[Congressional Record Volume 143, Number 48 (Tuesday, April 22, 1997)]
[Senate]
[Pages S3424-S3455]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



      By Mr. BUMPERS:
  S. 624. A bill to establish a competitive process for the awarding of 
concession contracts in units of the National Park System, and for 
other purposes; to the Committee on Energy and Natural Resources.


     THE NATIONAL PARK SERVICE CONCESSION POLICY REFORM ACT OF 1997

  Mr. BUMPERS. Mr. President, as a part of the Earth Day celebration, I 
am, once again, introducing legislation to reform the concessions 
policies of the National Park Service. This bill is very similar to a 
bill I sponsored in the 103d Congress--listen to this--which passed the 
Senate 90 to 9 and passed the House 386 to 30, but it is not yet law. 
It repeals the 1965 Concessions Policy Act which has been over a 30-
year-old outrage.
  My legislation would establish an open competitive process for 
awarding concessions contracts in units of the National Park System. It 
will be a competitive process for the first time. These contracts are 
very lucrative the way they are let under the 1965 act, and the 
American people are getting shafted and have been for a very long time.
  Instead of putting the money that we get today back into the Treasury 
for general purposes, under my bill, the money we get from the 
contracts will go to a special account for the use of the National Park 
Service, and Lord only knows every study shows they need it.
  This will be the 18th year that I have worked to reform the 
concession policies of this country. The very first oversight hearing I 
ever held upon becoming chairman of the Parks Subcommittee in 1979 was 
on this very issue. One has to have a lot of patience to operate around 
here.
  Since that time, there has been no telling how many reports, 
hearings, markups, floor debates there have been. Everybody agrees the 
existing law ought to be changed, but in 18 years, with the most 
diligent efforts I can put into it, it has not been changed, simply 
because the park concessioners have more clout with some Members of the 
Senate than have I. They have more clout than the American people have 
with the U.S. Senate.
  Mr. President, let me just tell you what has been happening.
  In 1995--that is the latest year for which we have complete 
information on these concession contracts--in 1995, the United States 
received just under $16 million in franchise fees on gross concession 
revenues of $676 million, a whopping 2.4-percent return.
  These contracts are almost handed down from generation to generation. 
They probably put them in their will and give them to their first-born 
son. It is almost impossible to undo one. But the U.S. taxpayer had a 
2.4 percent return on $676 million of national park concessions fees 
last year.
  In all fairness, let me add this. Under the existing law, a 
concessioner can also make improvements in the parks in consultation 
and agreement with the National Park Service. He can make improvements, 
he might even build a new hotel--all kinds of things like that--and he 
is entitled then to take that into consideration as a part of his fee. 
But even when you add that in, even when you add in the amount that 
concessioners spend to improve the park, which, incidentally, is to 
their benefit because it invariably increases revenues, that increases 
the amount we received to $40 million on $676 million, still only a 
5.9-percent return.
  You can invest in a T-bill and do as well, but this is our land, our 
property, the reason tourists go there and spend their money, because 
it is a park that Congress, in its infinite wisdom, established. Any 
property owner in the United States should ask yourself this question: 
Would you lease your property out for that kind of return when it was 
producing that kind of revenue for the lessee? You would not even 
consider it.

[[Page S3425]]

  A 5.9-percent return we are getting now is better than we have 
received in the past, but listen to this, just to show you how 
ridiculous the current policy is. You will recall that Matsushita 
bought MCA, which owned the Yosemite Park and Curry Co., the 
concessioner at Yosemite. So Matsushita, when they bought this company, 
inherited the concessions contract at Yosemite, which produces the most 
concessions revenue of any park in the United States.
  This will show what happens when you have competition. The people in 
this place, incidentally, are supposed to believe in capitalism. They 
believe in competition. They believe if you leave it to the 
marketplace, everything will work out just hunky-dory, except, it 
seems, for mining and concessions.
  So, here was a contract that Matsushita gave up, and whoever got the 
new contract was going to have to pay off a $62 million note.
  What happened in this contract, Matsushita gave up the contract, the 
National Park Foundation took it for 1 day just for transition 
purposes, and then Delaware North bid and was awarded the new contract, 
the first time, I believe, in the history of the National Park Service, 
since the old law, that a contract had been let competitively.
  Would you like to know what happened? The year before this contract 
was let, the taxpayers got a return from the Yosemite concessions 
operations of three-quarters of 1 percent. And the first year--the 
first year--Delaware North had it under the new, actually competitively 
let contract; on over $80 million of gross revenues, the taxpayers 
received about a 16-percent return.
  Why, Mr. President, do we continue to beat this dog about how 
important it is to rebuild these facilities in the parks and give a 
concessioner credit for it and all that?
  My bill eliminates the anticompetitive measures of the 1965 act, but 
it also recognizes that all concessions are not the same.
  People come to me and say, ``How about the small operators? They're 
struggling to make ends meet.'' Under my bill small family operations 
grossing less than $500,000 a year would retain a preference to renew 
their contracts--so would outfitters and guide operators. Even though 
they are not a major share of the revenue, we probably exempt 80 to 90 
percent of the concession operations because most of them are 
admittedly rather small. But my bill ensures that there will be open 
competition for the large contracts which generate over 90 percent of 
the total concessions revenue.
  As I have already pointed out, the revenues that we get under this 
bill will go straight into a special account to be used by the National 
Park Service, similar to the entrance fee legislation just enacted last 
Congress.
  Mr. President, one of the major changes that is made in this bill is 
the elimination of what is known as possessory interest. And here is 
the way it has been working. A concessioner goes to the National Park 
Service--this is just a hypothetical case--and says, ``We want to build 
a hotel for $10 million.'' They work out the deal and the Park Service 
approves it.
  What happens at that point is, they start depreciating that hotel. 
Any businessman does that, of course. So the concessioner starts 
depreciating this $10 million hotel over a 30- or 40-year period, 
whatever the IRS requires--let us assume it is a 40-year depreciation--
and at the end of 20 years he has depreciated $5 million and has $5 
million left to recover.
  Under existing law, he is entitled to receive whatever he can get for 
that hotel. If he surrenders the contract, or is kicked out, or for any 
other reason, loses his contract, he can receive literally the fair 
market value of the hotel, which may very well be $15 million. He only 
paid $10 million, he has a tax deduction of $5 million, and he can turn 
right around and sell it for $15 million and make that an obligation of 
the next concessioner.
  How much nonsense can you put in one law? You think about that. Now, 
you talk about a bird's nest on the ground, that is possessory 
interest.
  Mr. President, there is one other provision in the old law that is 
equally as egregious. And that is the preferential right an incumbent 
concessioner gets to renew his contract. Another hypothetical case--you 
have a 15-year contract, we will say, in Yellowstone National Park. At 
the end of the 15 years, the Park Service will put out a notice to 
anybody who might be interested to let them know if they would like to 
bid on the concessions operation at Yellowstone.
  So let us assume that I would kind of like to have the Yellowstone 
contract, so I go to the Park Service and say, ``I would like to bid on 
this.'' And the Park Service says, ``That's just jakey. You go ahead 
and bid. Tell us what you would give us for it.'' But let me tell you 
something, whatever you bid, the guy who has the contract now is 
entitled meet your bid, and if so, he gets it.
  You tell me, why would I spend a half-million dollars or whatever it 
takes preparing a bid on something as significant as the concessions in 
Yelowstone National Park, knowing that the person who has that contract 
now need only meet my bid?
  He may have paid a 2-percent return to the Federal Government last 
year. I may be willing to pay 10 percent. And the 
incumbent concessioner knows what the contract is worth. So he comes in 
and says, ``Well, I'll give you 10 percent, too.'' So I ask you, if you 
are a businessman, who in his right mind is going to go out there and 
spend a lot of money preparing a bid, knowing that the person who has 
the contract right now only need match your bid?

  I hear a lot of talk on the floor of the Senate about good old 
capitalism and good old competition and how it solves all problems. 
This is the most egregious policy I can imagine and yet it has been 
going on for years and years.
  But if we pass this bill it will not go on any more.
  Mr. President, we have made some progress through the efforts of the 
administration. However, they have gone about as far as they can go 
just doing things by regulation. They cannot do very much more. But I 
give a lot of credit to Bruce Babbitt and President Clinton for at 
least trying to bring some equity into this without changing the law.
  But you know, we have a lot of Senators here who have good friends 
who had the concession contract on some park in their State for 40 
years, and they just cannot see fit to change the law.
  You know, the other night I was watching some show on NBC about 
mining and how egregious our mining policies are. I have worked on that 
for about 8 years. And I think this year may finally be the year 
because it is getting to be a kind of a political hot potato for people 
who are not from mining States to continue to allow that kind of 
ripoff, rape, and pillage of the taxpayers. But I can tell you it is 
not a bit worse than this concessions policy we have had for all these 
years.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                                 S. 624

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Park Service 
     Concession Policy Reform Act of 1997''.

     SEC. 2. FINDINGS AND POLICY.

       (a) Findings.--In furtherance of the Act of August 25, 1916 
     (39 Stat. 535), as amended (16 U.S.C. 1, 2-4), which directs 
     the Secretary of the Interior to administer areas of the 
     National Park System in accordance with the fundamental 
     purpose of preserving their scenery, wildlife, natural and 
     historic objects, and providing for their enjoyment in a 
     manner that will leave them unimpaired for the enjoyment of 
     future generations, the Congress finds that the preservation 
     and conservation of park resources and values requires that 
     such public accommodations, facilities, and services as the 
     Secretary determines are necessary and appropriate in 
     accordance with this Act--
       (1) should be provided only under carefully controlled 
     safeguards against unregulated and indiscriminate use so that 
     visitation will not unduly impair these values; and
       (2) should be limited to locations and designs consistent 
     to the highest practicable degree with the preservation and 
     conservation of park resources and values.
       (b) Policy.--It is the policy of the Congress that--
       (1) development on Federal lands within a park shall be 
     limited to those facilities and services that the Secretary 
     determines are necessary and appropriate for public use and 
     enjoyment of the park in which such facilities and services 
     are located;
       (2) development of such facilities and services within a 
     park should be consistent to

[[Page S3426]]

     the highest practicable degree with the preservation and 
     conservation of the park's resources and values;
       (3) such facilities and services should be provided by 
     private persons, corporations, or other entities, except when 
     no qualified private interest is willing to provide such 
     facilities and services;
       (4) if the Secretary determines that development should be 
     provided within a park, such development shall be designed, 
     located, and operated in a manner that is consistent with the 
     purposes for which such park was established;
       (5) the right to provide such services and to develop or 
     utilize such facilities should be awarded to the person, 
     corporation, or entity submitting the best proposal through a 
     competitive selection process; and
       (6) such facilities or services should be provided to the 
     public at reasonable rates.

     SEC. 3. DEFINITIONS.

       As used in this Act, the term--
       (1) ``concessioner'' means a person, corporation, or other 
     entity to whom a concession contract has been awarded;
       (2) ``concession contract'' means a contract or permit (but 
     not a commercial use authorization issued pursuant to section 
     6) to provide facilities or services, or both, at a park;
       (3) ``facilities'' means improvements to real property 
     within parks used to provide accommodations, facilities, or 
     services to park visitors;
       (4) ``park'' means a unit of the National Park System;
       (5) ``proposal'' means the complete proposal for a 
     concession contract offered by a potential or existing 
     concessioner in response to the minimum requirements for the 
     contract established by the Secretary; and
       (6) ``Secretary'' means the Secretary of the Interior.

     SEC. 4. REPEAL OF CONCESSION POLICY ACT OF 1965.

       (a) Repeal.--The Act of October 9, 1965, Public Law 89-249 
     (79 Stat. 969, 16 U.S.C. 20-20g), entitled ``An Act relating 
     to the establishment of concession policies administered in 
     the areas administered by the National Park Service and for 
     other purposes'', is hereby repealed. The repeal of such Act 
     shall not affect the validity of any contract entered into 
     under such Act, but the provisions of this Act shall apply to 
     any such contract except to the extent such provisions are 
     inconsistent with the express terms and conditions of the 
     contract.
       (b) Conforming Amendment.--The fourth sentence of section 3 
     of the Act of August 25, 1916 (16 U.S.C. 3; 39 Stat. 535) is 
     amended by striking all through ``no natural'' and inserting 
     in lieu thereof, ``No natural''.

     SEC. 5. CONCESSION POLICY.

       Subject to the findings and policy stated in section 2, and 
     upon a determination by the Secretary that facilities or 
     services are necessary and appropriate for the accommodation 
     of visitors at a park, the Secretary shall, consistent with 
     the provisions of this Act, laws relating generally to the 
     administration and management of units of the National Park 
     System, and the park's general management plan, concession 
     plan, and other applicable plans, authorize private persons, 
     corporations, or other entities to provide and operate such 
     facilities or services as the Secretary deems necessary and 
     appropriate.

     SEC. 6. COMMERCIAL USE AUTHORIZATIONS

       (a) In General.--To the extent specified in this section, 
     the Secretary, upon request, may authorize a private person, 
     corporation, or other entity to provide services to park 
     visitors through a commercial use authorization.
       (b) Criteria for Issuance of Authorization.--(1) The 
     authority of this section may be used only to authorize 
     provision of services that the Secretary determines will have 
     minimal impact on park resources and values and which are 
     consistent with the purposes for which the park was 
     established and with all applicable management plans for such 
     park.
       (2) The Secretary--
       (A) shall require payment of a reasonable fee for issuance 
     of an authorization under this section, such fees to remain 
     available without further appropriation to be used, at a 
     minimum, to recover associated management and administration 
     costs;
       (B) shall require that the provision of services under such 
     an authorization be accomplished in a manner consistent to 
     the highest practicable degree with the preservation and 
     conservation of park resources and values;
       (C) shall take appropriate steps to limit the liability of 
     the United States arising from the provision of services 
     under such an authorization; and
       (D) shall have no authority under this section to issue 
     more authorizations than are consistent with the preservation 
     and proper management of park resources and values, and shall 
     establish such other conditions for issuance of such an 
     authorization as the Secretary determines appropriate for the 
     protection of visitors, provision of adequate and appropriate 
     visitor services, and protection and proper management of the 
     resources and values of the park.
       (c) Limitations.--any authorization issued under this 
     section shall be limited to--
       (1) commercial operations with annual gross revenues of not 
     more than $25,000 resulting from services originating and 
     provided solely within a park pursuant to such 
     authorization; or
       (2) the incidental use of park resources by commercial 
     operations which provide services originating outside of the 
     park's boundaries: Provided, That such authorization shall 
     not provide for the construction of any structure, fixture, 
     or improvement on Federal lands within the park.
       (d) Duration.--The term of any authorization issued under 
     this section shall not exceed two years.
       (e) Other Contracts.--A person, corporation, or other 
     entity seeking or obtaining an authorization pursuant to this 
     section shall not be precluded from also submitting proposals 
     for concession contracts.

     SEC. 7. COMPETITIVE SELECTION PROCESS.

       (a) In General.--(1) Except as provided in subsection (b), 
     and consistent with the provisions of subsection (g), any 
     concession contract entered into pursuant to this Act shall 
     be awarded to the person, corporation, or other entity 
     submitting the best proposal as determined by the Secretary, 
     through a competitive selection process, as provided in this 
     section.
       (2)(A) As soon as practicable after the date of enactment 
     of this Act, the Secretary shall promulgate appropriate 
     regulations establishing the competitive selection process.
       (B) The regulations shall include provisions for 
     establishing a procedure for the resolution of disputes 
     between the Secretary and a concessioner in those instances 
     where the Secretary has been unable to meet conditions or 
     requirements or provide such services, if any, as set forth 
     in a prospectus pursuant to sections 7(c)(2) (D) and (E).
       (b) Temporary Contract.--Notwithstanding the provisions of 
     subsection (a), the Secretary may award a temporary 
     concession contract in order to avoid interruption of 
     services to the public at a park, except that prior to making 
     such a determination, the Secretary shall take all reasonable 
     and appropriate steps to consider alternatives to avoid such 
     an interruption.
       (c) Prospectus.--(1)(A) Prior to soliciting proposals for a 
     concession contract at a park, the Secretary shall prepare a 
     prospectus soliciting proposals, and shall publish a notice 
     of its availability at least once in local or national 
     newspapers or trade publications, as appropriate, and shall 
     make such prospectus available upon request to all interested 
     parties.
       (B) A prospectus shall assign a weight to each factor 
     identified therein related to the importance of such factor 
     in the selection process. Points shall be awarded for each 
     such factor, based on the relative strength of the proposal 
     concerning that factor.
       (2) The prospectus shall include, but need not be limited 
     to, the following information--
       (A) the minimum requirements for such contract, as set 
     forth in subsection (d);
       (B) the terms and conditions of the existing concession 
     contract awarded for such park, if any, including all fees 
     and other forms of compensation provided to the United States 
     by the concessioner;
       (C) other authorized facilities or services which may be 
     provided in a proposal;
       (D) facilities and services to be provided by the Secretary 
     to the concessioner, if any, including but not limited to, 
     public access, utilities, and buildings;
       (E) minimum public services to be offered within a park by 
     the Secretary, including but not limited to, interpretive 
     programs, campsites, and visitor centers; and
       (F) such other information related to the proposed 
     concession operation as is provided to the Secretary pursuant 
     to a concession contract or is otherwise available to 
     the Secretary, as the Secretary determines is necessary to 
     allow for the submission of competitive proposals.
       (d) Minimum Proposal Requirements.--(1) No proposal shall 
     be considered which fails to meet the minimum requirements as 
     determined by the Secretary. Such minimum requirements shall 
     include, but need not be limited to--
       (A) the minimum acceptable franchise fee;
       (B) any facilities, services, or capital investment 
     required to be provided by the concessioner; and
       (C) measures necessary to ensure the protection and 
     preservation of park resources.
       (2) The Secretary shall reject any proposal, 
     notwithstanding the franchise fee offered, if the Secretary 
     determines that the person, corporation, or entity is not 
     qualified, is likely to provide unsatisfactory service, or 
     that the proposal is not responsive to the objectives of 
     protecting and preserving park resources and of providing 
     necessary and appropriate facilities or services to the 
     public at reasonable rates.
       (3) If all proposals submitted to the Secretary either fail 
     to meet the minimum requirements or are rejected by the 
     Secretary, the Secretary shall establish new minimum contract 
     requirements and re-initiate the competitive selection 
     process pursuant to this section.
       (e) Selection of Best Proposal.--(1) In selecting the best 
     proposal, the Secretary shall consider the following 
     principal factors:
       (A) the responsiveness of the proposal to the objectives of 
     protecting and preserving park resources and of providing 
     necessary and appropriate facilities and services to the 
     public at reasonable rates;
       (B) the experience and related background of the person, 
     corporation, or entity submitting the proposal, including but 
     not limited to, the past performance and expertise of such 
     person, corporation, or entity in providing the same or 
     similar facilities or services;
       (C) the financial capability of the person, corporation, or 
     entity submitting the proposal; and

[[Page S3427]]

       (D) the proposed franchise fee: Provided, That 
     consideration of revenue to the United States shall be 
     subordinate to the objectives of protecting and preserving 
     park resources and of providing necessary and appropriate 
     facilities or services to the public at reasonable rates.
       (2) The Secretary may also consider such secondary factors 
     as the Secretary deems appropriate.
       (3) In developing regulations to implement this Act, the 
     Secretary shall consider the extent to which plans for 
     employment of Indians (including Native Alaskans) and 
     involvement of businesses owned by Indians, Indian tribes, or 
     Native Alaskans in the operation of concession contracts 
     should be identified as a factor in the selection of a best 
     proposal under this section.
       (f) Congressional Notification.--(1) The Secretary shall 
     submit any proposed concession contract with anticipated 
     annual gross receipts in excess of $5,000,000 or a duration 
     of ten or more years to the Committee on Energy and Natural 
     Resources of the United States Senate and the Committee on 
     Resources of the United States House of Representatives.
       (2) The Secretary shall not award any such proposed 
     contract until at least 60 days subsequent to the 
     notification of both Committees.
       (g) No Preferential Right of Renewal.--(1) Except as 
     provided in paragraph (2), the Secretary shall not grant a 
     preferential right to a concessioner to renew a concession 
     contract entered into pursuant to this Act.
       (2) The Secretary shall grant a preferential right of 
     renewal with respect to a concession contract covered by 
     subsections (h) and (i), subject to the requirements of the 
     appropriate subsection.
       (A) As used in this subsection, and subsections (h) and 
     (i), the term ``preferential right of renewal'' means that 
     the Secretary shall allow a concessioner satisfying the 
     requirements of this subsection (and subsections (h) or (i), 
     as appropriate) the opportunity to match the terms and 
     conditions of any competing proposal which the Secretary 
     determines to be the best proposal.
       (B) A concessioner who exercises a preferential right of 
     renewal in accordance with the requirements of this paragraph 
     shall be entitled to award of the new concession contract 
     with respect to which such right is exercised.
       (h) Outfitting and Guide Contracts.--(1) The provisions of 
     paragraph (g)(2) shall apply only--
       (A) to a concession contract--
       (i) which solely authorizes a concessioner to provide 
     outfitting, guide, river running, or other substantially 
     similar services within a park; and
       (ii) which does not grant such concessioner any interest in 
     any structure, fixture, or improvement pursuant to section 
     12; and
       (B) where the Secretary determines that the concessioner 
     has operated satisfactorily during the term of the contract 
     (including any extensions thereof); and
       (C) where the Secretary determines that the concessioner 
     has submitted a responsive proposal for a new contract which 
     satisfies the minimum requirements established by the 
     Secretary pursuant to section 7.
       (2) With respect to a concession contract (or extension 
     thereof) covered by this subsection which is in effect on the 
     date of enactment of this Act, the provisions of this 
     paragraph shall apply if the holder of such contract, under 
     the laws and policies in effect on the day before the date of 
     enactment of this Act, would have been entitled to a 
     preferential right to renew such contract upon its 
     expiration.
       (i) Contracts With Annual Gross Receipts Under $500,000.--
     (1) The provisions of paragraph (g)(2) shall also apply to a 
     concession contract--
       (A) which the Secretary estimates will result in annual 
     gross receipts of less than $500,000;
       (B) where the Secretary has determined that the 
     concessioner has operated satisfactorily during the term of 
     the contract (including any extensions thereof); and
       (C) that the concessioner has submitted a responsive 
     proposal for a new concession contract which satisfies the 
     minimum requirements established by the Secretary pursuant to 
     section 7.
       (2) The provisions of this subsection shall not apply to a 
     concession contract which solely authorizes a concessioner to 
     provide outfitting, guide, river running, or other 
     substantially similar services within a park pursuant to 
     subsection (h).
       (j) No Preferential Right to Additional Services.--The 
     Secretary shall not grant a preferential right to a 
     concessioner to provide new or additional services at a park.

     SEC. 8. FRANCHISE FEES.

       (a) In General.--Franchise fees shall not be less than the 
     minimum fee established by the Secretary of each contract. 
     The minimum fee shall be determined in a manner that will 
     provide the concessioner with a reasonable opportunity to 
     realize a profit on the operation as a whole, commensurate 
     with the capital invested and the obligations assumed under 
     the contract.
       (b) Multiple Contracts Within a Park.--If multiple 
     concession contracts are awarded to authorize concessioners 
     to provide the same or similar outfitting, guide, river 
     running, or other similar services at the same approximate 
     location or resource within a specific park, the Secretary 
     shall establish an identical franchise fee for all such 
     contracts, subject to periodic review and revision by the 
     Secretary. Such fee shall reflect fair market value.
       (c) Adjustment of Franchise Fees.--The amount of any 
     franchise fee for the term of the concession contract shall 
     be specified in the concession contract and may only be 
     modified to reflect substantial changes from the conditions 
     specified or anticipated in the contract.

     SEC. 9. USE OF FRANCHISE FEES.

       (a) Deposits to Treasury.--All receipts collected pursuant 
     to this Act shall be covered into a special account 
     established in the Treasury of the United States. Except as 
     provided in subsection (b), amounts covered into such account 
     in a fiscal year shall be available for expenditure, subject 
     to appropriation, solely as follows:
       (1) Fifty percent shall be allocated among the units of the 
     National Park System in the same proportion as franchise fees 
     collected from a specific unit bears to the total amount 
     covered into the account for each fiscal year, to be used for 
     resource management and protection, maintenance activities, 
     interpretation, and research.
       (2) Fifty percent shall be allocated among the units of the 
     National Park System on the basis of need, in a manner to be 
     determined by the Secretary, to be used for resource 
     management and protection, maintenance activities, 
     interpretation, and research.
       (b) Special Account.--(1) Beginning in fiscal year 1998, 
     all receipts collected in the previous year in excess of the 
     following amounts shall be made available from the special 
     account to the Secretary without further appropriation, to be 
     allocated among the units of the National Park System on the 
     basis of need, in a manner to be determined by the Secretary, 
     to be used for resource management and protection, 
     maintenance activities, interpretation, and research:
       (1) $17,000,000 for fiscal year 1998.
       (2) $18,000,000 for fiscal year 1999.
       (3) $18,000,000 for fiscal year 2000.
       (4) $18,000,000 for fiscal year 2001.
       (5) $18,000,000 for fiscal year 2002.
       (c) Existing Concessioner Improvement Funds.--Nothing in 
     this section shall affect or restrict the use of funds 
     maintained by a concessioner in an existing concessioner 
     improvement account pursuant to a concession contract in 
     effect as of the date of enactment of this Act. No new, 
     renewed, or extended contracts entered into after the date of 
     enactment of this Act shall provide for or authorize the use 
     of such concessioner improvement accounts.
       (d) Inspector General Audits.--Beginning in fiscal year 
     1998, the Inspector General of the Department of the Interior 
     shall conduct a biennial audit of the concession fees 
     generated pursuant to this Act. The Inspector General shall 
     make a determination as to whether concession fees are being 
     collected and expended in accordance with this Act and shall 
     submit copies of each audit to the Committee on Energy and 
     Natural Resources of the United States Senate and the 
     Committee on Resources of the United States House of 
     Representatives.

     SEC. 10. DURATION OF CONTRACT.

       (a) Maximum Term.--A concession contract entered into 
     pursuant to this Act shall be awarded for a term not to 
     exceed ten years: Provided, however, That the Secretary may 
     award a contract for a term of up to twenty years if the 
     Secretary determines that the contract terms and conditions 
     necessitate a longer term.
       (b) Temporary Contract.--A temporary concession contract 
     awarded on a non-competitive basis pursuant to section 7(b) 
     shall be for a term not to exceed two years.

     SEC. 11. TRANSFER OF CONTRACT.

       (a) In General.--No concession contract may be transferred, 
     assigned, sold, or otherwise conveyed by a concessioner 
     without prior written notification to, and approval of the 
     Secretary.
       (b) Approval of Transfer.--The Secretary shall not 
     unreasonably withhold approval of a transfer, assignment, 
     sale, or conveyance of a concession contract, but shall not 
     approve the transfer, assignment, sale, or conveyance of a 
     concession contract to any individual, corporation or other 
     entity if the Secretary determines that--
       (1) such individual, corporation or entity is, or is likely 
     to be, unable to completely satisfy all of the requirements, 
     terms, and conditions of the contract;
       (2) such transfer, assignment, sale or conveyance is not 
     consistent with the objectives of protecting and preserving 
     park resources, and of providing necessary and appropriate 
     facilities or services to the public at reasonable rates;
       (3) such transfer, assignment, sale, or conveyance relates 
     to a concession contract which does not provide to the United 
     States consideration commensurate with the probable value of 
     the privileges granted by the contract; or
       (4) the terms of such transfer, assignment, sale, or 
     conveyance directly or indirectly attribute a significant 
     value to intangible assets or otherwise may so reduce the 
     opportunity for a reasonable profit over the remaining term 
     of the contract that the United States may be required to 
     make substantial additional expenditures in order to avoid 
     interruption of services to park visitors.

     SEC. 12. PROTECTION OF CONCESSIONER INVESTMENT.

       (a) Current Contract.--(1) A concessioner who before the 
     date of the enactment of this Act has acquired or 
     constructed, or is required under an existing concession 
     contract

[[Page S3428]]

     to commence acquisition or construction of any structure, 
     fixture, or improvement upon land owned by the United States 
     within a park, pursuant to such contract, shall have a 
     possessory interest therein, to the extent provided by such 
     contract.
       (2) Unless otherwise provided in such contract, said 
     possessory interest shall not be extinguished by the 
     expiration or termination of the contract and may not be 
     taken for public use without just compensation. Such 
     possessory interest may be assigned, transferred, encumbered, 
     or relinquished.
       (3) Upon the termination of a concession contract in effect 
     before the date of enactment of this title, the Secretary 
     shall determine the value of any outstanding possessory 
     interest applicable to the contract, such value to be 
     determined for all purposes on the basis of applicable laws 
     and contracts in effect on the day before the date of 
     enactment of this Act.
       (4) Nothing in this subsection shall be construed to grant 
     a possessory interest to a concessioner whose contract in 
     effect on the date of enactment of this Act does not 
     include recognition of a possessory interest.
       (b) New Contracts.--(1)(A) With respect to a concession 
     contract entered into on or after the date of enactment of 
     this Act, the value of any outstanding possessory interest 
     associated with such contract shall be set at the value 
     determined by the Secretary pursuant to subsection (a)(3).
       (B) As a condition of entering into a concession contract, 
     the value of any outstanding possesory interest shall be 
     reduced on an annual basis, in equal portions, over the same 
     number of years as the time period associated with the 
     straight line depreciation of the structure, fixture, or 
     improvement associated with such possessory interest, as 
     provided by applicable Federal income tax laws and 
     regulations in effect on the day before the date of enactment 
     of this Act.
       (C) In the event that the contract expires or is terminated 
     prior to the elimination of any outstanding possessory 
     interest, the concessioner shall be entitled to receive from 
     the United States or the successor concessioner payment equal 
     to the remaining value of the possessory interest.
       (D) A successor concessioner may not revalue any 
     outstanding possessory interest, nor the period of time over 
     which such interest is reduced.
       (E) Title to any structure, fixture, or improvement 
     associated with any outstanding possessory interest shall be 
     vested in the United States.
       (2)(A) If the Secretary determines during the competitive 
     selection process that all proposals submitted either fail to 
     meet the minimum requirements or are rejected (as provided in 
     section 7), the Secretary may, solely with respect to any 
     outstanding possessory interest associated with the contract 
     and established pursuant to a concession contract entered 
     into prior to the date of enactment of this Act, suspend the 
     reduction provisions of subsection (b)(1)(B) for the duration 
     of the contract, and re-initiate the competitive selection 
     process as provided in section 7.
       (B) The Secretary may suspend such reduction provisions 
     only if the Secretary determines that the establishment of 
     other new minimum contract requirements is not likely to 
     result in the submission of satisfactory proposals, and that 
     the suspension of the reduction provisions is likely to 
     result in the submission of satisfactory proposals: Provided, 
     however, That nothing in this paragraph shall be construed to 
     require the Secretary to establish a minimum franchise fee at 
     a level below the franchise fee in effect for such contract 
     on the day before the expiration date of the previous 
     contract.
       (c) New Structures.--(1) On or after the date of enactment 
     of this Act, a concessioner who constructs or acquires a new, 
     additional, or replacement structure, fixture, or improvement 
     upon land owned by the United States within a park, pursuant 
     to a concession contract, shall have an interest in such 
     structure, fixture, or improvement equivalent to the actual 
     original cost of acquiring or constructing such structure, 
     fixture, or improvement, less straight line depreciation over 
     the estimated useful life of the asset according to Generally 
     Accepted Accounting Principles: Provided, That in no event 
     shall the estimated useful life of such asset exceed the 
     depreciation period used for such asset for Federal income 
     tax purposes.
       (2) In the event that the contract expires or is terminated 
     prior to the recovery of such costs, the concessioner shall 
     be entitled to receive from the United States or the 
     successor concessioner payment equal to the value of the 
     concessioner's interest in such structure, fixture, or 
     improvement. A successor concessioner may not revalue the 
     interest in such structure, fixture, or improvement, the 
     method of depreciation, or the estimated useful life of the 
     asset.
       (3) Title to any such structure, fixture, or improvement 
     shall be vested in the United States.
       (d) Insurance, Maintenance and Repair.--Nothing in this 
     section shall affect the obligation of a concessioner to 
     insure, maintain, and repair any structure, fixture, or 
     improvement assigned to such concessioner and to insure that 
     such structure, fixture, or improvement fully complies with 
     applicable safety and health laws and regulations.

     SEC. 13. RATES AND CHARGES TO PUBLIC.

       The reasonableness of a concessioner's rates and charges to 
     the public shall, unless otherwise provided in the bid 
     specifications and contract, be judged primarily by 
     comparison with those rates and charges for facilities and 
     services of comparable character under similar conditions, 
     with due consideration for length of season, seasonal 
     variance, average percentage of occupancy, accessibility, 
     availability and costs of labor and materials, type of 
     patronage, and other factors deemed significant by the 
     Secretary.

     SEC. 14. CONCESSIONER PERFORMANCE EVALUATION.

       (a) Regulations.--as soon as practicable after the date of 
     enactment of this Act, the Secretary shall publish, after an 
     appropriate period for public comment, regulations 
     establishing standards and criteria for evaluating the 
     performance of concessions operating within parks.
       (b) Periodic Evaluation.--(1) The Secretary shall 
     periodically conduct an evaluation of each concessioner 
     operating under a concession contract pursuant to this Act, 
     as appropriate, to determine whether such concessioner has 
     performed satisfactorily. In evaluating a concessioner's 
     performance, the Secretary shall seek and consider applicable 
     reports and comments from appropriate Federal, State, and 
     local regulatory agencies, and shall seek and consider the 
     applicable views of park visitors and concession customers. 
     If the Secretary's performance evaluation results in an 
     unsatisfactory rating of the concessioner's overall 
     operation, the Secretary shall provide the concessioner with 
     a list of the minimum requirements necessary for the 
     operation to be rated satisfactory, and shall so notify the 
     concessioner in writing.
       (2) The Secretary may terminate a concession contract if 
     the concessioner fails to meet the minimum operational 
     requirements identified by the Secretary within the time 
     limitations established by the Secretary at the time notice 
     of the unsatisfactory rating is provided to the concessioner.
       (3) If the Secretary terminates a concession contract 
     pursuant to this section, the Secretary shall solicit 
     proposals for a new contract consistent with the provisions 
     of this Act.

     SEC. 15. RECORDKEEPING REQUIREMENTS.

       (a) In General.--Each concessioner shall keep such records 
     as the Secretary may prescribe to enable the Secretary to 
     determine that all terms of the concessioner's contract have 
     been, and are being faithfully performed, and the Secretary 
     or any of the Secretary's duly authorized representatives 
     shall, for the purpose of audit and examination, have access 
     to such records and to other books, documents and papers of 
     the concessioner pertinent to the contract and all the terms 
     and conditions thereof as the Secretary deems necessary.
       (b) General Accounting Office Review.--The Comptroller 
     General of the United States or any of his or her duly 
     authorized representatives shall, until the expiration of 
     five calendar years after the close of the business year for 
     each concessioner, have access to and the right to examine 
     any pertinent books, documents, papers, and records of the 
     concessioner related to the contracts or contracts involved.

     SEC. 16. EXEMPTION FROM CERTAIN LEASE REQUIREMENTS.

       The provisions of section 321 of the Act of June 30, 1932 
     (47 Stat. 412; 40 U.S.C. 303b), relating to the leasing of 
     buildings and properties of the United States, shall not 
     apply to contracts awarded by the Secretary pursuant to this 
     Act.

     SEC. 17. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated such sums as may be 
     necessary to carry out this Act.
                                 ______
                                 
      By Mr. McCONNELL (for himself, Mr. Moynihan, Mr. Lieberman, Mr. 
        Gorton and Mr. Grams):
  S. 625. A bill to provide for competition between forms of motor 
vehicle insurance, to permit an owner of a motor vehicle to choose the 
most appropriate form on insurance for that person, to guarantee 
affordable premiums, to provide for more adequate and timely 
compensation for accident victims, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.


                   THE AUTO CHOICE REFORM ACT OF 1997

  Mr. McCONNELL. Mr. President, I am happy today to join with my 
esteemed colleagues, Senator Moynihan and Senator Lieberman, to 
announce the introduction of the Auto Choice Reform Act. As you know, 
we introduced this bill in the last Congress, along with Senator Dole. 
We are proud to announce that Senator Slade Gorton and Senator Rod 
Grams have also joined us as original cosponsors.
  You will hear lots of discussion today, and in the coming months, 
about various aspects of automobile insurance and tort liability. But, 
everything you will hear about Auto Choice can be summed up in two 
words: choice and savings.
  Consumers want, need, and deserve both.
  Very simply, the Auto Choice Reform Act offers consumers the choice 
of opting out of the pain and suffering litigation lottery. The 
consumers who make this choice will achieve a substantial

[[Page S3429]]

savings on automobile insurance premiums.
  Based on an analysis by the Rand Institute for Civil Justice, the 
Joint Economic Committee estimates that, under Auto Choice, consumers 
could save a total of $45 billion nationwide in 1997--at no cost to the 
Government. And, over 5 years, Auto Choice could make available a total 
of $246 billion in savings. Now, that's better than any tax cut that 
either party has proposed.
  What does a $45 billion annual savings mean to the average driver? 
Well, that savings is colorfully and clearly illustrated behind me with 
this check: ``Pay to the Order of the American Driver--$243.'' And this 
check is not a one-time payment. Motorists could achieve this type of 
savings every year.
  However, before you can truly comprehend the benefits of Auto Choice, 
you must understand the terrible costs of the current tort liability 
system.
  The Nation's auto insurance system desperately needs an overhaul. And 
nobody knows this better than the American motorist--who is now paying 
on average $757 for automobile insurance. Between 1987 and 1994, 
average premiums rose 44 percent--nearly 1\1/2\ times the rate of 
inflation.
  Why are consumers forced to pay so much?
  Because the auto insurance system is clogged and bloated by fraud, 
wasteful litigation, and abuse.
  First, let's talk about fraud. In 1995, the F.B.I. announced a wave 
of indictments stemming from Operation Sudden Impact, the most wide-
ranging investigation of criminal fraud schemes involving staged car 
accidents and massive fraud in the health care system. The F.B.I. 
uncovered criminal enterprises staging bus and car accidents in order 
to bring lawsuits and collect money from innocent people, businesses 
and governments. F.B.I. Director Louis Freeh estimates that every 
American household is burdened by an additional $200 in unnecessary 
insurance premiums to cover this enormous amount of fraud.
  In addition to the pervasive criminal fraud that exists, the 
incentives of our litigation system encourage injured parties to make 
excessive medical claims to drive up their damage claims in lawsuits. 
The Rand Institute for Civil Justice, in a study released in 1995, 
concluded that 35 to 42 percent of claimed medical costs in car 
accident cases are excessive and unnecessary. Let me repeat that in 
simple English: well over one-third of doctor, hospital, physical 
therapy, and other medical costs claimed in car accident cases are 
for nonexistent injuries or for unnecessary treatment.

  The value of this wasteful health care? Four billion dollars 
annually. I don't need to remind anyone of the ongoing local and 
national debate over our health care system. While people have 
strongly-held differences over the causes and solutions to that 
problem, the Rand data make one thing certain --lawsuits, and the 
potential for hitting the jackpot, drive overuse and abuse of the 
health care system. Reducing those costs by $4 billion annually, 
without depriving one person of needed medical care, is clearly in our 
national interest.
  Why would an injured party inflate their medical claims, you might 
ask. It's simple arithmetic. For every $1 of economic loss, a party 
stands to recover up to $3 in pain and suffering awards. In short, the 
more you go to the doctor, the more you get from the jury. And, the 
more you get from the jury, the more money your attorney puts in his 
own pocket.
  In addition to the massive fraud encouraged by the liability system, 
seriously injured people are grossly undercompensated under the tort 
system. A 1991 Rand study reveals that people with economic losses 
between $25,000 and $100,000 recover on the average only 50 percent of 
their economic losses. People with losses in excess of $100,000 recover 
only 9 percent.
  Moreover, liability insurance does not pay until the claim is 
resolved. Studies show that the average time to recover is 16 months, 
and it takes longer in serious injury cases.
  The Auto Choice bill gives consumers a way out of this system of high 
premiums, rampant fraud, and slow, inequitable compensation. Our bill 
would remove the perverse incentives of lawsuits, while ensuring that 
car accident victims recover fully for their economic loss.
  Now, I'd like to answer the question: what is Auto Choice? Let me 
first answer with what it is not. It does not abolish lawsuits, and it 
does not eliminate the concept of fault within the legal system. There 
will no doubt be less reason to go to court, but the right to sue is 
absolutely not abolished.
  What it does do is allow drivers to decide how they want to be 
insured. In establishing the choice mechanism, the bill unbundles 
economic and noneconomic losses and allows the driver to choose whether 
to be covered for noneconomic losses--that is, pain and suffering 
losses.
  In other words, if a driver wants to be covered for pain and 
suffering, he stays in the current State system. If he wants to opt-out 
of the pain and suffering regime, he chooses the personal protection 
system.
  This choice, which sounds amazingly simple and imminently reasonable, 
is, believe it or not, currently unavailable for over ninety percent of 
all motorists. Auto Choice will change that.
  Let me briefly explain the choices that our bill will offer every 
consumer. A consumer will be able to choose one of two insurance 
systems.
  The first choice is the tort maintenance system. Drivers who wish to 
stay in their current system would choose this system and be able to 
sue and be sued for pain and suffering. These drivers would essentially 
buy the same type of insurance that they currently carry--and would 
recover, or fail to recover, in the same way that they do today. The 
only change for tort drivers would be that, in the event that they are 
hit by a personal protection driver, the tort driver would recover both 
economic and noneconomic damages from his own insurance policy. This 
supplemental first-party policy for tort drivers will be called tort 
maintenance coverage.

  The second choice is the personal protection system. Consumers 
choosing this system would be guaranteed prompt recovery of their 
economic losses, up to the levels of their own insurance policy. These 
drivers would give up recovery of pain and suffering damages in 
exchange for being immune from pain and suffering lawsuits. Personal 
protection drivers would achieve substantially reduced premiums because 
the personal protection system would dramatically reduce: First, pain 
and suffering damages, second, fraud, and third, the bulk of attorney 
fees.
  Under both insurance systems--tort maintenance and personal 
protection--the injured party whose economic losses exceed his own 
coverage will have the right to sue the responsible party for the 
excess. Moreover, tort drivers will retain the right to sue each other 
for both economic and noneconomic loss. Critics who say the right to 
sue is abolished by this bill are plain wrong.
  The advantages of personal protection coverage are enormous.
  First, personal protection coverage assures that those who suffer 
injury, regardless of whether someone else is responsible, will be paid 
for their economic losses. The driver does not have to leave 
compensation up to the vagaries of how an accident occurs and how much 
coverage the other driver has. A driver whose car goes off a slippery 
road will be able to recover for his economic losses. Such a blameless 
driver could not recover under the tort system because no other person 
was at fault. No matter when and how a driver or a member of his family 
is injured, the driver knows his insurance will protect his family.
  Second, the choice as to how much insurance protection to purchase is 
in the hands of the driver, who is in the best position to know how 
much coverage he and his family need. He can choose as much or as 
little insurance as his circumstances require, from $20,000 of 
protection to $1 million of coverage.
  Third, people who elect the personal protection option will, in the 
event they are injured, be paid promptly, as their losses accrue.
  Fourth, we will have more rational use of precious health care 
resources. Insuring on a first-party basis eliminates the incentives 
for excess medical claiming. When a person chooses to be compensated 
for actual economic loss, the tort system's incentives for padding 
one's claims disappear.
  Fifth, Auto Choice offers real benefits for low-income drivers 
because the

[[Page S3430]]

savings are progressive. Low-income drivers will see the biggest 
savings because they pay a higher proportion of their disposable income 
in insurance costs. A study of low income residents of Maricopa County, 
AZ, revealed that households below 50 percent of the poverty line spent 
an amazing 31.6 percent of their disposable income on car insurance.
  For many low-income families the choices are stark: car insurance and 
the ability to get to the job, or medicine, new clothing or extra food 
for the children. Or, they choose the worst alternative of all--driving 
without any insurance. Should we allow our litigation system to promote 
such unlawful conduct?
  Moreover, Auto Choice offers benefits to all taxpayers, even those 
who don't drive. For example, local governments will save taxpayer 
dollars through decreased insurance and litigation costs. This will 
allow governments to use our tax dollars to more directly benefit the 
community. Think of all the additional police and firefighters that 
could be hired with money now spent on lawsuits. Or, schools and 
playgrounds that could be better equipped. New York City spends more on 
liability claims than it spends on libraries, botanical gardens, the 
Bronx Zoo, the Metropolitan Museum of Art and the Department of Youth 
Services, combined. Imagine the improved quality of life in our urban 
areas if governments were free of spending on needless lawsuits.

  Last, we will create incentives for safer cars. Now, it actually 
costs more to insure a safer car. That's because a driver in a bigger 
car who is responsible for another's injury may have a bigger claim to 
pay. After all, the bigger, safer car may cause more damage to the 
person in a smaller, less safe car. So insuring a bigger, safer car 
costs more. But under auto choice and first-party coverage, insurance 
companies would reward customers with lower premiums for safer cars.
  The bottom line? We think that consumers should be able to make one 
simple choice: ``Do you want to continue to pay $757 a year for auto 
insurance and have the right to recover pain and suffering damages? Or 
would you rather save $243 a year on your premiums, be promptly 
reimbursed for your economic losses, and forego pain and suffering 
damages?''
  It's really that simple. And, we're not even going to tell them which 
answer is the right one. Because that's not up to us. It's up to the 
consumer. We simply want to give them the choice.
  In closing, I'd like to do something I rarely do--quote the New York 
Times--which summed up the benefits, and indeed, the simplicity of Auto 
Choice: Auto Choice ``would give families the option of foregoing suits 
for nonmonetary losses in exchange for quick and complete reimbursement 
for every blow to their pocketbook. Everyone would win--except the 
lawyers.''
  Now, before I turn over the floor to Senator Moynihan, I'd like to 
share with you a scathing indictment of the tort liability system that 
was written more than a quarter of a century ago by a true visionary:

       No one involved has an incentive to moderation or 
     reasonableness. The victim has every reason to exaggerate his 
     losses. It is some other person's insurance company that must 
     pay. The company has every reason to resist. It is somebody 
     else's customer who is making the claim. Delay, fraud, 
     contentiousness are maximized, and in the process the system 
     becomes grossly inefficient and expensive. Automobile 
     accident litigation has become a 20th-Century equivalent of 
     Dickens's Court of Chancery, eating up the pittance of widows 
     and orphans, a vale from which few return with their respect 
     for just[ice] undiminished.

  Well, those insightful and prophetic words were spoken by none other 
than the man who stands here with me as an original cosponsor today, my 
colleague from the State of New York, Pat Moynihan. Pat, it's taken 
over 25 years, but I think we're finally going to overhaul this broken-
down auto insurance system.
  Mr. President, this bill has broad support from across the spectrum. 
It should be obvious by the support and endorsements that this bill has 
already received that this is not conservative or liberal legislation. 
It is consumer legislation. I ask unanimous consent that the text of 
the bill and statements in support of Auto Choice from the Republican 
mayor of New York City, Rudolph Giuliani, the former Massachusetts 
Governor and Democratic presidential candidate, Michael Dukakis, and 
the executive director of the Reform Party, Russ Verney, be printed in 
the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                 S. 625

       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 ``Auto Choice Reform Act of 
     1997''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the costs of operating a motor vehicle are excessive 
     due in substantial part to the legal and administrative costs 
     associated with the resolution of claims under the tort 
     liability insurance system;
       (2) the tort liability insurance system often results in--
       (A) the failure to provide compensation commensurate with 
     loss;
       (B) an unreasonable delay in the payment of benefits; and
       (C) the expenditure of an excessive amount for legal fees;
       (3) the incentives of the tort liability insurance system 
     for motor vehicles are distorted, and result in--
       (A) significant fraud in the claims process, which 
     exacerbates the level of distrust of many individuals in the 
     United States with respect to the legal process and the rule 
     of law;
       (B) significant, wasteful, fraudulent, and costly overuse 
     and abuse of scarce health care resources and services;
       (C) unbearable cost burdens on low-income individuals, 
     imposing on them the Hobson's choice of driving on an 
     unlawful, uninsured basis or foregoing essential needs, such 
     as food and adequate shelter;
       (D) significant reductions in, access to, and purchases of, 
     motor vehicles, which--
       (i) damage the economic well-being of many low-income 
     individuals; and
       (ii) cause unnecessary harm to a critical component of the 
     economy of the United States;
       (E) significant deterioration of the economic well-being of 
     the majority of major cities in the United States through the 
     imposition of a massive tort tax that--
       (i) places a disproportionate burden on urban residents; 
     and
       (ii) contributes to the abandonment of the cities by many 
     taxpayers who are able to achieve substantial after-tax 
     savings on automobile insurance premiums by moving to 
     adjacent suburban communities; and
       (F) significant inability to achieve market-based discounts 
     in insurance rates for owners of safer cars, which reduces 
     the level of safety for drivers and passengers of motor 
     vehicles;
       (4) insurance to indemnify individuals for personal 
     injuries arising from motor vehicle collisions is frequently 
     unavailable at a reasonable cost because of the potential 
     liability for third-party tort claims;
       (5) a system that gives consumers the opportunity to insure 
     themselves and that separates economic and noneconomic 
     damages for the purposes of purchasing insurance would 
     provide significant cost savings to drivers of motor 
     vehicles;
       (6) a system that enables individuals to choose the form of 
     motor vehicle insurance that best suits their needs would--
       (A) enhance individual freedom;
       (B) reduce the cost of motor vehicle insurance; and
       (C) increase average compensation in the event of an 
     accident; and
       (7) a system that targets and emphasizes the scourge of 
     those individuals who drive under the influence of drugs or 
     alcohol will further deter such dangerous and unlawful 
     conduct.

     SEC. 3. PURPOSE.

       The purpose of this Act is to allow consumers of motor 
     vehicle insurance to choose between--
       (1) an insurance system that provides substantially the 
     same remedies as are available under applicable State law; 
     and
       (2) a predominately first-party insurance system that 
     provides for--
       (A) more comprehensive recovery of economic loss in a 
     shorter period of time; and
       (B) the right to sue negligent drivers for any 
     uncompensated economic losses.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Accident.--The term ``accident'' means an unforeseen or 
     unplanned event that--
       (A) causes loss or injury; and
       (B) arises from the operation, maintenance, or use of a 
     motor vehicle.
       (2) Add-on law.--The term ``add-on law'' means a State law 
     that provides that persons injured in motor vehicle 
     accidents--
       (A) are compensated without regard to fault for economic 
     loss; and
       (B) have the right to claim without any limitation for 
     noneconomic loss based on fault.
       (3) Economic loss.--The term ``economic loss'' means any 
     objectively verifiable pecuniary loss resulting from an 
     accident, including--
       (A) reasonable and necessary medical and rehabilitation 
     expenses;
       (B) loss of earnings;

[[Page S3431]]

       (C) burial costs;
       (D) replacement services loss;
       (E) costs of making reasonable accommodations to a personal 
     residence to make the residence more habitable for an injured 
     individual; and
       (F) loss of employment, and loss of business or employment 
     opportunities, to the extent recovery for such losses is 
     allowed under applicable State law.
       (4) Financial responsibility law.--The term ``financial 
     responsibility law'' means a law (including a law requiring 
     compulsory coverage) penalizing motorists for failing to 
     carry defined limits of tort liability insurance covering 
     motor vehicle accidents.
       (5) Injury.--The term ``injury'' means bodily injury, 
     sickness, disease, or death.
       (6) Insurer.--The term ``insurer'' means--
       (A) any person who is engaged in the business of issuing or 
     delivering motor vehicle insurance policies (including an 
     insurance agent); or
       (B) any person who is self-insured within the meaning of 
     applicable State law.
       (7) Intentional misconduct.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``intentional misconduct'' means conduct--
       (i) with respect to which harm is intentionally caused or 
     attempted to be caused by a person who acts or fails to act 
     for the purpose of causing harm, or with knowledge that harm 
     is substantially certain to result from that action or 
     failure to act; and
       (ii) that causes or substantially contributes to the harm 
     that is the subject of a claim.
       (B) Clarification.--For purposes of this paragraph, a 
     person does not intentionally cause or attempt to cause 
     harm--
       (i) solely because that person acts or fails to act with 
     the understanding that the action or failure to act creates a 
     grave risk of causing harm; or
       (ii) if the act or omission by that person causing bodily 
     harm is for the purpose of averting bodily harm to that 
     person or another person.
       (8) Motor vehicle.--The term ``motor vehicle'' means a 
     vehicle of any kind required to be registered under the 
     provisions of the applicable State law relating to motor 
     vehicles.
       (9) No-fault motor vehicle law.--The term ``no-fault motor 
     vehicle law'' means a State law that provides that--
       (A) persons injured in motor vehicle accidents are paid 
     compensation without regard to fault for their economic loss 
     that results from injury; and
       (B) in return for the payment referred to in subparagraph 
     (A), claims based on fault including claims for noneconomic 
     loss, are limited to a defined extent.
       (10) Noneconomic loss.--The term ``noneconomic loss'' means 
     subjective, nonmonetary losses including pain, suffering, 
     inconvenience, mental suffering, emotional distress, loss of 
     society and companionship, loss of consortium, hedonic 
     damages, injury to reputation, and humiliation.
       (11) Occupy.--The term ``occupy'' means, with respect to 
     the operation, maintenance, or use of a motor vehicle, to be 
     in or on a motor vehicle or to be engaged in the immediate 
     act of entering into or alighting from a motor vehicle before 
     or after its use for transportation.
       (12) Operation, maintenance, or use of a motor vehicle.--
       (A) In general.--The term ``operation, maintenance, or use 
     of a motor vehicle'' means occupying a motor vehicle.
       (B) Exclusions.--The term ``operation, maintenance, or use 
     of a motor vehicle'' does not include--
       (i) conduct within the course of a business of 
     manufacturing, sale, repairing, servicing, or otherwise 
     maintaining motor vehicles, unless the conduct occurs outside 
     of the scope of the business activity; or
       (ii) conduct within the course of loading or unloading a 
     motor vehicle, unless the conduct occurs while occupying the 
     motor vehicle.
       (13) Person.--The term ``person'' means any individual, 
     corporation, company, association, firm, partnership, 
     society, joint stock company, or any other entity, including 
     any governmental entity.
       (14) Personal protection insurance.--The term ``personal 
     protection insurance'' means insurance that provides for--
       (A) benefits to an insured person for economic loss without 
     regard to fault for injury resulting from a motor vehicle 
     accident; and
       (B) a waiver of tort claims in accordance with this Act.
       (15) Replacement services loss.--The term ``replacement 
     services loss'' means expenses reasonably incurred in 
     obtaining ordinary and necessary services from other persons 
     who are not members of the injured person's household, in 
     lieu of the services the injured person would have performed 
     for the benefit of the household.
       (16) Resident relative or dependent.--The term ``resident 
     relative or dependent'' means a person who--
       (A) is related to the owner of a motor vehicle by blood, 
     marriage, adoption, or otherwise (including a dependent 
     receiving financial services or support from such owner); and
       (B)(i) resides in the same household as the owner of the 
     motor vehicle at the time of the accident; or
       (ii) usually makes a home in the same family unit as that 
     owner, even though that person may temporarily live 
     elsewhere.
       (17) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, Guam, the United States Virgin Islands, American 
     Samoa, the Commonwealth of the Northern Mariana Islands, the 
     Trust Territories of the Pacific Islands, and any other 
     territory or possession of the United States.
       (18) Tort liability.--The term ``tort liability'' means the 
     legal obligation to pay damages for an injury adjudged to 
     have been committed by a tort-feasor.
       (19) Tort liability insurance.--The term ``tort liability 
     insurance'' means a contract of insurance under which an 
     insurer agrees to pay, on behalf of an insured, damages that 
     the insured is obligated to pay to a third person because of 
     the liability of the insured to that person.
       (20) Tort maintenance coverage.--
       (A) In general.--The term ``tort maintenance coverage'' 
     means insurance coverage under which a person described in 
     subparagraph (B), if involved in an accident with a person 
     covered by personal protection insurance, retains a right to 
     claim for injury based on fault for economic and noneconomic 
     losses under applicable State law, without modification by 
     any other provision of this Act.
       (B) Tort maintenance insured.--A person described in this 
     subparagraph is a person covered by the form of insurance 
     described in section 5(a)(2).
       (C) Responsibility for payment.--The responsibility for 
     payment for any claim under subparagraph (A) is assumed by 
     the insurer of the person with tort maintenance coverage to 
     the extent of such coverage.
       (21) Uncompensated economic loss.--
       (A) In general.--The term ``uncompensated economic loss'' 
     means economic loss payable based on fault.
       (B) Attorneys' fees.--The term includes a reasonable 
     attorney's fee calculated on the basis of the value of the 
     attorney's efforts as reflected in payment to the attorney's 
     client.
       (C) Exclusions.--The term does not include amounts paid 
     under--
       (i) personal protection insurance;
       (ii) tort maintenance coverage;
       (iii) no-fault or add-on motor vehicle insurance;
       (iv) Federal, State, or private disability or sickness 
     programs;
       (v) Federal, State, or private health insurance programs;
       (vi) employer wage continuation programs; or
       (vii) workers' compensation or similar occupational 
     compensation laws.
       (22) Uninsured motorist.--The term ``uninsured motorist'' 
     means the owner of a motor vehicle, including the resident 
     relatives or dependents of the owner, who is uninsured under 
     either the personal protection system or the tort maintenance 
     system described in section 5(a)--
       (A) at the limits prescribed by the applicable State 
     financial responsibility law; or
       (B) an amount prescribed under section 5(b)(1)(A).

     SEC. 5. AUTO CHOICE INSURANCE SYSTEM.

       (a) Operation of the Right To Choose.--Under this Act, a 
     person shall have the right to choose between the following 
     insurance systems:
       (1) Personal protection system.--A person may choose 
     insurance under a system that provides for personal 
     protection insurance for that person and any resident 
     relative or dependent of that person.
       (2) Tort maintenance system.--A person may choose insurance 
     under a system that provides for the form of motor vehicle 
     insurance (including tort liability, no-fault, add-on, or 
     uninsured motor vehicle insurance) that is otherwise required 
     in the State in which the person is insured.
       (b) Personal Protection System.--
       (1) Minimum policy requirements.--In order for a personal 
     protection insurance policy to be covered by this Act, a 
     motor vehicle insurance policy issued by an insurer shall, at 
     a minimum--
       (A) provide personal protection insurance coverage--
       (i) with no per accident limit; and
       (ii) in coverage amounts equal to the greater of--

       (I) the minimum per person limits of liability insurance 
     for personal injury under the applicable State financial 
     responsibility law; or
       (II) in a State covered by a no-fault motor vehicle 
     insurance law, the minimum level of insurance required for 
     no-fault benefits;

       (B) contain provisions for a waiver of certain tort rights 
     in accordance with this Act; and
       (C) contain provisions under the applicable State financial 
     responsibility law relating to liability for--
       (i) property damage; and
       (ii) bodily injury to protect third parties whose rights to 
     recover both economic and noneconomic loss are not affected 
     by the immunities provided under this Act for those persons 
     choosing personal protection insurance coverage.
       (2) Superseding provision.--This Act supersedes a State law 
     to the extent that, with respect to the issuance of a 
     personal protection insurance policy, the State law--
       (A) would otherwise bar a provision that provides for the 
     personal protection authorizations and accompanying 
     immunities set forth in this Act; or
       (B) is otherwise inconsistent with the requirements of this 
     Act.

[[Page S3432]]

       (3) Primacy of payment.--
       (A) In general.--Personal protection insurance benefits 
     shall be reduced by an amount equal to any benefits provided 
     or required to be provided under an applicable Federal or 
     State law for workers' compensation or any State-required 
     nonoccupational disability insurance.
       (B) Reimbursement of payors.--
       (i) In general.--A personal protection insurer may take 
     appropriate measures to ensure that any person otherwise 
     eligible for personal protection benefits who has been paid 
     or is being paid for losses payable by personal protection 
     insurance from a source other than the applicable personal 
     protection insurer shall not receive multiple payment for 
     those losses.
       (ii) Accrual of rights.--Any right to payment for losses 
     referred to in clause (i) from a personal protection insurer 
     accrues only to that payor. Payments by a payor referred to 
     in clause (i) shall not be counted against personal 
     protection limits for personal protection insurance until 
     such time as the payor is reimbursed under this subparagraph.
       (4) Prompt and periodic payment.--
       (A) In general.--A personal protection insurer may pay 
     personal protection benefits periodically as losses accrue.
       (B) Late payment.--Unless the treatment or expenses related 
     to the treatment are in reasonable dispute, a personal 
     protection insurer who does not pay a claim for economic loss 
     covered by a personal protection insurance policy issued 
     under this Act within 30 days after payment is due, shall 
     pay--
       (i) the loss compounded at a rate of 24 percent per annum, 
     as liquidated damages and in lieu of any penalty or exemplary 
     damages; and
       (ii) a reasonable attorney's fee calculated on the basis of 
     the value of the attorney's efforts as reflected in payment 
     to the attorney's client.
       (C) Administration of personal protection benefits.--To the 
     extent consistent with this Act, any applicable provision of 
     a State no-fault motor vehicle law or add-on law governing 
     the administration of payment of benefits without reference 
     to fault shall apply to the payment of benefits under 
     personal protection insurance under this subsection.
       (5) Motor vehicles with fewer than 4 load-bearing wheels.--
     A personal protection insurer may offer, but shall not 
     require, personal protection coverage of any motor vehicle 
     that has fewer than 4 load-bearing wheels, not including the 
     wheels of an attachment to the motor vehicle.
       (6) Authorizations for personal protection insurers.--A 
     personal protection insurer may write personal protection 
     coverage--
       (A)(i) without any deductible; or
       (ii) subject to a reasonable deductible, applicable in an 
     amount not to exceed $1,000 per person per accident;
       (B) with an exclusion of coverage for persons whose losses 
     are caused by driving under the influence of alcohol or 
     illegal drugs;
       (C) at appropriately reduced premium rates, deductibles and 
     exclusions reasonably related to health, disability, and 
     accident coverage on an insured person; and
       (D) the deductibles and exclusions described in 
     subparagraphs (A) and (C) shall apply only to--
       (i) the person named in the applicable insurance policy; 
     and
       (ii) the resident relatives or dependents of the person 
     described in clause (i).
       (c) Tort Maintenance System.--
       (1) Required tort maintenance coverage.--The coverage for a 
     person who chooses insurance under subsection (a)(2) shall 
     include tort maintenance coverage at a level that is at least 
     equivalent to the level of insurance required under the 
     applicable State financial responsibility law for bodily 
     injury liability.
       (2) Administration of tort maintenance coverage benefits.--
     To the extent consistent with this Act, any applicable 
     provision of a State law governing the administration of 
     payment of benefits under uninsured or underinsured motorist 
     coverage applies to the payment of benefits under tort 
     maintenance coverage under section 5(c).
       (d) Effect of Choice on Resident Relatives and 
     Dependents.--
       (1) In general.--Except as provided in paragraph (2), a 
     person who chooses either personal protection insurance or 
     tort maintenance coverage also binds the resident relatives 
     and dependents of that person.
       (2) Exception.--An adult resident relative or a dependent 
     of a person described in paragraph (1) may select the form of 
     insurance that that person does not select if the adult 
     relative makes that selection expressly in writing.
       (3) Implied consent.--In any case in which the resident 
     relative or dependent is injured in a motor vehicle accident, 
     the coverage of such person shall be the same as the person 
     described in paragraph (1).
       (4) Terms and conditions.--Insurers may specify reasonable 
     terms and conditions governing the commencement, duration, 
     and application of the chosen coverage depending on the 
     number of motor vehicles and owners thereof in a household.
       (e) Rules To Encourage Uniformity of Choice.--In order to 
     minimize conflict between the 2 options described in 
     subsection (d), insurers may maintain and apply underwriting 
     rules that encourage uniformity within a household.
       (f) Failure To Elect Type of Insurance.--
       (1) In general.--Any person who fails to elect a type of 
     insurance under this section shall be deemed to have elected 
     insurance under the tort maintenance system in effect in that 
     State.
       (2) Rule of construction.--This subsection shall not be 
     construed to prevent a State from enacting a law that deems a 
     person who fails to elect a type of insurance under this 
     section to have elected insurance under the personal 
     protection system.
       (g) Consumer Information Program.--The State official 
     charged with jurisdiction over insurance rates for motor 
     vehicles shall establish and maintain a program designed to 
     ensure that consumers are adequately informed about--
       (1) the comparative cost of insurance under the personal 
     protection system and the tort maintenance system; and
       (2) the benefits, rights, and obligations of insurers and 
     insureds under each system.

     SEC. 6. SOURCE OF COMPENSATION IN CASES OF ACCIDENTAL INJURY.

       (a) Accidents Involving Persons Choosing the Tort 
     Maintenance System.--A person described in section 5(a)(2) 
     who is involved in an accident with another person shall be 
     subject to applicable tort law for injury except that, based 
     on fault, that person--
       (1) may claim against any person covered by personal 
     protection insurance only for uncompensated economic loss; 
     and
       (2) may be claimed against by a person covered by personal 
     protection insurance only for uncompensated economic loss.
       (b) Accidents Involving Persons With Personal Protection 
     Insurance.--
       (1) Right to recover economic loss.--A person covered by a 
     personal protection insurance policy who is injured in an 
     accident is compensated under that policy only for economic 
     loss, without regard to fault.
       (2) Right to sue for uncompensated economic loss based on 
     fault.--If a person who chooses personal protection insurance 
     is--
       (A) involved in an accident with a person insured under 
     either the personal protection system or tort maintenance 
     system under section 5(a); and
       (B) sustains uncompensated economic loss,
     that person shall have the right to claim against the other 
     person involved in the accident for that loss based on fault.
       (c) Accidents Involving Persons With Personal Protection 
     Insurance and Persons Who Are Unlawfully Uninsured.--
       (1) In general.--A person covered by personal protection 
     insurance who is involved in an accident with an uninsured 
     motorist shall--
       (A) be compensated under that insured person's insurance 
     policy for economic loss without regard to fault; and
       (B) have the right to claim against the uninsured motorist 
     for economic loss and for noneconomic loss based on fault.
       (2) Forfeiture of rights.--An uninsured motorist forfeits 
     the right to claim against a motorist who has chosen personal 
     protection insurance for--
       (A) noneconomic loss; and
       (B) economic loss in an amount up to the amount of per-
     person bodily injury limits mandated by the applicable State 
     financial responsibility law.
       (d) Accidents Involving Motorists Under the Influence of 
     Alcohol or Illegal Drugs or Engaging in Intentional 
     Misconduct.--A person who is insured under personal 
     protection insurance shall have the right to claim, and be 
     subject to a claim, for--
       (1) driving under the influence of alcohol or illegal drugs 
     (as those terms are defined under applicable State law); or
       (2) intentional misconduct.
       (e) Priority of Benefits.--A person who is insured under 
     the personal protection system or tort maintenance system 
     under section 5(a) may only claim benefits under such 
     coverage up to the limits selected by or on behalf of such 
     person in the following priority:
       (1) The coverage under which the injured person was an 
     insured at the time of the accident.
       (2) The coverage of a motor vehicle involved in the 
     accident, if the person injured was an occupant of, or was 
     struck as a pedestrian by, such motor vehicle at the time of 
     the accident, except that such person shall not recover under 
     the coverage of both paragraph (1) and this paragraph.
       (f) Subrogation Rights.--A personal protection insurer is 
     subrogated, to the extent of the obligations of that insurer, 
     to all of the rights of the persons insured with personal 
     protection insurance issued by the insurer with respect to an 
     accident caused in whole or in part, as determined by 
     applicable State law, by--
       (1) the negligence of an uninsured motorist;
       (2) operating a motor vehicle under the influence of 
     alcohol or illegal drugs;
       (3) intentional misconduct; or
       (4) any other person who is not affected by the limitations 
     on tort rights and liabilities under this Act.
       (g) Rights of Lawfully Uninsured Persons.--Nothing in this 
     Act shall be construed to affect the tort rights of any 
     person lawfully uninsured under the terms of an applicable 
     State law for insurance under either the personal protection 
     system or tort maintenance system under section 5(a).
       (h) Rights of Persons Occupying Motor Vehicles With Fewer 
     Than 4 Load-Bearing Wheels.--Nothing in this Act shall be 
     construed to affect the tort rights of a person

[[Page S3433]]

     who occupies a motor vehicle with fewer than 4 load-bearing 
     wheels or an attachment thereto, unless an applicable 
     contract for personal protection insurance under which that 
     person is insured specifies otherwise. The preceding sentence 
     applies without regard to whether the person is otherwise 
     legally insured for personal protection insurance or tort 
     maintenance coverage.
       (i) Renewal or Cancellation.--An insurer shall not cancel, 
     fail to renew, or increase the premium of a person insured by 
     the insurer solely because that insured person or any other 
     injured person made a claim--
       (1) for personal protection insurance benefits; or
       (2) if there is no basis for ascribing fault to the insured 
     or one for whom the insured is vicariously liable, for tort 
     maintenance coverage.
       (j) Immunity.--Unless an insurer or an insurance agent 
     willfully misrepresents the available choices or fraudulently 
     induces the election of one motor vehicle insurance system 
     described in paragraph (1) over the other, no insurer or 
     insurance agent, employee of such insurer or agent, insurance 
     producer representing a motor vehicle insurer, automobile 
     residual market plan, or attorney licensed to practice law 
     within a State, shall be liable in an action for damages on 
     account of--
       (1) an election of--
       (A) the tort maintenance system under section 5(a); or
       (B) the personal protection system under section 5(a); or
       (2) a failure to make a required election.

     SEC. 7. RULES OF CONSTRUCTION.

       Nothing in this Act shall be construed--
       (1) to waive or affect any defense of sovereign immunity 
     asserted by any State under any law or by the United States;
       (2) to affect the awarding of punitive damages under any 
     State law;
       (3) to preempt State choice-of-law rules with respect to 
     claims brought by a foreign nation or a citizen of a foreign 
     nation;
       (4) to affect the right of any court to transfer venue, to 
     apply the law of a foreign nation, or to dismiss a claim of a 
     foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum;
       (5) subject to paragraph (1), to create or vest 
     jurisdiction in the district courts of the United States over 
     any motor vehicle accident liability or damages action 
     subject to this Act which is not otherwise properly in the 
     United States District Court;
       (6) to prevent insurers and insureds from contracting to 
     limit recovery for lost wages and income under personal 
     protection coverage in such manner that only 60 percent or 
     more of lost wages or income is covered;
       (7) to prevent an insurer from contracting with personal 
     protection insureds, as permitted by applicable State law, to 
     have submitted to arbitration any dispute with respect to 
     payment of personal protection benefits;
       (8) to relieve a motorist of the obligations imposed by 
     applicable State law to purchase tort liability insurance for 
     bodily injury to protect third parties who are not affected 
     by the immunities under this Act;
       (9) to preclude a State from enacting, for all motor 
     vehicle accident cases including cases covered by this Act, a 
     minimum dollar value for defined classes of cases involving 
     death or serious bodily injury;
       (10) to preclude a State from providing that forms of 
     insurance other than those listed in section 5(b)(3) shall be 
     subtracted from personal protection insurance benefits 
     otherwise payable for injury;
       (11) to preclude a State from enacting a law that--
       (A) allows litigation by tort maintenance insureds against 
     personal protection insureds for economic and noneconomic 
     loss; and
       (B) assures through a reallocation device that the 
     advantage of tort claim waivers by personal protection 
     insureds against tort maintenance insureds is reflected in 
     the premiums of personal protection insureds; or
       (12) to alter or diminish the authority or obligation of 
     the Federal courts to construe the terms of this Act.

     SEC. 8. APPLICABILITY TO STATES; CHOICE OF LAW; AND 
                   JURISDICTION.

       (a) Election of Nonapplicability by States.--This Act shall 
     not apply with respect to a State if such State enacts a 
     statute that--
       (1) cites the authority of this subsection;
       (2) declares the election of such State that this Act shall 
     not apply; and
       (3) contains no other provision.
       (b) Nonapplicability Based on State Finding.--
       (1) In general.--This Act shall not apply with respect to a 
     State, if--
       (A) the State official charged with jurisdiction over 
     insurance rates for motor vehicles makes a finding that the 
     statewide average motor vehicle premiums for bodily injury 
     insurance in effect immediately before the effective date of 
     this Act will not be reduced by an average of at least 30 
     percent for persons choosing personal protection insurance 
     (without including in the calculation for personal protection 
     insureds any cost for uninsured, underinsured, or medical 
     payments coverages);
       (B) a finding described under subparagraph (A) is supported 
     by evidence adduced in a public hearing and reviewable under 
     the applicable State administrative procedure law; and
       (C) a finding described under subparagraph (A) and any 
     review of such finding under subparagraph (B) occurs not 
     later than 90 days after the date of enactment of this Act.
       (2) Comparison of bodily injury premiums.--For purposes of 
     making a comparison under paragraph (1)(A) of premiums for 
     personal protection insurance with preexisting premiums for 
     bodily injury insurance (in effect immediately before the 
     date of enactment of this Act), the preexisting bodily injury 
     insurance premiums shall include premiums for--
       (A) bodily injury liability, uninsured and underinsured 
     motorists' liability, and medical payments coverage; and
       (B) if applicable, no-fault benefits under a no-fault motor 
     vehicle law or add-on law.
       (c) Choice of Law.--In disputes between citizens of States 
     that elect nonapplicability under subsection (a) and citizens 
     of States that do not make such an election, ordinary choice 
     of law principles shall apply.
       (d) Jurisdiction.--This Act shall not confer jurisdiction 
     on the district courts of the United States under section 
     1331 or 1337 of title 28, United States Code.
       (e) Statutes of Limitations.--Nothing in this Act shall 
     supersede an applicable State law that imposes a statute of 
     limitations for claims related to an injury caused by an 
     accident, except that such statute shall be tolled during the 
     period wherein any personal protection or tort maintenance 
     benefits are paid.

     SEC. 9. EFFECTIVE DATE.

       This Act shall take effect 90 days after the date of 
     enactment of this Act.
                                                                    ____


                 Statement of Mayor Rudolph W. Giuliani

       Today, members of Congress and other leaders from across 
     the political spectrum, representing diverse populations and 
     constituencies, unite in expressing support for the 
     introduction and passage of bold, necessary federal 
     legislation reforming auto insurance and tort law in America.
       The introduction of auto-choice legislation marks a 
     milestone in the nation's response to motorist demands for 
     fair, equitable and cost-effective insurance coverage. 
     Millions of drivers are presently paying excessive insurance 
     premiums because of inflated claims and huge pain and 
     suffering awards. Under this legislation proposed by Senators 
     Lieberman, McConnell and Moynihan, among others, the nation 
     as a whole stands to save $45 billion in insurance premiums 
     this year alone, with the average driver nationwide saving 
     $243 per year. That amounts to the equivalent of a $243 tax 
     cut without any corresponding cut in services. The newly 
     released report by the Joint Economic Committee of the United 
     States Congress on ``The Benefits and Savings of Auto-
     Choice'' estimates that with auto choice, New York City 
     motorists will see an average decrease of $417 per driver per 
     year.
       The genius of this bill is the unbundling of pain and 
     suffering coverage from insurance premiums and the switch to 
     first party coverage--similar to no-fault coverage. Moreover, 
     people who want coverage for pain and suffering--and are 
     willing to pay for it--can obtain it. But, they will not 
     recover pain and suffering damages at the expense of third 
     parties, or at the expense of our court system where 
     sympathetic juries often grant windfalls for being injured in 
     the form of subjective non-economic damages. There is simply 
     no justification for many of the enormous awards to the 
     injured who--though rightfully compensated for objective 
     pecuniary loss--are rewarded for unsubstantiated pain and 
     suffering damages, often with no regard for the relationship 
     to the fault of the parties concerned.
       Over the years, New York City has risked losing the 
     valuable civic contributions of many of its residents to the 
     suburbs where insurance rates are usually more affordable. 
     Coupled with the reduction in crime our City has experienced, 
     reduced insurance premiums would provide added incentive for 
     City residents to keep their homes and their businesses in 
     the City. These reforms come at no cost to City residents nor 
     would they diminish governmental services. Motorists in 
     municipalities and urban centers across the land stand to 
     reap these enormous savings.
       When we value the productivity of our urban residents and 
     demonstrate our respect for their contributions, we improve 
     the quality of life for the City as a whole and ensure its 
     prosperity for years to come. Auto-choice assists in doing 
     precisely that. It demonstrates our leaders' respect for the 
     economic well being of even the most hard pressed motorist.
       But equally as important, the bill would help restore a 
     little faith in our courts and judicial system, which have 
     been increasingly plagued with criticism by, and stands to 
     lose the confidence of, ordinary citizens. When people see 
     some lawyers running from the hospital to the court to the 
     insurance company, they understand why their premiums are so 
     high. Plaintiffs receive barely one-half of all settlements 
     after lawyers, experts and court fees are paid. Under 
     existing law, plaintiff attorneys have tremendous incentive 
     to shoot for the gold--that giant pain and suffering cash 
     cow--paid for by the American motorist through excessive 
     insurance premiums.
       People wonder: why can't this process be controlled? Today, 
     we tell these people that they, not special interests, are in 
     charge. We assure them that money which should not be 
     unjustly taken from them, will not be. We give them the 
     chance to determine for themselves how much insurance 
     coverage is

[[Page S3434]]

     enough coverage for them and their families. And, keep in 
     mind, under auto-choice, all motorists obtain coverage for 
     objective economic loss, such as medical bills or lost wages.
       The bill is sensible and fair, and I respectfully urge 
     Congress to pass this important legislation.
                                                                    ____

         Northeastern University, College of Arts and Sciences, 
           Department of Political Science,
                                                   April 17, 1997.
       I enthusiastically endorse the ``choice'' auto insurance 
     bill you are jointly sponsoring. Your action is an important 
     act of bipartisan leadership on an issue that significantly 
     affects all Americans.
       The issue you address has been a great concern of mine 
     throughout my political career ever since I sponsored the 
     first no-fault auto insurance bill in the nation.
       Given the horrendous high costs of auto insurance, coupled 
     with its long delays, high overhead, and rank unfairness when 
     it comes to payment, your ``choice'' reform takes the 
     sensible approach of allowing consumes to choose how to 
     insure themselves. In other words, your reform trust the 
     American people to decide for themselves whether to spend 
     their money on ``pain and suffering'' coverage of food, 
     medicine, life insurance or any other expenditure they deem 
     more valuable for themselves and their families.
       The bill is a particularly important to the people who live 
     in American cities where premiums are the highest. It is no 
     surprise that the cost studies done by the Joint Economic 
     Committee indicate that while your reform will make stunning 
     cost savings available to all American consumers, its largest 
     benefits will go to the low income drivers living in urban 
     areas.
       The bill will also help resolve the country's problems with 
     runaway health costs. By allowing consumer to remove 
     themselves from a system whose perverse incentives trigger 
     the cost of health care costs, your reform will lower the 
     cost of health care for all Americans while ensuring that 
     health care expenditure are more clearly targeted to health 
     care needs.
       I look forward to assisting you to the fullest possible 
     degree as you exercise your vitally need leadership on behalf 
     of America's consumers.
     Michael S. Dukakis.
                                                                    ____


          Statement of Reform Party Chairman Russell J. Verney

       Only on rare occasions does Congress have the opportunity 
     to stimulate our national economy without adding to the $5.2 
     trillion debt burden this generation is leaving to our 
     children and grandchildren.
       Auto Choice Reform is one of those rare opportunities. It 
     allows the owners of automobiles the choice of the level of 
     insurance coverage they wish to provide for their own losses. 
     protects an injured or harmed person's right to collect for 
     their losses and can cut the average automobile owner's 
     annual insurance rate by an average of $243 per year.
       Auto Choice Reform is an idea whose time has come. 
     Unfortunately, it will also stimulate a new furious round of 
     campaign (investments) contributions by special interests who 
     benefit from the current high cost of auto insurance rates 
     and protracted litigation associated with automobile 
     insurance and accidents injuries.
       As list of top donors to political parities and candidates 
     during 1995 and 1996, published by Mother Jones Magazine 
     listed numerous individuals from the insurance industry and 
     trial lawyers who have established their right of access to 
     our top political leaders in this country.
       The sponsors and promoters of the common sense Auto Choice 
     Reform Act will have to overcome the easy access special 
     interests have to our country's decision makers if this $44 
     billion per year cost savings for motorists in this country 
     is to be achieved.

  Mr. MOYNIHAN. Mr. President, I am pleased to be an original cosponsor 
of the Auto Choice Reform Act of 1997, a bill submitted by my 
distinguished colleague, Senator McConnell.
  This legislation is designed to create a new option in auto insurance 
for consumers who would prefer a system that guarantees quick and 
complete compensation. This alternative system would change most 
insurance coverage to a first-party system from a third-party system 
and it would separate economic and noneconomic compensation by 
unbundling the premium. Therefore, drivers would be allowed to insure 
themselves for only economic loss or for both economic and noneconomic 
loss.
  In the 1950's, I first became interested in the issue of auto 
insurance reform as a member of New York Gov. Averell Harriman's 
Traffic Safety Policy Coordinating Committee. At that time, while 
working on auto safety issues, I became convinced that as the number of 
automobiles increased, the number of automobile accidents would, 
inexorably, also increase. And the problem with the current state of 
the insurance system begins right there. A driver buys protection 
against the risk that he will negligently cause an accident that will 
injure another person. If that should occur, the driver's insurance 
company is responsible for compensating the victim. But this 
contradicts the very nature of traffic accidents. If they were orderly 
events, in which cause and effect could be clearly discerned and 
ascribed, then the present insurance system could work. But accidents 
are nothing of the sort. It is often very difficult to determine fault 
in traffic accidents. It is the role of the liable party's insurance 
company to argue that the plaintiff's injuries--no matter how hideous--
are not as serious as he or she claims. These cases overwhelm the court 
system and in so doing, they prevent real justice from occurring. 
Justice is possible only when it is done quickly and reflects the sense 
of what is right and what is wrong, as I wrote in ``Next: A New Auto 
Insurance Policy,'' which appeared in the August 27, 1967 New York 
Times magazine:

       The most serious secondary effect of the existing insurance 
     system, however, lies in its impact on the courts. This 
     process begins with the use of the police to enforce the 
     traffic laws, as a result of which the incidence of arrest by 
     armed police in the United States is the highest of any 
     society in history. The jam starts there, and is followed by 
     a flood of accident litigation cases that derive, in part at 
     least, from the original criminal case. We have now reached 
     the point where accident litigation accounts for an estimated 
     65 to 80 percent of the total civil court cases tried in the 
     United States. This in turn has brought us to the point where 
     delays in justice here are the longest of any democracy on 
     earth. It now takes an average of 30.1 months to obtain a 
     jury trial in the metropolitan areas of the nation. In 
     Westchester and Kings counties, it is 50 months plus. In 
     Chicago it is 60 months plus.
       A legal expert in the field, James Marshall, has argued 
     that persons involved in or witnessing an automobile accident 
     are not really capable of reconstructing it in court. The 
     event is too complex, and levels of perception too low. (How 
     would a witness to a shooting respond to a question as to 
     which way the bullet was traveling?) A fortiori the attempt 
     to reconstruct such an episode three, four, or five years 
     afterward is nigh impossible. Thus the question must be asked 
     whether a social concern of the highest order--the 
     administration of justice--is not being sacrificed to one of 
     a much lower priority, the reenactment of traffic accidents. 
     (As indeed the whole cops-and-robbers, shoot-'em-up paradigm 
     for managing the road system must be questioned. It was not 
     just chance that the riots in Watts and Newark began with 
     police arresting a motorist.)
       There is little likelihood, however, that greater efforts 
     toward the administration of justice--more judges, or 
     whatever--would change matters. A New York survey has shown 
     that of 220,000 annual claims of victims seeking to recover 
     damages caused by another's fault, only 7,000 reach trial, 
     and 2,500 reach verdict. Given the number and rate of 
     accidents in the existing transport system, a kind of 
     Malthusian principle governs the courts: the number of 
     litigated cases will automatically increase to use up all the 
     available judicial facilities and maintain a permanent 
     backlog. At a time when issues of justice, violence, and 
     civic peace are of immediate and pressing concern, to devote 
     the better part of the judicial (and an enormous portion of 
     the legal) resources of the nation to managing the road 
     system is the kind of incompetence that societies end up 
     paying for.
       Only one adult response is possible: the present automobile 
     insurance system has to change . . .

  In that article, 30 years ago, I proposed two alternatives to 
traditional tort coverage as solutions for the problem. One was to have 
the Federal Government provide insurance--financed by a penny or so 
increases in the Federal gasoline tax--for injuries and economic 
losses, with claims being adjusted in a fashion similar to the workers' 
compensation system. The second alternative was along the lines of the 
current legislation. For the past 35 years, Jeffrey O'Connell, the 
Samuel McCoy Professor of Law at the University of Virginia, has been 
figuring out the permutations of this second type of reform. It is his 
recommendations that shape today's legislation.
  Over 16 million motor vehicle accidents occur every year. The average 
amount of time it takes to receive compensation for losses in a tort 
case is over 18 months. Minimally injured parties are overcompensated 
while victims of serious injuries often fail to receive full 
restitution. According to a study by the RAND Institute, people with 
economic losses of under $5,000 receive over two to three times that 
amount in compensation. People with $25,000 to $100,000 worth of 
losses, however, currently are compensated for just over one-half of 
their losses, on average. The very seriously injured--

[[Page S3435]]

those with economic losses of over $100,000--receive compensation worth 
only 9 percent of their damages, on average. The current system does 
not work.
  This legislation is called Auto Choice because drivers would have a 
choice between this new system, called personal protection insurance 
[PPI], or they could remain insured under the system currently 
operating in their State--the tort maintenance system [TM]. For people 
who choose to insure themselves for only economic damages, this is akin 
to a $243 tax cut, according to a recent report by the Joint Economic 
Committee, only without any impact on the Federal budget. Our 
legislation would ensure more complete and more rapid recovery of 
losses for the people who incur them, and it would reduce the number of 
cases that presently overwhelm the courts.
  I thank my friend from Kentucky for inviting me to cosponsor this 
legislation, and hope other Senators agree with us that the time for 
auto choice has come.
  Mr. LIEBERMAN. Mr. President, I am here today with Senators 
McConnell, Moynihan, Gorton, and Grams to introduce the Auto Choice 
Reform Act of 1997. If enacted, this bill would save American consumers 
tens of billions of dollars, while at the same time producing an auto 
insurance system that operates more efficiently and promises drivers 
better and quicker compensation.
  America's drivers are plagued today by an auto accident insurance and 
compensation system that is too expensive and that does not work. Each 
of us currently pays an average of $785 annually for our auto insurance 
per car. This is an extraordinarily large sum, and one that is 
particularly difficult for people of modest means--and almost 
impossible for poor people--to afford. A study of Maricopa County, AZ 
drives this point home. That study found that families living below 50 
percent of the poverty line spend nearly one-third of their household 
income on premiums when they purchase auto insurance.
  Perhaps those costs would be worth it if they meant that people 
injured in car accidents were fully compensated for their injuries. But 
under our current tort system, that often is not the case, particularly 
for people who are seriously injured. Because of the need to prove 
fault and the ability to receive compensation only through someone 
else's insurance policy, some injured drivers--like those in one car 
accidents or those who are found to have been at fault themselves--are 
left without any compensation at all. Others must endure years of 
litigation before receiving any compensation for their injuries. In the 
end, people who suffer minimal injuries in auto accidents generally end 
up overcompensated, while victims of serious injuries often fail to 
receive full restitution. According to a study by Rand's Institute for 
Civil Justice, people who suffer economic losses--lost wages and 
medical bills, for example--in the range of $25,000 to $100,000 
currently are compensated for just over one-half of their losses on 
average. The very seriously injured--those with economic losses of over 
$100,000--receive compensation worth just 9 percent of those damages on 
average. Much of this shortfall is due to the high transaction costs--
the 33-percent attorneys' fee regularly taken out of a plaintiff's 
recovery, for one thing--associated with the current system.
  These statistics show that our auto insurance and compensation laws 
violate the cardinal rule I think those of us in the business 
legislating have a duty to follow: to draft our laws to encourage 
people to minimize their disputes, and to encourage those who do have 
disputes to resolve them as efficiently, as economically, and as 
quickly as possible. This is particularly true when we are dealing with 
laws impacting on people who are physically injured, because injured 
people simply--and literally--cannot afford to wait the years it often 
takes for a lawsuit to wind its way through our legal system. The laws 
governing our auto accident and insurance system do not now meet those 
simple criteria. They instead require consumers to pay extraordinarily 
high premiums to purchase auto insurance. That auto insurance, in turn 
and as a result of our broken legal system, does not bring seriously 
injured people either speedy or full compensation for their injuries.

  My colleagues and I set out to rethink the legal framework governing 
our car insurance and compensation system. We asked ourselves whether 
we could write a law that would both lower premiums and better 
compensate people for injuries suffered in car accidents. Why, we 
wondered, should people hurt in car crashes--people who have bought and 
paid for insurance policies--not be able to receive compensation for 
their injuries unless they find someone else who was at fault, sue 
them, engage in potentially years of litigation, and collect from that 
other person? Why, we asked, couldn't auto insurance instead be more 
like health and homeowner insurance, where people know when they buy 
their policies that they will be compensated immediately for any 
covered injury, regardless of who caused the injury and without having 
to find and pay a lawyer and often suffer through years of litigation?
  The answer we came up with was that there is no reason not to change 
our auto insurance and compensation laws to address these problems. Our 
Auto Choice proposal would address these problems by introducing reason 
into our auto insurance and accident laws. The bill would produce a 
system that would guarantee immediate compensation to injured people. 
At the same time, it would bring tremendous savings to the system--up 
to $45 billion annually according to a recent study. And, it would do 
so, not by forcing people to do something they do not want to do, but 
by giving them the choice--the right to determine for themselves what 
is in their best interests.
  Here's how our plan would work: All drivers would be required to 
purchase a certain minimum level of insurance, but they would get to 
choose the type of coverage they want. Those drivers who value 
immediate compensation for their injuries and lower premiums would be 
able to purchase what we call personal protection insurance. If the 
driver with that type of coverage is injured in an accident, he or she 
would get immediate compensation for all economic losses--things like 
lost wages, medical bills and attorneys fees--up to the limits of his 
or her policy, without regard to who was at fault in the accident.
  If their economic losses exceeded those policy limits, the injured 
party could sue the other driver for the extra economic loss on a fault 
basis. The only thing the plaintiff could not do is sue the other 
driver for noneconomic losses, the so-called pain and suffering 
damages.
  Those drivers who did not want to give up the ability to collect pain 
and suffering damages could choose a different option, called tort 
maintenance coverage. Drivers with that type of policy would be able to 
cover themselves for whatever level of economic and noneconomic damages 
they want, and they would then be able to collect those damages, also 
from their own insurance company, after proving fault.

  As I mentioned earlier, the savings from this new Choice system would 
be dramatic. According to a newly released report from the Joint 
Economic Committee, if all American drivers opted for personal 
protection insurance, they would save an average of $243 annually on 
their auto insurance premiums. Drivers in my home State of Connecticut 
would see even better savings, putting an additional $383 per year into 
their pockets. All told, the American economy could save up to $45 
billion each and every year under our proposal.
  Our Auto Choice plan, I think, both serves the reform goals I 
discussed above and incorporates all of the lessons we learned during 
our past experiences with no-fault laws. It ensures that most injured 
people would be compensated immediately and that we all can purchase 
auto insurance at a reasonable rate. As I said at the outset, we as 
legislators do our best when we make sure that our legal system 
minimizes the potential for disputes in society and facilitates the 
resolution of those disputes that exist. The Auto Choice law would do 
exactly that. It would ensure that something tens of thousands of us 
now have disputes about--who should compensate whom for car accidents--
no longer would be the subject of disputes because everyone who is 
injured will know from the outset that they will be compensated, they 
will know by whom they will be compensated, and they will know they 
will be compensated without having to sue someone else first. Mr. 
President,

[[Page S3436]]

this bill would be a boon to the American driver and to the American 
economy. I look forward to working with my colleagues to see it enacted 
into law.
  Mr. GORTON. Mr. President, I am pleased to join Senators McConnell, 
Grams, Moynihan, and Lieberman in cosponsoring the Auto Choice Reform 
Act, a measure that offers consumers a quick-pay, low-cost policy to 
replace their current policies--policies that are grossly inflated by 
the costs of damage claims for pain and suffering.
  Auto Choice Reform Act. Choice. Removing the perverse incentives to 
inflate damages that our current system creates, and allowing consumers 
to make rational choices, lies at the heart of this bill. Unlike some 
other no-fault measures, the Auto Choice Reform Act gives consumers, 
and States, choices. Choices which, if exercised, should significantly 
lower insurance premiums. For States, the choice is whether or not to 
offer the no-fault option to residents. A State can opt out 
legislatively, or if the State commissioner of insurance shows that a 
no-fault system will not result in a 30 percent decrease in bodily 
injury premiums for those who choose PPI. If States choose to offer the 
no-fault option, however, consumers still have the choice of whether or 
not to participate in the no-fault system. No driver will be deprived 
of her ability to sue, but instead, can choose between two systems.
  If they want, consumers can avail themselves of the new no-fault 
insurance system that the bill creates. If a consumer elects the 
personal protection insurance [PPI] system, then, in the event of an 
accident, and regardless of fault, she is compensated by her own 
insurer for economic losses, such as car repair, medical expenses or 
lost wages, up to her policy limit. She does not, however, recover for 
noneconomic losses, pain and suffering, and she may not be sued for 
pain and suffering damages. If her economic damages exceed her policy 
limit, however, she may sue for economic damages. By taking the often-
inflated damages for pain and suffering out of the equation, consumers 
choosing PPI should see a significant savings in their insurance 
premiums--a savings that has been estimated at $243 per policy.
  Motorists who choose not to participate in the no-fault system are 
allowed that option under this legislation. Again, the choice is with 
the consumer. By opting for what the bill refers to as tort maintenance 
coverage, a TMC driver can keep her traditional liability policy under 
which she can sue other TMC drivers for both economic and noneconomic 
damages. To cover noneconomic damages in accidents with PPI drivers, 
who TMC drivers cannot sue for noneconomic damages, the TMC driver can 
purchase a supplemental policy and recover the noneconomic damages from 
her own insurer.
  What does all of this mean? The New York Times perhaps summed it up 
best in an editorial that predicted that Auto Choice ``would give 
families the option of forgoing suits for non-monetary losses in 
exchange for quick and complete reimbursement for every blow to their 
pocketbook. Everyone would win--except the lawyers.'' Mr. President, I 
hope the Senate will act promptly to pass this bill.
                                 ______
                                 
      By Mr. KENNEDY:
  S. 626. A bill to amend the Fair Labor Standards Act of 1938 to 
provide for legal accountability for sweatshop conditions in the 
garment industry, and for other purposes; to the Committee on Labor and 
Human Resources.


                    Stop the Sweatshops Act of 1997

  Mr. KENNEDY. Mr. President, last Monday, President Clinton announced 
an agreement by the Apparel Industry Partnership that establishes a 
workplace code of conduct for the industry. I commend this agreement, 
which is the product of a presidential task force on the exploitation 
of garment industry workers by unscrupulous clothing manufacturers. The 
agreement is designed to encourage voluntary compliance with labor 
standards in all countries that manufacture clothing sold in the United 
States.

  Congress can build on this agreement by acting to abolish sweatshops 
in our own country. Last year, Congressman Bill Clay and I introduced 
the Stop the Sweatshops Act. Today I am introducing that legislation to 
help fulfill the promise of the Apparel Industry Partnership agreement. 
This bill will reinforce that agreement by making clothing 
manufacturers liable for sweatshop practices by contractors. This 
liability will help to ensure that honest employers who obey our laws 
will not lose out in competition with dishonest employers who do not. 
Without this bill, economic forces in the clothing industry make it 
unlikely that the Apparel Industry Partnership agreement will be fully 
effective in protecting American workers.
  Sweatshops continue to plague the garment industry. As important as 
the Apparel Industry Partnership agreement is, it has a significant 
deficiency. It has no enforcement mechanism. It applies only to 
manufacturers who agree to its terms and it does not specify how 
violations will be remedied or what penalties will be imposed. The Stop 
the Sweatshops Act remedies these deficiencies for all clothing 
manufacturing done in this country.
  This bill will require manufacturers to exert their considerable 
economic power to ensure fair treatment of garment workers. It will 
prevent manufacturers from playing one contractor against another, 
which drives down the prices of their goods. It is the cutthroat 
competition resulting from such practices that causes dangerous and 
unhealthy working conditions, brutally long hours, and inadequate pay.
  The record of worker exploitation in the garment industry shows that 
effective enforcement is crucial. Of the 22,000 manufacturers of 
clothing and accessories in the United States, the Department of Labor 
finds that more than half are paying wages substantially below the 
minimum wage, and a third are exposing their workers to serious safety 
and health risks.
  Sweatshops run by unscrupulous contractors have a long and sordid 
history in this country. In 1911, a tragic fire at the Triangle 
Shirtwaist Co. on Lower East Side in New York City killed 146 young 
immigrant women. They suffocated or were burned to death because the 
exits had been locked or blocked.
  Eighty-six years later, we still find too often that conditions have 
not improved. In August 1996, four Brooklyn garment factories were 
closed and their owners were arrested for operating sweatshops. Serious 
fire code violations were found, including locked exit doors, 
obstructed aisles, and violations of sprinkler system requirements. In 
addition, the contractors maintained two sets of accounting records, 
one showing that workers were being paid as little as $2.67 per hour--
far less than the minimum wage. The workers were all Asian immigrants 
making clothes for K-Mart.
  K-Mart requires its garment contractors to identify all 
subcontractors they employ, and to make ``regular and surprise 
inspections'' of manufacturing operations. But this requirement did not 
prevent the fire code violations, wage violations, and other illegal 
practices of the contractors arrested in Brooklyn last summer. This 
example shows that voluntary codes of conduct and monitoring programs, 
as the Apparel Industry Partnership agreement encourages, cannot, by 
themselves, eradicate the problem.
  Another sweatshop scandal came to light last spring, with respect to 
clothing made for Wal-Mart. It shows how far some manufacturers are 
willing to go to cut costs, and the terrible human toll that follows. 
In August 1995, Federal investigators raided a sewing factory outside 
Los Angeles. In a compound surrounded by barbed wire, agents found 
dozens of Thai and Mexican immigrant women working 20-hour days for as 
little as $1.00 per hour. The women were held captive at their sewing 
tables by guards who threatened them if they tried to escape.
  American consumers do not want their clothing produced in this way. A 
U.S. News and World Report poll showed that 6 in 10 Americans are 
concerned about working conditions in U.S. manufacturing firms. A poll 
reported in Newsday showed that 83 percent of consumers would be 
willing to pay an extra $1 on a $20 item if they knew the garment 
wasn't made in a sweatshop.
  Many law-abiding manufacturers already recognize the need to stamp 
out sweatshops in the United States. But, as these examples make clear, 
current law and voluntary codes of conduct are not adequate to prevent 
abuses. The 800 investigators of the Department of

[[Page S3437]]

Labor who monitor compliance with wage and hour laws cannot do the job 
alone. Manufacturers have the economic muscle and market power to end 
these abuses. But, under the current system, the market power works in 
the wrong direction--it encourages contractors to inflict sweatshop 
conditions on employees, rather than pay fair wages and maintain proper 
working conditions.
  The most effective way to enlist manufacturers in the battle against 
sweatshops is to make them liable along with their contractors for 
violations of the law. Manufacturers who know they will face liability 
will take the steps necessary to ensure that their contractors comply 
with applicable laws.
  Our Stop the Sweatshops Act does just that. It amends the Fair Labor 
Standards Act to make manufacturers in the garment industry liable, 
along with their contractors, for violations of these laws.
  Manufacturers will be liable for injunctive relief and civil 
penalties assessed against a contractor found to have broken the law. 
They will also be liable for back pay owed to employees for such 
violations. Manufacturers will be liable only for violations committed 
on work done for that manufacturer.
  The bill also authorizes the Secretary of Labor to assess a civil 
penalty of up to $1,000 for each employee in cases where contractors 
fail to keep required payroll records. If the records are fraudulent, 
the Secretary can assess penalties up to $10,000 for the first offense 
and $15,000 for further offenses. These penalties will give employers 
an incentive to keep proper records, and punish contractors who attempt 
to conceal abuses by maintaining two sets of records.
  This bill sends a clear message to garment industry employers. 
Exploitation of workers will not be tolerated. Sweatshops are 
unacceptable. We intend to do all we can to stamp them out, and this 
legislation will help us achieve that goal.
  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. 626

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

     SECTION 1. SHORT TITLE AND REFERENCE.

       (a) Short Title.--This Act may be cited as the ``Stop 
     Sweatshops Act of 1997''.
       (b) Reference.--Whenever in this Act an amendment or repeal 
     is expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 201 et seq.).

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) The production of garments in violation of minimum 
     labor standards burdens commerce and the free flow of goods 
     in commerce by spreading and perpetuating labor conditions 
     that undermine minimum living standards and by providing an 
     unfair means of competition to the detriment of employers who 
     comply with the law.
       (2) The existence of working conditions detrimental to fair 
     competition and the maintenance of minimum standards of 
     living necessary for health, efficiency, and general well-
     being of workers is a continuing and growing problem in the 
     domestic garment industry.
       (3) The Congress concurs in the findings of the Comptroller 
     General that most sweatshop employers violate the 
     recordkeeping requirements of the Fair Labor Standards Act of 
     1938 and that the failure of such employers to maintain 
     adequate records has affected, and continues to affect 
     adversely, the ability of the Department of Labor to collect 
     wages due to workers.
       (4) The amendment of the Fair Labor Standards Act of 1938 
     to provide for legal responsibility on the part of 
     manufacturers for compliance with such Act's wage and hour, 
     child labor, and industrial homework provisions by 
     contractors in the garment industry and to provide civil 
     penalties for violations of that Act's recordkeeping 
     requirements is necessary to promote fair competition and 
     working conditions that are not detrimental to the 
     maintenance of health, efficiency, and general well-being of 
     workers in the garment industry.

     SEC. 3. LEGAL RESPONSIBILITY FOR COMPLIANCE WITH WAGE AND 
                   HOUR PROVISIONS IN THE GARMENT INDUSTRY.

       (a) Amendment.--The Fair Labor Standards Act of 1938 (29 
     U.S.C. 201 et seq.) is amended by inserting after section 14 
     the following:


  ``legal responsibility for compliance in the garment industry with 
                            sections 6 and 7

       ``Sec. 14A. (a) Every manufacturer engaged in the garment 
     industry who contracts to have garment manufacturing 
     operations performed by another person as a contractor--
       ``(1) shall be civilly liable, with respect to those 
     garment manufacturing operations, to the same extent as the 
     contractor for any violation by the contractor of section 6 
     (except for violations of subsection (d)) or 7, for any 
     violation by the contractor of the provisions of section 11 
     regulating, restricting, or prohibiting industrial homework, 
     and for violation by the contractor of section 12; and
       ``(2) shall be subject to the same civil penalties assessed 
     against the contractor for violations of such sections.
       ``(b) In this section:
       ``(1) The term `contractor' means any person who contracts, 
     directly or indirectly through an intermediary or otherwise, 
     with a manufacturer to perform the cutting, sewing, dyeing, 
     washing, finishing, assembling, pressing, or otherwise 
     producing of any men's, women's, children's, or infants' 
     apparel (including clothing, knit goods, hats, gloves, 
     handbags, hosiery, ties, scarves, and belts, or a section or 
     component of apparel, except for premanufactured items such 
     as buttons, zippers, snaps, and studs) that is designed or 
     intended to be worn by any individual and that is to be sold 
     or offered for sale.
       ``(2) The term `garment industry' means the designing, 
     cutting, sewing, dyeing, washing, finishing, assembling, 
     pressing, or otherwise producing of men's, women's, 
     children's, or infants' apparel (including clothing, knit 
     goods, hats, gloves, handbags, hosiery, ties, scarves, and 
     belts, or a section or component of apparel, except for 
     premanufactured items such as buttons, zippers, snaps, and 
     studs) that is designed or intended to be worn by any 
     individual and that is to be sold or offered for sale.
       ``(3) The term `manufacturer' means any person, including a 
     retailer, who--
       ``(A) contracts, directly or indirectly through an 
     intermediary or otherwise, with a contractor to perform the 
     cutting, sewing, dyeing, washing, finishing, assembling, 
     pressing, or otherwise producing of any men's, women's, 
     children's, or infants' apparel (including clothing, knit 
     goods, hats, gloves, handbags, hosiery, ties, scarves, and 
     belts, or a section or component of apparel, except for 
     premanufactured items such as buttons, zippers, snaps, and 
     studs) that is designed or intended to be worn by any 
     individual and that is to be sold or offered for sale; or
       ``(B) designs, cuts, sews, dyes, washes, finishes, 
     assembles, presses, or otherwise produces or is responsible 
     for the production of any men's, women's, children's, or 
     infants' apparel (including clothing, knit goods, hats, 
     gloves, handbags, hosiery, ties, scarves, and belts, or a 
     section or component of apparel, except for premanufactured 
     items such as buttons, zippers, snaps, and studs) that is 
     designed or intended to be worn by any individual and that is 
     to be sold or offered for sale.
       ``(4) The term `retailer' means any person engaged in the 
     sale of apparel to the ultimate consumer for personal use.''.
       (b) Liability to Employees.--Section 16 (29 U.S.C. 216) is 
     amended--
       (1) in subsection (b), by inserting after the first 
     sentence the following: ``A manufacturer in the garment 
     industry (as defined in section 14A(b)(3)) shall also be 
     jointly and severally liable to such an employee to the same 
     extent as the contractor in the garment industry (as defined 
     in section 14A(b)(1)) who employed such employee if the 
     contractor violated section 6 (other than subsection (d)) or 
     7 in the production of apparel or components of apparel for 
     such manufacturer.'';
       (2) in subsection (b), by inserting in the last sentence 
     ``or by a manufacturer in the garment industry'' after ``by 
     an employer''; and
       (3) in subsection (c)--
       (A) in the third sentence, by striking ``first sentence'' 
     and inserting ``first or second sentence''; and
       (B) in the third sentence, by inserting ``or by a 
     manufacturer in the garment industry'' before ``liable''.

     SEC. 4. RECORDKEEPING.

       Section 16(e) (29 U.S.C. 216(e)) is amended by inserting 
     after the first sentence the following: ``Any person who 
     fails to establish, maintain, and preserve payroll records as 
     required under section 11(c) shall be subject to a civil 
     penalty of not to exceed $1,000 for each employee who was the 
     subject of such a violation. The Secretary may, in the 
     Secretary's discretion, impose civil penalties under this 
     subsection for willful violations. Any person who submits 
     fraudulent payroll records to the agencies enforcing this Act 
     in any of the agencies' investigations or hearings, or as 
     evidence in a court action, that conceal the actual hours of 
     labor worked by employees or the violation of section 6, 7, 
     11(d), or 12 shall be subject to a civil penalty of $10,000 
     for each act of fraud and $15,000 for each act of fraud for a 
     second offense.''.

     SEC. 5. EFFECTIVE DATE.

       The amendments made by this Act shall take effect upon the 
     expiration of 30 days after the date of enactment of this 
     Act.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Murkowski, Mr. Chafee, Mr. 
        Cochran, Mr. Leahy and Mr. Wellstone):
  S. 627. A bill to reauthorize the African Elephant Conservation Act; 
to the Committee on Environment and Public Works.

[[Page S3438]]

   THE AFRICAN ELEPHANT CONSERVATION ACT REAUTHORIZATION ACT OF 1997

  Mr. JEFFORDS. Mr. President, I rise today in celebration of Earth Day 
to introduce legislation to reauthorize the African Elephant 
Conservation Act of 1988, a historic conservation measure that 
continues to successfully preserve the African elephant in its natural 
environment. This legislation will extend the act through September of 
the year 2002.
  The African Elephant Conservation Act has resulted in the 
stabilization of elephant populations on the African Continent. By the 
late 1980's, the population of African elephants had dramatically 
declined from approximately 1.3 million animals in 1979 to less than 
700,000 in 1987. The primary reason for this decline was the poaching 
and illegal slaughter of elephants for their tusks, which fueled the 
international trade in ivory.
  To address this problem, the U.S. Congress enacted the African 
Elephant Conservation Act to provide assistance to African nations in 
their efforts to stop poaching and to develop and implement effective 
conservation programs. To accomplish this goal, the legislation created 
the African elephant conservation fund. Since 1988, Congress has 
appropriated over $6 million to fund 48 conservation projects in 17 
range states throughout Africa, with additional contributions of $7 
million through private matching moneys.
  The African elephant conservation fund has resulted in the 
development and implementation of various elephant conservation plans. 
Today, elephant populations have stabilized and are on the increase in 
southern Africa, the international ivory trade has been dramatically 
reduced, and wildlife rangers are better equipped to stop illegal 
poaching activities. The conservation fund originally focused on anti-
poaching efforts. Over the last several years, the projects have 
diversified to include elephant population research, efforts to 
mitigate elephant and human conflicts, the cataloging of ivory 
stockpiles, and the identification of new techniques for effective 
elephant management. It is important, however, to keep in mind that, 
while the African elephant conservation fund has resulted in several 
successful conservation projects, much work remains to be done to 
ensure that the African elephant continues to survive in its natural 
environment.
  We must work to ensure that the African elephant does not once again 
decline and disappear from its historic range. I am confident that 
additional conservation projects funded through the legislation will 
help to preserve this flagship species for many future generations. I 
urge my colleagues to join me in supporting the African Elephant 
Conservation Reauthorization Act of 1997.
                                 ______
                                 
      By Mr. GRAMM (for himself and Mrs. Hutchison):
  S. 628. A bill to designate the United States courthouse to be 
constructed at the corner of 7th Street and East Jackson Street in 
Brownsville, Texas, as the ``Reynaldo G. Garza United States 
Courthouse''; to the Committee on Environment and Public Works.


     the reynaldo g. garza u.s. courthouse designation act of 1997

  Mr. GRAMM. Mr. President, along with my colleague, Senator Hutchison, 
I am proud to introduce legislation that would name the Federal 
courthouse in Brownsville, TX after a man who has been involved in the 
administration of justice throughout South Texas for nearly 60 years, 
Judge Reynaldo G. Garza.
  Judge Garza was the first Mexican-American to be appointed to a 
Federal judgeship in the history of our country, when President Kennedy 
appointed him to a district court bench in 1961. Judge Garza served as 
a U.S. District Judge until 1979, when President Carter appointed him 
to the Fifth Circuit Court of Appeals, where he still serves, at the 
age of 81, in senior status.
  Besides being named a the first Mexican-American Federal district 
judge, he was the first Mexican-American chief district judge, and the 
first Mexican-American Federal circuit court judge. He would have been 
the first Mexican-American ever to have been appointed to a President's 
Cabinet if he had accepted President Carter's request to serve as the 
Nation's attorney general in 1977. Sensibly, however, Judge Garza 
didn't want to move from Brownsville to Washington, DC.
  Judge Garza's life has been filled with extraordinary 
accomplishments. Born in 1915 in Brownsville to Ygnacio and Zoila 
Garza, both Mexican immigrants, he was the sixth of eight children. 
Judge Garza reached adulthood during the Depression and, through sheer 
ability, hard work and determination, graduated from the University of 
Texas Law School in 1939. He then established a law practice in 
Brownsville, mixing his work with the demands of raising five children 
and serving his community in capacities ranging from the local school 
board and city commission to the Knights of Columbus.
  Following the Japanese attack on Pearl Harbor in December of 1941, 
Reynaldo Garza enlisted in the U.S. Army and served until the war's end 
in 1945 as a gunnery sergeant and in other capacities. In 1943, Garza 
was selected to serve as translator in a meeting between President 
Franklin D. Roosevelt and Mexican President Miguel Avila Camacho, 
marking the first time a U.S. president had met with a Mexican 
president on Mexican soil.
  Judge Garza's selfless commitment to his family, his community and 
his Nation is exemplary, and today, he serves as a role model for 
people both inside and outside of the legal profession.
  I am privileged to introduce this legislation in Judge Garza's honor 
today and look forward to working with my colleagues to make the 
Reynaldo G. Garza Federal courthouse a reality.
  Mrs. HUTCHISON. Madam President, today we honor our Nation's first 
Mexican-American Federal judge, Judge Reynaldo G. Garza. I am proud to 
cosponsor legislation with Senator Gramm to name the new Federal 
courthouse in Brownsville for Judge Garza. In this way, we will record 
for generations to come Judge Garza's selfless service to the city of 
Brownsville, to Texas and to our Nation.
  Traditionally, we reserve this honor for judges who no longer walk 
the courthouse halls. However, we wish to grant an exception for this 
exceptional man. Born of immigrant parents, Reynaldo Garza has paved a 
hopeful path for other immigrant sons. After distinguishing himself as 
a lawyer, he served on the U.S. District Court for the Southern 
District until his appointment to the U.S. Court of Appeals for the 
Fifth Circuit in 1979 by President Carter. As the first Mexican-
American to achieve these distinctions, Judge Garza truly personifies 
the pioneer spirit of this great Nation.
  I would like Judge Garza to be remembered as well for his gracious 
response to this action. Upon learning that the courthouse might be 
named for him, Judge Garza said simply, ``I'm humbled by the fact that 
somebody would even think I'm worthy of it.'' Indeed, no one is 
worthier than Judge Garza of this small token of our respect and 
admiration.
                                 ______
                                 
      By Mr. BREAUX (by request):
  S. 629. A bill entitled the ``OECD Shipbuilding Agreement Act''; to 
the Committee on Commerce, Science, and Transportation.


                  THE OECD SHIPBUILDING AGREEMENT ACT

  Mr. BREAUX. Mr. President: today I introduce a bill to implement the 
OECD shipbuilding agreement to end foreign shipbuilding subsidies. This 
bill is an administration draft that I submit to better focus upcoming 
congressional discussion of the issues. With Europe just announcing 
$2.1 billion in new subsidies for its shipyards, the United States 
cannot afford to delay action on this agreement any longer.
  The United States has taken a leadership role in pushing for the 
elimination of unfair subsidies in the international commercial 
shipbuilding sector. In 1981, the United States unilaterally eliminated 
its own commercial shipbuilding subsidies. In October 1989, the United 
States, at the request of the six defense-oriented shipyards and the 
smaller commercial shipyards, initiated negotiations in the OECD aimed 
at eliminating trade distorting foreign shipbuilding subsidies. After 5 
years of negotiations and constant prodding by the U.S. Congress, the 
OECD shipbuilding agreement was signed by the European Union, Japan, 
the Republic of Korea, Finland, Norway, and the United States on 
December 21, 1994.
  The OECD shipbuilding agreement, which covers over 80 percent of the

[[Page S3439]]

world's commercial shipbuilding and repair capacity, would prohibit 
government subsidies to the shipbuilding industry, as well as 
discipline export credits, set common rules for government financing 
programs, and establish a mechanism for addressing injurious pricing, 
that is, dumping. As of June 1, 1996, all signatories, except the 
United States, had ratified the agreement.
  In the last Congress, several parties expressed serious concerns 
about certain aspects of the agreement and the proposed implementing 
legislation which we were unable to address before the end of the last 
session. As a result, the agreement's entry into force has been delayed 
by more than a year. I am hopeful that an agreement on implementing 
legislation can be reached early this session and I think the bill I am 
introducing today is a huge step in that direction.
  I am very concerned, however, that further delay in confirming United 
States commitment to this agreement will seriously undermine U.S. long-
term efforts to eliminate foreign shipbuilding subsidies, especially as 
other countries face increased pressure to resume the granting of 
subsidies to their shipbuilding industries. The United States can't 
afford a shipbuilding subsidies race. We are cutting funding of 
important domestic programs now. The United States needs to approve and 
implement the shipbuilding agreement in order to give us the tools to 
challenge foreign subsidies and protect our shipbuilding industry 
against unfair foreign competition.
  I ask you to join the battle against unfair international 
shipbuilding subsidies by supporting the swift passage of legislation 
approving and implementing the OECD shipbuilding agreement.
  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. 629

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

                       PART 1--GENERAL PROVISIONS

     SECTION 101. SHORT TITLE; TABLE OF CONTENTS; PURPOSES.

       (a) Short Title.--This Act may be cited as the ``OECD 
     Shipbuilding Agreement Act''.
       (b) Table of Contents.--

                       Part 1--General Provisions

Sec. 101. Short title; Table of Contents.
Sec. 102. Approval of the Shipbuilding Agreement.
Sec. 103. Injurious pricing and countermeasures relating to 
              shipbuilding.
Sec. 104. Enforcement of countermeasures.
Sec. 105. Judicial review in injurious pricing and countermeasure 
              proceedings.

                        Part 2--Other Provisions

Sec. 111. Equipment and repair of vessels.
Sec. 112. Effect of agreement with respect to private remedies.
Sec. 113. Implementing regulations.
Sec. 114. Amendments to the Merchant Marine Act, 1936.
Sec. 115. Applicability of Title XI amendments.
Sec. 116. Withdrawal from Agreement.
Sec. 117. Monitoring and enforcement.
Sec. 118. Jones Act and related laws not affected.
Sec. 119. Expanding membership in the Shipbuilding Agreement.
Sec. 120. Protection of United States security interests.
Sec. 121. Definitions.

                         Part 3--Effective Date

Sec. 131. Effective date.
       (c) Purposes.--The purposes of this Act are--
       (1) to enhance the competitiveness of U.S. Shipbuilders 
     which has been diminished as a result of foreign subsidy and 
     predatory pricing practices;
       (2) to ensure that U.S. ownership, manning, and 
     construction of coastwise trade (Jones Act) vessels, which 
     have provided the Department of Defense with mariners and 
     assets in time of national emergency, cannot be compromised 
     by the OECD Shipbuilding Agreement; and
       (3) to strengthen our shipbuilding industrial base to 
     ensure that its full capabilities are available in time of 
     national emergency.

     SEC. 102. APPROVAL OF THE SHIPBUILDING AGREEMENT.

       The Congress approves The Agreement Respecting Normal 
     Competitive Conditions in the Commercial Shipbuilding and 
     Repair Industry (referred to in this Act as the 
     ``Shipbuilding Agreement''), a reciprocal trade agreement 
     which resulted from negotiations under the auspices of the 
     Organization for Economic Cooperation and Development, and 
     was entered into on December 21, 1994.

     SEC. 103. INJURIOUS PRICING AND COUNTERMEASURES RELATING TO 
                   SHIPBUILDING.

       The Tariff Act of 1930 is amended by adding at the end the 
     following new title:

    ``TITLE VIII--INJURIOUS PRICING AND COUNTERMEASURES RELATING TO 
                              SHIPBUILDING

       ``Subtitle A--Imposition of Injurious Pricing Charge and 
                            Countermeasures

``Sec. 801. Injurious pricing charge.
``Sec. 802. Procedures for initiating an injurious pricing 
              investigation.
``Sec. 803. Preliminary determinations.
``Sec. 804. Termination or suspension of investigation.
``Sec. 805. Final determinations.
``Sec. 806. Imposition and collection of injurious pricing charge.
``Sec. 807. Imposition of countermeasures.
``Sec. 808. Injurious pricing petitions by third countries.
``Sec. 809. Third country injurious pricing.

                      ``Subtitle B--Special Rules

``Sec. 821. Export price.
``Sec. 822. Normal value.
``Sec. 823. Currency conversion.

                        ``Subtitle C--Procedures

``Sec. 841. Hearings.
``Sec. 842. Determinations on the basis of the facts available.
``Sec. 843. Access to information.
``Sec. 844. Conduct of investigations.
``Sec. 845. Administrative action following shipbuilding agreement 
              panel reports.

                       ``Subtitle D--Definitions

``Sec. 861. Definitions.

       ``Subtitle A--Imposition of Injurious Pricing Charge and 
                            Countermeasures

     ``SEC. 801. INJURIOUS PRICING CHARGE.

       ``(a) Basis for Charge.--If--
       ``(1) the administering authority determines that a foreign 
     vessel has been sold directly or indirectly to one or more 
     United States buyers at less than its fair value, and
       ``(2) the Commission determines that--
       ``(A) an industry in the United States--
       ``(i) is or has been materially injured, or
       ``(ii) is threatened with material injury, or
       ``(B) the establishment of an industry in the United States 
     is or has been materially retarded,

     by reason of the sale of such vessel, then there shall be 
     imposed upon the foreign producer of the subject vessel an 
     injurious pricing charge, in an amount equal to the amount by 
     which the normal value exceeds the export price for the 
     vessel. For purposes of this subsection and section 
     805(b)(1), a reference to the sale of a foreign vessel 
     includes the creation or transfer of an ownership interest in 
     the vessel, except for an ownership interest created or 
     acquired solely for the purpose of providing security for a 
     normal commercial loan.
       ``(b) Foreign Vessels Not Merchandise.--No foreign vessel 
     may be considered to be, or to be part of, a class or kind of 
     merchandise for purposes of subtitle B of title VII.

     ``SEC. 802. PROCEDURES FOR INITIATING AN INJURIOUS PRICING 
                   INVESTIGATION.

       ``(a) Initiation by Administering Authority.--
       ``(1) General rule.--Except in the case in which subsection 
     (d)(6) applies, an injurious pricing investigation shall be 
     initiated whenever the administering authority determines, 
     from information available to it, that a formal investigation 
     is warranted into the question of whether the elements 
     necessary for the imposition of a charge under section 801(a) 
     exist, and whether a producer described in section 861(17)(C) 
     would meet the criteria of subsection (b)(1)(B) for a 
     petitioner.
       ``(2) Time for initiation by administering authority.--An 
     investigation may only be initiated under paragraph (1) 
     within 6 months after the time the administering authority 
     first knew or should have known of the sale of the vessel. 
     Any period during which an investigation is initiated and 
     pending as described in subsection (d)(6)(A) shall not be 
     included in calculating that 6-month period.
       ``(b) Initiation by Petition.--
       ``(1) Petition requirements.--
       ``(A) In general.--Except in a case in which subsection 
     (d)(6) applies, an injurious pricing proceeding shall be 
     initiated whenever an interested party, as defined in 
     subparagraph (C), (D), (E), or (F) of section 861(17), files 
     a petition with the administering authority, on behalf of an 
     industry, which alleges the elements necessary for the 
     imposition of an injurious pricing charge under section 
     801(a) and the elements required under subparagraph (B), (C), 
     (D), or (E) of this paragraph, and which is accompanied by 
     information reasonably available to the petitioner supporting 
     those allegations and identifying the transaction concerned.
       ``(B) Petitioners described in section 861(17)(C).--
       ``(i) In general.--If the petitioner is a producer 
     described in section 861(17)(C), and--
       ``(I) if the vessel was sold through a broad multiple bid, 
     the petition shall include information indicating that the 
     petitioner was invited to tender a bid on the contract at 
     issue, the petitioner actually did so, and the bid of the 
     petitioner substantially met the delivery date and technical 
     requirements of the bid,
       ``(II) if the vessel was sold through any bidding process 
     other than a broad multiple bid and the petitioner was 
     invited to tender a

[[Page S3440]]

     bid on the contract at issue, the petition shall include 
     information indicating that the petitioner actually did so 
     and the bid of the petitioner substantially met the delivery 
     date and technical requirements of the bid, or
       ``(III) except in a case in which the vessel was sold 
     through a broad multiple bid, if there is no invitation to 
     tender a bid, the petition shall include information 
     indicating that the petitioner was capable of building the 
     vessel concerned and, if the petitioner knew or should have 
     known of the proposed purchase, it made demonstrable efforts 
     to conclude a sale with the United States buyer consistent 
     with the delivery date and technical requirements of the 
     buyer.
       ``(ii) Rebuttable presumption regarding knowledge of 
     proposed purchase.--For purposes of clause (i)(III), there is 
     a rebuttable presumption that the petitioner knew or should 
     have known of the proposed purchase if it is demonstrated 
     that--
       ``(I) the majority of the producers in the industry have 
     made efforts with the United States buyer to conclude a sale 
     of the subject vessel, or
       ``(II) general information on the sale was available from 
     brokers, financiers, classification societies, charterers, 
     trade associations, or other entities normally involved in 
     shipbuilding transactions with whom the petitioner had 
     regular contacts or dealings.
       ``(C) Petitioners described in section 861(17)(d).--If the 
     petitioner is an interested party described in section 
     861(17)(D), the petition shall include information indicating 
     that members of the union or group of workers described in 
     that section are employed by a producer that meets the 
     requirements of subparagraph (B) of this paragraph.
       ``(D) Petitioners described in section 861(17)(e).--If the 
     petitioner is an interested party described in section 
     861(17)(E), the petition shall include information indicating 
     that a member of the association described in that section is 
     a producer that meets the requirements of subparagraph (B) of 
     this paragraph.
       ``(E) Petitioners described in section 861(17)(f).--If the 
     petitioner is an interested party described in section 
     861(17)(F), the petition shall include information indicating 
     that a member of the association described in that section 
     meets the requirements of subparagraph (C) or (D) of this 
     paragraph.
       ``(F) Amendments.--The petition may be amended at such 
     time, and upon such conditions, as the administering 
     authority and the Commission may permit.
       ``(2) Simultaneous filing with commission.--The petitioner 
     shall file a copy of the petition with the Commission on the 
     same day as it is filed with the administering authority.
       ``(3) Deadline for filing petition.--
       ``(A) Deadline.--(i) A petitioner to which paragraph 
     (1)(B)(i) (I) or (II) applies shall file the petition no 
     later than the earlier of--
       ``(I) 6 months after the time that the petitioner first 
     knew or should have known of the sale of the subject vessel, 
     or
       ``(II) 6 months after delivery of the subject vessel.
       ``(ii) A petitioner to which paragraph (1)(B)(i)(III) 
     applies shall--
       ``(I) file the petition no later than the earlier of 9 
     months after the time that the petitioner first knew or 
     should have known of the sale of the subject vessel, or 6 
     months after delivery of the subject vessel, and
       ``(II) submit to the administering authority a notice of 
     intent to file a petition no later than 6 months after the 
     time that the petitioner first knew or should have known of 
     the sale (unless the petition itself is filed within that 6-
     month period).
       ``(B) Presumption of knowledge.--For purposes of this 
     paragraph, if the existence of the sale, together with 
     general information concerning the vessel, is published in 
     the international trade press, there is a rebuttable 
     presumption that the petitioner knew or should have known of 
     the sale of the vessel from the date of that publication.
       ``(c) Actions Before Initiating Investigations.--
       ``(1) Notification of governments.--Before initiating an 
     investigation under either subsection (a) or (b), the 
     administering authority shall notify the government of the 
     exporting country of the investigation. In the case of the 
     initiation of an investigation under subsection (b), such 
     notification shall include a public version of the petition.
       ``(2) Acceptance of communications.--The administering 
     authority shall not accept any unsolicited oral or written 
     communication from any person other than an interested party 
     described in section 861(17)(C), (D), (E), or (F) before the 
     administering authority makes its decision whether to 
     initiate an investigation pursuant to a petition, except for 
     inquires regarding the status of the administering 
     authority's consideration of the petition or a request for 
     consultation by the government of the exporting country.
       ``(3) Nondisclosure of certain information.--The 
     administering authority and the Commission shall not disclose 
     information with regard to any draft petition submitted for 
     review and comment before it is filed under subsection 
     (b)(1).
       ``(d) Petition Determination.--
       ``(1) Time for initial determination.--
       ``(A) In general.--Within 45 days after the date on which a 
     petition is filed under subsection (b), the administering 
     authority shall, after examining, on the basis of sources 
     readily available to the administering authority, the 
     accuracy and adequacy of the evidence provided in the 
     petition, determine whether the petition--
       ``(i) alleges the elements necessary for the imposition of 
     an injurious pricing charge under section 801(a) and the 
     elements required under subsection (b)(1)(B), (C), (D), or 
     (E), and contains information reasonably available to the 
     petitioner supporting the allegation; and
       ``(ii) determine if the petition has been filed by or on 
     behalf of the industry.
       ``(B) Calculation of 45-day period.--Any period in which 
     paragraph (6)(A) applies shall not be included in calculating 
     the 45-day period described in subparagraph (A).
       ``(2) Affirmative determination.--If the determinations 
     under clauses (i) and (ii) of paragraph (1)(A) are 
     affirmative, the administering authority shall initiate an 
     investigation to determine whether the vessel was sold at 
     less than fair value, unless paragraph (6) applies.
       ``(3) Negative determinations.--If--
       ``(A) the determination under clause (i) or (ii) of 
     paragraph (1)(A) is negative, or
       ``(B) paragraph (6)(B) applies, the administering authority 
     shall dismiss the petition, terminate the proceeding, and 
     notify the petitioner in writing of the reasons for the 
     determination.
       ``(4) Determination of industry support.--
       ``(A) General rule.--For purposes of this subsection, the 
     administering authority shall determine that the petition has 
     been filed by or on behalf of the domestic industry, if--
       ``(i) the domestic producers or workers who support the 
     petition collectively account for at least 25 percent of the 
     total capacity of domestic producers capable of producing a 
     like vessel, and
       ``(ii) the domestic producers or workers who support the 
     petition collectively account for more than 50 percent of the 
     total capacity to produce a like vessel of that portion of 
     the domestic industry expressing support for or opposition to 
     the petition.
       ``(B) Certain positions disregarded.--In determining 
     industry support under subparagraph (A), the administering 
     authority shall disregard the position of domestic 
     producers who oppose the petition, if such producers are 
     related to the foreign producer or United States buyer of 
     the subject vessel, or the domestic producer is itself the 
     United States buyer, unless such domestic producers 
     demonstrate that their interests as domestic producers 
     would be adversely affected by the imposition of an 
     injurious pricing charge.
       ``(C) Polling the industry.--If the petition does not 
     establish support of domestic producers or workers accounting 
     for more than 50 percent of the total capacity to produce a 
     like vessel--
       ``(i) the administering authority shall poll the industry 
     or rely on other information in order to determine if there 
     is support for the petition as required by subparagraph (A), 
     or
       ``(ii) if there is a large number of producers in the 
     industry, the administering authority may determine industry 
     support for the petition by using any statistically valid 
     sampling method to poll the industry.
       ``(D) Comment by interested parties.--Before the 
     administering authority makes a determination with respect to 
     initiating an investigation, any person who would qualify as 
     an interested party under section 861(17) if an investigation 
     were initiated, may submit comments or information on the 
     issue of industry support. After the administering authority 
     makes a determination with respect to initiating an 
     investigation, the determination regarding industry support 
     shall not be reconsidered.
       ``(5) Definition of domestic producers or workers.--For 
     purposes of this subsection, the term `domestic producers or 
     workers' means interested parties as defined in section 861 
     (17) (C), (D), (E), or (F).
       ``(6) Proceedings by wto members.--The administering 
     authority shall not initiate an investigation under this 
     section if, with respect to the vessel sale at issue, an 
     antidumping proceeding conducted by a WTO member who is not a 
     Shipbuilding Agreement Party--
       ``(A) has been initiated and has been pending for not more 
     than on year, or
       ``(B) has been completed and resulted in the imposition of 
     antidumping measures or a negative determination with respect 
     to whether the sale was at less than fair value or with 
     respect to injury.
       ``(e) Notification to Commission of Determination.--The 
     administering authority shall--
       ``(1) notify the Commission immediately of any 
     determination it makes under subsection (a) or (d), and
       ``(2) if the determination is affirmative, make available 
     to the Commission such information as it may have relating to 
     the matter under investigation, under such procedures as the 
     administering authority and the Commission may establish to 
     prevent disclosure, other than with the consent of the party 
     providing it or under protective order, of any information to 
     which confidential treatment has been given by the 
     administering authority.

     ``SEC. 803. PRELIMINARY DETERMINATIONS.

       ``(a) Determination by Commission of Reasonable Indication 
     of Injury.--
       ``(1) General rule.--Except in the case of a petition 
     dismissed by the administering authority under section 
     802(d)(3), the Commission, within the time specified in 
     paragraph (2), shall determine, based on the information 
     available to it at the time of the determination, whether 
     there is a reasonable indication that--

[[Page S3441]]

       ``(A) an industry in the United States--
       ``(i) is or has been materially injured, or
       ``(ii) is threatened with material injury, or
       ``(B) the establishment of an industry in the United States 
     is or has been materially retarded, by reason of the sale of 
     the subject vessel. If the Commission makes a negative 
     determination under this paragraph, the investigation shall 
     be terminated.
       ``(2) Time for commission determination.--The Commission 
     shall make the determination described in paragraph (1) 
     within 90 days after the date on which the petition is filed 
     or, in the case of an investigation initiated under section 
     802(a), within 90 days after the date on which the Commission 
     receives notice from the administering authority that the 
     investigation has been initiated under such section.
       ``(b) Preliminary Determination by Administering 
     Authority.--
       ``(1) Period of injurious pricing investigation.--
       ``(A) In general.--The administering authority shall make a 
     determination, based upon the information available to it at 
     the time of the determination, of whether there is a 
     reasonable basis to believe or suspect that the subject 
     vessel was sold at less than fair value.
       ``(B) Cost data used for normal value.--If cost data is 
     required to determine normal value on the basis of a sale of 
     a foreign like vessel that has not been delivered on or 
     before the date on which the administering authority 
     initiates the investigation, the administering authority 
     shall make its determination within 160 days after the date 
     of delivery of the foreign like vessel.
       ``(C) Normal value based on constructed value.----If normal 
     value is to be determined on the basis of constructed 
     value, the administering authority shall make its 
     determination within 160 days after the date of delivery 
     of the subject vessel.
       ``(d) Other cases.--In cases in which subparagraph (B) or 
     (C) does not apply, the administering authority shall make 
     its determination within 160 days after the date on which the 
     administering authority initiates the investigation under 
     section 802.
       ``(E) Affirmative determination by commission required.--In 
     no event shall the administering authority make its 
     determination before an affirmative determination is made by 
     the Commission under subsection (a).
       ``(2) De minimis injurious pricing margin.--In making a 
     determination under this subsection, the administering 
     authority shall disregard any injurious pricing margin that 
     is de minimis. For purposes of the preceding sentence, an 
     injurious pricing margin is de minimis if the administering 
     authority determines that the injurious pricing margin is 
     less than 2 percent of the export price.
       ``(c) Extension of Period in Extraordinarily Complicated 
     Cases or For Good Cause.--
       ``(1) In general.--If--
       ``(A) the administering authority concludes that the 
     parties concerned are cooperating and determines that--
       ``(i) the case is extraordinarily complicated by reason 
     of--
       ``(I) the novelty of the issues presented, or
       ``(II) the nature and extent of the information required, 
     and
       ``(ii) additional time is necessary to make the preliminary 
     determination, or
       ``(B) a party to the investigation requests an extension 
     and demonstrates good cause for the extension,

     then the administering authority may postpone the time for 
     making its preliminary determination.
       ``(2) Length of postponement.--The preliminary 
     determination may be postponed under paragraph (1)(A) or (B) 
     until not later than the 190th day after--
       ``(A) the date of delivery of the foreign like vessel, if 
     subsection (b)(1)(B) applies,
       ``(B) the date of delivery of the subject vessel, if 
     subsection (b)(1)(C) applies, or
       ``(C) the date on which the administering authority 
     initiates an investigation under section 802, in a case in 
     which subsection (b)(1)(D) applies.
       ``(3) Notice of postponement.--The administering authority 
     shall notify the parties to the investigation, not later than 
     20 days before the date on which the preliminary 
     determination would otherwise be required under subsection 
     (b)(1), if it intends to postpone making the preliminary 
     determination under paragraph (1). The notification shall 
     include an explanation of the reasons for the postponement, 
     and notice of the postponement shall be published in the 
     Federal Register.
       ``(d) Effect of Determination by the Administering 
     Authority.--If the preliminary determination of the 
     administering authority under subsection (b) is affirmative, 
     the administering authority shall--
       ``(1) determine an estimated injurious pricing margin, and
       ``(2) make available to the Commission all information upon 
     which its determination was based and which the Commission 
     considers relevant to its injury determination, under such 
     procedures as the administering authority and the Commission 
     may establish to prevent disclosure, other than with the 
     consent of the party providing it or under protective order, 
     of any information to which confidential treatment has been 
     given by the administering authority.
       ``(e) Notice of Determination.--Whenever the Commission or 
     the administering authority makes a determination under this 
     section, the Commission or the administering authority, as 
     the case may be, shall notify the petitioner, and other 
     parties to the investigation, and the Commission or the 
     administering authority (whichever is appropriate) of its 
     determination. The administering authority shall include with 
     such notification the facts and conclusions on which its 
     determination is based. Not later than 5 days after the date 
     on which the determination is required to be made under 
     subsection (a)(2), the Commission shall transmit to the 
     administering authority the facts and conclusions on which 
     its determination is based.

     ``SEC. 804. TERMINATION OR SUSPENSION OF INVESTIGATION.

       ``(a) Termination of Investigation Upon Withdrawal of 
     Petition.--
       ``(1) In general.--Except as provided in paragraph (2), an 
     investigation under this subtitle may be terminated by either 
     the administering authority or the Commission, after notice 
     to all parties to the investigation, upon withdrawal of the 
     petition by the petitioner.
       ``(2) Limitation on Termination by Commission.--The 
     Commission may not terminate an investigation under paragraph 
     (1) before a preliminary determination is made by the 
     administering authority under section 803(b).
       ``(b) Termination of Investigations Initiated by 
     Administering Authority.--The administering authority may 
     terminate any investigation initiated by the 
     administering authority under section 802(a) after 
     providing notice of such termination to all parties to the 
     investigation.
       ``(c) Alternate Equivalent Remedy.--The criteria set forth 
     in subparagraphs (A) through (D) of section 806(e)(1) shall 
     apply to any agreement that forms the basis for termination 
     of an investigation under subsection (a) or (b).
       ``(d) Proceedings by WTO Members.--
       ``(1) Suspension of investigation.--The administering 
     authority and the Commission shall suspend an investigation 
     under this section if a WTO member that is not a Shipbuilding 
     Agreement Party initiates an antidumping proceeding described 
     in section 861(30)(A) with respect to the sale of the subject 
     vessel.
       ``(2) Termination of investigation.--If an antidumping 
     proceeding described in paragraph (1) is concluded by--
       ``(A) the imposition of antidumping measures, or
       ``(B) a negative determination with respect to whether the 
     sale is at less than fair value or with respect to injury, 
     the administering authority and the Commission shall 
     terminate the investigation under this section.
       ``(3) Continuation of investigation.--(A) If such a 
     proceeding--
       ``(i) is concluded by a result other than a result 
     described in paragraph (2), or
       ``(ii) is not concluded within one year from the date of 
     the initiation of the proceeding, then the administering 
     authority and the Commission shall terminate the suspension 
     and continue the investigation. The period in which the 
     investigation was suspended shall not be included in 
     calculating deadlines applicable with respect to the 
     investigation.
       ``(B) Notwithstanding subparagraph (A)(ii), if the 
     proceeding is concluded by a result described in paragraph 
     (2)(A), the administering authority and the Commission shall 
     terminate the investigation under this section.

     ``SEC. 805. FINAL DETERMINATIONS.

       ``(a) Determinations by Administering Authority.--
       ``(1) In general.--Within 75 days after the date of its 
     preliminary determination under section 803(b), the 
     administering authority shall make a final determination of 
     whether the vessel which is the subject of the investigation 
     has been sold in the United States at less than its fair 
     value.
       ``(2) Extension of period for determination.--
       ``(A) General rule.--The administering authority may 
     postpone making the final determination under paragraph (1) 
     until not later than 290 days after--
       11(i) the date of delivery of the foreign like vessel, in 
     an investigation to which section  803(b)(1)(B) applies,
       ``(ii) the date of delivery of the subject vessel, in an 
     investigation to which section 803(b)(1)(C) applies, or
       ``(iii) the date on which the administering authority 
     initiates the investigation under section 802, in an 
     investigation to which section 803(b)(1)(D) applies.
       ``(B) Request required.--The administering authority may 
     apply subparagraph (A) if a request in writing is made by--
       ``(i) the producer of the subject vessel, in a proceeding 
     in which the preliminary determination by the administering 
     authority under section 803(b) was affirmative, or
       ``(ii) the petitioner, in a proceeding in which the 
     preliminary determination by the administering authority 
     under section 803(b) was negative.
       ``(3) De minimis injurious pricing margin.--In making a 
     determination under this subsection, the administering 
     authority shall disregard any injurious pricing margin that 
     is de minimis as defined in section 803(b)(2).
       ``(b) Final Determination by Commission.--
       ``(1) In general.--The Commission shall make a final 
     determination of whether--
       ``(A) an industry in the United States--
       ``(i) is or has been materially injured, or
       ``(ii) is threatened with material injury, or
       ``(B) the establishment of an industry in the United States 
     is or has been materially

[[Page S3442]]

     retarded, by reason of the sale of the vessel with respect to 
     which the administering authority has made an affirmative 
     determination under subsection (a)(1).
       ``(2) Period for injury determination following affirmative 
     preliminary determination by administering authority.--If the 
     preliminary determination by the administering authority 
     under section 803(b) is affirmative, then the Commission 
     shall make the determination required by paragraph (1) before 
     the later of--
       ``(A) the 120th day after the day on which the 
     administering authority makes its affirmative preliminary 
     determination under section 803(b), or
       ``(B) the 45th day after the day on which the administering 
     authority makes its affirmative final determination under 
     subsection (a).
       ``(3) Period for injury determination following negative 
     preliminary determination by administering authority.--If the 
     preliminary determination by the administering authority 
     under section 803(b) is negative, and its final determination 
     under subsection (a) is affirmative, then the final 
     determination by the Commission under this subsection 
     shall be made within 75 days after the date of that 
     affirmative final determination.
       ``(c) Effect of Final Determinations.--
       ``(1) Effect of affirmative determination by the 
     administering authority.--If the determination of the 
     administering authority under subsection (a) is affirmative, 
     then the administering authority shall--
       ``(A) make available to the Commission all information upon 
     which such determination was based and which the Commission 
     considers relevant to its determination, under such 
     procedures as the administering authority and the Commission 
     may establish to prevent disclosure, other than with the 
     consent of the party providing it or under protective order, 
     of any information as to which confidential treatment has 
     been given by the administering authority, and
       ``(B) calculate an injurious pricing charge in an amount 
     equal to the amount by which the normal value exceeds the 
     export price of the subject vessel.
       ``(2) Issuance of order; effect of negative 
     determination.--If the determinations of the administering 
     authority and the Commission under subsections (a)(1) and 
     (b)(1) are affirmative, then the administering authority 
     shall issue an injurious pricing order under section 806. If 
     either of such determinations is negative, the investigation 
     shall be terminated upon the publication of notice of that 
     negative determination.
       ``(d) Publication of Notice of Determinations.--Whenever 
     the administering authority or the Commission makes a 
     determination under this section, it shall notify the 
     petitioner, other parties to the investigation, and the other 
     agency of its determination and of the facts and conclusions 
     of law upon which the determination is based, and it shall 
     publish notice of its determination in the Federal Register.
       ``(e) Correction of Ministerial Errors.--The administering 
     authority shall establish procedures for the correction of 
     ministerial errors in final determinations within a 
     reasonable time after the determinations are issued under 
     this section. Such procedures shall ensure opportunity for 
     interested parties to present their views regarding any such 
     errors. As used in this subsection, the term `ministerial 
     error' includes errors in addition, subtraction, or other 
     arithmetic function, clerical errors resulting from 
     inaccurate copying, duplication, or the like, and any other 
     type of unintentional error which the administering authority 
     considers ministerial.

     SEC. 806. IMPOSITION AND COLLECTION OF INJURIOUS PRICING 
                   CHARGE.

       ``(a) In General.--Within 7 days after being notified by 
     the Commission of an affirmative determination under section 
     805(b), the administering authority shall publish an order 
     imposing an injurious pricing charge on the foreign producer 
     of the subject vessel which--
       ``(1) directs the foreign producer of the subject vessel to 
     pay to the Secretary of the Treasury, or the designee of the 
     Secretary, within 180 days from the date of publication of 
     the order, an injurious pricing charge in an amount equal to 
     the amount by which the normal value exceeds the export price 
     of the subject vessel,
       (2) includes the identity and location of the foreign 
     producer and a description of the subject vessel, in such 
     detail as the administering authority deems necessary, and
       ``(3) informs the foreign producer that--
       ``(A) failure to pay the injurious pricing charge in a 
     timely fashion may result in the imposition of 
     countermeasures with respect to that producer under section 
     807,
       ``(B) payment made after the deadline described in 
     paragraph (1) shall be subject to interest charges at the 
     Commercial Interest Reference Rate (CIRR), and
       ``(C) the foreign producer may request an extension of the 
     due date for payment under subsection (b).
       ``(b) Extension of Due Date for Payment in Extraordinary 
     Circumstances.--
       ``(1) Extension.--Upon request, the administering authority 
     may amend the order under subsection (a) to set a due date 
     for payment or payments later than the date that is 180 days 
     from the date of publication of the order, if the 
     administering authority determines that full payment in 180 
     days would render the producer insolvent or would be 
     incompatible with a judicially supervised reorganization. 
     When an extended payment schedule provides for a series of 
     partial payments, the administering authority shall specify 
     the circumstances under which default on one or more payments 
     will result in the imposition of countermeasures.
       ``(2) Interest charges.--If a request is granted under 
     paragraph (1), payments made after the date that is 180 days 
     from the publication of the order shall be subject to 
     interest charges at the CIRR.
       ``(c) Notification of Order.--The administering authority 
     shall deliver a copy of the order requesting payment to the 
     foreign producer of the subject vessel and to an appropriate 
     representative of the government of the exporting country.
       ``(d) Revocation of Order.--The administering authority--
       ``(1) may revoke an injurious pricing order if the 
     administering authority determines that producers accounting 
     for substantially all of the capacity to produce a domestic 
     like vessel have expressed a lack of interest in the order, 
     and
       ``(2) shall revoke an injurious pricing order--
       ``(A) if the sale of the vessel that was the subject of the 
     injurious pricing determination is voided,
       ``(B) if the injurious pricing charge is paid in full, 
     including any interest accrued for late payment,
       ``(C) upon full implementation of an alternative equivalent 
     remedy described in subsection (e), or
       ``(D) if, with respect to the vessel sale that was at issue 
     in the investigation that resulted in the injurious pricing 
     order, an antidumping proceeding conducted by a WTO member 
     who is not a Shipbuilding Agreement Party has been completed 
     and resulted in the imposition of antidumping measures.
       ``(e) Alternative Equivalent Remedy.--
       ``(1) Agreement for alternate remedy.--The administering 
     authority may suspend an injurious pricing order if the 
     administering authority enters into an agreement with the 
     foreign producer subject to the order on an alternative 
     equivalent remedy, that the administering authority 
     determines--
       ``(A) is at least as effective a remedy as the injurious 
     pricing charge,
       ``(B) is in the public interest,
       ``(C) can be effectively monitored and enforced, and
       ``(D) is otherwise consistent with the domestic law and 
     international obligations of the United States.
       ``(2) Prior consultation and submission of comments.--
     Before entering into an agreement under paragraph (1), the 
     administering authority shall consult with the industry, and 
     provide for the submission of comments by interested parties, 
     with respect to the agreement.
       ``(3) Material violations of agreement.--If the injurious 
     pricing order has been suspended under paragraph (1), and the 
     administering authority determines that the foreign producer 
     concerned has materially violated the terms of the agreement 
     under paragraph (1), the administering authority shall 
     terminate the suspension.

     ``SEC. 807. IMPOSITION OF COUNTERMEASURES.

       ``(a) General Rule.--
       ``(1) Issuance of order imposing countermeasures.--Unless 
     an injurious pricing order is revoked or suspended under 
     section 806(d) or (e), the administering authority shall 
     issue an order imposing countermeasures.
       ``(2) Contents of order.--The countermeasure order shall--
       ``(A) state that, as provided in section 468, a permit to 
     lade or unlade passengers or merchandise may not be issued 
     with respect to vessels contracted to be built by the foreign 
     producer of the vessel with respect to which an injurious 
     pricing order was issued under section 806, and
       ``(B) specify the scope and duration of the prohibition on 
     the issuance of a permit to lade or unlade passengers or 
     merchandise.
       ``(b) Notice of Intent To Impose Countermeasures.--
       ``(1) General rule.--The administering authority shall 
     issue a notice of intent to impose countermeasures not later 
     than 30 days before the expiration of the time for payment 
     specified in the injurious pricing order (or extended payment 
     provided for under section 806(b)), and shall publish the 
     notice in the Federal Register within 7 days after issuing 
     the notice.
       ``(2) Elements of the notice of intent.--The notice of 
     intent shall contain at least the following elements:
       ``(A) Scope.--A permit to lade or unlade passengers or 
     merchandise may not be issued with respect to any vessel--
       ``(i) built by the foreign producer subject to the proposed 
     countermeasures, and
       ``(ii) with respect to which the material terms of sale are 
     established within a period of 4 consecutive years beginning 
     on the date that is 30 days after publication in the Federal 
     Register of the notice of intent described in paragraph (1).
       ``(B) Duration.--For each vessel described in subparagraph 
     (A), a permit to lade or unlade passengers or merchandise may 
     not be issued for a period of 4 years after the date of 
     delivery of the vessel.
       ``(c) Determination To Impose Countermeasures; Order.--
       ``(1) General rule.--The administering authority shall, 
     within the time specified in paragraph (2), issue a 
     determination and order imposing countermeasures.
       ``(2) Time for determination.--The determination shall be 
     issued within 90 days after

[[Page S3443]]

     the date on which the notice of intent to impose 
     countermeasures under subsection (b) is published in the 
     Federal Register. The administering authority shall publish 
     the determination, and the order described in paragraph (4), 
     in the Federal Register within 7 days after issuing the final 
     determination, and shall provide a copy of the determination 
     and order to the Customs Service.
       ``(3) Content of the determination.--In the determination 
     imposing countermeasures, the administering authority shall 
     determine whether, in light of all of the circumstances, an 
     interested party has demonstrated that the scope or duration 
     of the countermeasures described in subsection (b)(2) should 
     be narrower or shorter than the scope or duration set forth 
     in the notice of intent to impose countermeasures.
       ``(4) Order.--At the same time it issues its determination, 
     the administering authority shall issue an order imposing 
     countermeasures, consistent with its determination under 
     paragraph (1).
       ``(d) Administrative Review of Determination To Impose 
     Countermeasures.--
       ``(1) Request for review.--Each year, in the anniversary 
     month of the issuance of the order imposing countermeasures 
     under subsection (c), the administering authority shall 
     publish in the Federal Register a notice providing that 
     interested parties may request--
       ``(A) a review of the scope or duration of the 
     countermeasures determined under subsection (c)(3), and
       ``(B) a hearing in connection with such a review.
       ``(2) Review.--If a proper request has been received under 
     paragraph (1), the administering authority shall--
       ``(A) publish notice of initiation of a review in the 
     Federal Register not later than 15 days after the end of the 
     anniversary month of the issuance of the order imposing 
     countermeasures, and
       ``(B) review and determine whether the requesting party has 
     demonstrated that the scope or duration of the 
     countermeasures is excessive in light of all of the 
     circumstances.
       ``(3) Time for review.--The administering authority shall 
     make its determination under paragraph (2)(B) within 90 days 
     after the date on which the notice of initiation of the 
     review is published. If the determination under paragraph 
     (2)(B) is affirmative, the administering authority shall 
     amend the order accordingly. The administering authority 
     shall promptly publish the determination and any amendment to 
     the order in the Federal Register, and shall provide a copy 
     of any amended order to the Customs Service. In extraordinary 
     circumstances, the administering authority may extend the 
     time for its determination under paragraph (2)(B) to not 
     later than 150 days after the date on which the notice of 
     initiation of the review is published.
       ``(e) Extension of Countermeasures.--
       ``(1) Request for extension.--Within the time described in 
     paragraph (2), an interested party may file with the 
     administering authority a request that the scope or duration 
     of countermeasures be extended.
       ``(2) Deadline for request for extension.--
       ``(A) Request for extension beyond 4 years.--If the request 
     seeks an extension that would cause the scope or duration of 
     countermeasures to exceed 4 years, including any prior 
     extensions, the request for extension under paragraph (1) 
     shall be filed not earlier than the date that is 15 months, 
     and not later than the date that is 12 months, before the 
     date that marks the end of the period that specifies the 
     vessels that fall within the scope of the order by virtue of 
     the establishment of material terms of sale within that 
     period.
       ``(B) Other requests.--If the request seeks an extension 
     under paragraph (1) other than one described in subparagraph 
     (A), the request shall be filed not earlier than the date 
     that is 6 months, and not later than a date that is 3 months, 
     before the date that marks the end of the period referred to 
     in subparagraph (A).
       ``(3) Determination.--
       ``(A) Notice of request for extension.--If a proper request 
     has been received under paragraph (1), the administering 
     authority shall publish notice of initiation of an extension 
     proceeding in the Federal Register not later than 15 days 
     after the applicable deadline in paragraph (2) for requesting 
     the extension.
       ``(B) Procedures.--
       ``(i) Request for extension beyond 4 years.--If paragraph 
     (2)(A) applies to the request, the administering authority 
     shall consult with the Trade Representative under paragraph 
     (4).
       ``(ii) Other requests.--If paragraph (2)(B) applies to the 
     request, the administering authority shall determine, within 
     90 days after the date on which the notice of initiation 
     of the proceeding is published, whether the requesting 
     party has demonstrated that the scope or duration of the 
     countermeasures is inadequate in light of all of the 
     circumstances. If the administering authority determines 
     that an extension is warranted, it shall amend the 
     countermeasure order accordingly. The administering 
     authority shall promptly publish the determination and any 
     amendment to the order in the Federal Register, and shall 
     provide a copy of any amended order to the Customs 
     Service.
       ``(4) Consultation with trade representative.--If paragraph 
     (3)(B)(i) applies, the administering authority shall consult 
     with the Trade Representative concerning whether it would be 
     appropriate to request establishment of a dispute settlement 
     panel under the Shipbuilding Agreement for the purpose of 
     seeking authorization to extend the scope or duration of 
     countermeasures for a period in excess of 4 years.
       ``(5) Decision not to request panel.--If, based on 
     consultations under paragraph (4), the Trade Representative 
     decides not to request establishment of a panel, the Trade 
     Representative shall inform the party requesting the 
     extension of the countermeasures of the reasons for its 
     decision in writing. The decision shall not be subject to 
     judicial review.
       ``(6) Panel proceedings.--If, based on consultations under 
     paragraph (4), the Trade Representative requests the 
     establishment of a panel under the Shipbuilding Agreement to 
     authorize an extension of the period of countermeasures, and 
     the panel authorizes such an extension, the administering 
     authority shall promptly amend the countermeasure order. The 
     administering authority shall publish notice of the amendment 
     in the Federal Register.
       ``(f) List of Vessels Subject to Countermeasures.--
       ``(1) General rule.--At least once during each 12-month 
     period beginning on the anniversary date of a determination 
     to impose countermeasures under this section, the 
     administering authority shall publish in the Federal Register 
     a list of all delivered vessels subject to countermeasures 
     under the determination.
       ``(2) Content of list.--The list under paragraph (1) shall 
     include the following information for each vessel, to the 
     extent the information is available:
       ``(A) The name and general description of the vessel.
       ``(B) The vessel identification number.
       ``(C) The shipyard where the vessel was constructed.
       ``(D) The last-known registry of the vessel.
       ``(E) The name and address of the last-known owner of the 
     vessel.
       ``(F) The delivery date of the vessel.
       ``(G) The remaining duration of countermeasures on the 
     vessel.
       ``(H) Any other identifying information available.
       ``(3) Amendment of list.--The administering authority may 
     amend the list from time to time to reflect new information 
     that comes to its attention and shall publish any amendments 
     in the Federal Register.
       ``(4) Service of list and amendments.--
       ``(A) Service of list.--The administering authority shall 
     serve a copy of the list described in paragraph (1) on--
       ``(i) the petitioner under section 802(b),
       ``(ii) the United States Customs Service,
       ``(iii) the Secretariat of the Organization for Economic 
     cooperation and Development,
       ``(iv) the owners of vessels on the list,
       ``(v) the shipyards on the list, and.
       ``(vi) the government of the country in which a shipyard on 
     the list is located.
       ``(B) Service of amendments.--The administering authority 
     shall serve a copy of any amendments to the list under 
     paragraph (3) or subsection (g)(3) on--
       ``(i) the parties listed in clauses (i), (ii), and (iii) of 
     subparagraph (A), and
       ``(ii) if the amendment affects their interests, the 
     parties listed in clauses (iv), (v), and (vi) of subparagraph 
     (A).
       ``(g) Administrative Review of List of Vessels Subject to 
     Countermeasures.--
       ``(1) Request for review.--
       ``(A) In general.--An interested party may request in 
     writing a review of the list described in subsection (f)(1), 
     including any amendments thereto, to determine whether--
       ``(i) a vessel included in the list does not fall within 
     the scope of the applicable countermeasure order and should 
     be deleted, or
       ``(ii) a vessel not included in the list falls within the 
     scope of the applicable countermeasure order and should be 
     added.
       ``(B) Time for making request.--Any request seeking a 
     determination described in subparagraph (A)(i) shall be made 
     within 90 days after the date of publication of the 
     applicable list.
       ``(2) Review.--If a proper request for review has been 
     received, the administering authority shall--
       ``(A) publish notice of initiation of a review in the 
     Federal Register--
       ``(i) not later than 15 days after the request is received, 
     or
       ``(ii) if the request seeks a determination described in 
     paragraph (1)(A)(i), not later than 15 days after the 
     deadline described in paragraph (1)(B), and
       ``(B) review and determine whether the requesting party has 
     demonstrated that--
       ``(i) a vessel included in the list does not qualify for 
     such inclusion, or
       ``(ii) a vessel not included in the list qualifies for 
     inclusion.
       ``(3) Time for determination.--The administering authority 
     shall make its determination under paragraph (2)(B) within 90 
     days after the date on which the notice of initiation of such 
     review is published. If the administering authority 
     determines that a vessel should be added or deleted from the 
     list, the administering authority shall amend the list 
     accordingly. The administering authority shall promptly 
     publish in the Federal Register the determination and any 
     such amendment to the list.
       ``(h) Expiration of Countermeasures.--Upon expiration of a 
     countermeasure order imposed under this section, the 
     administering authority shall promptly publish a notice of 
     the expiration in the Federal Register.

[[Page S3444]]

       ``(i) Supension or Termination of Proceedings or 
     Countermeasures; Temporary Reduction of Countermeasures.--
       ``(1) If injurious pricing order revoked or suspended.--If 
     an injurious pricing order had been revoked or suspended 
     under section 806(d) or (e), the administering authority 
     shall, as appropriate, suspend or terminate proceedings under 
     this section with respect to that order, or suspend or revoke 
     a countermeasure order issued with respect to that injurious 
     pricing order.
       ``(2) If payment date amended.--
       ``(A) Suspension of modification of deadline.--Subject to 
     subparagraph (C), if the payment date under an injurious 
     pricing order is amended under section 845, the administering 
     authority shall, as appropriate, suspend proceedings or 
     modify deadlines under this section, or suspend or amend a 
     countermeasure order issued with respect to that injurious 
     pricing order.
       ``(B) Date for application of countermeasure.--In taking 
     action under subparagraph (A), the administering authority 
     shall ensure that countermeasures are not applied before the 
     date that is 30 days after publication in the Federal 
     Register of the amended payment date.
       ``(C) Reinstitution of proceedings.--If--
       ``(i) a countermeasure order is issued under subsection (c) 
     before an amendment is made under section 845 to the payment 
     date of the injurious pricing order to which the 
     countermeasure order applies, and
       ``(ii) the administering authority determines that the 
     period of time between the original payment date and the 
     amended payment date is significant for purposes of 
     determining the appropriate scope or duration of 
     countermeasures,

     the administering authority may, in lieu of acting under 
     subparagraph (A), reinstitute proceedings under subsection 
     (c) for purposes of issuing new determination under that 
     subsection.
       ``(j) Comment and Hearing.--In the course of any proceeding 
     under subsection (c), (d), (e), or (g), the administering 
     authority--
       ``(1) shall solicit comments from interested parties, and
       ``(2)(A) in a preceding under subsection (c), (d), or (e), 
     upon the request of an interested party, shall hold a hearing 
     in accordance with section 841(b) in connection with that 
     proceeding, or
       ``(B) in a proceeding under subsection (g), upon the 
     request of an interested party, may hold a hearing in 
     accordance with section 841(b) in connection with that 
     proceeding.

     ``SEC. 808. INJURIOUS PRICING PETITIONS BY THIRD COUNTRIES.

       ``(a) Filing of Petition.--The government of a Shipbuilding 
     Agreement Party may file with the Trade Representative a 
     petition requesting that an investigation be conducted to 
     determine if--
       ``(1) a vessel from another Shipbuilding Agreement Party 
     has been sold directly or indirectly to one or more United 
     States buyers at less than fair value, and
       ``(2) an industry, in the petitioning country, producing or 
     capable of producing a like vessel is materially injured by 
     reason of such sale.
       ``(b) Initiation.--The Trade Representative, after 
     consultation with the administering authority and the 
     Commission and obtaining the approval of the Parties Group 
     under the Shipbuilding Agreement, shall determine whether to 
     initiate an investigation described in subsection (a).
       ``(c) Determinations.--Upon initiation of an investigation 
     under subsection (a), the Trade Representative shall request 
     the following determinations be made in accordance with 
     substantive and procedural requirements by the Trade 
     Representative, notwithstanding any other provision of this 
     title:
       ``(1) Sale at less than fair value.--The administering 
     authority shall determine whether the subject vessel has been 
     sold at less than fair value.
       ``(2) Injury to industry.--The Commission shall determine 
     whether an industry in the petitioning country is or has been 
     materially injured by reason of the sale of the subject 
     vessel in the United States.
       ``(d) Public Comment.--An opportunity for public comment 
     shall be provided, as appropriate--
       ``(1) by the Trade Representative, in making the 
     determinations required by subsection (b), and
       ``(2) by the administering authority and the Commission, in 
     making the determination required by subsection (c).
       ``(e) Issuance of Order.--If the administering authority 
     makes an affirmative determination under paragraph (1) of 
     subsection (c) and the Commission makes an affirmative 
     determination under paragraph (2) of subsection (c), the 
     administering authority shall--
       ``(1) order an injurious pricing charge in accordance with 
     section 806, and
       ``(2) make such determinations and take such other actions 
     as are required by sections 806 and 807, as if affirmative 
     determinations had been made under subsections (a) and (b) of 
     section 805.
       ``(f) Reviews of Determinations.--For purposes of review 
     under section 516B, if an order is issued under subsection 
     (e)--
       ``(1) the final determinations of the administering 
     authority and the Commission under subsection (c) shall be 
     treated as final determinations made under section 805, and
       ``(2) determinations of the administering authority under 
     subsection (e)(2) shall be treated as determinations made 
     under section 806 and 807, as the case may be.
       ``(g) Access to Information.--Section 843 shall apply to 
     investigations under this section, to the extent specified by 
     the Trade Representative, after consultation with the 
     administering authority and the Commission.

     ``SEC. 809. THIRD COUNTRY INJURIOUS PRICING.

       ``(a) Petition by Domestic Industry.--
       ``(1) With respect to the sale of a vessel to a buyer in a 
     Shipbuilding Agreement Party, any interested party who would 
     be eligible to file a petition under section 802(b)(1) with 
     respect to the sale if it had been to a United States buyer, 
     if it has reason to believe that--
       ``(A) the vessel has been sold at less than fair value; and
       ``(B) an industry in the United States is or has been 
     materially injured, or is threatened with material injury by 
     reason of the sale of the vessel;

     may submit a petition to the Trade Representative that 
     alleges the elements referred to in subparagraphs (A) and (B) 
     and requests the Trade Representative to take action under 
     subsection (b) of this section on behalf of the domestic 
     industry.
       ``(2) A petition submitted under paragraph (1) shall 
     contain such detailed information as the Trade Representative 
     may require in support of the allegations in the petition.
       ``(b) Application for Injurious Pricing Action on Behalf of 
     the Domestic Industry.--
       ``(1) If the Trade Representative, on the basis of the 
     information contained in a petition submitted under 
     subsection (a), determines that there is a reasonable basis 
     for the allegations in the petition, the Trade Representative 
     shall submit to the appropriate authority of the Shipbuilding 
     Agreement Party where the alleged injurious pricing is 
     occurring an application pursuant to Article 10 of Annex II 
     to the Shipbuilding Agreement which requests that appropriate 
     injurious pricing action under the law of that country be 
     taken, on behalf of the United States, with respect to the 
     sale of the vessel.
       ``(2) At the request of the Trade Representative, the 
     appropriate officers of the Department of Commerce and the 
     United States International Trade Commission shall assist the 
     Trade Representative in preparing the application under 
     paragraph (1).
       ``(c) Consultation After Submission of Application.--After 
     submitting an application under subsection (b)(1), the Trade 
     Representative shall seek consultations with the appropriate 
     authority of the Shipbuilding Agreement Party regarding the 
     request for injurious pricing action.
       ``(d) Action Upon Refusal of Shipbuilding Agreement Party 
     To Act.--If the appropriate authority of the Shipbuilding 
     Agreement Party refuses to undertake injurious pricing 
     measures in response to a request made therefor by the Trade 
     Representative under subsection (b) of this section, the 
     Trade Representative promptly shall consult with the domestic 
     industry on whether action under any other law of the United 
     States is appropriate.

                      ``Subtitle B--Special Rules

     ``SEC. 821. EXPORT PRICE.

       ``(a) Export Price.--For purposes of this title, the term 
     `export price' means the price at which the subject vessel is 
     first sold (or agreed to be sold) by or for the account of 
     the foreign producer of the subject vessel to an unaffiliated 
     United States buyer. The term `sold (or agreed to be sold) by 
     or for the account of the foreign producer' includes any 
     transfer of an ownership interest, including by way of lease 
     or long-term bareboat charter, in conjunction with the 
     original transfer from the producer, either directly or 
     indirectly, to a United States buyer.
       ``(b) Adjustments to Export Price.--The price used to 
     establish export price shall be--
       ``(1) increased by the amount of any import duties imposed 
     by the country of exportation which have been rebated, or 
     which have not been collected, by reason of the exportation 
     of the subject vessel, and
       ``(2) reduced by--
       ``(A) the amount, if any, included in such price, 
     attributable to any additional costs, charges, or expenses 
     which are incident to bringing the subject vessel from the 
     shipyard in the exporting country to the place of delivery,
       ``(B) the amount, if included in such price, of any export 
     tax, duty, or other charge imposed by the exporting country 
     on the exportation of the subject vessel, and
       ``(C) all other expenses incidental to placing the vessel 
     in condition for delivery to the buyer.

     ``SEC. 822. NORMAL VALUE.

       ``(a) Determination.--In determining under this title 
     whether a subject vessel has been sold at less than fair 
     value, a fair comparison shall be made between the export 
     price and normal value of the subject vessel. In order to 
     achieve a fair comparison with the export price, normal value 
     shall be determined as follows:
       ``(1) Determination of Normal Value.--
       ``(A) In general.--The normal value of the subject vessel 
     shall be the price described in subparagraph (B), at a time 
     reasonably corresponding to the time of the sale used to 
     determine the export price under section 821(a).
       ``(B) Price.--The price referred to in subparagraph (A) 
     is--
       ``(i) the price at which a foreign like vessel is first 
     sold in the exporting country, in the ordinary course of 
     trade and, to the extent practicable, at the same level of 
     trade, or

[[Page S3445]]

       ``(ii) in a case to which subparagraph (C) applies, the 
     price at which a foreign like vessel is so sold for 
     consumption in a country other than the exporting country or 
     the United States, if--
       ``(I) such price is representative, and
       ``(II) the administering authority does not determine that 
     the particular market situation in such other country 
     prevents a proper comparison with the export price.
       ``(C) Third country sales.--This subparagraph applies 
     when--
       ``(i) a foreign like vessel is not sold in the exporting 
     country as described in subparagraph (B)(i), or
       ``(ii) the particular market situation in the exporting 
     country does not permit a proper comparison with the export 
     price.
       ``(D) Contemporaneous sale.--For purposes of subparagraph 
     (A), `a time reasonably corresponding to the time of the 
     sale' means within 3 months before or after the sale of the 
     subject vessel or, in the absence of such sales, such longer 
     period as the administering authority determines would be 
     appropriate.
       ``(2) Fictitious markets.--No pretended sale, and no sale 
     intended to establish a fictitious market, shall be taken 
     into account in determining normal value.
       ``(3) Use of constructed value.--If the administering 
     authority determines that the normal value of the subject 
     vessel cannot be determined under paragraph (1)(B) or (1)(C), 
     then the normal value of the subject vessel shall be the 
     constructed value of that vessel, as determined under 
     subsection (e).
       ``(4) Indirect sales.--If a foreign like vessel is sold 
     through an affiliated party, the price at which the foreign 
     like vessel is sold by such affiliated party may be used in 
     determining normal value.
       ``(5) Adjustments.--The price described in paragraph (1)(B) 
     shall be--
       ``(A) reduced by--
       ``(i) the amount, if any, included in the price described 
     in paragraph (1)(B), attributable to any costs, charges, and 
     expenses incident to bringing the foreign like vessel from 
     the shipyard to the place of delivery to the purchaser,
       ``(ii) the amount of any taxes imposed directly upon the 
     foreign like vessel or components thereof which have been 
     rebated, or which have not been collected, on the subject 
     vessel, but only to the extent that such taxes are added to 
     or included in the price of the foreign like vessel, and
       ``(iii) the amount of all other expenses incidental to 
     placing the foreign like vessel in condition for delivery to 
     the buyer, and
       ``(B) increased or decreased by the amount of any 
     difference (or lack thereof) between the export price and the 
     price described in paragraph (1)(B) (other than a difference 
     for which allowance is otherwise provided under this section) 
     that is established to the satisfaction of the administering 
     authority to be wholly or partly due to--
       ``(i) physical differences between the subject vessel and 
     the vessel used in determining normal value, or
       ``(ii) other differences in the circumstances of sale.
       ``(6) Adjustments for level of trade.--The price described 
     in paragraph (1)(B) shall also be increased or decreased to 
     make due allowance for any difference (or lack thereof) 
     between the export price and the price described in paragraph 
     (1)(B) (other than a difference for which allowance is 
     otherwise made under this section) that is shown to be wholly 
     or partly due to a difference in level of trade between the 
     export price and normal value, if the difference in level of 
     trade--
       ``(A) involves the performance of different selling 
     activities, and
       ``(B) is demonstrated to affect price comparability, based 
     on a pattern of consistent price differences between sales at 
     different levels of trade in the country in which normal 
     value is determined.

     In a case described in the preceding sentence, the amount of 
     the adjustment shall be based on the price differences 
     between the two levels of trade in the country in which 
     normal value is determined.
       ``(7) Adjustments to constructed value.--Constructed value 
     as determined under subsection (e) may be adjusted, as 
     appropriate, pursuant to this subsection.
       ``(b) Sales at Less Than Cost of Production.--
       ``(1) Determination; sales disregarded.--Whenever the 
     administering authority has reasonable grounds to believe or 
     suspect that the sale of the foreign like vessel under 
     consideration for the determination of normal value has been 
     made at a price which represents less than the cost of 
     production of the foreign like vessel, the administering 
     authority shall determine whether, in fact, such sale was 
     made at less than the cost of production. If the 
     administering authority determines that the sale was made at 
     less than the cost of production and was not at a price which 
     permits recovery of all costs within 5 years, such sale may 
     be disregarded in the determination of normal value. Whereas 
     such a sale is disregarded, normal value shall be based on 
     another sale of a foreign like vessel in the ordinary course 
     of trade. If no sales made in the ordinary course of trade 
     remain, the normal value shall be based on the constructed 
     value of the subject vessel.
       ``(2) Definitions and special rules.--For purposes of this 
     subsection:
       ``(A) Reasonable grounds to believe or suspect.--There are 
     reasonable grounds to believe or suspect that the sale of a 
     foreign like vessel was made at a price that is less than the 
     cost of production of the vessel, if an interested party 
     described in subparagraph (C), (D), (E), or (F) of section 
     861(17) provides information, based upon observed prices or 
     constructed prices or costs, that the sale of the foreign 
     like vessel under consideration for the determination of 
     normal value has been made at a price which represents less 
     than the cost of production of the vessel.
       ``(B) Recovery of costs.--If the price is below the cost of 
     production at the time of sale but is above the weighted 
     average cost of production for the period of investigation, 
     such price shall be considered to provide for recovery of 
     costs within 5 years.
       ``(3) Calculation of cost of production.--For purposes of 
     this section, the cost of production shall be an amount equal 
     to the sum of--
       ``(A) the cost of materials and of fabrication or other 
     processing of any kind employed in producing the foreign like 
     vessel, during a period which would ordinarily permit the 
     production of that vessel in the ordinary course of business, 
     and
       ``(B) an amount for selling, general, and administrative 
     expenses based on actual data pertaining to the production 
     and sale of the foreign like vessel by the producer in 
     question.
       For purposes of subparagraph (A), if the normal value is 
     based on the price of the foreign like vessel sold in a 
     country other than the exporting country, the cost of 
     materials shall be determined without regard to any internal 
     tax in the exporting country imposed on such materials or on 
     their disposition which are remitted or refunded upon 
     exportation.
       ``(c) Nonmarket Economy Countries.--
       ``(1) In general.--If--
       ``(A) the subject vessel is produced in a nonmarket economy 
     country, and
       ``(B) the administering authority finds that available 
     information does not permit the normal value of the subject 
     vessel to be determined under subsection (a),

     the administering authority shall determine the normal value 
     of the subject vessel on the basis of the value of the 
     factors of production utilized in producing the vessel and to 
     which shall be added an amount for general expenses and 
     profit plus the cost of expenses incidental to placing the 
     vessel in a condition for delivery to the buyer. Except as 
     provided in paragraph (2), the valuation of the factors of 
     production shall be based on the best available information 
     regarding the values of such factors in a market economy 
     country or countries considered to be appropriate by the 
     administering authority.
       ``(2) Exception.--If the administering authority finds that 
     the available information is inadequate for purposes of 
     determining the normal value of the subject vessel under 
     paragraph (1), the administering authority shall determined 
     the normal value on the basis of the price at which a vessel 
     that is--
       ``(A) comparable to the subject vessel, and
       ``(B) produced in one or more market economy countries that 
     are at a level of economic development comparable to that of 
     the nonmarket economy country, is sold in other countries, 
     including the United States.
       ``(3) Factors of production.--For purposes of paragraph 
     (1), the factors of production utilized in producing the 
     vessel include, but are not limited to--
       ``(A) hours of labor required,
       ``(B) quantities of raw materials employed,
       ``(C) amounts of energy and other utilities consumed, and
       ``(D) representative capital cost, including depreciation.
       ``(4) Valuation of factors of production.--The 
     administering authority, in valuing factors of production 
     under paragraph (1), shall utilize, to the extent possible, 
     the prices or costs of factors of production in one or more 
     market economy countries that are--
       ``(A) at a level of economic development comparable to that 
     of the nonmarket economy country, and
       ``(B) significant producers of comparable vessels.
       ``(d) Special Rule for Certain Multinational 
     Corporations.--Whenever, in the course of an investigation 
     under this title, the administering authority determines 
     that--
       ``(1) the subject vessel was produced in facilities which 
     are owned or controlled, directly or indirectly, by a person, 
     firm, or corporation which also owns or controls, directly or 
     indirectly, other facilities for the production of a foreign 
     like vessel which are located in another country or 
     countries,
       ``(2) subsection (a)(1)(C) applies, and
       ``(3) the normal value of a foreign like vessel produced in 
     one or more of the facilities outside the exporting country 
     is higher than the normal value of the foreign like vessel 
     produced in the facilities located in the exporting country,

     the administering authority shall determined the normal value 
     of the subject vessel by reference to the normal value at 
     which a foreign like vessel is sold from one or more 
     facilities outside the exporting country. The administering 
     authority, in making any determination under this subsection, 
     shall make adjustments for the difference between the costs 
     of production (including taxes, labor, materials, and 
     overhead) of the foreign like vessel produced in facilities 
     outside the exporting country and costs of production of the 
     foreign like vessel produced in facilities in the exporting 
     country, if such differences are demonstrated to its 
     satisfaction.

[[Page S3446]]

       ``(e) Constructed Value.--
       ``(1) In general.--For purposes of this title, the 
     constructed value of a subject vessel shall be an amount 
     equal to the sum of--
       ``(A) the cost of materials and fabrication or other 
     processing of any kind employed in producing the subject 
     vessel, during a period which would ordinarily permit the 
     production of the vessel in the ordinary course of business, 
     and
       ``(B)(i) the actual amounts incurred and realized by the 
     foreign producer of the subject vessel for selling, general, 
     and administrative expenses, and for profits, in connection 
     with the production and sale of a foreign like vessel, in the 
     ordinary course of trade, in the domestic market of the 
     country of origin of the subject vessel, or
       ``(ii) if actual data are not available with respect to the 
     amounts described in clause (i), then--
       ``(I) the actual amounts incurred and realized by the 
     foreign producer of the subject vessel for selling, general, 
     and administrative expenses, and for profits, in connection 
     with the production and sale of the same general category of 
     vessel in the domestic market of the country of origin of the 
     subject vessel,
       ``(II) the weighted average of the actual amounts incurred 
     and realized by producers in the country of origin of the 
     subject vessel (other than the producer of the subject 
     vessel) for selling, general, and administrative expenses, 
     and for profits, in connection with the production and sale 
     of a foreign like vessel, in the ordinary course of trade, in 
     the domestic market, or
       ``(III) if data are not available under subclause (I) or 
     (II), the amounts incurred and realized for selling, general, 
     and administrative expenses, and for profits, based on any 
     other reasonable method, except that the amount allowed for 
     profit may not exceed the amount normally realized by foreign 
     producers (other than the producer of the subject vessel) in 
     connection with the sale of vessels in the same general 
     category of vessel as the subject vessel in the domestic 
     market of the country of origin of the subject vessel.
       For purposes of this paragraph, the profit shall be based 
     on the average profit realized over a reasonable period of 
     time before and after the sale of the subject vessel and 
     shall reflect a reasonable profit at the time of such sale. 
     For purposes of the preceding sentence, a `reasonable period 
     of time' shall not, except where otherwise appropriate, 
     exceed 6 months before, or 6 months after, the sale of the 
     subject vessel. In calculating profit under this paragraph, 
     any distortion which would result in other than a profit 
     which is reasonable at the time of the sale shall be 
     eliminated.
       ``(2) Costs and profits based on other reasonable 
     methods.--When costs and profits are determined under 
     paragraph (1)(B)(ii)(III), such determination shall, except 
     where otherwise appropriate, be based on appropriate export 
     sales by the producer of the subject vessel or, absent such 
     sales, to export sales by other producers of a foreign like 
     vessel or the same general category of vessel as the subject 
     vessel in the country of origin of the subject vessel.
       ``(3) Costs of materials.--For purposes of paragraph 
     (1)(A), the cost of materials shall be determined without 
     regard to any internal tax in the exporting country imposed 
     on such materials or their disposition which are remitted or 
     refunded upon exportation of the subject vessel produced from 
     such materials.
       ``(f) Special Rules for Calculation of Cost of Production 
     and for Calculation of Constructed Value.--For purposes of 
     subsections (b) and (e)--
       ``(1) Costs.--
       ``(A) In general.--Costs shall normally be calculated based 
     on the records of the foreign producer of the subject vessel, 
     if such records are kept in accordance with the generally 
     accepted accounting principles of the exporting country and 
     reasonably reflect the costs associated with the production 
     and sale of the vessel. The administering authority shall 
     consider all available evidence on the proper allocation of 
     costs, including that which is made available by the foreign 
     producer on a timely basis, if such allocations have been 
     historically used by the foreign producer, in particular for 
     establishing appropriate amortization and depreciation 
     periods, and allowances for capital expenditures and other 
     development costs.
       ``(B) Nonrecurring costs.--Costs shall be adjusted 
     appropriately for those nonrecurring costs that benefit 
     current or future production, or both.
       ``(C) Startup costs.--
       ``(i) In general.--Costs shall be adjusted appropriately 
     for circumstances in which costs incurred during the time 
     period covered by the investigation are affected by startup 
     operations.
       ``(ii) Startup operations.--Adjustments shall be made for 
     startup operations only where--
       ``(I) a producer is using new production facilities or 
     producing a new type of vessel that requires substantial 
     additional investment, and
       ``(II) production levels are limited by technical factors 
     associated with the initial phase of commercial production.

     For purposes of subclause (II), the initial phase of 
     commercial production ends at the end of the startup period. 
     In determining whether commercial production levels have been 
     achieved, the administering authority shall consider factors 
     unrelated to startup operations that might affect the volume 
     of production processed, such as demand, seasonality, or 
     business cycles.
       ``(iii) Adjustment for startup operations.--The adjustment 
     for startup operations shall be made by substituting the unit 
     production costs incurred with respect to the vessel at the 
     end of the startup period for the unit production costs 
     incurred during the startup period. If the startup period 
     extends beyond the period of the investigation under this 
     title, the administering authority shall use the most recent 
     cost of production data that it reasonably can obtain, 
     analyze, and verify without delaying the timely completion of 
     the investigation.

     For purposes of this subparagraph, the startup period ends at 
     the point at which the level of commercial production that is 
     characteristic of the vessel, the producer, or the industry 
     is achieved.
       ``(D) Costs due to extraordinary circumstances not 
     included.--Costs shall not include actual costs which are due 
     to extraordinary circumstances (including, but not limited 
     to, labor disputes, fire, and natural disasters) and which 
     are significantly over the cost increase which the 
     shipbuilder could have reasonably anticipated and taken into 
     account at the time of sale.
       ``(2) Transactions disregarded.--A transaction directly or 
     indirectly between affiliated persons may be disregarded if, 
     in the case of any element of value required to be 
     considered, the amount representing that element does not 
     fairly reflect the amount usually reflected in sales of a 
     like vessel in the market under consideration. If a 
     transaction is disregarded under the preceding sentence and 
     no other transactions are available for consideration, the 
     determination of the amount shall be based on the information 
     available as to what the amount would have been if the 
     transaction had occurred between persons who are not 
     affiliated.
       ``(3) Major input rule.--If, in the case of a transaction 
     between affiliated persons involving the production by one of 
     such persons of a major input to the subject vessel, the 
     administering authority has reasonable grounds to believe or 
     suspect that an amount represented as the value of such input 
     is less than the cost of production of such input, then the 
     administering authority may determine the value of the major 
     input on the basis of the information available regarding 
     such cost of production, if such cost is greater than the 
     amount that would be determined for such input under 
     paragraph (2).

     ``SEC. 823. CURRENCY CONVERSION.

       ``(a) In General.--In an injurious pricing proceeding under 
     this title, the administering authority shall convert foreign 
     currencies into United States dollars using the exchange rate 
     in effect on the date of sale of the subject vessel, except 
     that if it is established that a currency transaction on 
     forward markets is directly linked to a sale under 
     consideration, the exchange rate specified with respect to 
     such foreign currency in the forward sale agreement shall be 
     used to convert the foreign currency.
       ``(b) Date of Sale.--For purposes of this section, `date of 
     sale' means the date of the contract of sale or, where 
     appropriate, the date on which the material terms of sale are 
     otherwise established. If the material terms of sale are 
     significantly changed after such date, the date of sale is 
     the date of such change. In the case of such a change in the 
     date of sale, the administering authority shall make 
     appropriate adjustments to take into account any unreasonable 
     effect on the injurious pricing margin due only to 
     fluctuations in the exchange rate between the original date 
     of sale and the new date of sale.

                        ``Subtitle C--Procedures

     ``SEC. 841. HEARINGS.

       ``(a) Upon Request.--The administering authority and the 
     Commission shall each hold a hearing in the course of an 
     investigation under this title, upon the request of any party 
     to the investigation, before making a final determination 
     under section 805.
       ``(b) Procedures.--Any hearing required or permitted under 
     this title shall be conducted after notice published in the 
     Federal Register, and a transcript of the hearing shall be 
     prepared and made available to the public. The hearing shall 
     not be subject to the provisions of subchapter II of chapter 
     5 of title 5, United States Code, or to section 702 of such 
     title.

     ``SEC. 842. DETERMINATIONS ON THE BASIS OF THE FACTS 
                   AVAILABLE.

       ``(a) In General.--
       ``(1) necessary information is not available on the record, 
     or
       ``(2) an interested party or any other person--
       ``(A) withholds information that has been requested by the 
     administering authority or the Commission under this title,
       ``(B) fails to provide such information by the deadlines 
     for the submission of the information or in the form and 
     manner requested, subject to subsections (b)(1) and (d) of 
     section 844,
       ``(C) significantly impedes a proceeding under this title, 
     or
       ``(D) provides such information but the information cannot 
     be verified as provided in section 844(g),

     the administering authority and the Commission shall, subject 
     to section 844(c), use the facts otherwise available in 
     reaching the applicable determination under this title.
       ``(b) Adverse Inferences.--If the administering authority 
     or the Commission (as the case may be) finds that an 
     interested party has failed to cooperate by not acting to the

[[Page S3447]]

     best of its ability to comply with a request for information 
     from the administering authority or the Commission, the 
     administering authority or the Commission (as the case may 
     be), in reaching the applicable determination under this 
     title, may use an inference that is adverse to the interests 
     of that party in selecting from among the facts otherwise 
     available. Such adverse inference may include reliance on 
     information derived from--
       ``(1) the petition, or
       ``(2) any other information placed on the record.
       ``(c) Corroboration of Secondary Information.--When the 
     administering authority or the Commission relies on secondary 
     information rather than on information obtained in the course 
     of an investigation under this title, the administering 
     authority and the Commission, as the case may be, shall, to 
     the extent practicable, corroborate that information from 
     independent sources that are reasonably at their disposal.

     ``SEC. 843. ACCESS TO INFORMATION.

       ``(a) Information Generally Made Available.--
       ``(1) Progress of investigation reports.--The administering 
     authority and the Commission shall, from time to time upon 
     request, inform the parties to an investigation under this 
     title of the progress of that investigation.
       ``(2) Ex parte meetings.--the administering authority and 
     the Commission shall maintain a record of any ex parte 
     meeting between--
       ``(A) interested parties or other persons providing factual 
     information in connection with a proceeding under this title, 
     and
       ``(B) the person charged with making the determination, or 
     any person charged with making a final recommendation to that 
     person, in connection with that proceeding, if information 
     relating to that proceeding was presented or discussed at 
     such meeting. The record of such an ex parte meeting shall 
     include the identity of the persons present at the meeting, 
     the date, time, and place of the meeting, and a summary of 
     the matters discussed or submitted. The record of the ex 
     parte meeting shall be included in the record of the 
     proceeding.
       ``(3) Summaries; nonproprietary submissions.--The 
     administering authority and the Commission shall disclose--
       ``(A) any proprietary information received in the course of 
     a proceeding under this title if it is disclosed in a form 
     which cannot be associated with, or otherwise be used to 
     identify, operations of a particular person, and
       ``(B) any information submitted in connection with a 
     proceeding which is not designated as proprietary by the 
     person submitting it.
       ``(4) Maintenance of public record.--The administering 
     authority and the Commission shall maintain and make 
     available for public inspection and copying a record of all 
     information which is obtained by the administering authority 
     or the Commission, as the case may be, in a proceeding under 
     this title to the extent that public disclosure of the 
     information is not prohibited under this chapter or exempt 
     from disclosure under section 552 of title 5, United States 
     Code.
       ``(b) Proprietary Information.--
       ``(1) Proprietary status maintained.--
       ``(A) In general.--Except as provided in subsection (a)(4) 
     and subsection (c), information submitted to the 
     administering authority or the Commission which is designated 
     as proprietary by the person submitting the information shall 
     not be disclosed to any person without the consent of the 
     person submitting the information, other than--
       ``(i) to an officer or employee of the administering 
     authority or the Commission who is directly concerned with 
     carrying out the investigation in connection with which the 
     information is submitted or any other proceeding under this 
     title covering the same subject vessel, or
       ``(ii) to an officer or employee of the United States 
     Customs Service who is directly involved in conducting an 
     investigation regarding fraud under this title.
       ``(B) Additional requirements.--The administering authority 
     and the Commission shall require that information for which 
     proprietary treatment is requested be accompanied by--
       ``(i) either--
       ``(I) a nonproprietary summary in sufficient detail to 
     permit a reasonable understanding of the substance of the 
     information submitted in confidence, or
       ``(II) a statement that the information is not susceptible 
     to summary, accompanied by a statement of the reasons in 
     support of the contention, and
       ``(ii) either--
       ``(I) a statement which permits the administering authority 
     or the Commission to release under administrative protective 
     order, in accordance with subsection (c), the information 
     submitted in confidence, or
       ``(II) a statement to the administering authority or the 
     Commission that the business proprietary information is of a 
     type that should not be released under administrative 
     protective order.
       ``(2) Unwarranted designation.--If the administering 
     authority or the Commission determines, on the basis of the 
     nature and extent of the information or its availability from 
     public sources, that designation of any information as 
     proprietary is unwarranted, then it shall notify the person 
     who submitted it and ask for an explanation of the reasons 
     for the designation. Unless that person persuades the 
     administering authority or the Commission that the 
     designation is warranted, or withdraws the designation, the 
     administering authority or the Commission, as the case may 
     be, shall return it to the party submitting it. In a case in 
     which the administering authority or the Commission returns 
     the information to the person submitting it, the person may 
     thereafter submit other material concerning the subject 
     matter of the returned information if the submission is made 
     within the time otherwise provided for submitting such 
     material.
       ``(c) Limited Disclosure of Certain Proprietary Information 
     Under Protective Order.--
       ``(1) Disclosure by administering authority or 
     commission.--
       ``(A) In general.--Upon receipt of an application (before 
     or after receipt of the information requested) which 
     describes in general terms the information requested and sets 
     forth the reasons for the request, the administering 
     authority or the Commission shall make all business 
     proprietary information presented to, or obtained by it, 
     during a proceeding under this title (except privileged 
     information, classified information, and specific information 
     of a type for which there is a clear and compelling need to 
     withhold from disclosure) available to all interested 
     parties who are parties to the proceeding under a 
     protective order described in subparagraph (B), regardless 
     of when the information is submitted during the 
     proceeding. Customer names (other than the name of the 
     United States buyer of the subject vessel) obtained during 
     any investigation which requires a determination under 
     section 805(b) may not be disclosed by the administering 
     authority under protective order until either an order is 
     published under section 806(a) as a result of the 
     investigation or the investigation is suspended or 
     terminated. The Commission may delay disclosure of 
     customer names (other than the name of the United States 
     buyer of the subject vessel) under protective order during 
     any such investigation until a reasonable time before any 
     hearing provided under section 841 is held.
       ``(B) Protective order.--The protective order under which 
     information is made available shall contain such requirements 
     as the administering authority or the Commission may 
     determine by regulation to be appropriate. The administering 
     authority and the Commission shall provide by regulation for 
     such sanctions as the administering authority and the 
     Commission determine to be appropriate, including disbarment 
     from practice before the agency.
       ``(C) Time limitations on determinations.--The 
     administering authority or the Commission, as the case may 
     be, shall determine whether to make information available 
     under this paragraph--
       ``(i) not later than 14 days (7 days if the submission 
     pertains to a proceeding under section 803(a)) after the date 
     on which the information is submitted, or
       ``(ii) if--
       ``(I) the person that submitted the information raises 
     objection to its release, or
       ``(II) the information is unusually voluminous or complex,

     not later than 30 days (10 days if the submission pertains to 
     a proceeding under section 803(a)) after the date on which 
     the information is submitted.
       ``(D) Availability after determination.--If the 
     determination under subparagraph (C) is affirmative, then--
       ``(i) the business proprietary information submitted to the 
     administering authority or the Commission on or before the 
     date of the determination shall be made available, subject to 
     the terms and conditions of the protective order, on such 
     date, and
       ``(ii) the business proprietary information submitted to 
     the administering authority or the Commission after the date 
     of the determination shall be served as required by 
     subsection (d).
       ``(E) Failure to disclose.--If a person submitting 
     information to the administering authority refuses to 
     disclose business proprietary information which the 
     administering authority determines should be released under a 
     protective order described in subparagraph (B), the 
     administering authority shall return the information, and any 
     nonconfidential summary thereof, to the person submitting the 
     information and summary and shall not consider either.
       ``(2) Disclosure under court order.--If the administering 
     authority or the Commission denies a request for information 
     under paragraph (1), then application may be made to the 
     United States Court of International Trade for an order 
     directing the administering authority or the Commission, as 
     the case may be, to make the information available. After 
     notification of all parties to the investigation and after an 
     opportunity for a hearing on the record, the court may issue 
     an order, under such conditions as the court deems 
     appropriate, which shall not have the effect of stopping or 
     suspending the investigation, directing the administering 
     authority or the Commission to make all or a portion of the 
     requested information described in the preceding sentence 
     available under a protective order and setting forth 
     sanctions for violation of such order if the court finds 
     that, under the standards applicable in proceedings of the 
     court, such an order is warranted, and that--
       ``(A) the administering authority or the Commission has 
     denied access to the information under subsection (b)(1),

[[Page S3448]]

       ``(B) the person on whose behalf the information is 
     requested is an interested party who is a party to the 
     investigation in connection with which the information was 
     obtained or developed, and
       ``(C) the party which submitted the information to which 
     the request relates has been notified, in advance of the 
     hearing, of the request made under this section and of its 
     right to appear and be heard.
       ``(d) Service.--Any party submitting written information, 
     including business proprietary information, to the 
     administering authority or the Commission during a proceeding 
     shall, at the same time, serve the information upon all 
     interested parties who are parties to the proceeding, if the 
     information is covered by a protective order. The 
     administering authority or the Commission  shall not accept 
     any such information that is not accompanied by a 
     certificate of service and a copy of the protective order 
     version of the document containing the information. 
     Business proprietary information shall only be served upon 
     interested parties who are parties to the proceeding that 
     are subject to protective order, except that a 
     nonconfidential summary thereof shall be served upon all 
     other interested parties who are parties to the 
     proceeding.
       ``(e) Information Relating to Violations of Protective 
     Orders and Sanctions.--The administering authority and the 
     Commission may withhold from disclosure any correspondence, 
     private letters of reprimand, settlement agreements, and 
     documents and files compiled in relation to investigations 
     and actions involving a violation or possible violation of a 
     protective order issued under subsection (c), and such 
     information shall be treated as information described in 
     section 552(b)(3) of title 5, United States Code.
       ``(f) Opportunity for Comment by Vessel Buyers.--The 
     administering authority and the Commission shall provide an 
     opportunity for buyers of subject vessels to submit relevant 
     information to the administering authority concerning a sale 
     at less than fair value or countermeasures, and to the 
     Commission concerning material injury by reason of the sale 
     of a vessel at less than fair value.
       ``(g) Publication of Determinations; Requirements for Final 
     Determinations.--
       ``(1) In general.--Whenever the administering authority 
     makes a determination under section 802 whether to initiate 
     an investigation, or the administering authority or the 
     Commission makes a preliminary determination under section 
     803, a final determination under section 805, a determination 
     under subsection (b), (c), (d), (e)(3)(B)(ii), (g), or (i) of 
     section 807, or a determination to suspend an investigation 
     under this title, the administering authority or the 
     Commission, as the case may be, shall publish the facts and 
     conclusions supporting that determination, and shall publish 
     notice of that determination in the Federal Register.
       ``(2) Contents of notice or determination.--The notice or 
     determination published under paragraph (1) shall include, to 
     the extent applicable--
       ``(A) in the case of a determination of the administering 
     authority--
       ``(i) the names of the United States buyer and the foreign 
     producer, and the country of origin of the subject vessel,
       ``(ii) a description sufficient to identify the subject 
     vessel (including type, purpose, and size),
       ``(iii) with respect to an injurious pricing charge, the 
     injurious pricing margin established and a full 
     explanation of the methodology used in establishing such 
     margin,
       ``(iv) with respect to countermeasures, the scope and 
     duration of countermeasures and, if applicable, any changes 
     thereto, and
       ``(v) the primary reasons for the determination, and
       ``(B) in the case of a determination of the Commission--
       ``(i) considerations relevant to the determination of 
     injury, and
       ``(ii) the primary reasons for the determination.
       ``(3) Additional requirements for final determinations.--In 
     addition to the requirements set forth in paragraph (2)--
       ``(A) the administering authority shall include in a final 
     determination under section 805 or 807(c) an explanation of 
     the basis for its determination that addresses relevant 
     arguments, made by interested parties who are parties to the 
     investigation, concerning the establishment of the injurious 
     pricing charge with respect to which the determination is 
     made, and
       ``(B) the Commission shall include in a final determination 
     of injury an explanation of the basis for its determination 
     that addresses relevant arguments that are made by interested 
     parties who are parties to the investigation concerning the 
     effects and impact on the industry of the sale of the subject 
     vessel.

     ``SEC. 844. CONDUCT OF INVESTIGATIONS.

       ``(a) Certification of Submissions.--Any person providing 
     factual information to the administering authority or the 
     Commission in connection with a proceeding under this title 
     on behalf of the petitioner or any other interested party 
     shall certify that such information is accurate and complete 
     to the best of that person's knowledge.
       ``(b) Difficulties in Meeting Requirements.--
       ``(1) Notification by interested party.--If an interested 
     party, promptly after receiving a request from the 
     administering authority or the Commission for information, 
     notifies the administering authority or the Commission (as 
     the case may be) that such party is unable to submit the 
     information requested in the requested form and manner, 
     together with a full explanation and suggested alternative 
     forms in which such party is able to submit the information, 
     the administering authority or the Commission (as the case 
     may be) shall consider the ability of the interested party to 
     submit the information in the requested form and manner and 
     may modify such requirements to the extent necessary to 
     avoid imposing an unreasonable burden on that party.
       ``(2) Assistance to Interested Parties.--The administering 
     authority and the Commission shall take into account any 
     difficulties experience by interested parties, particularly 
     small companies, in supplying information requested by the 
     administering authority or the Commission in connection with 
     investigations under this title, and shall provide to such 
     interested parties any assistance that is practicable in 
     supplying such information.
       ``(c) Deficient Submissions.--If the administering 
     authority or the Commission determines that a response to a 
     request for information under this title does not comply with 
     the request, the administering authority or the Commission 
     (as the case may be) shall promptly inform the person 
     submitting the response of the nature of the deficiency and 
     shall, to the extent practicable, provide that person with an 
     opportunity to remedy or explain the deficiency in light of 
     the time limits established for the completion of 
     investigations or reviews under this title. If that person 
     submits further information in response to such deficiency 
     and either--
       ``(1) the administering authority or the Commission (as the 
     case may be ) finds that such response is not satisfactory, 
     or
       ``(2) such response is not submitted within the applicable 
     time limits,

     then the administering authority or the Commission (as the 
     case may be) may, subject to subsection (d), disregard all or 
     part of the original and subsequent responses.
       ``(d) Use of Certain Information.--In reaching a 
     determination under section 803, 805, or 807, the 
     administering authority and the Commission shall not decline 
     to consider information that is submitted by an interested 
     party and is necessary to the determination but does not meet 
     all the applicable requirements established by the 
     administering authority or the Commission if--
       ``(1) the information is submitted by the deadline 
     established for its submission,
       ``(2) the information can be verified,
       ``(3) the information is not so incomplete that it cannot 
     serve as a reliable basis for reaching the applicable 
     determination,
       ``(4) the interested party has demonstrated that it acted 
     to the best of its ability in providing the information and 
     meeting the requirements established by the administering 
     authority or the Commission with respect to the information, 
     and
       ``(5) the information can be used without undue 
     difficulties.
       ``(e) Nonacceptance of Submissions.--If the administering 
     authority or the Commission declines to accept into the 
     record any information submitted in an investigation under 
     this title, it shall, to the extent practicable, provide 
     to the person submitting the information a written 
     explanation of the reasons for not accepting the 
     information.
       ``(f) Public Comment on Information.--Information that is 
     submitted on a timely basis to the administering authority or 
     the Commission during the course of a proceeding under this 
     title shall be subject to comment by other parties to the 
     proceeding within such reasonable time as the administering 
     authority or the Commission shall provide. The administering 
     authority and the Commission, before making a final 
     determination under section 805 or 807, shall cease 
     collecting information and shall provide the parties with a 
     final opportunity to comment on the information obtained by 
     the administering authority or the Commission (as the case 
     may be) upon which the parties have not previously had an 
     opportunity to comment. Comments containing new factual 
     information shall be disregarded.
       ``(g) Verification.--The administering authority shall 
     verify all information relied upon in making a final 
     determination under section 805.

     ``SEC. 845. ADMINISTRATIVE ACTION FOLLOWING SHIPBUILDING 
                   AGREEMENT PANEL REPORTS.

       ``(a) Action by United States International Trade 
     Commission.--
       ``(1) Advisory report.--If a dispute settlement panel under 
     the Shipbuilding Agreement finds in a report that an action 
     by the Commission in connection with a particular proceeding 
     under this title is not in conformity with the obligations of 
     the United States under the Shipbuilding Agreement, the Trade 
     Representative may request the Commission to issue an 
     advisory report on whether this title permits the Commission 
     to take steps in connection with the particular proceeding 
     that would render its action not inconsistent with the 
     findings of the panel concerning those obligations. The Trade 
     Representative shall notify the Committee on Ways and Means 
     of the House of Representatives and the Committee on Finance 
     of the Senate of such request.
       ``(2) Time limits for report.--The Commission shall 
     transmit its report under paragraph (1) to the Trade 
     Representative within 30 calendar days after the Trade 
     Representative requests the report.
       ``(3) Consultations on request for commission 
     determination.--If a majority of the

[[Page S3449]]

     Commissioners issues an affirmative report under paragraph 
     (1), the Trade Representatives shall consult with the 
     congressional committees listed in paragraph (1) concerning 
     the matter.
       ``(4) Commission determination.--Notwithstanding any other 
     provision of this title, if a majority of the Commissioners 
     issues an affirmative report under paragraph (1), the 
     Commission, upon the written request of the 
     Trade Representative, shall issue a determination in 
     connection with the particular proceeding that would 
     render the Commission's action described in paragraph (1) 
     not inconsistent with the findings of the panel. The 
     Commission shall issue its determination not later than 
     120 calendar days after the request from the Trade 
     Representative is made.
       ``(5) Consultations on implementation of commission 
     determination.--The Trade Representative shall consult with 
     the congressional committees listed in paragraph (1) before 
     the Commission's determination under paragraph (4) is 
     implemented.
       ``(6) Revocation of order.--If, by virtue of the 
     Commission's determination under paragraph (4), an injurious 
     pricing order is no longer supported by an affirmative 
     Commission determination under this title, the Trade 
     Representative may, after consulting with the congressional 
     committees under paragraph (5), direct the administering 
     authority to revoke the injurious pricing order.
       ``(b) Action by Administering Authority.--
       ``(1) Consultations with administering authority and 
     congressional committees.--Promptly after a report or other 
     determination by a dispute settlement panel under the 
     Shipbuilding Agreement is issued that contains findings 
     that--
       ``(A) an action by the administering authority in a 
     proceeding under this title is not in conformity with the 
     obligations of the United States under the Shipbuilding 
     Agreement,
       ``(B) the due date for payment of an injurious pricing 
     charge contained in an order issued under section 806 should 
     be amended,
       ``(C) countermeasures provided for in an order issued under 
     section 807 should be provisionally suspended or reduced 
     pending the final decision of the panel, or
       ``(D) the scope or duration of countermeasures imposed 
     under section 807 should be narrowed or shortened,

     the Trade Representative shall consult with the administering 
     authority and the congressional committees listed in 
     subsection (a)(1) on the matter.
       ``(2) Determination by administering authority.--
     Notwithstanding any other provision of this title, the 
     administering authority shall, in response to a written 
     request from the Trade Representative, issue a determination, 
     or an amendment to or suspension of an injurious pricing or 
     countermeasure order, as the case may be, in connection with 
     the particular proceeding that would render the administering 
     authority's action described in paragraph (1) not 
     inconsistent with the findings of the panel.
       ``(3) Time Limits for Determinations.--The administering 
     authority shall issue its determination, amendment, or 
     suspension under paragraph (2)--
       ``(A) with respect to a matter described in subparagraph 
     (A) of paragraph (1), within 180 calendar days after the 
     request from the Trade Representative is made, and
       ``(B) with respect to a matter described in subparagraph 
     (B), (C), or (D) or paragraph (1), within 15 calendar days 
     after the request from the Trade Representative is made.
       ``(4) Consultations before implementation.--Before the 
     administering authority implements any determination, 
     amendment, or suspension under paragraph (2), the Trade 
     Representative shall consult with the administering authority 
     and the congressional committees listed in subsection (a)(1) 
     with respect to such determination, amendment, or suspension.
       ``(5) Implementation of determination.--The Trade 
     Representative may, after consulting with the administering 
     authority and the congressional committees under paragraph 
     (4), direct the administering authority to implement, in 
     whole or in part, the determination, amendment, or suspension 
     made under paragraph (2). The administering authority shall 
     publish notice of such implementation in the Federal 
     Register.
       ``(c) Opportunity for Comment by Interested Parties.--
     Before issuing a determination, amendment, or suspension, the 
     administering authority, in a matter described in subsection 
     (b)(1)(A), or the Commission, in a matter described in 
     subsection (a)(1), as the case may be, shall provide 
     interested parties with an opportunity to submit written 
     comments and, in appropriate cases, may hold a hearing, with 
     respect to the determination.

                       ``Subtitle D--Definitions

     ``SEC. 861. DEFINITIONS.

       ``For purposes of this subtitle:
       ``(1) Administering Authority.--The term `administering 
     authority' means the Secretary of Commerce, or any other 
     officer of the United States to whom the responsibility for 
     carrying out the duties of the administering authority under 
     this title are transferred by law.
       ``(2) Commission.--The term `Commission' means the United 
     States International Trade Commission.
       ``(3) Country.--The term `country' means a foreign country, 
     a political subdivision, dependent territory, or possession 
     of a foreign country and, except as provided in paragraph 
     (16)(E)(iii), may not include an association of 2 or more 
     foreign countries, political subdivisions, 
     dependent territories, or possessions of countries into a 
     customs union outside the United States.
       ``(4) Industry.--
       ``(A) In general.--Except as used in section 808, the term 
     `industry' means the producers as a whole of a domestic like 
     vessel, or those producers whose collective capability to 
     produce a domestic like vessel constitutes a major proportion 
     of the total domestic capability to produce a domestic like 
     vessel.
       ``(B) Producer.--A `producer' of a domestic like vessel 
     includes an entity that is producing the domestic like vessel 
     and an entity with the capability to produce the domestic 
     like vessel.
       ``(C) Capability to produce a domestic like vessel.--A 
     producer has the `capability to produce a domestic like 
     vessel' if it is capable of producing a domestic like vessel 
     with its present facilities or could adapt its facilities in 
     a timely manner to produce a domestic like vessel.
       ``(D) Related parties.--(i) In an investigation under this 
     title, if a producer of a domestic like vessel and the 
     foreign producer, seller (other than the foreign producer), 
     or United States buyer of the subject vessel are related 
     parties, or if a producer of a domestic like vessel is also a 
     United States buyer of the subject vessel, the domestic 
     producer may, in appropriate circumstances, be excluded from 
     the industry.
       ``(ii) For purposes of clause (i), a domestic producer and 
     the foreign producer, seller, or United States buyer shall be 
     considered to be related parties, if--
       ``(I) the domestic producer directly or indirectly controls 
     the foreign producer, seller, or United States buyer,
       ``(II) the foreign producer, seller, or United States buyer 
     directly or indirectly controls the domestic producer,
       ``(III) a third party directly or indirectly controls the 
     domestic producer and the foreign producer, seller, or United 
     States buyer, or
       ``(IV) the domestic producer and the foreign producer, 
     seller, or United States buyer directly or indirectly control 
     a third party and there is reason to believe that the 
     relationship causes the domestic producer to act differently 
     than a nonrelated producer.

     For purposes of this subparagraph, a party shall be 
     considered to directly or indirectly control another party if 
     the party is legally or operationally in a position to 
     exercise restraint or direction over the other party.
       ``(E) Product lines.--In an investigation under this title, 
     the effect of the sale of the subject vessel shall be 
     assessed in relation to the United States production (or 
     production capability) of a domestic like vessel if available 
     data permit the separate identification of production (or 
     production capability) in terms of such criteria as the 
     production process or the producer's profits. If the domestic 
     production (or production capability) of a domestic like 
     vessel has no separate identity in terms of such criteria, 
     then the effect of the sale of the subject vessel shall be 
     assessed by the examination of the production (or production 
     capability) of the narrowest group or range of vessels, which 
     includes a domestic like vessel, for which the necessary 
     information can be provided.
       ``(5) Buyer.--The term `buyer' means any person who 
     acquires an ownership interest in a vessel, including by way 
     of lease or long-term bareboat charter, in conjunction with 
     the original transfer from the producer, either directly or 
     indirectly, including an individual or company which owns or 
     controls a buyer. There may be more than one buyer of any one 
     vessel.
       ``(6) United states buyer.--The term `United States buyer' 
     means a buyer that is any of the following:
       ``(A) A United States citizen.
       ``(B) A juridical entity, including any corporation, 
     company, association, or other organization, that is legally 
     constituted under the laws and regulations of the United 
     States or a political subdivision thereof, regardless of 
     whether the entity is organized for pecuniary gain, privately 
     or government owned, or organized with limited or unlimited 
     liability.
       ``(C) A juridical entity that is owned or controlled by 
     nationals or entities described in subparagraphs (A) and (B). 
     For the purposes of this subparagraph--
       ``(i) the term `own' means having more than a 50 percent 
     interest, and
       ``(ii) the term `control' means the actual ability to have 
     substantial influence on corporate behavior, and control is 
     presumed to exist where there is at least a 25 percent 
     interest.

     If ownership of a company is established under clause (i), 
     other control is presumed not to exist unless it is otherwise 
     established.
       ``(7) Ownership interest.--An `ownership interest' in a 
     vessel includes any contractual or proprietary interest which 
     allows the beneficiary or beneficiaries of such interest to 
     take advantage of the operation of the vessel in a manner 
     substantially comparable to the way in which an owner may 
     benefit from the operation of the vessel. In determining 
     whether such substantial comparability exists, the 
     administering authority shall consider--
       ``(A) the terms and circumstances of the transaction which 
     conveys the interest,
       ``(B) commercial practice within the industry,

[[Page S3450]]

       ``(C) whether the vessel subject to the transaction is 
     integrated into the operations of the beneficiary or 
     beneficiaries, and
       ``(D) whether in practice there is a likelihood that the 
     beneficiary or beneficiaries of such interests will take 
     advantage of and the risk for the operation of the vessel for 
     a significant part of the life-time of the vessel.
       ``(8) Vessel.--
       ``(A) In general.--Except as otherwise specifically 
     provided under international agreements, the term `vessel' 
     means--
       ``(i) a self-propelled seagoing vessel of 100 gross tons or 
     more used for transportation of goods or persons or for 
     performance of a specialized service (including, but not 
     limited to, ice breakers and dredgers), and
       ``(ii) a tug of 365 kilowatts or more,

     that is produced in a Shipbuilding Agreement Party or a 
     country that is not a Shipbuilding Agreement Party and not a 
     WTO member.
       ``(B) Exclusions.--The term `vessel' does not include--
       ``(i) any fishing vessel destined for the fishing fleet of 
     the country in which the vessel is built,
       ``(ii) any military vessel (including any military reserve 
     vessel), and
       ``(iii) any vessel sold before the date that the 
     Shipbuilding Agreement enters into force with respect to the 
     United States, except that any vessel sold after December 21, 
     1994, for delivery more than 5 years after the date of the 
     contract of sale shall be a `vessel' for purposes of this 
     title unless the shipbuilder demonstrates to the 
     administering authority that the extended delivery date was 
     for normal commercial reasons and not to avoid applicability 
     of this title.
       ``(C) Self-propelled seagoing vessel.--A vessel is `self-
     propelled seagoing' if its permanent propulsion and steering 
     provide it all the characteristics of self-navigability in 
     the high seas.
       ``(D) Military vessel.--A `military vessel' is a vessel 
     which, according to its basic structural characteristics and 
     ability, is intended to be used exclusively for military 
     purposes.
       ``(E) Military reserve vessel.--A `military reserve vessel' 
     is a military vessel constructed under any of the programs 
     enumerated in section 120 of the OECD Shipbuilding Agreement 
     Act.
       ``(9) Like vessel.--The term `like vessel' means a vessel 
     of the same type, same purpose, and approximate size as the 
     subject vessel and possessing characteristics closely 
     resembling those of the subject vessel.
       ``(10) Domestic like vessel.--The term `domestic like 
     vessel' means a like vessel produced in the United States.
       ``(11) Foreign like vessel.--Except as used in section 
     822(e)(1)(B)(ii)(II), the term `foreign like vessel' means a 
     like vessel produced by the foreign producer of the subject 
     vessel for sale in the producer's domestic market or in a 
     third country.
       ``(12) Same general category of vessel.--The term `same 
     general category of vessel' means a vessel of the same type 
     and purpose as the subject vessel, but of a significantly 
     different size.
       ``(13) Subject vessel.--The term `subject vessel' means a 
     vessel subject to investigation under section 801 or 808.
       ``(14) Foreign producer.--The term `foreign producer' means 
     the producer or producers of the subject vessel.
       ``(15) Exporting country.--The term `exporting country' 
     means the country in which the subject vessel was built.
       ``(16) Material injury.--
       ``(A) In general.--The term `material injury' means harm 
     which is not inconsequential, immaterial, or unimportant.
       ``(B) Sale and consequent impact.--In making determinations 
     under sections 803(a) and 805(b), the Commission in each 
     case--
       ``(i) shall consider--
       ``(I) the sale of the subject vessel,
       ``(II) the effect of the sale of the subject vessel on 
     prices in the United States for a domestic like vessel, and
       ``(III) the impact of the sale of the subject vessel on 
     domestic producers of a domestic like vessel, but only in the 
     context of production operations within the United States, 
     and
       ``(ii) may consider such other economic factors as are 
     relevant to the determination regarding whether there is or 
     has been material injury by reason of the sale of the subject 
     vessel.

     In the notification required under section 805(d), the 
     Commission shall explain its analysis of each factor 
     considered under clause (i), and identify each factor 
     considered under clause (ii) and explain in full its 
     relevance to the determination.
       ``(C) Evaluation of relevant factors.--For purposes of 
     subparagraph (B)--
       ``(i) Sale of the subject vessel.--In evaluating the sale 
     of the subject vessel, the Commission shall consider whether 
     the sale, either in absolute terms or relative to production 
     or demand in the United States, in terms of either volume or 
     value, is or has been significant.
       ``(ii) Price.--In evaluating the effect of the sale of the 
     subject vessel on prices, the Commission shall consider 
     whether--
       ``(I) there has been significant price underselling of the 
     subject vessel as compared with the price of a domestic like 
     vessel, and
       ``(II) the effect of the sale of the subject vessel 
     otherwise depresses or has depressed prices to a significant 
     degree or prevents or has prevented price increases, which 
     otherwise would have occurred, to a significant degree.
       ``(iii) Impact on affected domestic industry.--In examining 
     the impact required to be considered under subparagraph 
     (B)(i)(III), the Commission shall evaluate all relevant 
     economic factors which have a bearing on the state of the 
     industry in the United States, including, but not limited 
     to--
       ``(I) actual and potential decline in output, sales, market 
     share, profits, productivity, return on investments, and 
     utilization of capacity,
       ``(II) factors affecting domestic prices, including with 
     regard to sales,
       ``(III) actual and potential negative effects on cash flow, 
     employment, wages, growth, ability to raise capital, and 
     investment,
       ``(IV) actual and potential negative effects on the 
     existing development and production efforts of the domestic 
     industry, including efforts to develop a derivative or more 
     advanced version of a domestic like vessel, and
       ``(V) the magnitude of the injurious pricing margin.

     The Commission shall evaluate all relevant economic factors 
     described in this clause within the context of the business 
     cycle and conditions of competition that are distinctive to 
     the affected industry.
       ``(D) Standard for determination.--The presence or absence 
     of any factor which the Commission is required to evaluate 
     under subparagraph (C) shall not necessarily give decisive 
     guidance with respect to the determination by the Commission 
     of material injury.
       ``(E) Threat of material injury.--
       ``(i) In general.--In determining whether an industry in 
     the United States is threatened with material injury by 
     reason of the sale of the subject vessel, the Commission 
     shall consider, among other relevant economic factors--
       ``(I) any existing unused production capacity or imminent, 
     substantial increase in production capacity in the exporting 
     country indicating the likelihood of substantially increased 
     sales of a foreign like vessel to United States buyers, 
     taking into account the availability of other export markets 
     to absorb any additional exports,
       ``(II) whether the sale of a foreign like vessel or other 
     factors indicate the likelihood of significant additional 
     sales to United States buyers,
       ``(III) whether sale of the subject vessel or sale of a 
     foreign like vessel by the foreign producer are at prices 
     that are likely to have a significant depressing or 
     suppressing effect on domestic prices, and are likely to 
     increase demand for further sales,
       ``(IV) the potential for product-shifting if production 
     facilities in the exporting country, which can presently be 
     used to produce a foreign like vessel or could be adapted in 
     a timely manner to produce a foreign like vessel, are 
     currently being used to produce other types of vessels,
       ``(V) the actual and potential negative effects on the 
     existing development and production efforts of the domestic 
     industry, including efforts to develop a derivative or more 
     advanced version of a domestic like vessel, and
       ``(VI) any other demonstrable adverse trends that indicate 
     the probability that there is likely to be material injury by 
     reason of the sale of the subject vessel.
       ``(ii) Basis for determination.--The Commission shall 
     consider the factors set forth in clause (i) as a whole. The 
     presence or absence of any factor which the Commission is 
     required to consider under clause (i) shall not necessarily 
     give decisive guidance with respect to the determination. 
     Such a determination may not be made on the basis of mere 
     conjecture or supposition.
       ``(iii) Effect of injurious pricing in third-country 
     markets.--
       ``(I) In general.--The Commission shall consider whether 
     injurious pricing in the markets of foreign countries (as 
     evidenced by injurious pricing findings or injurious pricing 
     remedies of other Shipbuilding Agreement Parties, or 
     antidumping determinations of, or measures imposed by, other 
     countries, against a like vessel produced by the producer 
     under investigation) suggests a threat of material injury to 
     the domestic industry. In the course of its investigation, 
     the Commission shall request information from the foreign 
     producer or United States buyer concerning this issue.
       ``(II) European communities.--For purposes of the clause, 
     the European Communities as a whole shall be treated as a 
     single foreign country.
       ``(F) Cumulation for determining material injury.--
       ``(i) In general.--For purposes of clauses (i) and (ii) of 
     subparagraph (C), and subject to clause (ii) of this 
     subparagraph, the Commission shall cumulatively assess the 
     effects of sales of foreign like vessels from all foreign 
     producers with respect to which--
       ``(I) petitions were filed under section 802(b) on the same 
     day,
       ``(II) investigations were initiated under section 802(a) 
     on the same day, or
       ``(III) petitions were filed under section 802(b) and 
     investigations were initiated under section 802(a) on the 
     same day,

     if, with respect to such vessels, to foreign producers 
     compete with each other and with producers of a domestic like 
     vessel in the United States market.
       ``(ii) Exceptions.--The Commission shall not cumulatively 
     assess the effects of sales under clause (i)
       ``(I) with respect to which the administering authority has 
     made a preliminary negative determination, unless the 
     administering

[[Page S3451]]

     authority subsequently made a final affirmative determination 
     with respect to those sales before the Commission's final 
     determination is made, or
       ``(II) from any producer with respect to which the 
     investigation has been terminated.
       ``(iii) Records in final investigations.--In each final 
     determination in which it cumulatively assesses the effects 
     of sales under clause (i), the Commission may make its 
     determinations based on the record compiled in the first 
     investigation in which it makes a final determination, except 
     that when the administering authority issues its final 
     determination is a subsequently completed investigation, the 
     Commission shall permit the parties in the subsequent 
     investigation to submit comments concerning the significance 
     of the administering authority's final determination, and 
     shall include such comments and the administering 
     authority's final determination in the record for the 
     subsequent investigation.
       ``(G) Cumulation for determining threat of material 
     injury.--To the extent practicable and subject to 
     subparagraph (F)(ii), for purposes of clause (i) (II) and 
     (III) of subparagraph (E), the Commission may cumulatively 
     assess the effects of sales of like vessels from all 
     countries with respect to which--
       ``(i) petitions were filed under section 802(b) on the same 
     day,
       ``(ii) investigations were initiated under section 802(a) 
     on the same day, or
       ``(iii) petitions were filed under section 802(b) and 
     investigations were initiated under section 802(a) on the 
     same day,

     if, with respect to such vessels, the foreign producers 
     compete with each other and with producers of a domestic like 
     vessel in the United States market.
       ``(17) Interested party.--the term `interested party' 
     means, in a proceeding under this title--
       ``(A)(i) the foreign producer, seller (other than the 
     foreign producer), and the United States buyer of the subject 
     vessel, or
       ``(ii) a trade or business association a majority of the 
     members of which are the foreign producer, seller, or United 
     States buyer of the subject vessel,
       ``(B) the government of the country in which the subject 
     vessel is produced or manufactured,
       ``(C) a producer that is a member of an industry,
       ``(D) a certified union or recognized union or group of 
     workers which is representative of an industry,
       ``(E) a trade or business association a majority of whose 
     members are producers in an industry,
       ``(F) an association, a majority of whose members is 
     composed of interested parties described in subparagraph (C), 
     (D), or (E), and
       ``(G) for purposes of section 807, a purchaser who, after 
     the effective date of an order issued under that section, 
     entered into a contract of sale with the foreign producer 
     that is subject to the order.
       ``(18) Affirmative determinations by divided commission.--
     If the Commissioners voting on a determination by the 
     Commission are evenly divided as to whether the determination 
     should be affirmative or negative, the Commission shall be 
     deemed to have made an affirmative determination. For the 
     purpose of applying this paragraph when the issue before the 
     Commission is to determine whether there is or has been--
       ``(A) material injury to an industry in the United States,
       ``(B) threat of material injury to such an industry, or
       ``(C) material retardation of the establishment of an 
     industry in the United States,

     by reason of the sale of the subject vessel, an affirmative 
     vote on any of the issues shall be treated as a vote that the 
     determination should be affirmative.
       ``(19) Ordinary course of trade.--The term `ordinary course 
     of trade' means the conditions and practices which, for a 
     reasonable time before the sale of the subject vessel, have 
     been normal in the shipbuilding industry with respect to a 
     like vessel. The administering authority shall consider the 
     following sales and transactions, among others, to be outside 
     the ordinary course of trade:
       ``(A) Sales disregarded under section 822(b)(1).
       ``(B) Transactions disregarded under section 822(f)(2).
       ``(20) Nonmarket economy country.--
       ``(A) In general.--the term `nonmarket economy country' 
     means any foreign country that the administering authority 
     determines does not operate on market principles of cost or 
     pricing structures, so that sales of vessels in such 
     country do not reflect the fair value of the vessels.
       ``(B) Factors to be considered.--In making determinations 
     under subparagraph (A) the administering authority shall take 
     into account--
       ``(i) the extent to which the currency of the foreign 
     country is convertible into the currency of other countries,
       ``(ii) the extent to which wage rates in the foreign 
     country are determined by free bargaining between labor and 
     management,
       ``(iii) the extent to which joint ventures or other 
     investments by firms of other foreign countries are permitted 
     in the foreign country,
       ``(iv) the extent of government ownership or control of the 
     means of production,
       ``(v) the extent of government control over the allocation 
     of resources and over the price and output decisions of 
     enterprises, and
       ``(vi) such other factors as the administering authority 
     considers appropriate.
       ``(C) Determination in effect.--
       ``(i) Any determination that a foreign country is a 
     nonmarket economy country shall remain in effect until 
     revoked by the administering authority.
       ``(ii) The administering authority may make a determination 
     under subparagraph (A) with respect to any foreign country at 
     any time.
       ``(D) Determinations not in issue.--Notwithstanding any 
     other provision of law, any determination made by the 
     administering authority under subparagraph (A) shall not be 
     subject to judicial review in any investigation conducted 
     under subtitle A.
       ``(21) Shipbuilding agreement.--The term `Shipbuilding 
     Agreement' means The Agreement Respecting Normal Competitive 
     Conditions in the Commercial Shipbuilding and Repair 
     Industry, resulting from negotiations under the auspices of 
     the Organization for Economic Cooperation and Development, 
     and entered into on December 21, 1994.
       ``(22) Shipbuilding agreement party.--The term 
     `Shipbuilding Agreement Party' means a state or separate 
     customs territory that is a Party to the Shipbuilding 
     Agreement, and with respect to which the United States 
     applies the Shipbuilding Agreement.
       ``(23) WTO agreement.--The term `WTO Agreement' means the 
     Agreement defined in section 2(9) of the Uruguay Round 
     Agreements Act.
       ``(24) WTO member.--The term `WTO member' means a state, or 
     separate customs territory (within the meaning of Article 
     XII of the WTO Agreement), with respect to which the 
     United States applies the WTO Agreement.
       ``(25) Trade representative.--The term `Trade 
     Representative' means the United States Trade Representative.
       ``(26) Affiliated persons.--The following persons shall be 
     considered to be `affiliated' or `affiliated persons':
       ``(A) Members of a family, including brothers and sisters 
     (whether by the whole or half blood), spouse, ancestors, and 
     lineal descendants.
       ``(B) Any officer or director of an organization and such 
     organization.
       ``(C) Partners.
       ``(D) Employer and employee.
       ``(E) Any person directly or indirectly owning, 
     controlling, or holding with power to vote, 5 percent or more 
     of the outstanding voting stock or shares of any 
     organization, and such organization.
       ``(F) Two or more persons directly or indirectly 
     controlling, controlled by, or under common control with, any 
     person.
       ``(G) Any person who controls any other person, and such 
     other person.

     For purposes of this paragraph, a person shall be considered 
     to control another person if the person is legally or 
     operationally in a position to exercise restraint or 
     direction over the other person.
       ``(27) Injurious pricing.--The term `injurious pricing' 
     refers to the sale of a vessel at less than fair value.
       ``(28) Injurious pricing margin.--
       ``(A) In general.--The term `injurious pricing margin' 
     means the amount by which the normal value exceeds the export 
     price of the subject vessel.
       ``(B) Magnitude of the injurious pricing margin.--The 
     magnitude of the injurious pricing margin used by the 
     Commission shall be--
       ``(i) in making a preliminary determination under section 
     803(a) in an investigation (including any investigation in 
     which the Commission cumulatively assesses the effect of 
     sales under paragraph (16)(F)(i)), the injurious pricing 
     margin or margins published by the administering authority in 
     its notice of initiation of the investigation; and
       ``(ii) in making a final determination under section 
     805(b), the injurious pricing margin or margins most recently 
     published by the administering authority before the closing 
     of the Commission's administrative record.
       ``(29) Commercial interest reference rate.--The term 
     `Commercial Interest Reference Rate' or `CIRR' means an 
     interest rate that the administering authority determines to 
     be consistent with Annex III, and appendices and notes 
     thereto, of the Understanding on Export Credits for Ships, 
     resulting from negotiations under the auspices of the 
     Organization for Economic Cooperation, and entered into on 
     December 21, 1994.
       ``(30) Antidumping.--
       ``(A) WTO members.--In the case of a WTO member, the term 
     `antidumping' refers to action taken pursuant to the 
     Agreement on Implementation of Article VI of the General 
     Agreement on Tariffs and Trade 1994.
       ``(B) Other cases.--In the case of any country that is not 
     a WTO member, the term `antidumping' refers to action taken 
     by the country against the sale of a vessel at less than fair 
     value that is comparable to action described in subparagraph 
     (A).
       ``(31) Broad multiple bid.--The term `broad multiple bid' 
     means a bid in which the proposed buyer extends an invitation 
     to bid to at least all the producers in the industry known by 
     the buyer to be capable of building the subject vessel.''.

     SEC. 104. ENFORCEMENT OF COUNTERMEASURES.

       Part II of title IV of the Tariff Act of 1930 is amended by 
     adding at the end the following:

     ``SEC. 468. SHIPBUILDING AGREEMENT COUNTERMEASURES.

       ``(a) In General.--Notwithstanding any other provision of 
     law, upon receiving from

[[Page S3452]]

     the Secretary of Commerce a list of vessels subject to 
     countermeasures under section 807, the Customs Service shall 
     deny any request for a permit to lade or unlade passengers, 
     merchandise, or baggage from or onto those vessels so listed.
       ``(b) Exceptions.--Subsection (a) shall not be applied to 
     deny a permit for the following:
       ``(1) To unlade any United States citizen or permanent 
     legal resident alien from a vessel included in the list 
     described in subsection (a), or to unlade any refugee or any 
     alien who would otherwise be eligible to apply for asylum and 
     withholding of deportation under the Immigration and 
     Nationality Act.
       ``(2) To lade or unlade any crewmember of such vessel.
       ``(3) To lade or unlade coal and other fuel supplies (for 
     the operation of the listed vessel), ships' stores, sea 
     stores, and the legitimate equipment of such vessel.
       ``(4) To lade or unlade supplies for the use or sale on 
     such vessel.
       ``(5) To lade or unlade such other merchandise, baggage, or 
     passenger as the Customs Service shall determine necessary to 
     protect the immediate health, safety, or welfare of a human 
     being.
       ``(c) Correction of Ministerial or Clerical Errors.--
       ``(1) Petition for correction.--If the master of any vessel 
     whose application for a permit to lade or unlade has been 
     denied under this section believes that such denial resulted 
     from a ministerial or clerical error, no amounting to a 
     mistake of law, committed by any Customs officer, the master 
     may petition the Customs Service for correction of such 
     error, as provided by regulation.
       ``(2) Inapplicability of sections 514 and 520.--
     Notwithstanding paragraph (1), imposition of countermeasures 
     under this section shall not be deemed an exclusion or other 
     protestable decision under section 514, and shall not be 
     subject to correction under section 520.
       ``(3) Petitions seeking administrative review.--Any 
     petition seeking administrative review of any matter 
     regarding the Secretary of Commerce's decision to list a 
     vessel under section 807 mut be brought under that section.
       ``(d) Penalties.--In addition to any other provision of 
     law, the Customs Service may impose a civil penalty of not to 
     exceed $10,000 against the master of any vessel--
       ``(1) who submits false information in requesting any 
     permit to lade or unlade; or
       ``(2) who attempts to, or actually does, lade or unlade in 
     violation of any denial of such permit under this section.''.

     SEC. 105. JUDICIAL REVIEW IN INJURIOUS PRICING AND 
                   COUNTERMEASURE PROCEEDINGS.

       (a) Judicial Review.--Part III of title IV of the Tariff 
     Act of 1930 is amended by inserting after section 516A the 
     following:

     ``SEC. 516B. JUDICIAL REVIEW IN INJURIOUS PRICING AND 
                   COUNTERMEASURE PROCEEDINGS.

       ``(a) Review of Determination.--
       ``(1) In general.--Within 30 days after the date of 
     publication in the Federal Register of--
       ``(A)(i) a determination by the administering authority 
     under section 802(c) not to initiate an investigation,
       ``(ii) a negative determination by the Commission under 
     section 803(a) as to whether there is or has been reasonable 
     indication of material injury, threat of material injury, or 
     material retardation,
       ``(iii) a determination by the administering authority to 
     suspend or revoke an injurious pricing order under section 
     806 (d) or (e),
       ``(iv) a determination by the administering authority under 
     section 807(c),
       ``(v) a determination by the administering authority in a 
     review under section 807(d),
       ``(vi) a determination by the administering authority 
     concerning whether to extend the scope or duration of a 
     countermeasure order under section 807(e)(3)(B)(ii),
       ``(vii) a determination by the administering authority to 
     amend a countermeasure order under section 807(e)(6),
       ``(viii) a determination by the administering authority in 
     a review under section 807(g),
       ``(ix) a determination by the administering authority under 
     section 807(i) to terminate proceedings, or to amend or 
     revoke a countermeasure order,
       ``(x) a determination by the administering authority under 
     section 845(b), with respect to a matter described in 
     paragraph (1)(D) of that section, or
       ``(B)(i) an injurious pricing order based on a 
     determination described in subparagraph (A) of paragraph (2),
       ``(ii) notice of a determination described in subparagraph 
     (B) of paragraph (2),
       ``(iii) notice of implementation of a determination 
     described in subparagraph (c) of paragraph (2), or
       ``(iv) notice of revocation of an injurious pricing order 
     based on a determination described in subparagraph (D) of 
     paragraph (2),

     an interested party who is a party to the proceeding in 
     connection with which the matter arises may commence an 
     action in the United States Court of International Trade by 
     filing concurrently a summons and complaint, each with the 
     content and in the form, manner, and style prescribed by the 
     rules of that court, contesting any factual findings or legal 
     conclusions upon which the determination is based.
       ``(2) Reviewable determinations.--The determinations 
     referred to in paragraph (1)(B) are--
       ``(A) a final affirmative determination by the 
     administering authority or by the Commission under section 
     805, including any negative part of such a determination 
     (other than a part referred to in subparagraph (B)),
       ``(B) a final negative determination by the administering 
     authority or the Commission under section 805,
       ``(C) a determination by the administering authority under 
     section 845(b), with respect to a matter described in 
     paragraph (1)(A) of that section, and
       ``(D) a determination by the Commission under section 
     845(a) that results in the revocation of an injurious pricing 
     order.
       ``(3) Exception.--Notwithstanding the 30-day limitation 
     imposed by paragraph (1) with regard to an order described  
     in paragraph (1)(B)(i), a final affirmative determination 
     by the administering authority under section 805 may be 
     contested by commencing an action, in accordance with the 
     provisions of paragraph (1), within 30 days after the date 
     of publication in the Federal Register of a final negative 
     determination by the Commission under section 805.
       ``(4) Procedures and fees.--The procedures and fees set 
     forth in chapter 169 of title 28, United States Code, apply 
     to an action under this section.
       ``(b) Standards of Review.--
       ``(1) Remedy.--The court shall hold unlawful any 
     determination, finding, or conclusion found--
       ``(A) in an action brought under subparagraph (A) of 
     subsection (a)(1), to be arbitrary, capricious, an abuse of 
     discretion, or otherwise not in accordance with law, or
       ``(B) in an action brought under subparagraph (B) of 
     subsection (a)(1), to be unsupported by substantial evidence 
     on the record, or otherwise not in accordance with law.
       ``(2) Record for review.--
       ``(A) In general.--For purposes of this subsection, the 
     record, unless otherwise stipulated by the parties, shall 
     consist of--
       ``(i) a copy of all information presented to or obtained by 
     the administering authority or the Commission during the 
     course of the administrative proceeding, including all 
     governmental memoranda pertaining to the case and the record 
     of ex parte meetings required to be kept by section 
     843(a)(2); and
       ``(ii) a copy of the determination, all transcripts or 
     records of conferences or hearings, and all notices published 
     in the Federal Register.
       ``(B) Confidential or privileged material.--The 
     confidential or privileged status accorded to any documents, 
     comments, or information shall be preserved in any action 
     under this section. Notwithstanding the preceding sentence, 
     the court may examine, in camera, the confidential or 
     privileged material, and may disclose such material under 
     such terms and conditions as it may order.
       ``(c) Standing.--Any interested party who was a party to 
     the proceeding under title VIII shall have the right to 
     appear and be heard as a party in interest before the United 
     States Court of International Trade in an action under this 
     section. The party filing the action shall notify all such 
     interested parties of the filing of an action under this 
     section, in the form, manner, and within the time prescribed 
     by rules of the court.
       ``(d) Definitions.--For purposes of this section:
       ``(1) Administering authority.--The term `administering 
     authority' has the meaning given that term in section 861(1).
       ``(2) Commission.--The term `Commission' means the United 
     States International Trade Commission.
       ``(3) Interested party.--The term `interested party' means 
     any person described in section 861(17).''.
       (b) Conforming Amendments.--
       (1) Jurisdiction of the court.--Section 1581(c) of title 
     28, United States Code, is amended by inserting ``or 516B'' 
     after ``section 516A''.
       (2) Relief.--Section 2643 of title 28, United States Code, 
     is amended--
       (A) in subsection (c)(1) by striking ``and (5)'' and 
     inserting ``(5), and (6)''; and
       (B) in subsection (c) by adding at the end the following 
     new paragraph:
       ``(6) In any civil action under section 516B of the Tariff 
     Act of 1930, the Court of International Trade may not issue 
     injunctions or any other form of equitable relief, except 
     with regard to implementation of a countermeasure order under 
     section 468 of that Act, upon a proper showing that such 
     relief is warranted.''.

                        Part 2--Other Provisions

     SEC. 111. EQUIPMENT AND REPAIR OF VESSELS.

       Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466), is 
     amended by adding at the end the following new subsection:
       ``(i) The duty imposed by subsection (a) shall not apply 
     with respect to activities occurring in a Shipbuilding 
     Agreement Party, as defined in section 861(22), with respect 
     to--
       ``(1) self-propelled seagoing vessels of 100 gross tons or 
     more that are used for transportation of goods or persons or 
     for performance of a specialized service (including, but not 
     limited to, ice breakers and dredges), and
       ``(2) tugs of 365 kilowatts or more.

     A vessel shall be considered `self-propelled seagoing' if its 
     permanent propulsion and steering provide it all the 
     characteristics of self-navigability in the high seas.''.

     SEC. 112. EFFECT OF AGREEMENT WITH RESPECT TO PRIVATE 
                   REMEDIES.

       No person other than the United States--
       (1) shall have any cause of action or defense under the 
     Shipbuilding Agreement or by virtue of congressional approval 
     of the agreement, or

[[Page S3453]]

       (2) may challenge, in any action brought under any 
     provision of law, any action or inaction by any department, 
     agency, or other instrumentality of the United States, the 
     District of Columbia, any State, any political subdivision of 
     a State, or any territory or possession of the United States 
     on the ground that such action or inaction is inconsistent 
     with such agreement.

     SEC. 113. IMPLEMENTING REGULATIONS.

       After the date of the enactment of this Act, the heads of 
     agencies with functions under this Act and the amendments 
     made by this Act may issue such regulations as may be 
     necessary to ensure that this Act is appropriately 
     implemented on the date the Shipbuilding Agreement enters 
     into force with respect to the United States.

     SEC. 114. AMENDMENTS TO THE MERCHANT MARINE ACT, 1936.

       The Merchant Marine Act, 1936, is amended as follows:
       (1) Section 511(a)(2) (46 App. U.S.C. 1161(a)(2)) is 
     amended by inserting after ``1939,'' the following: ``or, if 
     the vessel is a Shipbuilding Agreement vessel, constructed in 
     a Shipbuilding Agreement Party, but only with regard to 
     moneys deposited, on or after the date on which the 
     Shipbuilding Trade Agreement Act takes effect, into a 
     construction reserve fund established under subsection (b)''.
       (2) Section 601(a) (46 App. U.S.C. 1171(a)) is amended by 
     striking'', and that such vessel or vessels were built in the 
     United States, or have been documented under the laws of the 
     United States not later than February 1, 1928, or actually 
     ordered and under construction for the account of citizens of 
     the United States prior to such date;'' and inserting ``and 
     that such vessel or vessels were built in the United States, 
     or, if the vessel or vessels are Shipbuilding Agreement 
     vessels, in a Shipbuilding Agreement Party;''.
       (3) Section 606(6) (46 App. U.S.C. 1176(6)) is amended by 
     inserting ``or, if the vessel is a Shipbuilding Agreement 
     vessel, in a Shipbuilding Agreement Party or in the United 
     States,'' before ``, except in an emergency.''.
       (4) Section 607 (46 App. U.S.C. 1177) is amended as 
     follows:
       (A) Subsection (a) is amended by inserting ``or, if the 
     vessel is a Shipbuilding Agreement vessel, in a Shipbuilding 
     Agreement Party,'' after ``built in the United States''.
       (B) Subsection (k) is amended as follows:
       (i) Paragraph (1) is amended by striking subparagraph (A) 
     and inserting the following:
       ``(A)(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States or in a 
     Shipbuilding Agreement Party, or
       ``(ii) that is a Shipbuilding Agreement vessel and is 
     constructed in a Shipbuilding Agreement Party and, if 
     reconstructed, is reconstructed in a Shipbuilding Agreement 
     Party or in the United States,''.
       (ii) Paragraph (2)(A) is amended to read as follows:
       ``(A)(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States or in a 
     Shipbuilding Agreement Party, or
       ``(ii) that is a Shipbuilding Agreement vessel and is 
     constructed in a Shipbuilding Agreement Party and, if 
     reconstructed, is reconstructed in a Shipbuilding Agreement 
     Party or in the United States, but only with regard to moneys 
     deposited into the fund on or after the data on which the 
     Shipbuilding Trade Agreement Act takes effect.''.
       (5) Section 610 (46 App. U.S.C. 1180) is amended by 
     striking ``shall be built in a domestic yard or shall have 
     been documented under the laws of the United States not later 
     than February 1, 1928, or actually ordered and under 
     construction for the account of citizens of the United States 
     prior to such date,'' and inserting ``shall be built in the 
     United States or, if the vessel is a Shipbuilding Agreement 
     vessel, in a Shipbuilding Agreement Party,''.
       (6) Section 901(b)(1) (46 App. U.S.C. 1241(b)(1)) is 
     amended by striking the third sentence and inserting the 
     following:

     ``For purposes of this section, the term `privately owned 
     United States-flag commercial vessels' shall be deemed to 
     include--
       ``(A) any privately owned United States-flag commercial 
     vessel constructed in the United States, and if rebuilt, 
     rebuilt in the United States or in a Shipbuilding Agreement 
     Party on or after the date on which the Shipbuilding Trade 
     Agreement Act takes effect, and
       ``(B) any privately owned vessel constructed in a 
     Shipbuilding Agreement Party on or after the date on which 
     the Shipbuilding Agreement Act takes effect, and if rebuilt, 
     rebuilt in a Shipbuilding Agreement party or in the United 
     States, that is documented pursuant to chapter 121 of title 
     46, United States Code.

     The term `privately owned United States-flag commercial 
     vessels' shall also be deemed to include any cargo vessel 
     that so qualified pursuant to section 615 of this Act or this 
     paragraph before the date on which the Shipbuilding Trade 
     Agreement Act takes effect. The term `privately owned United 
     States-flag commercial vessels' shall not be deemed to 
     include any liquid bulk cargo vessel that does not meet the 
     requirements of section 3703a of title 46, United States 
     Code.''.
       (7) Section 905 (46 App. U.S.C. 1244) is amended by adding 
     at the end the following:
       ``(h) The term `Shipbuilding Agreement' means the Agreement 
     Respecting Normal Competitive Conditions in the Commercial 
     Shipbuilding and Repair Industry, which resulted from 
     negotiations under the auspices of the Organization for 
     Economic Cooperation and Development, and was entered into on 
     December 21, 1994.
       ``(i) The term `Shipbuilding Agreement Party' means a state 
     or separate customs territory that is a Party to the 
     Shipbuilding Agreement, and with respect to which the United 
     States applies the Shipbuilding Agreement.
       ``(j) The term `Shipbuilding Agreement vessel' means a 
     vessel to which the Secretary determines Article 2.1 of the 
     Shipbuilding Agreement applies.
       ``(k) The term `Export Credit Understanding' means the 
     Understanding on Export Credits for Ships which resulted from 
     negotiations under the auspices of the Organization for 
     Economic Cooperation and Development and was entered into on 
     December 21, 1994.
       ``(l) The term `Export Credit Understanding vessel' means a 
     vessel to which the Secretary determines the Export Credit 
     Understanding applies.''.
       (8) Section 1104A (46 App. U.S.C. 1274) is amended as 
     follows:
       (A) Paragraph (5) of subsection (b) is amended to read as 
     follows:
       ``(5) shall bear interest (exclusive of charges for the 
     guarantee and service charges, if any) at rates not to exceed 
     such percent per annum on the unpaid principal as the 
     Secretary determines to be reasonable, taking into account 
     the range of interest rates prevailing in the private market 
     for similar loans and the risks assumed by the Secretary, 
     except that, with respect to Export Credit Understanding 
     vessels, and Shipbuilding Agreement vessels, the 
     obligations shall bear interest at a rate the Secretary 
     determines to be consistent with obligations of the United 
     States under the Export Credit Understanding or the 
     Shipbuilding Agreement, as the case may be;''.
       (B) Subsection (i) is amended to read as follows:
       ``(i)(1) Except as provided in paragraph (2), the Secretary 
     may not, with respect to--
       ``(A) the general 75 percent or less limitation contained 
     in subsection (b)(2),
       ``(B) the 87\1/2\ percent or less limitation contained in 
     the 1st, 2nd, 4th, or 5th proviso to subsection (b)(2) or in 
     section 1112(b), or
       ``(C) the 80 percent or less limitation in the 3rd proviso 
     to such subsection, establish by rule, regulation, or 
     procedure any percentage within any such limitation that is, 
     or is intended to be, applied uniformly to all guarantees or 
     commitments to guarantee made under this section that are 
     subject to the limitation.
       ``(2) With respect to Export Credit Understanding vessels 
     and Shipbuilding Agreement vessels, the Secretary may 
     establish by rule, regulation, or procedure a uniform 
     percentage that the Secretary determines to be consistent 
     with obligations of the United States under the Export Credit 
     Understanding or the Shipbuilding Agreement, as the case may 
     be.''.
       (C) Section 1104B(b) (46 App. U.S.C. 1274a(b)) is amended 
     by striking the period at the end and inserting the 
     following:
       ``, except that, with respect to Export Credit 
     Understanding vessels and Shipbuilding Agreement vessels, the 
     Secretary may establish by rule, regulation, or procedure a 
     uniform percentage that the Secretary determines to be 
     consistent with obligations of the United States under the 
     Export Credit Understanding or the Shipbuilding Agreement, as 
     the case may be.''.

     SEC. 115. APPLICABILITY OF TITLE XI AMENDMENTS

       (a) Effective date.--
       (1) In general.--Notwithstanding any provision of the 
     Shipbuilding Agreement or the Export Credit Understanding, 
     the amendments made by paragraph (8) of section 114 shall not 
     apply with respect to any commitment to guarantee made under 
     title XI of the Merchant Marine Act, 1936, before January 1, 
     1999, with respect to a vessel delivered:
       (A) before January 1, 2002, or
       (B) in the case of ``unusual circumstances'' to which 
     paragraph (2) applies, as soon after January 1, 2002, as is 
     practicable.
       (2) Unusual circumstances.--This paragraph applies in a 
     case in which unusual circumstances beyond the control of the 
     parties concerned prevent the delivery of a vessel by January 
     1, 2002. As used in this paragraph, the term ``unusual 
     circumstances'' means acts of God (other than ordinary storms 
     or inclement weather conditions) labor strikes, acts of 
     sabotage, explosions, fires, or vandalism, and similar 
     circumstances.
       (b) Matching Competition By Non-Members.--Section 114 does 
     not prevent the Secretary of Transportation from exercising 
     his full discretion and authority under title XI of the 
     Merchant Marine Act, 1936, consistent with clause 8 and Annex 
     III of the Export Credit Understanding, to assist United 
     States shipyards in meeting unfairly subsidized bids by 
     foreign yards in countries not covered by the disciplines of 
     the OECD Shipbuilding Agreement.

     SEC. 116. WITHDRAWAL FROM AGREEMENT.

       (a) Withdrawal.--
       (1) Notice.--The President shall give notice, under Article 
     14 of the Shipbuilding Agreement, of intent of the United 
     States to withdraw from the Shipbuilding Agreement, as soon 
     as is practicable after one or more Shipbuilding Agreement 
     Parties give notice, under such Article, of intent to 
     withdraw from the Shipbuilding Agreement, if paragraph (2) 
     applies.

[[Page S3454]]

       (2) Tonnage of new construction in withdrawing parties.--
     This paragraph applies if the combined gross tonnage of new 
     Shipbuilding Agreement vessels that were constructed in all 
     Shipbuilding Agreement Parties who have given notice to 
     withdraw from the Shipbuilding Agreement, and that were 
     delivered in the calendar year preceding the calendar year in 
     which the notice is given, is 15 percent or more of the gross 
     tonnage of new Shipbuilding Agreement vessels that were 
     constructed in all Shipbuilding Agreement Parties and were 
     delivered in the calendar year preceding the calendar year in 
     which the notice is given.
       (3) Termination of withdrawal.--If a Shipbuilding Agreement 
     Party described in paragraph (2) takes action to terminate 
     its withdrawal from the Shipbuilding Agreement, so that 
     paragraph (2) would not apply if that Party had not given the 
     notice to withdraw, the President may take the necessary 
     steps to terminate the notice of withdrawal of the United 
     States from the Shipbuilding Agreement.
       (b) Reinstatement of Laws.--If the United States withdraws 
     from the Shipbuilding Agreement, on the date on which the 
     withdrawal becomes effective, the amendments made by section 
     114 cease to have effect, and the provisions of law amended 
     by section 114 shall be effective, on and after such date, as 
     if this Act had not been enacted.

     SEC. 117. MONITORING AND ENFORCEMENT.

       (a) In General.--The United States Trade Representative 
     shall establish a program to monitor the compliance of 
     Shipbuilding Agreement Parties with their obligations under 
     the Shipbuilding Agreement. This program should include--
       (1) the establishment of a task force composed of 
     representatives of the Departments of Commerce, Labor, State, 
     Transportation, and other appropriate agencies;
       (2) coordination of gathering and analysis of relevant 
     information;
       (3) consultation with United States embassies located in 
     countries that are Shipbuilding Agreement Parties to assist 
     in obtaining information on policies and practices that is 
     publicly available in those countries;
       (4) regular consultations with representatives of industry, 
     labor, and other interested parties regarding policies and 
     practices of Shipbuilding Agreement Parties and of other 
     countries with significant commercial shipbuilding 
     industries;
       (5) annual publication of a notice in the Federal Register 
     affording an opportunity for interested parties to comment on 
     the implementation of the Agreement; and
       (6) the taking of any other appropriate action to monitor 
     compliance of Shipbuilding Agreement Parties.
       (b) Report to Congress.--Before the end of each twelve-
     month period in which the United States is a Party to the 
     Agreement, the United States Trade Representative shall 
     report to the Congress on:
       (1) the activities undertaken as part of its monitoring 
     program;
       (2) the results of its consultations under subsection 
     (a)(4) above; and
       (3) compliance with the provisions of the Shipbuilding 
     Agreement.
       (c) Action if Violation.--If the United States Trade 
     Representative receives information provided by 
     representatives of industry, labor, and other interested 
     parties, indicating that a Shipbuilding Agreement Party is in 
     material violation of the Shipbuilding Agreement in a manner 
     that is detrimental to the interests of the United States, 
     the United States Trade Representative should use vigorously 
     the consultation and, if the matter is not otherwise 
     resolved, the dispute settlement procedures provided for 
     under the Shipbuilding Agreement to redress the situation.

     SEC. 118. JONES ACT AND RELATED LAWS NOT AFFECTED.

       (a) In General.--Nothing in the Shipbuilding Agreement 
     shall be construed to amend, alter, or modify in any manner 
     the Merchant Marine Act, 1920 (46 App. U.S.C. 861 et seq.), 
     the Act of June 19, 1886 (46 App. U.S.C. 289), or any other 
     provision of law set forth in Accompanying Note 2 to Annex II 
     to the Shipbuilding Agreement; nor shall the Shipbuilding 
     Agreement undermine the operation or administration of these 
     statutes or prevent them from achieving their objectives.
       (b) Withdrawal of GATT Concessions.--The Shipbuilding 
     Agreement shall not provide any mechanism for withdrawal of 
     concessions under GATT 1994 because of the maintenance or 
     operation of the coastwise trade laws of the United States.
       (c) Annual Review.--The Secretary of Transportation shall 
     review annually the impact, if any, of the Agreement on the 
     operation or implementation of the statutes identified in 
     subsection (a), shall consult with the United States Trade 
     Representative, Department of Defense, U.S. industry and 
     labor, and other interested parties, and shall report to the 
     President. If the President determines that the 
     implementation of the Agreement is significantly undermining 
     the administration or operation of these statutes or 
     significantly impeding them from achieving their objectives, 
     the President shall give notice of intent to withdraw from 
     the Agreement pursuant to Article 14 of the Agreement. The 
     authorization and implementation of responsive measures, 
     under the provisions of paragraph 2.e of Annex II B of the 
     Agreement by any Shipbuilding Agreement Party shall be taken 
     into account in making this determination.

     SEC. 119. EXPANDING MEMBERSHIP IN THE SHIPBUILDING AGREEMENT.

       The United States Trade Representative shall monitor the 
     impact of the policies and practices pursued by countries 
     that are not Shipbuilding Agreement Parties, and shall seek 
     the prompt accession to the Shipbuilding Agreement of 
     countries that have significant commercial shipbuilding and 
     repair industries, including, but not limited to Australia, 
     the People's Republic of China, Poland, Romania, the Russian 
     Federation, and Ukraine. The United States Trade 
     Representative shall report to Congress annually on any 
     impact and on the success of efforts to expand the membership 
     of the Agreement. When it is determined that the continuing 
     failure of a country to adopt the disciplines of the 
     Agreement is undermining the effectiveness of the Agreement 
     and placing U.S. shipyards at a competitive disadvantage, the 
     United States Trade Representative shall act vigorously to 
     redress this situation, making appropriate use of the 
     mechanisms at its disposal under United States trade laws as 
     well as the opportunities for consultations and dispute 
     settlement action under any appropriate international 
     organization, both bilaterally and in concert with other 
     Shipbuilding Agreement Parties.

     SEC. 120. PROTECTION OF UNITED STATES SECURITY INTERESTS.

       (a) In General.--Nothing in the Shipbuilding Agreement 
     shall be construed to prevent the United States from taking 
     any action which the United States considers necessary for 
     the protection of essential security interests.
       (b) Military Vessels and Requirements.--Nothing in the 
     Agreement and in this Act shall be construed to amend or 
     modify any laws or programs relating to U.S. military vessels 
     (including military reserve vessels) or the military 
     requirements of the United States. As used in this 
     section--
       (1) Military vessel.--A ``military vessel'' is a vessel 
     which, according to its basic structural characteristics and 
     ability, is intended to be used exclusively for military 
     purposes;
       (2) Military reserve vessels.--``Military reserve vessels'' 
     are military vessels, as defined in paragraph (1), that are 
     either owned directly by the Department of Defense or leased 
     or chartered by the Department of Defense for military use, 
     including for the purpose of supporting the United States 
     Armed Forces in a contingency. Military Reserve Vessels 
     include:
       (A) ``Prepositioned Vessels'', which are vessels equipped 
     with military features and strategically located throughout 
     the world for utilization when needed;
       (B) ``Surge (Phase) Vessels'', which are vessels equipped 
     with military features or which meet military specifications, 
     and which are dedicated to the provision of logistical 
     support for the Armed Forces on a contingency, including 
     ``Fast Sealift Ships'' (FSS), ``Ready Reserve Force'' (RRF) 
     vessels, and ``Large Medium Speed Roll-on/roll-off'' (LMSR) 
     vessels; and
       (C) ``Sustainment (Phase) Vessels'', which are privately 
     owned merchant marine vessels and are chartered on a long-
     term basis by the Department of Defense for the purpose of 
     carrying military cargo or personnel including the ``Military 
     Sealift Command Controlled Fleet''; and
       (3) Military requirements.--``Laws or programs relating to 
     the military requirements of the United States'' include any 
     program which, consistent with Article 2(2) of the Agreement, 
     provides for modifications made or features added to vessels 
     to make them more capable of carrying military equipment in a 
     contingency provided that the vessels constructed or modified 
     by such programs are under long-term contractual arrangement 
     with the Department of Defense for their call up in the event 
     of contingency.

     SEC. 121. DEFINITIONS.

       Except as otherwise provided, as used in this part--
       (1) the terms ``Shipbuilding Agreement'', ``Shipbuilding 
     Agreement Party'', ``Shipbuilding Agreement Vessels'', and 
     ``Export Credit Understanding'' have the meanings given those 
     terms in subsections (h), (i), (j), and (k), respectively, of 
     section 905 of the Merchant Marine Act, 1936, as added by 
     section 114(7) of this Act; and
       (2) the term ``GATT 1994'' has the meaning given that term 
     in section 2 of the Uruguay Round Agreements Act.

                         Part 3--Effective Date

     SEC. 131. EFFECTIVE DATE.

       Except as otherwise provided, this Act takes effect on the 
     date that the Shipbuilding Agreement enters into force with 
     respect to the United States.
                                 ______
                                 
      By Mr. BYRD:
  S. 630. A bill to amend the Internal Revenue Code of 1986 to deposit 
in the highway trust fund the receipts of the 4.3-cent increase in the 
fuel tax rates enacted by the Omnibus Budget Reconciliation Act of 
1993; to the Committee on Finance.


                 federal highway trust fund legislation

  Mr. BYRD. Mr. President, I rise to introduce a bill today to ensure 
that adequate resources are available to reverse the very destructive 
trend of Federal disinvestment in our Nation's critical infrastructure 
of highways and bridges. The bill that I introduce would place into the 
highway trust fund the 4.3-

[[Page S3455]]

cents-per-gallon gas tax that is currently used for our deficit 
reduction.
  Senators will recall that back in May and June of last year, there 
was much debate on this 4.3-cent gas tax, which was first imposed by 
the Omnibus Budget Reconciliation Act of 1993.
  During this past summer, I deferred offering this bill as an 
amendment to two separate tax bills, and I did so at the request of 
both the majority and the minority leaders. But unfortunately, another 
opportunity to offer the amendment to a tax bill did not arise.
  By depositing this additional 4.3-cents per gallon gas tax into the 
highway trust fund, Congress will have the resources to better meet the 
true needs of our Nation's transportation infrastructure.
  Our Federal investment in infrastructure as a percentage of the total 
Federal budget has declined significantly since 1980. Few economics 
would disagree that adequate long-term investment in infrastructure is 
critical to a nation's economic well-being. Only through investment 
here at home, only through investment to maintain and renew our own 
physical plant, can our economy grow and generate good wages for our 
citizens.

  Even so, our Nation's investment in infrastructure as a percentage of 
our gross domestic product has almost been cut in half since 1980. As a 
nation, we invest a considerably smaller percentage of our gross 
domestic product in infrastructure than our economic competitors invest 
in economic infrastructure in Europe and in Asia.
  Nowhere do we pay a greater price for inadequate infrastructure 
investment than in our Nation's highways. Our National Highway System 
carries nearly 80 percent of U.S. interstate commerce and nearly 80 
percent of intercity passenger and tourist traffic. Yet, we have 
allowed segments of our National Highway System to fall into disrepair.
  The Department of Transportation recently released its latest report 
on the condition of the Nation's highways. Its findings are even more 
disturbing than earlier reports. The Department of Transportation 
currently classified less than half of the mileage on our interstate 
system as being in good condition and only 39 percent of our entire 
National Highway System is rated in good condition. Fully 61 percent of 
our Nation's highways are rated in either fair condition or in poor 
condition. Almost one in four of our Nation's highway bridges are now 
categorized as either structurally deficient or functionally obsolete.
  According to the Department of Transportation, investment in our 
Nation's highways is a full $15 billion short each year just to 
maintain these current inadequate conditions--just to maintain them. 
Put another way, we would have to increase our national highway 
investment by more than $15 billion a year just to avoid further 
deterioration of our national highway network.
  It should be noted that, while our highway infrastructure continue to 
deteriorate, highway use is on the rise. Indeed, it is growing at a 
very rapid pace. The number of vehicle miles traveled has grown by 
roughly 40 percent in just the last decade. As a result, we are 
witnessing new highs in the levels of highway congestion, causing 
delays in the movement of goods and people that costs our national 
economy more than $40 billion a year.
  So, Mr. President, it is clear that the requirement that we place on 
our National Highway System are growing while our investment continues 
to decline. We are simply digging ourselves a deeper and deeper hole. 
Six years ago, in 1991, it was estimated that an investment of $47.5 
billion would be necessary on an annual basis to ensure that highway 
conditions would not deteriorate any further than existed in that 
year--that it would not get any worse. By 1993, that figure grew to 
$51.6 billion. And 2 years ago, that figure grew to $54.8 billion. 
Ergo, the longer we delay increasing Federal highway spending, the more 
expensive it will be to reverse this destructive trend, which costs our 
Nation dearly.
  Productivity improvements are the key to global competitiveness, 
rising standards of living and economic growth. Investments in highways 
result in significant, nationwide improvements in productivity. 
According to the Federal Highway Administration, every $1 billion 
invested in highways creates and sustains over 40,000 full-time jobs. 
Furthermore, the very same $1 billion also results in a $240 million 
reduction in overall production costs for American manufacturers.
  While we can easily see the economic impact of disinvestment in our 
Nation's highways, we must not lose sight of the fact that 
deteriorating highways have a direct relationship to safety as well. We 
may be talking about your life. We may be talking about your life. And 
we are. Almost 42,000 people died on our Nation's highways in 1996. 
That equates to having a mid-sized passenger aircraft crash every day, 
killing all of its occupants. The National Highway Traffic Safety 
Administration counts poor road conditions as a contributing factor in 
a large percentage of these fatal accidents, as well as those in which 
there are serious injuries. The economic impact of these highway 
accidents cost our Nation $150 billion a year, and that figure is 
growing. More importantly, this wasteful carnage brings incredible 
sorrow to affected families and friends, and the Nation loses the 
skills, the talents, and the contributions of the victims.
  The Senate will soon take up legislation to reauthorize the 
Intermodal Surface Transportation Efficiency Act, or ISTEA. This bill 
will be one of the most important pieces of legislation that we 
consider this session. Many Members, including myself, have introduced 
legislation to address specific transportation needs in their States 
and regions. Also, many Members have spoken of the need for formula 
changes to bring about what they perceive to be a more equitable 
distribution of funds from the highway program.
  However, we must face the fact that, absent a substantial increase in 
the current level of spending on our highway program, we will not have 
the resources available to address the many important, but often 
competing, needs for our Nation's highway requirements in all regions 
of the country.
  So in the coming weeks, Mr. President, I look forward to working with 
all of my colleagues toward the enactment of substantially increased 
authorizations and appropriations for our Nation's highway system. And 
the bill that I have introduced today will provide a very helpful tool 
with which to do that.

                          ____________________