[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.
____________________