i) 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;
(ii) 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
(iii) such transfer would be in the interest of the
Organization, as determined by the Secretary of Commerce in
consultation with the Director.
(B) 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) Accumulated leave.--The amount of sick and annual leave
and compensatory time accumulated under title 5, United
States Code, before the effective date described in paragraph
(1), by any individual who becomes an officer or employee of
the Organization under this subsection, are obligations of
the Organization.
(4) Termination rights.--Any employee referred to in
paragraph (1) or (2) of this subsection whose employment with
the Organization is terminated during the 1-year period
beginning on the effective date of this title shall be
entitled to rights and benefits, to be afforded by the
Organization, 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 such 1-year period to the Board under such
procedures as it may prescribe.
(5) Transition provisions.--(A)(i) On or after the
effective date of this title, the President shall appoint a
Director of the United States Patent and Trademark
Organization who shall serve until the earlier of--
(I) the date on which a Director qualifies under subsection
(a); or
(II) the date occurring 1 year after the effective date of
this title.
(ii) The President shall not make more than 1 appointment
under this subparagraph.
(B) The individual serving as the Assistant Commissioner of
Patents on the day before the effective date of this title
shall serve as the Commissioner of Patents until the date on
which a Commissioner of Patents is appointed under section 3
of title 35, United States Code, as amended by this Act.
(C) The individual serving as the Assistant Commissioner of
Trademarks on the day before the effective date of this title
shall serve as the Commissioner of Trademarks until the date
on which a Commissioner of Trademarks is appointed under
section 53 of the Act of July 5, 1946 (commonly referred to
as the Trademark Act of 1946), as amended by this Act.
(j) Competitive Status.--For purposes of appointment to a
position in the competitive service for which an officer or
employee of the Organization is qualified, such officer or
employee shall not forfeit any competitive status, acquired
by such officer or employee before the effective date of this
title, by reason of becoming an officer or employee of the
Organization under subsection (i).
(k) Savings Provisions.--Compensation, benefits, and other
terms and conditions of employment in effect immediately
before the effective date of this title, 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 Organization, until changed in accordance
with this section (whether by action of the Director or
otherwise).
(l) Removal of Quasi-Judicial Examiners.--The Organization
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 Organization.
SEC. 114. UNITED STATES PATENT OFFICE.
(a) Establishment of the Patent Office as a Separate
Administrative Unit.--Section 1 of title 35, United States
Code, is amended to read as follows:
``Sec. 1. Establishment
``(a) Establishment.--The United States Patent Office is
established as a separate administrative unit of the United
States Patent and Trademark Organization, where
[[Page S2691]]
records, books, drawings, specifications, and other papers
and things pertaining to patents shall be kept and preserved,
except as otherwise provided by law.
``(b) Reference.--For purposes of this title, the United
States Patent Office shall also be referred to as the
`Office' and the `Patent Office'.''.
(b) Powers and Duties.--Section 2 of title 35, United
States Code, is amended to read as follows:
``Sec. 2. Powers and duties
``The United States Patent Office, under the policy
direction of the Secretary of Commerce through the Director
of the United States Patent and Trademark Organization, shall
be responsible for--
``(1) granting and issuing patents;
``(2) conducting studies, programs, or exchanges of items
or services regarding domestic and international patent law,
the administration of the Organization, or any other function
vested in the Organization 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 offices and international
organizations, in connection with the granting and issuing of
patents; and
``(4) disseminating to the public information with respect
to patents.
(c) 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 Office shall be vested in a Commissioner of Patents,
who shall be a citizen of the United States and who shall be
appointed by the Director of the United States Patent and
Trademark Organization and shall serve at the pleasure of the
Director of the United States Patent and Trademark
Organization. The Commissioner of Patents shall be a person
who, by reason of professional background and experience in
patent law, is especially qualified to manage the Office.
``(2) Duties.--
``(A) In general.--The Commissioner shall be responsible
for all aspects of the management, administration, and
operation of the Office, including the granting and issuing
of patents, and shall perform these duties in a fair,
impartial, and equitable manner.
``(B) Advising the director of the united states patent and
trademark organization.--The Commissioner of Patents shall
advise the Director of the United States Patent and Trademark
Organization of all activities of the Office undertaken in
response to obligations of the United States under treaties
and executive agreements, or which relate to cooperative
programs with those authorities of foreign governments that
are responsible for granting patents. The Commissioner of
Patents shall advise the Director of the United States Patent
and Trademark Organization on matters of patent law and shall
recommend to the Director of the United States Patent and
Trademark Organization changes in law or policy which may
improve the ability of United States citizens to secure and
enforce patent rights in the United States or in foreign
countries.
``(C) Regulations.--The Commissioner may establish
regulations, not inconsistent with law, for the conduct of
proceedings in the Patent Office. The Director of the United
States Patent and Trademark Organization shall determine
whether such regulations are consistent with the policy
direction of the Secretary of Commerce.
``(D) Consultation with the management advisory board.--(i)
The Commissioner shall consult with the Management Advisory
Board established in section 5--
``(I) on a regular basis on matters relating to the
operation of the Office; and
``(II) before submitting budgetary proposals to the
Director of the United States Patent and Trademark
Organization for submission to the Office of Management and
Budget or changing or proposing to change patent user fees or
patent regulations.
``(ii) The Director of the United States Patent and
Trademark Organization shall determine whether such fees or
regulations are consistent with the policy direction of the
Secretary of Commerce.
``(3) Oath.--The Commissioner shall, before taking office,
take an oath to discharge faithfully the duties of the
Office.
``(4) Compensation.--
``(A) In general.--The Commissioner shall receive
compensation at the rate of pay in effect for level IV of the
Executive Schedule under section 5315 of title 5.
``(B) Bonus.--In addition to compensation under
subparagraph (A), the Commissioner may, at the discretion of
the Director of the United States Patent and Trademark
Organization, receive as a bonus, an amount which would raise
total compensation to the equivalent of the rate of pay in
effect for level III of the Executive Schedule under section
5314 of title 5.
``(b) Officers and Employees.--The Commissioner shall
appoint a Deputy Commissioner of Patents 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. In the event of a vacancy in the office of
Commissioner, the Deputy Commissioner shall fill the office
of Commissioner until a new Commissioner is appointed and
takes office. Other officers, attorneys, employees, and
agents shall be selected and appointed by the Commissioner,
and shall be vested with such powers and duties as the
Commissioner may determine.''.
(d) 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 Office Management Advisory Board
``(a) Establishment of Management Advisory Board.--
``(1) Appointment.--The United States Patent Office shall
have a Management Advisory Board (hereafter in this title
referred to as the `Advisory Board') of 5 members, who shall
be appointed by the President and shall serve at the pleasure
of the President. Not more than 3 of the 5 members shall be
members of the same political party.
``(2) Chair.--The President shall designate a Chair of the
Advisory Board, whose term as chair shall be for 3 years.
``(3) Timing of appointments.--Initial appointments to the
Advisory Board shall be made within 3 months after the
effective date of the United States Patent and Trademark
Organization Act of 1997. Vacancies shall be filled in the
manner in which the original appointment was made under this
subsection within 3 months after they occur.
``(b) Basis for Appointments.--Members of the Advisory
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 Office, and shall include
individuals with substantial background and achievement in
corporate finance and management.
``(c) Meetings.--The Advisory Board shall meet at the call
of the Chair to consider an agenda set by the Chair.
``(d) Duties.--The Advisory Board shall--
``(1) review the policies, goals, performance, budget, and
user fees of the United States Patent Office, and advise the
Commissioner on these matters;
``(2) within 60 days after the end of each fiscal year--
``(A) prepare an annual report on the matters referred to
in paragraph (1);
``(B) transmit the report to the Director of the United
States Patent and Trademark Organization, the President, and
the Committees on the Judiciary of the Senate and the House
of Representatives; and
``(C) publish the report in the Patent Office Official
Gazette.
``(f) Compensation.--Each member of the Advisory Board
shall be compensated for each day (including travel time)
during which such member is attending meetings or conferences
of the Advisory Board or otherwise engaged in the business of
the Advisory 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 such member's home or regular place of
business such member may be allowed travel expenses,
including per diem in lieu of subsistence, as authorized by
section 5703 of title 5.
``(g) Access to Information.--Members of the Advisory Board
shall be provided access to records and information in the
United States Patent Office, except for personnel or other
privileged information and information concerning patent
applications required to be kept in confidence by section
122.''.
(e) Conforming Amendments.--Section 6 of title 35, United
States Code, and the item relating to such section in the
table of contents for chapter 1 of title 35, United States
Code, are repealed.
(f) Board of Patent Appeals and Interferences.--Section 7
of title 35, United States Code, is amended to read as
follows:
``Sec. 7. Board of Patent Appeals and Interferences
``(a) Establishment and Composition.--There shall be in the
United States Patent Office a Board of Patent Appeals and
Interferences. The Commissioner, the Deputy Commissioner, 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.--
``(1) In general.--The Board of Patent Appeals and
Interferences shall, on written appeal of an applicant, a
patent owner, or a third-party requester in a reexamination
proceeding--
``(A) review adverse decisions of examiners--
``(i) upon applications for patents; and
``(ii) in reexamination proceedings; and
``(B) determine priority and patentability of invention in
interferences declared under section 135(a).
``(2) Hearings.--Each appeal and interference shall be
heard by at least 3 members of the Board, who shall be
designated by the Deputy Commissioner. Only the Board of
Patent Appeals and Interferences may grant rehearings.''.
(g) Annual Report of Commissioner.--Section 14 of title 35,
United States Code, is amended to read as follows:
``Sec. 14. Annual report to Congress
``The Commissioner shall report to the Director of the
United States Patent and Trademark Organization such
information as the Director is required to submit to Congress
annually under chapter 91 of title 31, including--
``(1) the total of the moneys received and expended by the
Office;
``(2) the purposes for which the moneys were spent;
[[Page S2692]]
``(3) the quality and quantity of the work of the Office;
and
``(4) other information relating to the Office.''.
(h) Practice Before Patent Office.--
(1) In general.--Section 31 of title 35, United States
Code, is amended to read as follows:
``Sec. 31. Regulations for agents and attorneys
``The Commissioner may prescribe regulations governing the
recognition and conduct of agents, attorneys, or other
persons representing applicants or other parties before the
Office. The regulations may require such persons, 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.''.
(2) Designation of attorney to conduct hearing.--Section 32
of title 35, United States Code, is amended in the first
sentence by striking ``Patent and Trademark Office'' and
inserting ``Patent Office'' and 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 Office to conduct the
hearing required by this section.''.
(i) Funding.--
(1) Adjustment of fees.--Section 41(f) of title 35, United
States Code, is amended to read as follows:
``(f) The Commissioner, after consulting with the Patent
Office Management Advisory Board pursuant to section
3(a)(2)(C) of this title and after notice and opportunity for
full participation by interested public and private parties,
may, by regulation, adjust the fees established in this
section. The Director of the United States Patent and
Trademark Organization shall determine whether such fees are
consistent with the policy direction of the Secretary of
Commerce.''.
(2) Patent office funding.--Section 42 of title 35, United
States Code, is amended to read as follows:
``Sec. 42. Patent Office funding
``(a) Fees Payable to the Office.--All fees for services
performed by or materials furnished by the United States
Patent Office shall be payable to the Office.
``(b) Use of Moneys.--Moneys from fees shall be available
to the United States Patent Office to carry out, to the
extent provided in appropriations Acts, 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 Commissioner
under this title shall be used only for the processing of
patent applications and for other services and materials
relating to patents.
``(c) Contribution to the Office of the Director of the
United States Patent and Trademark Organization.--The Patent
Office shall contribute 50 percent of the annual budget of
the Office of the Director of the United States Patent and
Trademark Organization.''.
SEC. 115. UNITED STATES TRADEMARK OFFICE.
(a) Establishment of the United States Trademark Office as
a Separate Administrative Unit.--The Act of July 5, 1946
(commonly referred to as the Trademark Act of 1946) is
amended--
(1) by redesignating titles X and XI as titles XI and XII,
respectively;
(2) by redesignating sections 45, 46, 47, 48, 49, 50, and
51 as sections 61, 71, 72, 73, 74, 75, and 76, respectively;
and
(3) by inserting after title IX the following new title:
``TITLE X--UNITED STATES TRADEMARK OFFICE
``SEC. 51. ESTABLISHMENT.
``(a) Establishment.--The United States Trademark Office is
established as a separate administrative unit of the United
States Patent and Trademark Organization.
``(b) Reference.--For purposes of this chapter, the United
States Trademark Office shall also be referred to as the
`Office' and the `Trademark Office'.
``SEC. 52. POWERS AND DUTIES.
``The United States Trademark Office, under the policy
direction of the Secretary of Commerce through the Director
of the United States Patent and Trademark Organization, shall
be responsible for--
``(1) the registration of trademarks;
``(2) conducting studies, programs, or exchanges of items
or services regarding domestic and international trademark
law or the administration of the Office;
``(3) authorizing or conducting studies and programs
cooperatively with foreign trademark offices and
international organizations, in connection with the
registration of trademarks; and
``(4) disseminating to the public information with respect
to trademarks.
``SEC. 53. OFFICERS AND EMPLOYEES.
``(a) Commissioner.--
``(1) In general.--The management of the United States
Trademark Office shall be vested in a Commissioner of
Trademarks, who shall be a citizen of the United States and
who shall be appointed by the Director of the United States
Patent and Trademark Organization and shall serve at the
pleasure of the Director of the United States Patent and
Trademark Organization. The Commissioner of Trademarks shall
be a person who, by reason of professional background and
experience in trademark law, is especially qualified to
manage the Office.
``(2) Duties.--
``(A) In general.--The Commissioner shall be responsible
for all aspects of the management, administration, and
operation of the Office, including the registration of
trademarks, and shall perform these duties in a fair,
impartial, and equitable manner.
``(B) Advising the director of the united states patent and
trademark organization.--The Commissioner of Trademarks shall
advise the Director of the United States Patent and Trademark
Organization of all activities of the Office undertaken in
response to obligations of the United States under treaties
and executive agreements, or which relate to cooperative
programs with those authorities of foreign governments that
are responsible for registering trademarks. The Commissioner
of Trademarks shall advise the Director of the United States
Patent and Trademark Organization on matters of trademark law
and shall recommend to the Director of the United States
Patent and Trademark Organization changes in law or policy
which may improve the ability of United States citizens to
secure and enforce trademark rights in the United States or
in foreign countries.
``(C) Regulations.--The Commissioner may establish
regulations, not inconsistent with law, for the conduct of
proceedings in the Trademark Office. The Director of the
United States Patent and Trademark Organization shall
determine whether such regulations are consistent with the
policy direction of the Secretary of Commerce.
``(D) Consultation with the management advisory board.--(i)
The Commissioner shall consult with the Trademark Office
Management Advisory Board established under section 54--
``(I) on a regular basis on matters relating to the
operation of the Office; and
``(II) before submitting budgetary proposals to the
Director of the United States Patent and Trademark
Organization for submission to the Office of Management and
Budget or changing or proposing to change trademark user fees
or trademark regulations.
``(ii) The Director of the United States Patent and
Trademark Organization shall determine whether such fees or
regulations are consistent with the policy direction of the
Secretary of Commerce.
``(E) Publications.--(i) The Commissioner may print, or
cause to be printed, the following:
``(I) Certificates of trademark registrations, including
statements and drawings, together with copies of the same.
``(II) The Official Gazette of the United States Trademark
Office.
``(III) Annual indexes of trademarks and registrants.
``(IV) Annual volumes of decisions in trademark cases.
``(V) Pamphlet copies of laws and rules relating to
trademarks and circulars or other publications relating to
the business of the Office.
``(ii) The Commissioner may exchange any of the
publications specified under clause (i) for publications
desirable for the use of the Trademark Office.
``(3) Oath.--The Commissioner shall, before taking office,
take an oath to discharge faithfully the duties of the
Office.
``(4) Compensation.--
``(A) In general.--The Commissioner shall receive
compensation at the rate of pay in effect for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code.
``(B) Bonus.--In addition to compensation under
subparagraph (A), the Commissioner may, at the discretion of
the Director of the United States Patent and Trademark
Organization, receive as a bonus, an amount which would raise
total compensation to the equivalent of the rate of pay in
effect for level III of the Executive Schedule under section
5314 of title 5.
``(b) Officers and Employees.--The Commissioner shall
appoint a Deputy Commissioner of Trademarks 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. In the event of a vacancy in the office of
Commissioner, the Deputy Commissioner shall fill the office
of Commissioner until a new Commissioner is appointed and
takes office. Other officers, attorneys, employees, and
agents shall be selected and appointed by the Commissioner,
and shall be vested with such powers and duties as the
Commissioner may determine.
``SEC. 54. TRADEMARK OFFICE MANAGEMENT ADVISORY BOARD.
``(a) Establishment of Management Advisory Board.--
``(1) Appointment.--The United States Trademark Office
shall have a Management Advisory Board (hereafter in this
title referred to as the `Advisory Board') of 5 members, who
shall be appointed by the President and shall serve at the
pleasure of the President. Not more than 3 of the 5 members
shall be members of the same political party.
``(2) Chair.--The President shall designate a Chair of the
Advisory Board, whose term as chair shall be for 3 years.
``(3) Timing of appointments.--Initial appointments to the
Advisory Board shall be
[[Page S2693]]
made within 3 months after the effective date of the United
States Patent and Trademark Organization Act of 1997.
Vacancies shall be filled in the manner in which the original
appointment was made under this section within 3 months after
they occur.
``(b) Basis for Appointments.--Members of the Advisory
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 Trademark Office, and shall include
individuals with substantial background and achievement in
corporate finance and management.
``(c) Meetings.--The Advisory Board shall meet at the call
of the Chair to consider an agenda set by the Chair.
``(d) Duties.--The Advisory Board shall--
``(1) review the policies, goals, performance, budget, and
user fees of the United States Trademark Office, and advise
the Commissioner on these matters; and
``(2) within 60 days after the end of each fiscal year--
``(A) prepare an annual report on the matters referred to
under paragraph (1);
``(B) transmit the report to the Director of the United
States Patent and Trademark Organization, the President, and
the Committees on the Judiciary of the Senate and the House
of Representatives; and
``(C) publish the report in the Trademark Office Official
Gazette.
``(f) Compensation.--Each member of the Advisory Board
shall be compensated for each day (including travel time)
during which such member is attending meetings or conferences
of the Advisory Board or otherwise engaged in the business of
the Advisory 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, United
States Code, and while away from such member's home or
regular place of business such member may be allowed travel
expenses, including per diem in lieu of subsistence, as
authorized by section 5703 of title 5, United States Code.
``(g) Access to Information.--Members of the Advisory Board
shall be provided access to records and information in the
United States Trademark Office, except for personnel or other
privileged information.
``SEC. 55. ANNUAL REPORT TO CONGRESS.
``The Commissioner shall report to the Director of the
United States Patent and Trademark Organization such
information as the Director is required to report to Congress
annually under chapter 91 of title 5, including--
``(1) the moneys received and expended by the Office;
``(2) the purposes for which the moneys were spent;
``(3) the quality and quantity of the work of the Office;
and
``(4) other information relating to the Office.
``SEC. 56. TRADEMARK OFFICE FUNDING.
``(a) Fees Payable to the Office.--All fees for services
performed by or materials furnished by the United States
Trademark Office shall be payable to the Office.
``(b) Use of Moneys.--Moneys from fees shall be available
to the United States Trademark Office to carry out, to the
extent provided in appropriations Acts, 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 Commissioner
under this chapter shall be used only for the registration of
trademarks and for other services and materials relating to
trademarks.
``(c) Contribution to the Office of the Director of the
United States Patent and Trademark Organization.--The
Trademark Office shall contribute 50 percent of the annual
budget of the Office of the Director of the United States
Patent and Trademark Organization.''.
(b) 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 of Trademarks, the Deputy Commissioner of
Trademarks, and members competent in trademark law who are
appointed by the Commissioner.''.
(c) Determination of Fees.--Section 31(a) of the Act of
July 5, 1946 (commonly referred to as the Trademark Act of
1946) (15 U.S.C. 1067(a)) is amended by striking the second
and third sentences and inserting the following: ``Fees
established under this subsection may be adjusted by the
Commissioner, after consulting with the Trademark Office
Management Advisory Board in accordance with section
53(a)(2)(C) of this Act and after notice and opportunity for
full participation by interested public and private parties.
The Director of the United States Patent and Trademark
Organization shall determine whether such fees are consistent
with the policy direction of the Secretary of Commerce.''.
SEC. 116. SUITS BY AND AGAINST THE ORGANIZATION.
(a) Actions Under United States Law.--Any civil action or
proceeding to which the United States Patent and Trademark
Organization 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
Organization.
(b) Representation by the Department of Justice.--The
United States Patent and Trademark Organization shall be
deemed an agency of the United States for purposes of section
516 of title 28, United States Code.
(c) Prohibition on Attachment, Liens, or Similar Process.--
No attachment, garnishment, lien, or similar process,
intermediate or final, in law or equity, may be issued
against property of the Organization.
SEC. 117. FUNDING.
(a) In General.--The activities of the United States Patent
and Trademark Organization and each office of the
Organization shall be funded entirely through fees payable to
the United States Patent Office (under section 42 of title
35, United States Code) and the United States Trademark
Office (under section 56 of the Act of July 5, 1946 (commonly
known as the Trademark Act of 1946)), and surcharges
appropriated by Congress, to the extent provided in
appropriations Acts and subject to the provisions of
subsection (b).
(b) Borrowing Authority.--
(1) In general.--The United States Patent and Trademark
Organization 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 the activities of the United States Patent
Office and the United States Trademark Office. Borrowing
under this section shall be subject to prior approval in
appropriations Acts. Such borrowing shall not exceed amounts
approved in appropriations Acts.
(2) Borrowing authority.--Any borrowing under this
subsection shall be repaid only from fees paid to the Office
for which such obligations were issued and surcharges
appropriated by Congress. Such obligations shall be
redeemable at the option of the United States Patent and
Trademark Organization before maturity in the manner
stipulated in such obligations and shall have such maturity
as is determined by the United States Patent and Trademark
Organization 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.
(3) Purchase of obligations.--The Secretary of the Treasury
shall purchase any obligations of the United States Patent
and Trademark Organization 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, United States
Code, and the purposes for which securities may be issued
under that chapter are extended to include such purpose.
(4) Treatment.--Payment under this subsection of the
purchase price of such obligations of the United States
Patent and Trademark Organization shall be treated as public
debt transactions of the United States.
SEC. 118. TRANSFERS.
(a) Transfer of Functions.--Except as relates to the
direction of patent and trademark policy, there are
transferred to, and vested in, the United States Patent and
Trademark Organization 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 title, 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 Organization, on the effective date of this title,
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 title.
Subtitle B--Effective Date; Technical Amendments
SEC. 131. EFFECTIVE DATE.
This title and the amendments made by this title shall take
effect 4 months after the date of the enactment of this Act.
SEC. 132. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Amendments to Title 35.--
(1) Table of parts.--The item relating to part I in the
table of parts for title 35, United States Code, is amended
to read as follows:
``I. United States Patent Office..............................1.''.....
[[Page S2694]]
(2) Heading.--The heading for part I of title 35, United
States Code, is amended to read as follows:
``PART I--UNITED STATES PATENT OFFICE''.
(3) Table of chapters.--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) Table of sections.--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 Office Management Advisory Board.
``6. Duties of Commissioner.
``7. Board of Patent Appeals and Interferences.
``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) Commissioner of patents and trademarks.--(A) Section
41(h)(1) of title 35, United States Code, is amended by
striking ``Commissioner of Patents and Trademarks'' and
inserting ``Commissioner''.
(B) Section 155 of title 35, United States Code, is amended
by striking ``Commissioner of Patents and Trademarks'' and
inserting ``Commissioner''.
(C) Section 155A(c) of title 35, United States Code, is
amended by striking ``Commissioner of Patents'' and inserting
``Commissioner''.
(6) Patent and trademark office.--The provisions of title
35, United States Code, are amended by striking ``Patent and
Trademark Office'' each place it appears and inserting
``Patent Office''.
(b) Amendments to the Trademark Act of 1946.--
(1) References.--All amendments in this subsection refer to
the Act of July 5, 1946 (commonly referred to as the
Trademark Act of 1946).
(2) Amendments relating to commissioner.--Section 61 (as
redesignated by section 115(a)(2) of this Act) is amended by
striking the undesignated paragraph relating to the
definition of the term ``Commissioner'' and inserting the
following:
``The term `Commissioner' means the Commissioner of
Trademarks.''.
(3) Amendments relating to patent and trademark office.--
(A) Section 1(a)(1) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(B) Section 1(a)(2) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(C) Section 1(b)(1) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(D) Section 1(b)(2) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(E) Section 1(d)(1) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(F) Section 1(e) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(G) Section 2(d) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(H) Section 7(a) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(I) Section 7(d) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(J) Section 7(e) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(K) Section 7(f) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(L) Section 7(g) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(M) Section 8(a) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(N) Section 8(b) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(O) Section 10 is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(P) Section 12(a) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(Q) Section 13(a) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(R) Section 13(b)(1) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(S) Section 15(2) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(T) Section 17 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(U) Section 21(a)(2) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(V) Section 21(a)(3) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(W) Section 21(a)(4) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(X) Section 21(b)(3) is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(Y) Section 21(b)(4) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(Z) Section 24 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(AA) Section 29 is amended by striking ``Patent and
Trademark Office'' each place such term appears and inserting
``Trademark Office''.
(BB) Section 30 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(CC) Section 31(a) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(DD) Section 34(a) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(EE) Section 34(d)(1)(B)(i) is amended by striking ``Patent
and Trademark Office'' and inserting ``Trademark Office''.
(FF) Section 35(a) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(GG) Section 36 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(HH) Section 37 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(II) Section 38 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(JJ) Section 39(b) is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(KK) Section 41 is amended by striking ``Patent and
Trademark Office'' and inserting ``Trademark Office''.
(LL) Section 61 (as redesignated under section 115(a)(2) of
this Act) is amended in the undesignated paragraph relating
to the definition of ``registered mark''--
(i) by striking ``Patent and Trade Mark Office'' and
inserting ``Trademark Office; and
(ii) by striking ``Patent and Trade Office'' and inserting
``Trademark Office''.
(MM) Section 72(a) (as redesignated under section 115(a)(2)
of this Act) is amended by striking ``Patent and Trademark
Office'' and inserting ``Trademark Office''.
(NN) Section 75 (as redesignated under section 115(a)(2) of
this Act) is amended by striking ``Patent and Trademark
Office'' and inserting ``Trademark Office''.
(c) Amendments to Title 5.--Section 5316 of title 5, United
States Code, is amended--
(1) by striking ``Commissioner of Patents, Department of
Commerce.''; and
(2) by striking:
``Deputy Commissioner of Patents and Trademarks.
``Assistant Commissioner for Patents.
``Assistant Commissioner for Trademarks.''.
(d) Amendment to Title 31.--Section 9101(3) of title 31,
United States Code, is amended by adding at the end the
following:
``(O) the United States Patent and Trademark
Organization.''.
(e) Amendments to Inspector General Act of 1978.--Section
11 of the Inspector General Act of 1978 (5 U.S.C. App.) is
amended--
(1) in paragraph (1) by striking ``or the Commissioner of
Social Security, Social Security Administration;'' and
inserting ``the Commissioner of Social Security, Social
Security Administration; or the Director of the United States
Patent and Trademark Organization, United States Patent and
Trademark Organization;''; and
(2) in paragraph (2) by striking ``or the Veterans'
Administration, or the Social Security Administration;'' and
inserting ``the Veterans' Administration, the Social Security
Administration, or the United States Patent and Trademark
Organization;''.
Subtitle C--Miscellaneous Provisions
SEC. 141. 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, agency, or office from
which a function is transferred by this title--
(1) to the head of such department, agency, or office is
deemed to refer to the head of the department, agency, or
office to which such function is transferred; or
(2) to such department, agency, or office is deemed to
refer to the department, agency, or office to which such
function is transferred.
SEC. 142. EXERCISE OF AUTHORITIES.
Except as otherwise provided by law, a Federal official to
whom a function is transferred by this title 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
[[Page S2695]]
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 title.
SEC. 143. SAVINGS PROVISIONS.
(a) Legal Documents.--All orders, determinations, rules,
regulations, permits, grants, loans, contracts, agreements,
certificates, licenses, and privileges that--
(1) 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 title,
or any other Government official, or by a court of competent
jurisdiction, in the performance of any function that is
transferred by this title, and
(2) 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 title 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 title before an office
transferred by this title, 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
title 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 title had not been enacted.
(c) Suits.--This title shall not affect suits commenced
before the effective date of this title, 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 title 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 title, shall abate
by reason of the enactment of this title.
(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 title
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 title, any statutory
requirements relating to notice, hearings, action upon the
record, or administrative or judicial review that apply to
any function transferred by this title 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 title.
SEC. 144. TRANSFER OF ASSETS.
Except as otherwise provided in this title, 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 title
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. 145. DELEGATION AND ASSIGNMENT.
(a) In General.--Except as otherwise expressly prohibited
by law or otherwise provided in this title, an official to
whom functions are transferred under this title (including
the head of any office to which functions are transferred
under this title) may--
(1) delegate any of the functions so transferred to such
officers and employees of the office of the official as the
official may designate; and
(2) authorize successive redelegations of such functions as
may be necessary or appropriate.
(b) Responsibility for Administration.--No delegation of
functions under this section or under any other provision of
this title shall relieve the official to whom a function is
transferred under this title of responsibility for the
administration of the function.
SEC. 146. 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 title.
(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
title, 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 title.
(c) Termination of Affairs.--The Director shall provide for
the termination of the affairs of all entities terminated by
this title and for such further measures and dispositions as
may be necessary to effectuate the purposes of this title.
SEC. 147. CERTAIN VESTING OF FUNCTIONS CONSIDERED TRANSFERS.
For purposes of this title, the vesting of a function in a
department, agency, or office pursuant to reestablishment of
an office shall be considered to be the transfer of the
function.
SEC. 148. AVAILABILITY OF EXISTING FUNDS.
Existing appropriations and funds available for the
performance of functions, programs, and activities terminated
pursuant to this title 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. 149. DEFINITIONS.
For purposes of this title--
(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.
TITLE II--EARLY PUBLICATION OF PATENT APPLICATIONS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Patent Application
Publication Act of 1997''.
SEC. 202. EARLY PUBLICATION.
Section 122 of title 35, United States Code, is amended to
read as follows:
``Sec. 122. Confidential status of applications; publication
of patent applications
``(a) Confidentiality.--Except as provided in subsection
(b), applications for patents shall be kept in confidence by
the Patent Office and no information concerning the same
given without authority of the applicant or owner unless
necessary to carry out the provisions of an Act of Congress
or in such special circumstances as may be determined by the
Commissioner.
``(b) Publication.--
``(1) In general.--(A) Subject to paragraph (2), each
application for patent, except applications for design
patents filed under chapter 16 of this title and provisional
applications filed under section 111(b) of this title, shall
be published, in accordance with procedures determined by the
Commissioner, as soon as possible after the expiration of a
period of 18 months from the earliest filing date for which a
benefit is sought under this title. At the request of the
applicant, an application may be published earlier than the
end of such 18-month period.
``(B) No information concerning published patent
applications shall be made available to the public except as
the Commissioner determines.
``(C) Notwithstanding any other provision of law, a
determination by the Commissioner to release or not to
release information concerning a published patent application
shall be final and nonreviewable.
``(2) Exceptions.--(A) An application that is no longer
pending shall not be published.
``(B) An application that is subject to a secrecy order
pursuant to section 181 of this title shall not be published.
``(C)(i) Upon the request of the applicant at the time of
filing, the application shall not be published in accordance
with paragraph (1) until 3 months after the Commissioner
makes a notification to the applicant under section 132 of
this title.
``(ii) Applications filed pursuant to section 363 of this
title, applications asserting priority under section 119 or
365(a) of this title, and applications asserting the benefit
of an earlier application under section 120, 121, or 365(c)
of this title shall not be eligible for a request pursuant to
this subparagraph.
``(iii) In a request under this subparagraph, the applicant
shall certify that the invention disclosed in the application
was not and will not be the subject of an application filed
in a foreign country.
``(iv) The Commissioner may establish appropriate
procedures and fees for making a request under this
subparagraph.
``(c) Pre-Issuance Opposition.--The provisions of this
section shall not operate to create any new opportunity for
pre-issuance opposition. The Commissioner may establish
appropriate procedures to ensure that this section does not
create any new opportunity for pre-issuance opposition that
did not exist prior to the adoption of this section.''.
SEC. 203. TIME FOR CLAIMING BENEFIT OF EARLIER FILING DATE.
(a) In a Foreign Country.--Section 119(b) of title 35,
United States Code, is amended to read as follows:
``(b)(1) No application for patent shall be entitled to
this right of priority unless a claim, identifying the
foreign application by specifying its application number,
country, and the day, month, and year of its filing, is filed
in the Patent Office at such time during the pendency of the
application as required by the Commissioner.
``(2) The Commissioner may consider the failure of the
applicant to file a timely claim for priority as a waiver of
any such claim,
[[Page S2696]]
and may require the payment of a surcharge as a condition of
accepting an untimely claim during the pendency of the
application.
``(3) The Commissioner may require a certified copy of the
original foreign application, specification, and drawings
upon which it is based, a translation if not in the English
language, and such other information as the Commissioner
considers necessary. Any such certification shall be made by
the foreign intellectual property authority in which the
foreign application was filed and show the date of the
application and of the filing of the specification and other
papers.''.
(b) In the United States.--Section 120 of title 35, United
States Code, is amended by adding at the end the following:
``The Commissioner may determine the time period during the
pendency of the application within which an amendment
containing the specific reference to the earlier filed
application is submitted. The Commissioner may consider the
failure to submit such an amendment within that time period
as a waiver of any benefit under this section. The
Commissioner may establish procedures, including the payment
of a surcharge, to accept unavoidably late submissions of
amendments under this section.''.
SEC. 204. PROVISIONAL RIGHTS.
Section 154 of title 35, United States Code, is amended--
(1) in the section caption by inserting ``; provisional
rights'' after ``patent''; and
(2) by adding at the end the following new subsection:
``(d) Provisional Rights.--
``(1) In general.--In addition to other rights provided by
this section, a patent shall include the right to obtain a
reasonable royalty from any person who, during the period
beginning on the date of publication of the application for
such patent pursuant to section 122(b) of this title, or in
the case of an international application filed under the
treaty defined in section 351(a) of this title designating
the United States under Article 21(2)(a) of such treaty, the
date of publication of the application, and ending on the
date the patent is issued--
``(A)(i) makes, uses, offers for sale, or sells in the
United States the invention as claimed in the published
patent application or imports such an invention into the
United States; or
``(ii) if the invention as claimed in the published patent
application is a process, uses, offers for sale, or sells in
the United States or imports into the United States products
made by that process as claimed in the published patent
application; and
``(B) had actual notice of the published patent
application, and where the right arising under this paragraph
is based upon an international application designating the
United States that is published in a language other than
English, a translation of the international application into
the English language.
``(2) Right based on substantially identical inventions.--
The right under paragraph (1) to obtain a reasonable royalty
shall not be available under this subsection unless the
invention as claimed in the patent is substantially identical
to the invention as claimed in the published patent
application.
``(3) Time limitation on obtaining a reasonable royalty.--
The right under paragraph (1) to obtain a reasonable royalty
shall be available only in an action brought not later than 6
years after the patent is issued. The right under paragraph
(1) to obtain a reasonable royalty shall not be affected by
the duration of the period described in paragraph (1).
``(4) Requirements for international applications.--
``(A) Effective date.--The right under paragraph (1) to
obtain a reasonable royalty based upon the publication under
the treaty of an international application designating the
United States shall commence from the date that the Patent
Office receives a copy of the publication under the treaty
defined in section 351(a) of this title of the international
application, or, if the publication under the treaty of the
international application is in a language other than
English, from the date that the Patent Office receives a
translation of the international application in the English
language.
``(B) Copies.--The Commissioner may require the applicant
to provide a copy of the international application and a
translation thereof.''.
SEC. 205. PRIOR ART EFFECT OF PUBLISHED APPLICATIONS.
Section 102(e) of title 35, United States Code, is amended
to read as follows:
``(e) the invention was described in--
``(1)(A) an application for patent, published pursuant to
section 122(b) of this title, by another filed in the United
States before the invention by the applicant for patent,
except that an international application filed under the
treaty defined in section 351(a) of this title shall have the
effect under this subsection of a national application
published under section 122(b) of this title only if the
international application designating the United States was
published under Article 21(2)(a) of such treaty in the
English language, or
``(B) a patent granted on an application for patent by
another filed in the United States before the invention by
the applicant for patent, or''.
SEC. 206. COST RECOVERY FOR PUBLICATION.
The Commissioner shall recover the cost of early
publication required by the amendment made by section 202 by
adjusting the filing, issue, and maintenance fees under title
35, United States Code, by charging a separate publication
fee, or by any combination of these methods.
SEC. 207. CONFORMING CHANGES.
The following provisions of title 35, United States Code,
are amended:
(1) Section 11 is amended in paragraph 1 of subsection (a)
by inserting ``and published applications for patents'' after
``Patents''.
(2) Section 12 is amended--
(A) in the section caption by inserting ``and
applications'' after ``patents''; and
(B) by inserting ``and published applications for patents''
after ``patents''.
(3) Section 13 is amended--
(A) in the section caption by inserting ``and
applications'' after ``patents''; and
(B) by inserting ``and published applications for patents''
after ``patents''.
(4) The items relating to sections 12 and 13 in the table
of sections for chapter 1 are each amended by inserting ``and
applications'' after ``patents''.
(5) The item relating to section 122 in the table of
sections for chapter 11 is amended by inserting ``;
publication of patent applications'' after ``applications''.
(6) The item relating to section 154 in the table of
sections for chapter 14 is amended by inserting ``;
provisional rights'' after ``patent''.
(7) Section 181 is amended--
(A) in the first undesignated paragraph--
(i) by inserting ``by the publication of an application
or'' after ``disclosure''; and
(ii) ``the publication of the application or'' after
``withhold'';
(B) in the second undesignated paragraph by inserting ``by
the publication of an application or'' after ``disclosure of
an invention'';
(C) in the third undesignated paragraph--
(i) by inserting ``by the publication of the application
or'' after ``disclosure of the invention''; and
(ii) ``the publication of the application or'' after
``withhold''; and
(D) in the fourth undesignated paragraph by inserting ``the
publication of an application or'' after ``and'' in the first
sentence.
(8) Section 252 is amended in the first undesignated
paragraph by inserting ``substantially'' before ``identical''
each place it appears.
(9) Section 284 is amended by adding at the end of the
second undesignated paragraph the following: ``Increased
damages under this paragraph shall not apply to provisional
rights under section 154(d) of this title.''.
(10) Section 374 is amended to read as follows:
``Sec. 374. Publication of international application: Effect
``The publication under the treaty, defined in section
351(a) of this title, of an international application
designating the United States shall confer the same rights
and shall have the same effect under this title as an
application for patent published under section 122(b), except
as provided in sections 102(e) and 154(d) of this title.''.
SEC. 208. LAST DAY OF PENDENCY OF PROVISIONAL APPLICATION.
Section 119(e) of title 35, United States Code, is amended
by adding at the end the following:
``(3) If the day that is 12 months after the filing date of
a provisional application falls on a Saturday, Sunday, or
legal holiday as defined in rule 6(a) of the Federal Rules of
Civil Procedure, the period of pendency of the provisional
application shall be extended to the next succeeding business
day.''.
SEC. 209. EFFECTIVE DATE.
(a) Sections 202 Through 207.--Sections 202 through 207,
and the amendments made by such sections, shall take effect
on April 1, 1998, and shall apply to all applications filed
under section 111 of title 35, United States Code, on or
after that date, and all applications complying with section
371 of title 35, United States Code, that resulted from
international applications filed on or after that date. The
amendment made by section 204 shall also apply to
international applications designating the United States that
are filed on or after April 1, 1998.
(b) Section 208.--The amendments made by section 208 shall
take effect on the date of the enactment of this Act and,
except for a design patent application filed under chapter 16
of title 35, United States Code, shall apply to any
application filed on or after June 8, 1995.
TITLE III--PATENT TERM RESTORATION
SEC. 301. PATENT TERM EXTENSION AUTHORITY.
Section 154(b) of title 35, United States Code, is amended
to read as follows:
``(b) Term Extension.--
``(1) Basis for patent term extension.--
``(A) Delay.--Subject to the limitations under paragraph
(2), if the issue of an original patent is delayed due to--
``(i) a proceeding under section 135(a) of this title;
``(ii) the imposition of an order pursuant to section 181
of this title;
``(iii) appellate review by the Board of Patent Appeals and
Interferences or by a Federal court where the patent was
issued pursuant to a decision in the review reversing an
adverse determination of patentability; or
``(iv) an unusual administrative delay by the Patent Office
in issuing the patent,
the term of the patent shall be extended for the period of
delay.
``(B) Administrative delay.--For purposes of subparagraph
(A)(iv), an unusual administrative delay by the Patent Office
is the failure to--
[[Page S2697]]
``(i) make a notification of the rejection of any claim for
a patent or any objection or argument under section 132 of
this title or give or mail a written notice of allowance
under section 151 of this title not later than 14 months
after the date on which the application was filed;
``(ii) respond to a reply under section 132 of this title
or to an appeal taken under section 134 of this title not
later than 4 months after the date on which the reply was
filed or the appeal was taken;
``(iii) act on an application not later than 4 months after
the date of a decision by the Board of Patent Appeals and
Interferences under section 134 or 135 of this title or a
decision by a Federal court under section 141, 145, or 146 of
this title where allowable claims remain in an application;
or
``(iv) issue a patent not later than 4 months after the
date on which the issue fee was paid under section 151 of
this title and all outstanding requirements were satisfied.
``(2) Limitations.--
``(A) In general.--The total duration of any extensions
granted pursuant to either subclause (iii) or (iv) of
paragraph (1)(A) or both such subclauses shall not exceed 10
years. To the extent that periods of delay attributable to
grounds specified in paragraph (1) overlap, the period of any
extension granted under this subsection shall not exceed the
actual number of days the issuance of the patent was delayed.
``(B) Reduction of extension.--The period of extension of
the term of a patent under this subsection shall be reduced
by a period equal to the time in which the applicant failed
to engage in reasonable efforts to conclude prosecution of
the application. The Commissioner shall prescribe regulations
establishing the circumstances that constitute a failure of
an applicant to engage in reasonable efforts to conclude
processing or examination of an application.
``(C) Disclaimed term.--No patent the term of which has
been disclaimed beyond a specified date may be extended under
this section beyond the expiration date specified in the
disclaimer.
``(3) Procedures.--The Commissioner shall prescribe
regulations establishing procedures for the notification of
patent term extensions under this subsection and procedures
for contesting patent term extensions under this
subsection.''.
SEC. 302. EFFECTIVE DATE.
The amendments made by section 301 shall take effect on the
date of the enactment of this Act and, except for a design
patent application filed under chapter 16 of title 35, United
States Code, shall apply to any application filed on or after
June 8, 1995.
TITLE IV--PRIOR DOMESTIC COMMERCIAL USE
SEC. 401. SHORT TITLE.
This title may be cited as the ``Prior Domestic Commercial
Use Act of 1997''.
SEC. 402. DEFENSE TO PATENT INFRINGEMENT BASED ON PRIOR
DOMESTIC COMMERCIAL USE.
(a) Defense.--Chapter 28 of title 35, United States Code,
is amended by adding at the end the following new section:
``Sec. 273. Prior domestic commercial use; defense to
infringement
``(a) Definitions.--For purposes of this section--
``(1) the terms `commercially used', `commercially use',
and `commercial use' mean the use in the United States in
commerce or the use in the design, testing, or production in
the United States of a product or service which is used in
commerce, whether or not the subject matter at issue is
accessible to or otherwise known to the public;
``(2) the terms `used in commerce', and `use in commerce'
mean that there has been an actual sale or other commercial
transfer of the subject matter at issue or that there has
been an actual sale or other commercial transfer of a product
or service resulting from the use of the subject matter at
issue; and
``(3) the `effective filing date' of a patent is the
earlier of the actual filing date of the application for the
patent or the filing date of any earlier United States,
foreign, or international application to which the subject
matter at issue is entitled under section 119, 120, or 365 of
this title.
``(b) Defense to Infringement.--
``(1) In general.--A person shall not be liable as an
infringer under section 271 of this title with respect to any
subject matter that would otherwise infringe one or more
claims in the patent being asserted against such person, if
such person had, acting in good faith, commercially used the
subject matter before the effective filing date of such
patent.
``(2) Exhaustion of right.--The sale or other disposition
of the subject matter of a patent by a person entitled to
assert a defense under this section with respect to that
subject matter shall exhaust the patent owner's rights under
the patent to the extent such rights would have been
exhausted had such sale or other disposition been made by the
patent owner.
``(c) Limitations and Qualifications of Defense.--The
defense to infringement under this section is subject to the
following:
``(1) Derivation.--A person may not assert the defense
under this section if the subject matter on which the defense
is based was derived from the patentee or persons in privity
with the patentee.
``(2) Not a general license.--The defense asserted by a
person under this section is not a general license under all
claims of the patent at issue, but extends only to the
subject matter claimed in the patent with respect to which
the person can assert a defense under this chapter, except
that the defense shall also extend to variations in the
quantity or volume of use of the claimed subject matter, and
to improvements in the claimed subject matter that do not
infringe additional specifically claimed subject matter of
the patent.
``(3) Effective and serious preparation.--With respect to
subject matter that cannot be commercialized without a
significant investment of time, money, and effort, a person
shall be deemed to have commercially used the subject matter
if--
``(A) before the effective filing date of the patent, the
person reduced the subject matter to practice in the United
States, completed a significant portion of the total
investment necessary to commercially use the subject matter,
and made a commercial transaction in the United States in
connection with the preparation to use the subject matter;
and
``(B) thereafter the person diligently completed the
remainder of the activities and investments necessary to
commercially use the subject matter, and promptly began
commercial use of the subject matter, even if such activities
were conducted after the effective filing date of the patent.
``(4) Burden of proof.--A person asserting the defense
under this section shall have the burden of establishing the
defense.
``(5) Abandonment of use.--A person who has abandoned
commercial use of subject matter may not rely on activities
performed before the date of such abandonment in establishing
a defense under subsection (b) with respect to actions taken
after the date of such abandonment.
``(6) Personal defense.--The defense under this section may
only be asserted by the person who performed the acts
necessary to establish the defense and, except for any
transfer to the patent owner, the right to assert the defense
shall not be licensed or assigned or transferred to another
person except in connection with the good faith assignment or
transfer of the entire enterprise or line of business to
which the defense relates.
``(7) One-year limitation.--A person may not assert a
defense under this section unless the subject matter on which
the defense is based had been commercially used or reduced to
practice more than one year prior to the effective filing
date of the patent by the person asserting the defense or
someone in privity with that person.
``(d) Unsuccessful Assertion of Defense.--If the defense
under this section is pleaded by a person who is found to
infringe the patent and who subsequently fails to demonstrate
a reasonable basis for asserting the defense, the court shall
find the case exceptional for the purpose of awarding
attorney's fees under section 285 of this title.
``(e) Invalidity.--A patent shall not be deemed to be
invalid under section 102 or 103 of this title solely because
a defense is established under this section.''.
(b) Conforming Amendment.--The table of sections at the
beginning of chapter 28 of title 35, United States Code, is
amended by adding at the end the following new item:
``Sec. 273. Prior domestic commercial use; defense to infringement.''.
SEC. 403. EFFECTIVE DATE AND APPLICABILITY.
This title and the amendments made by this title shall take
effect on the date of the enactment of this Act, but shall
not apply to any action for infringement that is pending on
such date of enactment or with respect to any subject matter
for which an adjudication of infringement, including a
consent judgment, has been made before such date of
enactment.
TITLE V--PATENT REEXAMINATION REFORM
SEC. 501. SHORT TITLE.
This title may be cited as the ``Patent Reexamination
Reform Act of 1997''.
SEC. 502. DEFINITIONS.
Section 100 of title 35, United States Code, is amended by
adding at the end the following new subsection:
``(e) The term `third-party requester' means a person
requesting reexamination under section 302 of this title who
is not the patent owner.''.
SEC. 503. REEXAMINATION PROCEDURES.
(a) Request for Reexamination.--Section 302 of title 35,
United States Code, is amended to read as follows:
``Sec. 302. Request for reexamination
``(a) In General.--Any person at any time may file a
request for reexamination by the Office of a patent on the
basis of any prior art cited under the provisions of section
301 of this title or on the basis of the requirements of
section 112 of this title except for the requirement to set
forth the best mode of carrying out the invention.
``(b) Requirements.--The request shall--
``(1) be in writing, include the identity of the real party
in interest, and be accompanied by payment of a reexamination
fee established by the Commissioner of Patents pursuant to
the provisions of section 41 of this title; and
``(2) set forth the pertinency and manner of applying cited
prior art to every claim for which reexamination is requested
or the manner in which the patent specification or claims
fail to comply with the requirements of section 112 of this
title.
[[Page S2698]]
``(c) Copy.--Unless the requesting person is the owner of
the patent, the Commissioner promptly shall send a copy of
the request to the owner of record of the patent.''.
(b) Determination of Issue by Commissioner.--Section 303 of
title 35, United States Code, is amended to read as follows:
``Sec. 303. Determination of issue by Commissioner
``(a) Reexamination.--Not later than 3 months after the
filing of a request for reexamination under the provisions of
section 302 of this title, the Commissioner shall determine
whether a substantial new question of patentability affecting
any claim of the patent concerned is raised by the request,
with or without consideration of other patents or printed
publications. On the Commissioner's initiative, and any time,
the Commissioner may determine whether a substantial new
question of patentability is raised by patents and
publications or by the failure of the patent specification or
claims to comply with the requirements of section 112 of this
title except for the best mode requirement described in
section 302.
``(b) Record.--A record of the Commissioner's determination
under subsection (a) shall be placed in the official file of
the patent, and a copy shall be promptly given or mailed to
the owner of record of the patent and to the third-party
requester, if any.
``(c) Final Decision.--A determination by the Commissioner
pursuant to subsection (a) shall be final and nonappealable.
Upon a determination that no substantial new question of
patentability has been raised, the Commissioner may refund a
portion of the reexamination fee required under section 302
of this title.''.
(c) Reexamination Order by Commissioner.--Section 304 of
title 35, United States Code, is amended to read as follows:
``Sec. 304. Reexamination order by Commissioner
``If, in a determination made under the provisions of
section 303(a) of this title, the Commissioner finds that a
substantial new question of patentability affecting a claim
of a patent is raised, the determination shall include an
order for reexamination of the patent for resolution of the
question. The order may be accompanied by the initial action
of the Patent Office on the merits of the reexamination
conducted in accordance with section 305 of this title.''.
(d) Conduct of Reexamination Proceedings.--Section 305 of
title 35, United States Code, is amended to read as follows:
``Sec. 305. Conduct of reexamination proceedings
``(a) In General.--Subject to subsection (b), reexamination
shall be conducted according to the procedures established
for initial examination under the provisions of sections 132
and 133 of this title. In any reexamination proceeding under
this chapter, the patent owner shall be permitted to propose
any amendment to the patent and a new claim or claims, except
that no proposed amended or new claim enlarging the scope of
the claims of the patent shall be permitted.
``(b) Response.--(1) This subsection shall apply to any
reexamination proceeding in which the order for reexamination
is based upon a request by a third-party requester.
``(2) With the exception of the reexamination request, any
document filed by either the patent owner or the third-party
requester shall be served on the other party.
``(3) If the patent owner files a response to any Patent
Office action on the merits, the third-party requester shall
have 1 opportunity to file written comments within a
reasonable period not less than 1 month after the date of
service of the patent owner's response. Written comments
provided under this paragraph shall be limited to issues
covered by the Patent Office action or the patent owner's
response.
``(c) Special Dispatch.--Unless otherwise provided by the
Commissioner for good cause, all reexamination proceedings
under this section, including any appeal to the Board of
Patent Appeals and Interferences, shall be conducted with
special dispatch within the Office.''.
(e) Appeal.--Section 306 of title 35, United States Code,
is amended to read as follows:
``Sec. 306. Appeal
``(a) Patent Owner.--The patent owner involved in a
reexamination proceeding under this chapter--
``(1) may appeal under the provisions of section 134 of
this title, and may appeal under the provisions of sections
141 through 144 of this title, with respect to any decision
adverse to the patentability of any original or proposed
amended or new claim of the patent, and
``(2) may be a party to any appeal taken by a third-party
requester pursuant to subsection (b) of this section.
``(b) Third-Party Requester.--A third-party requester may--
``(1) appeal under the provisions of section 134 of this
title, and may appeal under the provisions of sections 141
through 144 of this title, with respect to any final decision
favorable to the patentability of any original or proposed
amended or new claim of the patent; or
``(2) be a party to any appeal taken by the patent owner,
subject to subsection (c) of this section.
``(c) Participation as Party.--
``(1) In general.--A third-party requester who, under the
provisions of sections 141 through 144 of this title, files a
notice of appeal or who participates as a party to an appeal
by the patent owner is estopped from asserting at a later
time, in any forum, the invalidity of any claim determined to
be patentable on appeal on any ground which the third-party
requester raised or could have raised during the
reexamination proceedings.
``(2) Election to participate.--A third-party requester is
deemed not to have participated as a party to an appeal by
the patent owner unless, not later than 20 days after the
patent owner has filed notice of appeal, the third-party
requester files notice with the Commissioner electing to
participate.''.
(f) Reexamination Prohibited.--
(1) In general.--Chapter 30 of title 35, United States
Code, is amended by adding at the end the following new
section:
``Sec. 308. Reexamination prohibited
``(a) Order for Reexamination.--Notwithstanding any
provision of this chapter, once an order for reexamination of
a patent has been issued under section 304 of this title,
neither the patent owner nor the third-party requester, if
any, nor privies of either, may file a subsequent request for
reexamination of the patent until a reexamination certificate
is issued and published under section 307 of this title,
unless authorized by the Commissioner.
``(b) Final Decision.--Once a final decision has been
entered against a party in a civil action arising in whole or
in part under section 1338 of title 28 that the party has not
sustained its burden of proving the invalidity of any patent
claim in suit, then neither that party nor its privies may
thereafter request reexamination of any such patent claim on
the basis of issues which that party or its privies raised or
could have raised in such civil action, and a reexamination
requested by that party or its privies on the basis of such
issues may not thereafter be maintained by the Office,
notwithstanding any other provision of this chapter.''.
(2) Technical and conforming amendment.--The table of
sections for chapter 30 of title 35, United States Code, is
amended by adding at the end the following:
``308. Reexamination prohibited.''.
SEC. 504. CONFORMING AMENDMENTS.
(a) Patent Fees; Patent Search Systems.--Section 41(a)(7)
of title 35, United States Code, is amended to read as
follows:
``(7) On filing each petition for the revival of an
unintentionally abandoned application for a patent, for the
unintentionally delayed payment of the fee for issuing each
patent, or for an unintentionally delayed response by the
patent owner in a reexamination proceeding, $1,250, unless
the petition is filed under sections 133 or 151 of this
title, in which case the fee shall be $110.''.
(b) Appeal to the Board of Patent Appeals and
Interferences.--Section 134 of title 35, United States Code,
is amended to read as follows:
``Sec. 134. Appeal to the Board of Patent Appeals and
Interferences
``(a) Patent Applicant.--An applicant for a patent, any of
whose claims has been twice rejected, may appeal from the
decision of the primary examiner to the Board of Patent
Appeals and Interferences, having once paid the fee for such
appeal.
``(b) Patent Owner.--A patent owner in a reexamination
proceeding may appeal from the final rejection of any claim
by the primary examiner to the Board of Patent Appeals and
Interferences, having once paid the fee for such appeal.
``(c) Third-Party.--A third-party requester may appeal to
the Board of Patent Appeals and Interferences from the final
decision of the primary examiner favorable to the
patentability of any original or proposed amended or new
claim of a patent, having once paid the fee for such
appeal.''.
(d) Appeal to Court of Appeals for the Federal Circuit.--
Section 141 of title 35, United States Code, is amended by
amending the first sentence to read as follows: ``An
applicant, a patent owner, or a third-party requester,
dissatisfied with the final decision in an appeal to the
Board of Patent Appeals and Interferences under section 134
of this title, may appeal the decision to the United States
Court of Appeals for the Federal Circuit.''.
(e) Proceedings on Appeal.--Section 143 of title 35, United
States Code, is amended by amending the third sentence to
read as follows: ``In ex parte and reexamination cases, the
Commissioner shall submit to the court in writing the grounds
for the decision of the Patent Office, addressing all the
issues involved in the appeal.''.
(f) Civil Action To Obtain Patent.--Section 145 of title
35, United States Code, is amended in the first sentence by
inserting ``(a)'' after ``section 134''.
SEC. 505. EFFECTIVE DATE.
This title and the amendments made by this title shall take
effect on the date that is 6 months after the date of the
enactment of this Act and shall apply to all reexamination
requests filed on or after such date.
TITLE VI--MISCELLANEOUS PATENT PROVISIONS
SEC. 601. PROVISIONAL APPLICATIONS.
(a) Abandonment.--Section 111(b)(5) of title 35, United
States Code, is amended to read as follows:
``(5) Abandonment.--Notwithstanding the absence of a claim,
upon timely request and as prescribed by the Commissioner, a
provisional application may be treated as an application
filed under subsection (a). If no such request is made, the
provisional application shall be regarded as abandoned 12
months after the filing date of such application and shall
not be subject to revival thereafter.''.
[[Page S2699]]
(b) Effective Date.--The amendments made by subsection (a)
apply to a provisional application filed on or after June 8,
1995.
SEC. 602. INTERNATIONAL APPLICATIONS.
Section 119 of title 35, United States Code, is amended as
follows:
(1) In subsection (a), insert ``or in a WTO member
country'' after ``or to citizens of the United States,''.
(2) At the end of section 119 add the following new
subsections:
``(f) Applications for plant breeder's rights filed in a
WTO member country (or in a foreign UPOV Contracting Party)
shall have the same effect for the purpose of the right of
priority under subsections (a) through (c) of this section as
applications for patents, subject to the same conditions and
requirements of this section as apply to applications for
patents.
``(g) As used in this section--
``(1) the term `WTO member country' has the same meaning as
the term is defined in section 104(b)(2) of this title; and
``(2) the term `UPOV Contracting Party' means a member of
the International Convention for the Protection of New
Varieties of Plants.''.
SEC. 603. PLANT PATENTS.
(a) Tuber Propagated Plants.--Section 161 of title 35,
United States Code, is amended by striking ``a tuber
propagated plant or''.
(b) Rights in Plant Patents.--The text of section 163 of
title 35, United States Code, is amended to read as follows:
``In the case of a plant patent, the grant to the patentee,
such patentee's heirs or assigns, shall have the right to
exclude others from asexually reproducing the plant, and from
using, offering for sale, or selling the plant so reproduced,
or any of its parts, throughout the United States, or from
importing the plant so reproduced, or any parts thereof, into
the United States.''.
(c) Effective Date.--The amendments by subsection (a) shall
apply on the date of enactment of this Act. The amendments
made by subsection (b) shall apply to any plant patent issued
on or after the date of enactment of this Act.
SEC. 604. ELECTRONIC FILING.
Section 22 of title 35, United States Code, is amended by
striking ``printed or typewritten'' and inserting ``printed,
typewritten, or on an electronic medium'' .
____
Omnibus Patent Act of 1997--Summary
title i--the united states patent and trademark organization
This title establishes the United States Patent and
Trademark Organization (USPTO) as a wholly owned government
corporation connected for policy-making purposes to the
Department of Commerce. Like the existing U.S. Patent and
Trademark Office, the USPTO is charged with patent and
trademark policy formulation and the administration of the
patent and trademark systems. But unlike the present
structure, the USPTO will be freed from a heavy-handed
federal bureaucracy, which inhibits the ability of the Patent
and Trademark Office to meet the demands of those who fully
sustain its operation through user fees. Heightened
efficiency is also achieved by separating the policymaking
functions from the day-to-day operating functions.
The USPTO is headed by a Director of the U.S. Patent and
Trademark Office, who is charged with advising the President
through the Secretary of Commerce regarding patent and
trademark policy. He or she is appointed by the President
with Senate confirmation, and he or she serves at the
pleasure of the President.
The USPTO has two autonomous subdivisions: the Patent
Office and the Trademark Office. Each office is responsible
for the administration of its own system. Each office
controls its own budget and its management structure and
procedures. Each office must generate its own revenue in
order to be self-sustaining and to provide for the Office of
the Director. The Patent Office and the Trademark Office are
headed by the Commissioner of Patents and the Commissioner of
Trademarks, respectively. The two Commissioners are appointed
by the Director and serve at his or her pleasure.
title ii--early publication
Title II of the bill provides for the early publication of
patent applications. It would require the Patent Office to
publish pending applications eighteen months after the
application was filed. An exception of this rule is made for
applications filed only in the United States. Those
applications will be published eighteen months after filing
or three months after the office issues its first response on
the application, whichever is later. Additionally, once an
application is published, Title II grants the applicant
``provisional rights,'' that is, legal protection for his or
her invention.
title iii--patent term restoration
Title III deals with the problem of administrative delay in
the patent examination process by restoring to the patent
holder any part of the term that is lost due to undue
administrative delay. Title III gives clear deadlines in
which the Patent Office must act. The office has
fourteen months to issue a first office action and four
months to respond to subsequent applicant filings. Any
delay beyond those deadlines is considered undue delay and
will be restored to the patent term.
Title IV--Prior domestic Commercial Use
This title provides rights to a person who has commercially
sold an invention more than one year before the effective
filing date of a patent application by another person. Anyone
in this situation will be permitted to continue to sell his
or her product without being forced to pay a royalty to the
patent holder.
Title V--Patent Re-examination Reform
Title V provides for a greater role for third parties in
patent re-examination proceedings by allowing third-parties
to raise a challenge to an existing patent and to participate
in the reexamination process in a meaningful way.
Title VI--Miscellaneous
Provisional Applications for Patents
This title amends section 115 of Title 35 of the U.S. Code
to clarify that if a provisional application is converted
into a non-provisional application within twelve months of
filing, that it stands as a full patent application, with the
date of filing of the provisional application as the date of
priority. If no request is made within twelve months, the
provisional application is considered abandoned. This
clarification will make certain that American provisional
applications are given the same weight as other countries'
provisional applications in other countries' courts.
Plant Patents
Title VI also makes two corrections to the plant patent
statute. First, the ban on tuber propagated plants is
removed. This depression-era ban was included for fear of
limiting the food supply. This is no longer a concern.
Second, the plant patent statute is amended to include parts
of plants. This closes a loophole that foreign growers have
used to import the fruit or flowers of patented plants
without paying a royalty because the entire plant was not
being sold.
Electronic Filing
Lastly, this title also allows for the filing of patent and
trademark documents by electronic medium.
______
By Mrs. FEINSTEIN:
S. 508. A bill to provide Mai Hoa ``Jasmin'' Salehi permanent
residency; to the Committee on the Judiciary.
private relief legislation
Mrs. FEINSTEIN. Mr. President, this bill grants permanent residency
status to Jasmin Salehi, a California constituent who is currently
assisting the LA district attorney with the prosecution of her
husband's murderer.
Mai Hoa Jasmin Salehi is a Korean immigrant who was denied permanent
residency after her husband was violently murdered at a Denny's in
Reseda, CA, where he worked as manager. Local INS officials in Los
Angeles denied Jasmin's application because the law requires legal
immigrants be married for 2 years before they become eligible for
permanent resident status. Jasmin and Cyrus Salehi were newlyweds who
had been married only 11 months before the murder.
I have previously sought administrative relief for Jasmin by asking
the INS if any humanitarian exemptions could be made in Jasmin's case,
but the local INS officials in Los Angeles has told my staff that there
is nothing they can do.
Jasmin met and married Cyrus Salehi, an American citizen, in March
1995 and has completed all the paperwork necessary to obtain her green
card. But now, Jasmin has been told that she can stay in the United
States as long as the district attorney needs her to prosecute her
husband's murderer. Despite here assistance in the prosecution, Jasmin
would be deported once the investigation and subsequent trial are
completed.
Jasmin has done everything right in order to become a permanent
resident of this country--except for the tragedy of her husband's
murder 13 months before she could become a permanent resident. I hope
you support this bill so that we can help Jasmin begin to rebuild her
life in the United States.
Mr. President, I ask for unanimous consent that the attached news
article and the bill be entered into the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 508
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
I. Permanent Residence:
Notwithstanding any other provision of law, for purposes of
the Immigration and Nationality Act (8 U.S.C. 1101 et seq.),
Mai Hoa ``Jasmin'' Salehi, shall be held and considered to
have been lawfully admitted to the United States for
permanent residence as of the date of the enactment of this
Act upon payment of the required visa fees.
[[Page S2700]]
____
[From the Los Angeles Daily News]
Widow's Troubles Multiply
(By Jeannette DeSantis)
Things have gotten worse instead of better for Jasmin
Salehi.
Alone in a new apartment, half of her belongings still
packed in moving boxes, Salehi, 32, surveys her new residence
and wonders how it came to this.
When the Korean widow first came to the United States more
than a year ago, her life was filled with promise. A loving
husband with a steady income, friends and a comfortable home
in Sherman Oaks were more that she could ask for.
Then life handed her more.
Her husband of 11 months, Cyrus Salehi, was slain earlier
this year. Soon after, the Immigration and Naturalization
Service notified Salehi she would be deported because she had
not been married to a U.S. citizen long enough to get her
green card.
And recently, she was evicted from the only home she has
known since arriving in the United States.
``All these things happened at one time,'' Salehi said.
``It is really hard for me, and I get depresses . . .
especially during the holidays.''
In the midst of her first holiday season as a widow, Salehi
can only dream of her husband, Cyrus Salehi, killed in
February after two robbers shot him during a holdup at the
Reseda Denny's restaurant he owned.
``There are lots of memories of my husband . . . and our
Christmases together,'' she said. ``Now, every Christmas will
be a Christmas without him.''
But it won't be a holiday season without friends.
Francine and Ralph Myers, who informally adopted Salehi
since Cyrus's death, met her through a victim support group.
The Myers, whose son was slain, know well how those first
holiday seasons can affect a victim of crime.
``It can be a real tough time,'' Francine Myers said. ``It
is different for everyone. Jasmin doesn't want to decorate. I
remember (after my son died) I would try to change every
tradition we had and make new ones.''
Myers said Salehi is a survivor, who stood up to the INS
and was allowed to stay in the country until her husband's
accused killer stands trial. Meanwhile, she has not let her
own grief stop her from helping others.
``Although she needs help, she unselfishly helps others,''
Myers said, adding that Salehi has accompanied her to the
trial of the person accused of murdering her own son. ``That
says something about her.''
Salehi contends that she is only returning the support the
Myers have given her. ``She is a victim too, and all that
time she is there for me,'' Salehi said.
Shellie Samuels, the deputy district attorney handling the
Cyrus Salehi murder case, said that although all victims of
crime are traumatized by a loved one's death, Salehi's ordeal
has been especially nightmarish.
``Besides the emotional trauma she has gone through, the
U.S. has not done right by her,'' Samuels said. ``Her
American citizen husband gets killed and they treat her like
an illegal immigrant.''
Cyrus and Jasmin Salehi filed the paperwork for Salehi to
receive a green card in early 1995, soon after their March
nuptials.
But Salehi was deemed ineligible for residence status
because her husband was killed before they had been married
two years--an INS time requirement for a spouse sponsorship.
The INS has only offered Salehi a temporary reprieve,
allowing her to stay in the country for her husband's murder
trial.
As for Salehi, she fears if she is sent back to Korea, she
will be a stranger in her own country, a place where stigmas
are attached to orphans and widows, of which she is both.
Born Mai Hoa Joo in Seoul, Korea, in 1964, Salehi's parents
died within months of each other when she was 14. A college
graduate, Salehi visited the United States several times
before she immigrated.
During a 1993 visit, Salehi met her husband at a Denny's
restaurant in Los Angeles. They continued their relationship
even as Salehi returned to Korea.
Once married, Salehi received a work permit after she
applied for a green card and began working at a clothing
manufacturer in downtown Los Angeles, where she still puts in
10-hour days on a regular basis.
But her salary as a production manager was not enough to
cover the mortgage payment on the small house the couple
owned, even though she has inherited part ownership of the
Denny's restaurant where her husband was killed.
``She has run into a lot of roadblocks, but she is a
survivor,'' said Francine Myers. ``She will do all right as
long as she feels like she has the support behind her.''
______
By Mr. BURNS:
S. 509 A bill to provide for the return of certain program and
activity fund rejected by States to the Treasury to reduce the Federal
deficit, and for other purposes; to the Committee on the Budget and the
Committee on Governmental Affairs, jointly, pursuant to the order of
August 4, 1977, as modified by the order of April 11, 1986, with
instructions that if one Committee reports, the other Committee have
thirty days to report or be discharged.
the fair and responsible fund use act
Mr. BURNS. Mr. President, I rise to introduce the Fair and
Responsible Fund Use Act. It is a bill that will provide for the return
of funds, rejected by a State, to the Treasury. These funds will then
be used specifically to reduce the Federal deficit.
Sometimes the Federal Government makes available to Montana, and
other States, funds which are inconsistent with State priorities.
Usually this money comes with strings attached. In other words, the
Federal Government wants us to take X action to get Y dollars.
Sometimes, out of fiscal conservatism, or philosophical differences,
States will return that money to the Treasury. But what has been the
reward for an individual State's refusal to grab the Federal carrot
that has been dangled in front of it? That money is returned to the
program for use by other States.
That's just not right. California or New York should not be the
beneficiaries of Montana's restraint and good judgment. The good people
of Montana have asked me to take action to stop this from happening and
that's why I am introducing this bill today. The Fair and Responsible
Fund Use Act will require that we take those funds returned by the
States and use them to pay down our national deficit.
Montana and 48 other States are required by law to balance their
budgets. While we came one vote short of making that the standard for
this Nation, most of us here in Washington are still determine to
balance our books. If a State has the courage and willingness to do
without a quick Federal buck, then it's only right that the American
people, as a whole, should benefit from that action.
Whatever the States send back may seem like small potatoes to some
people, but as the late Senator Everett Dirksen once said, ``A billion
here, and a billion there, and pretty soon you're talking about real
money.''
We face the very real danger of being crushed by our national
deficit. Some of our mindless spending in the past years has left us
with a debt of 5.34 trillion dollars-- ``trillion'' with a capital
``T.'' And it's only going to get worse if we don't do something to
help out.
This bill makes good common sense. We all must work together in order
to pay off the huge national deficit and this is one step in the right
direction. I urge my colleagues to support this legislation.
______
By Mr. MOYNIHAN:
S. 510. A bill to authorize the Architect of the Capitol to develop
and implement a plan to improve the Capitol grounds through the
elimination and modification of space allocated for parking; to the
Committee on Rules and Administration.
The Arc of Park Capitol Grounds Improvement Act of 1997
Mr. MOYNIHAN. Mr. President, nearly 100 years ago, in March of 1901,
the Senate Committee on the District of Columbia was directed by Senate
Resolution to ``report to the Senate plans for the development and
improvement of the entire park system of the District of Columbia * * *
(F)or the purpose of preparing such plans the committee * * * may
secure the services of such experts as may be necessary for a proper
consideration of the subject.''
And secure ``such experts'' the committee assuredly did. The
Committee formed what came to be known as the McMillan Commission,
named for committee chairman Senator James McMillan of Michigan. The
Commission's membership was a ``who's who'' of late 19th and 20th-
century architecture, landscape design, and art: Daniel Burnham,
Frederick Law Olmsted Jr., Charles F. McKim, and Augustus St. Gaudens.
The Commission traveled that summer to Rome, Venice, Vienna, Budapest,
Paris, and London, studying the landscapes, architecture, and public
spaces of the grandest cities in the world. The McMillan Commission
returned and fashioned the city of Washington as we now know it.
We are particularly indebted today for the Commission's preservation
of the Mall. When the members left for Europe, the Congress had just
given the Pennsylvania Railroad a 400-foot wide swath of the Mall for a
new station and trackage. It is hard to imagine our city without the
uninterrupted stretch of greenery from the Capitol to the Washington
Monument, but such would have been the result. Fortunately, when in
London, Daniel
[[Page S2701]]
Burnham was able to convince Pennsylvania Railroad president Alexander
Cassatt that a site on Massachusetts Avenue would provide a much
grander entrance to the city. President Cassatt assented and Daniel
Burnham gave us Union Station.
But the focus of the Commission's work was the District's park
system. The Commission noted in its report:
Aside from the pleasure and the positive benefits to health
that the people derive from public parks, in a capital city
like Washington there is a distinct use of public spaces
as the indispensable means of giving dignity to Government
buildings and of making suitable connections between the
great departments * * * [V]istas and axes; sites for
monuments and museums; parks and pleasure gardens;
fountains and canals; in a word all that goes to make a
city a magnificent and consistent work of art were
regarded as essential in the plans made by L'Enfant under
the direction of the first President and his Secretary of
State.
Washington and Jefferson might be disappointed at the affliction now
imposed on much of the Capitol Grounds by the automobile.
Despite the ready and convenient availability of the city's Metrorail
system, an extraordinary number of Capitol Hill employees drive to
work. No doubt many must. But must we provide free parking? If there is
one lesson learned from the Intermodal Surface Transportation
Efficiency Act of 1991, it is that free goods are always wasted. Free
parking is a powerful incentive to drive to work when the alternative
is to pay for public transportation. As we have created parking spaces
around the Capitol, such as the scar of angle-parked cars at the foot
of Pennsylvania Avenue made available ``temporarily'' during
construction of the Thurgood Marshall Federal Judiciary Building,
demand has simply risen to meet the available supply. The result--the
Pennsylvania Avenue spaces have become permanent and a portion of the
Nation's main street remains an aesthetic disaster.
Today, I am reintroducing legislation to complete the beautification
of the Capitol Grounds, as envisioned by the illustrious McMillan
Commission in 1901, through the elimination of most surface parking and
restoration of the sites as public parks. The Arc of Park Capitol
Grounds Improvement Act of 1997 would require the Architect of the
Capitol to develop and implement a comprehensive plan to improve the
Capitol Grounds through the creation of an ``arc of park,'' sweeping
from Second Street, NE to the Capitol Reflecting Pool and back to First
Street, SE, with the Capitol Building as its approximate center.
Delaware Avenue between Columbus Circle and Constitution Avenue would
be closed to traffic and rebuilt as a grand pedestrian walkway from
Union Station to the Capitol. The angled parking would be eliminated on
Pennsylvania Avenue between First and Third Streets, NW, and the
Pennsylvania Avenue tree line would be continued onto the Capitol
Grounds.
There is, of course, the matter of parking. This legislation
authorizes the Architect of the Capitol to construct underground
parking facilities, as needed. These facilities, which will undoubtedly
be expensive, will be financed simply by charging for the parking. A
legitimate user fee. In the matter of parking, this legislation is an
appropriate companion to a bill that my colleague from Rhode Island,
Senator Chafee, and I introduced earlier today, which will enable
employers to provide their employees with cash compensation in lieu of
a parking space. This bill, which was also included in the
Administration's ISTEA reauthorization proposal, will expand employee
options for commuting and reduce auto use.
______
By Mr. CHAFEE (for himself, Mr. Rockefeller, Mr. Jeffords, Mr.
DeWine, Mr. Dodd, Ms. Moseley-Braun, Mr. Kerry, Mr. Kerrey, and
Mr. Kennedy):
S. 511. A bill to require that the health and safety of a child be
considered in any foster care or adoption placement, to eliminate
barriers to the termination of parental rights in appropriate cases, to
promote the adoption of children with special needs, and for other
purposes; to the Committee on Finance.
THE SAFE ADOPTIONS AND FAMILY ENVIRONMENTS ACT
Mr. CHAFEE. Mr. President, today I am pleased to introduce
legislation to make some critical reforms to the child welfare system.
The goals of the legislation are twofold: to ensure that abused and
neglected children are in safe settings, and to move children more
rapidly out of the foster care system and into permanent placements.
While the goal of reunifying children with their biological families
is laudable, we should not be encouraging States to return abused or
neglected children to homes that are clearly unsafe; regrettably, this
is occurring under current law.
Our legislation would clarify the primacy of safety and health in
decisions made about children who have been abused and neglected. The
legislation would also push States to identify and enact State laws to
address those circumstances in which the rights of the biological
parent should be terminated expeditiously (for example, when the parent
has been found guilty of felony assault, chronic sexual abuse, or the
murder of a sibling).
The legislation also would provide incentives to move children into
permanent placements, either by returning them home when reunification
is the goal or by removing barriers to adoption.
I would like to thank those who have worked so hard to develop this
legislation. In particular, Senator Rockefeller, the lead Democratic
cosponsor, with whom I have worked for many years on childrens' issues.
I also want to thank Senator DeWine, who, as a former prosecutor,
brings a good deal of legal expertise and personal experience to this
issue. We are also grateful for all Senator Jeffords has done in the
past to lay the groundwork for this important legislation.
My sincere thanks also goes out to the many child advocacy
organizations which were so helpful in the development of this
legislation.
Finally, it is encouraging that similar legislation has been
introduced in the House by Representatives Camp and Kennelly. While
there are minor differences between our bills, the overall goals of
both bills are the same. In that regard, I look forward to working with
our House counterparts toward the enactment this year of child welfare
reform legislation this year.
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. 511
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Safe
Adoptions and Family Environments Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--REQUIRING CONSIDERATION OF THE HEALTH AND SAFETY OF A CHILD IN
FOSTER CARE AND ADOPTION PLACEMENTS
Sec. 101. Improving foster care protection requirements.
Sec. 102. Clarifying State plan requirements.
Sec. 103. Including safety in case plan and case review system
requirements.
Sec. 104. Multidisciplinary/multiagency child death review teams.
TITLE II--ENHANCING PUBLIC AGENCY AND COMMUNITY ACCOUNTABILITY FOR THE
HEALTH AND SAFETY OF CHILDREN
Sec. 201. Knowledge development and collaboration to prevent and treat
substance abuse problems among families known to child
protective service agencies.
Sec. 202. Priority in providing substance abuse treatment.
Sec. 203. Foster care payments for children with parents in residential
facilities.
Sec. 204. Reimbursement for staff training.
Sec. 205. Criminal records checks for prospective foster and adoptive
parents and group care staff.
Sec. 206. Development of State guidelines to ensure safe, quality care
to children in out-of-home placements.
TITLE III--INCENTIVES FOR PROVIDING PERMANENT FAMILIES FOR CHILDREN
Sec. 301. Reasonable efforts for adoption or location of a permanent
home.
Sec. 302. Permanency planning hearings.
Sec. 303. Promotion of adoption of children with special needs.
Sec. 304. One-year reimbursement for reunification services.
Sec. 305. Adoptions across State and county jurisdictions.
[[Page S2702]]
TITLE IV--PROMOTION OF INNOVATION IN ENSURING SAFE AND PERMANENT
FAMILIES
Sec. 401. Innovation grants to reduce backlogs of children awaiting
adoption and for other purposes.
Sec. 402. Expansion of child welfare demonstration projects.
TITLE V--MISCELLANEOUS
Sec. 501. Effective date.
TITLE I--REQUIRING CONSIDERATION OF THE HEALTH AND SAFETY OF A CHILD IN
FOSTER CARE AND ADOPTION PLACEMENTS
SEC. 101. IMPROVING FOSTER CARE PROTECTION REQUIREMENTS.
(a) In General.--Paragraph (9)(B) of section 422(b) of the
Social Security Act (42 U.S.C. 622(b)), as added by section
202(a)(3) of the Social Security Act Amendments of 1994
(Public Law 103-432; 108 Stat. 4453), is amended--
(1) in clause (iii)(I), by inserting ``safe and'' after
``where''; and
(2) in clause (iv), by inserting ``safely'' after
``remain''.
(b) Conforming and Technical Amendments.--Title IV of the
Social Security Act (42 U.S.C. 620-635) is amended--
(1) in section 422(b)--
(A) by striking the period at the end of paragraph (9) (as
added by section 554(3) of the Improving America's Schools
Act of 1994 (Public Law 103-382; 108 Stat. 4057)) and
inserting a semicolon;
(B) by redesignating paragraph (10) as paragraph (11); and
(C) by redesignating paragraph (9), as added by section
202(a)(3) of the Social Security Act Amendments of 1994
(Public Law 103-432, 108 Stat. 4453), as paragraph (10); and
(2) in sections 424(b), 425(a), and 472(d), by striking
``422(b)(9)'' each place it appears and inserting
``422(b)(10)''.
SEC. 102. CLARIFYING STATE PLAN REQUIREMENTS.
(a) In General.--Section 471 of the Social Security Act (42
U.S.C. 671) is amended--
(1) in subsection (a), by striking paragraph (15) and
inserting the following:
``(15) provides that, in each case--
``(A) in determining reasonable efforts, as described in
this section, the child's health and safety shall be the
paramount concern; and
``(B) reasonable efforts will be made--
``(i) prior to the placement of a child in foster care, to
prevent or eliminate the need for removing the child from the
child's home when the child can be cared for at home without
endangering the child's health or safety; and
``(ii) to make it possible for the child to return to the
child's home, except--
``(I) if the State through legislation has specified the
cases in which the State is not required to make efforts at
reunification because of circumstances that endanger the
child's health or safety, which shall include cases such as
those described in subsection (c); or
``(II) if a court determines that returning the child to
the child's home, would endanger the child's health or
safety;''; and
(2) by adding at the end the following:
``(c) For purposes of subsection (a)(15)(B)(ii)(I), the
cases described in this subsection are as follows:
``(1) A case involving a child with a parent who has been
found by a court of competent jurisdiction--
``(A) to have committed murder (as defined in section
1111(a) of title 18, United States Code) of another child of
such parent;
``(B) to have committed voluntary manslaughter (as defined
in section 1112(a) of title 18, United States Code) of
another child of such parent;
``(C) to have aided or abetted, attempted, conspired, or
solicited to commit murder or voluntary manslaughter of
another child of such parent;
``(D) to have committed a felony assault that results in
serious bodily injury to the child or to another child of
such parent; or
``(E) to have abandoned, tortured, chronically abused, or
sexually abused the child.''.
(b) State Legislation Required.--Section 471 of the Social
Security Act (42 U.S.C. 671), as amended by subsection (a),
is amended by adding at the end the following:
``(d) Not later than October 3, 1999, a State, in order to
be eligible for payments under this part, shall have and
enforce State laws that specify--
``(1) the cases, such as those described in subsection (c),
in which the State is not required to make efforts at
reunification of the child with the child's parent; and
``(2) the cases, such as those described in subsection (c),
in which there are grounds for expedited termination of
parental rights without efforts first being required to
reunify the child with the child's parent because of the
circumstances that endanger the child's health or safety.''.
(c) Redesignation of Paragraph.--Section 471(a) of the
Social Security Act (42 U.S.C. 671(a)) is amended--
(1) by striking ``and'' at the end of paragraph (17);
(2) by striking the period at the end of paragraph (18) (as
added by section 1808(a) of the Small Business Job Protection
Act of 1996 (Public Law 104-188; 110 Stat. 1903)) and
inserting ``; and''; and
(3) by redesignating paragraph (18) (as added by section
505(3) of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (Public Law 104-193; 110 Stat.
2278)) as paragraph (19).
SEC. 103. INCLUDING SAFETY IN CASE PLAN AND CASE REVIEW
SYSTEM REQUIREMENTS.
Section 475 of the Social Security Act is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by inserting ``safety and'' after
``discussion of the''; and
(B) in subparagraph (B)--
(i) by inserting ``safe and'' after ``child receives''; and
(ii) by inserting ``safe'' after ``return of the child to
his own''; and
(2) in paragraph (5)--
(A) in subparagraph (A), in the matter preceding clause
(i), by inserting ``a safe setting that is'' after
``placement in''; and
(B) in subparagraph (B)--
(i) by inserting ``the safety of the child,'' after
``determine''; and
(ii) by inserting ``and safely maintained in'' after
``returned to''.
SEC. 104. MULTIDISCIPLINARY/MULTIAGENCY CHILD DEATH REVIEW
TEAMS.
(a) State Child Death Review Teams.--Section 471(a) of the
Social Security Act (42 U.S.C. 671(a)), as amended by section
102(b), is amended by adding at the end the following:
``(e)(1) Not later than 5 years after the date of enactment
of the Safe Adoptions and Family Environments Act, a State,
in order to be eligible for payments under this part, shall
submit to the Secretary a certification that the State has
established and is maintaining, a State child death review
team, and if necessary in order to cover all counties in the
State, child death review teams on the regional or local
level, that shall review child deaths, including deaths in
which--
``(A) there has been a prior report of child abuse or
neglect or there is reason to suspect that the child death
was caused by, or related to, child abuse or neglect;
``(B) the child who died was a ward of the State or was
otherwise known to the State or local child welfare agency;
``(C) the child death was a suicide; or
``(D) the cause of the child death was otherwise
unexplained or unexpected.
``(2) A child death review team established in accordance
with this subsection should have a membership that, as
defined by the Secretary, will present a range of viewpoints
that are independent from any specific agency, and shall
include representatives from, at a minimum, specific fields
of expertise, such as law enforcement, health, mental health,
and substance abuse, and from the community.
``(3) A State child death review team shall--
``(A) provide support to a regional or local child death
review team;
``(B) make public an annual summary of case findings;
``(C) provide recommendations for systemwide improvements
in services to prevent fatal abuse and neglect; and
``(D) if the State child death review team covers all
counties in the State on its own, carry out the duties of a
regional or local child death review team described in
paragraph (4).
``(4) A regional or local child death review team shall--
``(A) conduct individual case reviews;
``(B) assist with regional or local management of child
death cases; and
``(C) suggest followup procedures and systems
improvements.''.
(b) Federal Child Death Review Team.--Section 471(a) of the
Social Security Act (42 U.S.C. 671(a)), as amended by
subsection (a), is amended by adding at the end the
following:
``(f)(1) The Secretary shall establish a Federal child
death review team that shall consist of at least the
following:
``(A) Representatives of the following Federal agencies who
have expertise in the prevention or treatment of child abuse
and neglect:
``(i) Department of Health and Human Services.
``(ii) Department of Justice.
``(iii) Bureau of Indian Affairs.
``(iv) Department of Defense.
``(v) Bureau of the Census.
``(B) Representatives of national child-serving
organizations who have expertise in the prevention or
treatment of child abuse and neglect and that, at a minimum,
represent the health, child welfare, social services, and law
enforcement fields.
``(2) The Federal child death review team established under
this subsection shall--
``(A) review reports of child deaths on military
installations and other Federal lands, and coordinate with
Indian tribal organizations in the review of child deaths on
Indian reservations;
``(B) conduct ongoing reviews of the status of State child
death review teams and regional or local child death review
teams, and of the management of interstate child death cases;
``(C) provide guidance and technical assistance to States
and localities seeking to initiate or improve child death
review teams and to prevent child fatalities;
``(D) review and analyze relevant aggregate data from State
child death review teams and from regional or local child
death review teams, in order to identify and track national
trends in child fatalities; and
``(E) develop recommendations on related policy and
procedural issues for Congress, relevant Federal agencies,
and States and localities for the purpose of preventing child
fatalities.''.
[[Page S2703]]
TITLE II--ENHANCING PUBLIC AGENCY AND COMMUNITY ACCOUNTABILITY FOR THE
HEALTH AND SAFETY OF CHILDREN
SEC. 201. KNOWLEDGE DEVELOPMENT AND COLLABORATION TO PREVENT
AND TREAT SUBSTANCE ABUSE PROBLEMS AMONG
FAMILIES KNOWN TO CHILD PROTECTIVE SERVICE
AGENCIES.
(a) Sources of Federal Support for Substance Abuse
Prevention and Treatment for Parents and Children.--Not later
than 12 months after the date of enactment of this Act, the
Secretary of Health and Human Services, acting through the
Administrator of the Administration for Children, Youth and
Families, and the Director of the Center for Substance Abuse
Prevention and the Director of the Center for Substance Abuse
Treatment, shall prepare and provide to State child welfare
agencies and substance abuse prevention and treatment
agencies an inventory of all Federal programs that may
provide funds for substance abuse prevention and treatment
services for families receiving services directly or through
grants or contracts from public child welfare agencies. An
inventory prepared under this subsection shall include with
respect to each Federal program listed, the amount of Federal
funds that are available for that program and the relevant
eligibility requirements. The Secretary shall biennially
update the inventory required under this subsection.
(b) Collaboration Between Federally Supported Substance
Abuse and Child Protection Agencies.--
(1) Substance abuse prevention and treatment block grant.--
Section 1932(a) of the Public Health Service Act (42 U.S.C.
300x-32(a)) is amended--
(A) in paragraph (6)(B), by striking ``and'' at the end;
(B) by redesignating paragraph (7) as paragraph (8); and
(C) by inserting after paragraph (6) the following:
``(7) the application contains an assurance that the State
will collect information and prepare the report required
under section 201(b)(3) of the Safe Adoptions and Family
Environments Act; and''.
(2) Social security act.--Title IV of the Social Security
Act is amended--
(A) in section 422(b), as amended by section 101(b) of this
Act--
(i) in paragraph (10), by striking ``and'' at the end;
(ii) in paragraph (11), by striking the period and
inserting ``; and''; and
(iii) by adding at the end the following:
``(12) provide that the State shall collect information and
prepare the report required under section 201(b)(3) of the
Safe Adoptions and Family Environments Act.''; and
(B) in section 432(a)--
(i) in paragraph (7)(B), by striking ``and'' at the end;
(ii) in paragraph (8), by striking the period and inserting
``; and''; and
(iii) by adding at the end the following:
``(9) provides that the State shall collect information and
prepare the report required under section 201(b)(3) of the
Safe Adoptions and Family Environments Act.''.
(3) Report on joint activities.--
(A) In general.--In order to be eligible to receive a grant
under subpart 2 of part B of title XIX of the Public Health
Service Act (42 U.S.C. 300x-21 et seq.) and under subparts 1
and 2 of part B of title IV of the Social Security Act (42
U.S.C. 620 et seq.), the State substance abuse prevention and
treatment agency responsible for administering a grant under
subpart 2 of part B of title XIX of the Public Health Service
Act (42 U.S.C. 300x-21 et seq.), and the State child welfare
agency responsible for administering the State plans under
subparts 1 and 2 of part B of title IV of the Social Security
Act (42 U.S.C. 620 et seq.) shall, not later than 12 months
after the date of enactment of this Act, jointly prepare a
report containing the information described in subparagraph
(B) on the joint prevention and treatment activities
conducted by such agencies, and shall submit the report to
the Secretary of Health and Human Services who shall forward
such report to the Administrator of the Administration for
Children, Youth and Families, the Director of the Center for
Substance Abuse Prevention, and the Director of the Center
for Substance Abuse Treatment.
(B) Required information.--The information described in
this subparagraph shall, to the maximum extent practicable,
include--
(i) a description of the characteristics of the parents of
children, including the aggregate numbers, who are reported
to State or local child welfare agencies because of
allegations of child abuse or neglect and have substance
abuse treatment needs, and the nature of those needs;
(ii) a description of the characteristics of the children
of parents who are receiving substance abuse treatment from
services administered by the State substance abuse prevention
and treatment and medicaid agencies, including the aggregate
number and whether they are in their parents' custody;
(iii) a description of the barriers that prevent the
substance abuse treatment needs of clients of child welfare
agencies from being treated appropriately;
(iv) a description of the manner in which the State child
welfare and substance abuse prevention and treatment agencies
are collaborating--
(I) to assess the substance abuse treatment needs of
families who are known to child welfare agencies;
(II) to remove barriers that prevent the State from meeting
the needs of families with substance abuse problems;
(III) to expand substance abuse prevention, including early
intervention, and treatment for children and parents who are
known to child welfare agencies; and
(IV) to provide for the joint funding of substance abuse
treatment and prevention activities, the joint training of
staff, and the joint consultations between staff of the 2
State agencies;
(v) a description of the information available on the
treatment and cost-effectiveness of, and the annual
expenditures for, substance abuse treatment services provided
to families who are known to child welfare agencies;
(vi) available data on the number of parents and children
served by both the State child welfare and the substance
abuse prevention and treatment agencies and the number of the
parents ordered by a court to seek such services; and
(vii) any other information determined appropriate by the
Secretary of Health and Human Services.
(c) Report to Congress.--Not later than 18 months after the
date of enactment of this Act, the Secretary of Health and
Human Services, acting through the Administrator of the
Administration for Children, Youth and Families, the Director
of the Center for Substance Abuse Prevention, and the
Director of the Center for Substance Abuse Treatment, shall,
using the information reported to the Secretary jointly by
State child welfare and substance abuse prevention and
treatment agencies, prepare and submit to the appropriate
committees of Congress a report containing--
(1) a description of the extent to which clients of child
welfare agencies have substance abuse treatment needs, the
nature of those needs, and the extent to which those needs
are being met;
(2) a description of the barriers that prevent the
substance abuse treatment needs of clients of child welfare
agencies from being treated appropriately;
(3) a description of the collaborative activities of State
child welfare and substance abuse prevention and treatment
agencies to jointly assess clients' needs, fund substance
abuse prevention and treatment, train and consult with staff,
and evaluate the effectiveness of programs serving clients in
both agencies' caseloads;
(4) a summary of the available data on the treatment and
cost-effectiveness of substance abuse treatment services for
clients of child welfare agencies; and
(5) recommendations, including recommendations for Federal
legislation, for addressing the needs and barriers, as
described in paragraphs (1) and (2), and for promoting
further collaboration of the State child welfare and
substance abuse prevention and treatment agencies in meeting
the substance abuse treatment needs of families.
SEC. 202. PRIORITY IN PROVIDING SUBSTANCE ABUSE TREATMENT.
Section 1927 of the Public Health Service Act (42 U.S.C.
300x-27) is amended--
(1) in the heading, by inserting ``and caretaker parents''
after ``women''; and
(2) in subsection (a)--
(A) in paragraph (1)--
(i) by inserting ``and all caretaker parents who are
referred for treatment by the State or local child welfare
agency'' after ``referred for''; and
(ii) by striking ``is given'' and inserting ``are given'';
and
(B) in paragraph (2)--
(i) by striking ``such women'' and inserting ``such
pregnant women and caretaker parents''; and
(ii) by striking ``the women'' and inserting ``the pregnant
women and caretaker parents''.
SEC. 203. FOSTER CARE PAYMENTS FOR CHILDREN WITH PARENTS IN
RESIDENTIAL FACILITIES.
Section 472(b) of the Social Security Act (42 U.S.C.
672(b)) is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period and inserting
``, or''; and
(3) by adding at the end the following:
``(3) placed with the child's parent in a residential
program that provides treatment and other necessary services
for parents and children, including parenting services,
when--
``(A) the parent is attempting to overcome--
``(i) a substance abuse problem and is complying with an
approved treatment plan;
``(ii) being a victim of domestic violence;
``(iii) homelessness; or
``(iv) special needs resulting from being a teenage parent;
``(B) the safety of the child can be assured;
``(C) the range of services provided by the program is
designed to appropriately address the needs of the parent and
child;
``(D) the goal of the case plan for the child is to try to
reunify the child with the family within a specified period
of time; and
``(E) the parent described in subparagraph (A)(i) has not
previously been treated in a residential program serving
parents and their children together.''.
SEC. 204. REIMBURSEMENT FOR STAFF TRAINING.
(a) Training of Personnel.--Section 474(a) of the Social
Security Act (42 U.S.C. 674(a)) is amended--
(1) in paragraph (3)(A)--
[[Page S2704]]
(A) by striking ``75'' and inserting ``subject to
subsection (e), 75'';
(B) by inserting ``, and training directed at staff
maintenance and retention'' after ``enrolled in such
institutions''; and
(C) by striking ``of personnel'' and all that follows and
inserting the following: ``of--
``(i) personnel employed or preparing for employment by the
State agency or by the local agency administering the State
plan in the political subdivision; and
``(ii) personnel employed by courts and State or local law
enforcement agencies, and by State, local, or private
nonprofit substance abuse prevention and treatment agencies,
mental health providers, domestic violence prevention and
treatment agencies, health agencies, child care agencies,
schools, and child welfare, family service, and community
service agencies that are collaborating with the State or
local agency administering the State plan in the political
subdivision to keep children safe, support families, and
provide permanent families for children, including adoptive
families;'';
(2) in paragraph (3)(B), by striking ``75'' and inserting
``subject to subsection (e), 75''; and
(3) by adding at the end, the following flush sentence:
``Amounts under subparagraphs (A) and (B) of paragraph (3)
shall be paid without regard to the primary provider of the
training, and shall be determined without regard to the
proportion of children on whose behalf foster care
maintenance payments or adoption assistance payments are
being made under the State plan under this part.''.
(b) Requirements for Receipt of Training Funds.--Section
474 of the Social Security Act (42 U.S.C. 674) is amended by
adding at the end the following:
``(e) Requirements for Reimbursement of Training
Expenditures.--
``(1) Cross-agency training expenditures.--
``(A) Guidelines for qualified expenditures.--The Secretary
shall issue guidelines describing the types of training
expenditures that shall qualify for reimbursement under
subsection (a)(3)(A)(ii). The guidelines issued under the
authority of this subparagraph shall emphasize reimbursement
of training expenditures to treat and prevent child abuse and
neglect, keep children safe, support families, and provide
permanent families for children, including adoptive families.
``(B) Documentation.--A State may not receive reimbursement
for training expenditures incurred under subsection
(a)(3)(A)(ii) unless the State submits to the Secretary, in
such form and manner as the Secretary may specify,
documentation evidencing that the expenditures conform with
the guidelines issued under subparagraph (A).
``(2) Maintenance of effort.--With respect to a fiscal
year, a State may not receive funds under subparagraph (A) or
(B) of subsection (a)(3) if the total State expenditures for
the previous fiscal year for training under such
subparagraphs are less than the total State expenditures
under such subparagraphs for fiscal year 1996.''.
SEC. 205. CRIMINAL RECORDS CHECKS FOR PROSPECTIVE FOSTER AND
ADOPTIVE PARENTS AND GROUP CARE STAFF.
Section 471(a) of the Social Security Act (42 U.S.C.
671(a)), as amended by section 102(c), is amended--
(1) in paragraph (18), by striking ``and'' at the end;
(2) in paragraph (19), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(20) provides procedures for criminal records checks and
checks of a State's child abuse registry for any prospective
foster parent or adoptive parent, and any employee of a
child-care institution before the foster parent or adoptive
parent, or the child-care institution may be finally approved
for placement of a child on whose behalf foster care
maintenance payments or adoption assistance payments are to
be made under the State plan under this part, including
procedures requiring that--
``(A) in any case in which a criminal record check reveals
a criminal conviction for child abuse or neglect, or spousal
abuse, a criminal conviction for crimes against children, or
a criminal conviction for a crime involving violence,
including rape, sexual or other assault, or homicide,
approval shall not be granted; and
``(B) in any case in which a criminal record check reveals
a criminal conviction for a felony or misdemeanor not
involving violence, or a check of any State child abuse
registry indicates that a substantiated report of abuse or
neglect exists, final approval may be granted only after
consideration of the nature of the offense or incident, the
length of time that has elapsed since the commission of the
offense or the occurrence of the incident, the individual's
life experiences during the period since the commission of
the offense or the occurrence of the incident, and any risk
to the child.''.
SEC. 206. DEVELOPMENT OF STATE GUIDELINES TO ENSURE SAFE,
QUALITY CARE TO CHILDREN IN OUT-OF-HOME
PLACEMENTS.
Section 471(a) of the Social Security Act (42 U.S.C.
671(a)), as amended by section 205, is amended--
(1) in paragraph (19), by striking ``and'' at the end;
(2) in paragraph (20), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(21) provides that the State shall--
``(A) develop and implement State guidelines to ensure
safe, quality care for children residing in out-of-home care
settings, such as guidelines issued by a nationally
recognized accrediting body, including the Council on
Accreditation for Services for Families and Children and the
Joint Commission on the Accreditation of Health Care
Organizations;
``(B) assist public provider agencies and private provider
agencies that contract and subcontract with the State to meet
over a time period determined by the State the quality
guidelines established under subparagraph (A);
``(C) clearly articulate the guidelines against which an
agency's performance will be judged and the conditions under
which the guidelines established under subparagraph (A) will
be applied;
``(D) regularly monitor progress made by the public and
private agencies located in the State in meeting the
guidelines established under subparagraph (A); and
``(E) judge agency compliance with the guidelines
established under subparagraph (A) through measuring
improvement in child and family outcomes, and through such
other measures as the State may determine appropriate to
judge such compliance.''.
TITLE III--INCENTIVES FOR PROVIDING PERMANENT FAMILIES FOR CHILDREN
SEC. 301. REASONABLE EFFORTS FOR ADOPTION OR LOCATION OF A
PERMANENT HOME.
(a) State Plan.--Section 471(a) of the Social Security Act
(42 U.S.C. 671(a)), as amended by section 206, is amended--
(1) in paragraph (20), by striking ``and'' at the end;
(2) in paragraph (21), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(22) provides that, in any case in which the State's goal
for the child is adoption or placement in another permanent
home, reasonable efforts will be made to place the child in a
timely manner with an adoptive family, legal guardian, or in
another planned permanent living arrangement and to complete
whatever steps are necessary to finalize the adoption or
legal guardianship.''.
(b) Case Plan and Case Review System.--Section 475 of the
Social Security Act (42 U.S.C. 675) is amended--
(1) in paragraph (1)--
(A) in the last sentence--
(i) by striking ``the case plan must also include''; and
(ii) by redesignating such sentence as subparagraph (D) and
indenting appropriately; and
(B) by adding at the end, the following:
``(E) In the case of a child with respect to whom the
State's goal is adoption or placement in another permanent
home, documentation of the steps taken by the agency to find
an adoptive family or other permanent living arrangement for
the child, to place the child with an adoptive family, legal
guardian, or in another planned permanent living arrangement,
and to finalize the adoption or legal guardianship. At a
minimum, such documentation shall include child specific
recruitment efforts such as the use of State, regional, and
national adoption exchanges including electronic exchange
systems.''; and
(2) in paragraph (5)(B), by inserting ``(including the
requirement specified in paragraph (1)(E))'' after ``case
plan''.
SEC. 302. PERMANENCY PLANNING HEARINGS.
Section 475(5)(C) of the Social Security Act (42 U.S.C.
675(5)(C)) is amended--
(1) by striking ``dispositional'' and inserting
``permanency planning'';
(2) by striking ``no later than'' and all that follows
through ``12 months'' and inserting ``not later than 12
months after the original placement (and not less frequently
than every 6 months''; and
(3) by striking ``future status of'' and all that follows
through ``long term basis)'' and inserting ``permanency plans
for the child (including whether and, if applicable, when,
the child will be returned to the parent, referred for
termination of parental rights, placed for adoption, or
referred for legal guardianship, or other planned permanent
living arrangement)''.
SEC. 303. PROMOTION OF ADOPTION OF CHILDREN WITH SPECIAL
NEEDS.
(a) In General.--Section 473(a) of the Social Security Act
(42 U.S.C. 673(a)) is amended by striking paragraph (2) and
inserting the following:
``(2)(A) For purposes of paragraph (1)(B)(ii), a child
meets the requirements of this paragraph if such child--
``(i) prior to termination of parental rights and the
initiation of adoption proceedings was in the care of a
public or licensed nonprofit private child care agency or
Indian tribal organization either pursuant to a voluntary
placement agreement (provided the child was in care for not
more than 180 days) or as a result of a judicial
determination to the effect that continuation in the home
would be contrary to the welfare of such child, or was
residing in a foster family home or child care institution
with the child's minor parent (either pursuant to such a
voluntary placement agreement or as a result of such a
judicial determination); and
``(ii) has been determined by the State pursuant to
subsection (c) to be a child with special needs.
``(B) Notwithstanding any other provision of law, and
except as provided in paragraph (7), a child who is not a
citizen or resident of
[[Page S2705]]
the United States and who meets the requirements of
subparagraph (A) and is otherwise determined to be eligible
for the receipt of adoption assistance payments, shall be
eligible for adoption assistance payments under this part.
``(C) A child who meets the requirements of subparagraph
(A) and who is otherwise determined to be eligible for the
receipt of adoption assistance payments shall continue to be
eligible for such payments in the event that the child's
adoptive parent dies or the child's adoption is dissolved,
and the child is placed with another family for adoption.''.
(b) Exception.--Section 473(a) of the Social Security Act
(42 U.S.C. 673(a)) is amended by adding at the end the
following:
``(7)(A) Notwithstanding any other provision of this
subsection, no payment may be made to parents with respect to
any child that--
``(i) would be considered a child with special needs under
subsection (c);
``(ii) is not a citizen or resident of the United States;
and
``(iii) the parents adopted outside of the United States or
the parents brought into the United States for the purpose of
adopting such child.
``(B) Subparagraph (A) shall not be construed as
prohibiting payments under this part for a child described in
subparagraph (A) that is placed in foster care subsequent to
the failure, as determined by the State, of the initial
adoption of such child by the parents described in such
subparagraph.''.
SEC. 304. ONE-YEAR REIMBURSEMENT FOR REUNIFICATION SERVICES.
Section 475(4) of the Social Security Act (42 U.S.C.
675(4)) is amended by adding at the end the following:
``(C)(i) In the case of a child that is removed from the
child's home and placed in a foster family home or a child
care institution, the foster care maintenance payments made
with respect to such child may include payments to the State
for reimbursement of expenditures for reunification services,
but only during the 1-year period that begins on the date
that the child is removed from the child's home.
``(ii) For purposes of clause (i), the term `reunification
services' includes services and activities provided to a
child described in clause (i) and the parents or primary
caregiver of such a child, in order to facilitate the
reunification of the child safely and appropriately within a
timely fashion, and may only include individual, group, and
family counseling, inpatient, residential, or outpatient
substance abuse treatment services, mental health services,
assistance to address domestic violence, and transportation
to or from such services.''.
SEC. 305. ADOPTIONS ACROSS STATE AND COUNTY JURISDICTIONS.
(a) Study of Interjurisdictional Adoption Issues.--The
Secretary of Health and Human Services (in this section
referred to as the ``Secretary'') shall appoint an advisory
panel that shall--
(1) study and consider how to improve procedures and
policies to facilitate the timely and permanent adoptions of
children across State and county jurisdictions;
(2) examine, at a minimum, interjurisdictional adoption
issues--
(A) concerning the recruitment of prospective adoptive
families from other States and counties;
(B) concerning the procedures to grant reciprocity to
prospective adoptive family home studies from other States
and counties;
(C) arising from a review of the comity and full faith and
credit provided to adoption decrees and termination of
parental rights orders from other States; and
(D) concerning the procedures related to the administration
and implementation of the Interstate Compact on the Placement
of Children; and
(3) not later than 12 months after the final appointment to
the advisory panel, submit to the Secretary the report
described in subsection (c).
(b) Composition of Advisory Panel.--The advisory panel
required under subsection (a) shall, at a minimum, be
comprised of representatives of the following:
(1) Adoptive parent organizations.
(2) Public and private child welfare agencies that place
children for adoption.
(3) Family court judges' organizations.
(4) Adoption attorneys.
(5) The Association of the Administrators of the Interstate
Compact on the Placement of Children and the Association of
the Administrators of the Interstate Compact on Adoption and
Medical Assistance.
(6) Any other organizations that advocate for adopted
children or children awaiting adoption.
(c) Contents of Report.--The report required under
subsection (a)(3) shall include the results of the study
conducted under paragraphs (1) and (2) of subsection (a) and
recommendations on how to improve procedures to facilitate
the interjurisdictional adoption of children, including
interstate and intercounty adoptions, so that children will
be assured timely and permanent placements.
(d) Congress.--The Secretary shall submit a copy of the
report required under subsection (a)(3) to the appropriate
committees of Congress, and, if relevant, make
recommendations for proposed legislation.
TITLE IV--PROMOTION OF INNOVATION IN ENSURING SAFE AND PERMANENT
FAMILIES
SEC. 401. INNOVATION GRANTS TO REDUCE BACKLOGS OF CHILDREN
AWAITING ADOPTION AND FOR OTHER PURPOSES.
(a) In General.--Section 474(a) of the Social Security Act
(42 U.S.C. 674) is amended--
(1) in paragraph (4), by striking the period and inserting
``; plus''; and
(2) by inserting after paragraph (4), the following:
``(5) an amount equal to the State's innovation grant
award, if an award for the State has been approved by the
Secretary pursuant to section 478.''.
(b) Innovation Grants.--Part E of title IV of the Social
Security Act (42 U.S.C. 670 et seq.) is amended by inserting
after section 477, the following:
``SEC. 478. INNOVATION GRANTS.
``(a) Payments.--
``(1) In general.--A State that has an application
described in paragraph (3) approved by the Secretary, shall
be entitled to receive payments, in an amount determined by
the Secretary, under section 474(a)(5) for not more than 5
years for the purpose of carrying out the innovation projects
described in paragraph (2).
``(2) Innovation projects described.--The innovation
projects described in this paragraph are projects that are
designed to achieve 1 or more of the following goals:
``(A) Reducing a backlog of children in long-term foster
care or awaiting adoption placement.
``(B) Ensuring, not later than 1 year after a child enters
foster care, a permanent placement for the child.
``(C) Identifying and addressing barriers that result in
delays to permanent placements for children in foster care,
including inadequate representation of child welfare agencies
in termination of parental rights and adoption proceedings,
and other barriers to termination of parental rights.
``(D) Implementing or expanding community-based permanency
initiatives, particularly in communities where families
reflect the ethnic and racial diversity of children in the
State for whom foster and adoptive homes are needed.
``(E) Developing and implementing community-based child
protection activities that involve partnerships among State
and local governments, multiple child-serving agencies, the
schools, and community leaders in an attempt to keep children
free from abuse and neglect.
``(F) Establishing new partnerships with businesses and
religious organizations to promote safety and permanence for
children.
``(G) Assisting in the development and implementation of
the State guidelines described in section 471(a)(21).
``(H) Developing new staffing approaches to allow the
resources of several States to be used to conduct
recruitment, placement, adoption, and post-adoption services
on a regional basis.
``(I) Any other goal that the Secretary specifies by
regulation.
``(3) Application.--
``(A) In general.--An application for a grant under this
section may be submitted for fiscal year 1998 or 1999 and
shall contain--
``(i) a plan, in such form and manner as the Secretary may
prescribe, for an innovation project described in paragraph
(2) that will be implemented by the State for a period of not
more than 5 consecutive fiscal years, beginning with fiscal
year 1998 or 1999, as applicable;
``(ii) an assurance that no waivers from provisions in law,
as in effect at the time of the submission of the
application, are required to implement the innovation
project; and
``(iii) such other information as the Secretary may require
by regulation.
``(4) Duration.--An innovation project approved under this
section shall be conducted for not more than 5 consecutive
fiscal years, except that the Secretary may terminate a
project before the end of the period originally approved if
the Secretary determines that the State conducting the
project is not in compliance with the terms of the plan and
application approved by the Secretary under this section.
``(5) Amounts.--With respect to a fiscal year, the
Secretary shall award State grants under this section, in an
aggregate amount not to exceed $50,000,000 for that fiscal
year. A State shall not receive a grant under this section
unless, for each year for which a grant is awarded, the State
agrees to match the grant with $1 for every $3 received.
``(6) Nonsupplanting.--Any amounts payable to a State under
paragraph (5) of section 474(a) shall be in addition to the
amounts payable under paragraphs (1), (2), (3), and (4) of
that section, and shall supplement but not replace any other
funds that may be available for the same purpose in the
localities involved.
``(7) Evaluations and reports.--
``(A) State evaluations.--Each State administering an
innovation project under this section shall--
``(i) provide for ongoing and retrospective evaluation of
the project, meeting such conditions and standards as the
Secretary may require; and
``(ii) submit to the Secretary such reports, at such times,
in such format, and containing such information as the
Secretary may require.
``(B) Reports to congress.--The Secretary shall, on the
basis of reports received from States administering projects
under this section, submit interim reports, and, not later
than 6 months after the conclusion of all projects
administered under this section, a
[[Page S2706]]
final report to Congress. A report submitted under this
subparagraph shall contain an assessment of the effectiveness
of the State projects administered under this section and any
recommendations for legislative action that the Secretary
considers appropriate.
``(8) Regulations.--Not later than 60 days after the date
of enactment of this section, the Secretary shall promulgate
final regulations for implementing this section.''.
SEC. 402. EXPANSION OF CHILD WELFARE DEMONSTRATION PROJECTS.
Section 1130(a) of the Social Security Act (42 U.S.C.
1320a-9(a)) is amended by striking ``10'' and inserting
``15''.
TITLE V--MISCELLANEOUS
SEC. 501. EFFECTIVE DATE.
This Act and the amendments made be this Act take effect on
October 1, 1997.
Mr. ROCKEFELLER. Mr. President, children who are at risk of abuse and
neglect are among the most vulnerable group in our society, and we have
a compelling obligation to do a better job in protecting such children.
I am proud to join Senator Chafee and others in a bipartisan effort to
improve our federal child welfare programs.
Almost a decade ago, I had the opportunity and privilege to serve as
the Chairman of the bipartisan National Commission on Children. Our
diverse group spent several years traveling the country to meet with
families, officials and advocates to delve into the needs of children
and families. We issued a unanimous report in 1991 with a comprehensive
strategy to help children and strengthen families. One of the chapters
of our report was directed toward helping children at risk of abuse and
neglect. Since the Children's Commission, I have been working to
convert our bipartisan recommendations into policy and programs.
The Children's Commission basic recommendations called for a more
comprehensive strategy for child protective services. The panel noted
the need for a range of services so that children and families could
get what was needed on a case-by-case basis. Our report call for
intensive family preservation services when appropriate. If children
must be removed from their homes, reunification services need to be
available to prepare children and parents for a safe return. There
should be better training for foster parents and child welfare staff.
Adoption can be the best option for some children so adoption
procedures should be streamlined.
The SAFE Act--Safe Adoptions and Family Environments--follows through
on the Children's Commission recommendations. Our bill stresses that a
child's safety and a child's health must be a primary concern by
clarifying current law known as ``reasonable efforts.'' It is designed
to encourage states to move children into stable, permanent placements
quickly. For some children, this will be adoption. For others,
appropriate intervention and support services can enable children to
return home safely. This bill will direct states to establish a
permanency planning hearing for a child in foster care within 12
months, instead of the current 18 months which will cut by one-third
the amount of time a child is without a plan for a stable home. Our
bill also offers states incentives to reduce the backlog of children
waiting for adoption.
I have fought for children and family programs throughout my career,
and will continue to do so. Last Congress, I argued strongly that there
is a fundamental difference between welfare reform and child welfare
and foster care. I opposed a block grant approach to foster care
because abused children should not be placed at further risk or face
time-limits. Ultimately, I voted for the block grant of welfare reform.
While I opposed attempts to convert child welfare and foster care
into a block grant last year, I acknowledged the problems in the system
and pledged to work on ways to strengthen and improve programs for
abused and neglected children outside the context of welfare reform.
Today, we are delivering on that commitment and working in a bipartisan
manner to encourage reform.
Reform is desperately needed. Reports indicate that more than 1
million American children suffered some type of abuse and neglect. Over
450,000 children are in foster care in our country. In my home state of
West Virginia, referrals to Child Protective Services are expected to
increase from 12,500 reports in 1991 to 17,000 this year. Foster care
placements in West Virginia has jumped to 3,113 children in January
1997, up from 2,900 children in January 1996.
Clearly, we must work together with the states to address the
complicated needs of abused and neglected children.
While our legislation may seem technical in nature, its goals are
focused on protecting children and ensuring that every child moves
swiftly into a safe, permanent placement where they can grow up healthy
and secure. To achieve such basic goals, we need to invest in a range
of services--from prevention of abuse, family reunification, and
adoptions.
Protecting children and helping families should be a bipartisan,
community based effort. We must forge partnerships with states and
advocates. This legislation reflects this spirit and commitment.
______
By Mr. KENNEDY (for himself, Mr. Dodd, Mr. Robb, Ms. Mosley-
Braun, Mr. Lautenberg, Mr. Kerry, Ms. Snowe, Mrs. Murray, Mr.
Feingold, Mr. Harkin, Mr. Chafee, Mr. Jeffords, Mr. Akaka, Mr.
Bingaman, and Mrs. Feinstein):
S.J. Res. 24. A joint resolution proposing an amendment to the
Constitution of the United States relative to equal rights for women
and men; to the Committee on the Judiciary.
the equal rights amendment
Mr. KENNEDY. Mr. President, it is an honor to introduce the equal
rights amendment on behalf of myself and 14 other Senators. Two days
before the 25th anniversary of the first congressional approval of the
equal rights amendment, we reaffirm our strong commitment to making the
ERA part of the Constitution of the United States. We intend to do all
we can to see that it becomes part of the Constitution, which is where
it belongs.
In a sense, action now is more important than ever. Women have
achieved a great deal during the last two decades. But the statutory
route has not been as successful as we had hoped. Too many women and
girls still face unfair and discriminatory barriers in their education,
careers, sports, and other goals. The glass ceiling, the locked door,
the sticky floor, the wage gap, and the occupation gap are very real
problems.
Women still earn only 76 cents for each dollar earned by men. After a
full day's work, no woman should be forced to take home only three-
quarters of a pay-check.
The vast majority of women are still clustered in a narrow range of
traditionally low-paying occupations. Too many women continue to be
victims of sexual harassment.
We must do more, much more, to guarantee fair treatment in the
workplace and in all aspects of society. Existing laws against sex
discrimination in all its ugly forms can't get the job done. The need
for a constitutional guarantee of equal rights for women is compelling.
Susan B. Anthony said it best over a century ago. When the
Constitution says, ``We the People,'' it should mean all the people.
Those words speak to us across the years. And in 1997, we intend to see
that ``all'' means ``all''--and making ERA part of the Constitution is
the right way to do it.
Mr. President, I ask unanimous consent that the text of the joint
resolution be printed in the Record.
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:
S.J. Res. 24
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled (two-thirds of
each House concurring therein), That the following article is
proposed as an amendment to the Constitution of the United
States, which shall be valid to all intents and purposes as
part of the Constitution when ratified by the legislatures of
three-fourths of the several States:
``Article --
``Section 1. Equality of rights under the law shall not be
denied or abridged by the United States or by any State on
account of sex.
``Section 2. The Congress shall have the power to enforce,
by appropriate legislation, the provisions of this article.
``Section 3. This amendment shall take effect two years
after the date of ratification.''.
____________________